Bethel University AstroTech Fuel Systems and Organizational Theory The Complete sections should have a minimum word count (total per week) of 1200 words an

Bethel University AstroTech Fuel Systems and Organizational Theory The Complete sections should have a minimum word count (total per week) of 1200 words and each question has to be 300 words each and three scholarly sources. Approved sources for this course include the course textbook and scholarly articles from the Bethel library databases. No other source information is acceptable. EVERYTHING NEEDS TO BE IN OWN WORDS. (EACH QUESTION MUST BE 300 WORDS OR MORE).
Select the link to read Case B – AstroTech Fuel Systems
Case Summary
1.In a narrative format, discuss the key facts and critical issues presented in the case.
2.There is obvious conflict at Astrotech Fuel Systems between Jim McGee and George Phalen.
What could each person have done differently to alleviate some or all of this conflict?
3.Compare and contrast the roles played by politics and power in this case. Discuss how these
plays out in relation to Jim McGee, George Phalen, Ben short, and Dick Faraday. What power
styles did each exhibit in the case?
Case Analysis
4.Considering the department sources of power discussed in the textbook, which one was
Phalen trying to establish for the Fuel System operation and how was he going about it?
Decision Making, Power
and Politics
Chapter Outline:
8-1
Decision Making in
Organizations
8-2
Power in Organizations
8-3
Politics in Organizations
W
I
L
L
I
S
,
Summary
Review Questions
Glossary
Endnotes
K
A
S
S
A
N
D
R
A
Key Terms
2
1
6
1
T
S
8-4
Conflict in Organizations
bounded rationality
Carnegie model
coalition
incremental decision model
intuitive decision making
nonprogrammed decisions
organizational conflict
organizational decision making
organizational politics
power
programmed decisions
rational model of decision making
satisficing
unstructured model of decision making
8
This book has emphasized the importance of strategically managing organizations,
whether they are operating in the for-profit sector or the not-for-profit sector. The
challenge of competitive forces, discussed in chapter 2 on strategy, is reaching
a zenith. This fact particularly impacts the first topic of this chapter, which is
decision making. Because competition for resources and customers has reached
the hypercompetitive level, decisions by organizations must be made quickly and
accurately.
8-1 Decision Making in Organizations
W
I are required because
Why do organizations make decisions? Primarily, decisions
organizations represent the merger of people, systems, L
and technology. Such a
L beg solving or creates
complicated conflagration inevitably leads to problems that
opportunities that need courses of action. Hence, organizational
decision making
I
is the process of identifying problems or opportunities and
S finding solutions or
courses of action that further the goals of the organization.
,
When firms are small, such as those usually found in the existence stage of the
organizational life cycle, all important decisions and most
K minor decisions are
made by one person or a small group of people. However,
A as organizations add
capacity to produce, employees, and markets, the need
S for decision making
increases exponentially. Modern organizations are pushing this decision making
S
responsibility to the lowest possible levels to increase speed and efficiency. This
concept, known as empowerment, puts the responsibility A
for solving a problem or
N
acting on an opportunity in the hands of those closest to the situation.1
organizational
decision making
the process of identifying
problems or opportunities
and finding solutions or
courses of action that
further the goals of the
organization
D
As technology continues to permeate our organizations, markets and competition
R
become global, and productivity increases accelerate, the time available for mulling
A
over important matters in the decision making process shrinks. Fortunately, most
decisions faced by organizations are somewhat routine. Decisions made on a
2 procedures are known
routine, repetitive basis addressed by company policy and
as programmed decisions.
1
6
Nonprogrammed decisions involve nonroutine, out of the ordinary situations
1
and are generally not covered by existing policy or procedure. An example of a
T where an organization
nonprogrammed decision would be a competitive situation
S about the difficulty
is faced with a serious threat from a substitute product. Think
faced by steel producers when automobile manufacturers began to utilize plastic
on a widespread basis in their new cars. This is an example of a strategic threat
from the external environment that resulted in a loss of revenue. That is a serious
enough issue. However, this substitution led to the utilization of plastic into other
products, replacing glass, steel, and even paper.
programmed decisions
decisions made on a
routine, repetitive basis
that are addressed by
company policy and
procedures
nonprogrammed
decisions
decisions that involve
nonroutine, out-of-the
ordinary situations and
are generally not covered
by existing policy or
procedure
Organizational Theory
8-2
8-1a The Rational Decision Making Model
Regardless of whether decisions are programmed or nonprogrammed, everyone
has a process that they follow when confronted with the need for a decision. As
organization theory has evolved over the years, a clear need has been recognized
by researchers and practitioners alike for a model for decision makers to adopt.
Too many organizational managers were making decisions based only on past
experience, or expediency, or whatever might make them look good to their
superiors.
Allowing organizational decision-makers to “fly by the seat
W of their pants” works
against the goals and objectives set by most firms. To overcome this problem, a
I
rational or classical model of decision making has been developed. The rational
L
model is a decision making process that relies on a step-by-step systematic
L as anywhere from
approach to solving a problem. This model has been portrayed
a three-step2 to a six-step3 to an eight-step4 process. FigureI 8.1 depicts a version of
the rational model based on a strategic management
S
,
rational model of
decision-making
a decision making process
that relies on a step-bystep systematic approach
to solving a problem
K
A
S
Figure 8.1 The Rational Decision Making Model
S
A
Each step in Figure 8.1 will be explained using a practical example from the Coca
Nthe early 1980’s Coke
Cola Company headquartered in Atlanta, Georgia. During
D newly-introduced
began losing market share in supermarkets to Pepsi. Although
Diet Coke had recently become the No. 1 diet soft drink,
RCoke executives were
concerned with their competitive position in relation to Pepsi’s.
