Decision-making is the process of choosing among alternative courses of action in order to attain goals and objectives. Decisions made in an organization are subject to 'group thinking', which might lead to failure in implementation of policies and strategies, like what happened in the Bay of Pigs invasion by the US army (Janis, I. 1972, quoted in Salaman, G. 2002, p. 9- 38). The failures can be analyzed from two perspectives, namely (Valentine, E., 1994, quoted in Salaman, G. 2002);
The behavioral diagnosis is very important as the human information processing is influenced by external factors such as beliefs and political influences. According to Millar, S. J., Hickson, D. J. and Wilson, D. C. (1996), the complexity of the modern organizations increases the importance of making key decisions.
Pettigrew (1973, quoted in Salaman, G. 2002) suggests a 'contextualist' framework for exploring the behavioral dimension of organizational failures. Accordingly, at any point in time, the organization's capabilities, prospects, decisions and actions are rooted in the preceding events, choices, and experiences that comprise its history and shaped its culture. The lateral relationships existing in the organization can be called 'office politics', where the executive is a tactician and philosopher who 'must live by his wits, competitive instincts, understanding of social forces and ability as a leader. So the behavior perspective of organizational decision making makes it necessary to understand the Behavioral theory of the firm.
Behavioral theory of the firm
The behavioral theory of the firm helps to understand the actual process of making business decisions and provide detailed observations of the ways in which organizations make these decisions (Cyert and March, 1963, quoted in Salaman, G. 2002, p. 62). Cyert and March propose two major organizing devices: a set of variable concepts and a set of relational concepts. The variable concepts are organizational goals, organizational expectations, organizational choice and organizational control. There are also four major relational concepts, namely;
Quasi-resolution of conflict- The coalition in an organization is a coalition of members having different personal goals. Members require some procedure for resolving conflicts, such as acceptable-level decision rules, sequential attention to goals, or both.
Uncertainty avoidance- The modern decision theory is concerned with problems with decision making under risk and uncertainty. Organizations avoid uncertainty by anticipating events in distant future by using decision rules emphasizing short term reaction to short term feedback and thereby devising ways to make the environment controllable.
Problemistic search- According to this theory, the search is stimulated by a problem and is directed towards finding a solution for that problem.
Organizational learning- Organizations exhibit adaptive behavior over time, with respect to three different phases of the decision process: adaptation of goals, adaptation in attention rules, and adaptation in search rules.
So the organizations require a decision making model that can be applicable in its