To make matters
A
worse, Pepsi had been running taste test advertisements on television for several
years where blindfolded consumers picked Pepsi over Coke based on taste.
2
1 project to tinker with
Robert Goizeuta, chairman of Coca Cola, initiated a secret
Coke’s formula, developed in 1886 by Georgia pharmacist
John Pemberton,
6
believing that the sweeter taste of Pepsi was leading to1Coke’s loss of market
share. By 1984 the company was ready to try the new formula in consumer trials in
T
over 30 cities in America. With the aid of a market research firm, Coke conducted
its own taste tests, with close to 40,000 people choosingS
New Coke over the old
classic by 55 to 45 %. The also chose it over Pepsi.
The introduction of New Coke, and the withdrawal of Old Coke, came in April of
1985. To Coke’s surprise, the outcry over the new formula and the pulling of the
old Coke was met with outrage. Less than 90 days later, the old formula was reOrganizational Theory
8-3
introduced to the market as Coca-Cola Classic. Coke’s stock price went up over $5 in one week after bringing
back the old formula.5 This example is not an illustration of a successful initial decision, as Coke’s decision to
introduce New Coke could only be described as a failure. However, it very clearly demonstrates how difficult
important strategic decisions can be, and it reveals one firm’s ability to recognize when it had made a mistake.
Step 1: Recognize and confront the situation – do not sit on a situation that is a potential
problem or opportunity for your organization hoping that it will take care of itself. Coca-Cola
executives became concerned with a drop in market share in the early 1980’s as Pepsi began
outselling Coke in supermarkets. The company decided the problem was the taste of their
product, in that Pepsi was sweeter than Coke.
W
Step 2: Develop the solution options – strategic managers base decision-making options
I
on their compatibility with the organization’s strategy to accomplish its goals and objectives.
L
Anything else is counterproductive. Coca-Cola owned the most recognizable brand in the
world. To protect its market share andLits name, Coke looked at introducing new products (like
I
Diet Coke), changing advertising strategies
(conducting its own taste tests), or actually altering
the formula of its main product (introducing
New Coke).
S
,
Step 3: Evaluate the possible outcomes of each option – Sometimes a possible solution to
a situation sounds very good until it is evaluated based on the possible outcomes. As they
K knew they already had six brands on the shelves of
evaluated each option, Coke executives
stores, they believed their marketingAcampaign was already one of the best in the world, and
they were concerned that tinkering with
S their tried and true formula was risky.
S
Step 4: Choose the best option and implement – Once the best option is identified based on
an evaluation of possible outcomes,A
implement the option. After analyzing this situation for
N
some time, CEO Robert Goizueta, with support from Robert Woodruff, the 95 year-old former
chairman of Coca-Cola, put the wheels
D in motion for the introduction of New Coke.
R
The example of decision making at Coca-Cola by its top management team demonstrates that even a rational,
A
objective, research-based decision can be wrong. In the end, after spending over $4 million to taste test its
new formula, Coca-Cola failed in its introduction of New Coke. Some say an intangible, e.g., the consumer’s
2 failure.6 Yet, Coca-Cola survived and prospered under
emotional tie to the brand, was to blame for New Coke’s
Goizueta’s leadership as its stock price increased 3800%
1 during his tenure. Since his death in October of 1997,
7
however, Coca-Cola has struggled to find the right leader
6 at the right time.
1
Critics are quick to point out that the rational model has several flaws. For example, managers do not have
T do not know all possible alternatives, and they do not
complete, perfect information most of the time. They
understand nor can they predict all possible outcomesSof those alternatives. Decision makers also have limited
mental capability, something that is not recognized by this model. The rational model is a prescriptive model
in that it lays out a process for how decisions should be made. A second model will be discussed below that is
more descriptive, demonstrating how decisions actually are made in organizations.
Organizational Theory
8-4
8-1b The Carnegie Model
A second model of decision making is the administrative model, or the Carnegie
Model. Developed by organizational researchers James March and Herbert Simon
from Carnegie-Mellon University, this model tries to explain how organizational
decision makers actually make decisions. The result is a realistic snapshot
of the limitations decision makers bring to the process, particularly in light of
the tremendous number of variables involved in decision making in today’s
organizations.
The Carnegie model reflects a descriptive decision-makingW
process in organizations
where coalitions determine a final choice based on incomplete information, social
I
and psychological processes, limited abilities of decision makers, and the need
L
to find quick, satisficing solutions.8 The Carnegie Model is a good example of
what happens to a behavioral theory in management whenLit is actually studied in
practice. Rarely does one single top manager make all ofI the important decisions
in an organization without input and buy-in from many
S other key managers.
Although an organization may have clearly defined goals,
, conflict as to how to
obtain those goals or whether they are actually the proper goals often develops. In
these situations, coalitions can form within the organization between employees,
K
managers, and/or shareholders to push forward a solution.9 In contrast, the rational
A in organizations and
model of decision making tends to assume no conflict exists
S
that organizational goals are all commonly shared by immediate
stakeholders.
Carnegie model
reflects a descriptive
decision-making process
in organizations where
coalitions determine a
final choice based on
incomplete information,
social and psychological
processes, limited abilities
of decision makers, and
the need to find quick,
satisficing solutions
S
Mintzberg categorizes the possible reasons for coalitions in an organization and
A
identifies the actual groups, both external and internal, that might result. He defines
N
a coalition as “a group of people who band together to win some issue.”10 Below
D
is a list of these possible coalitions.
External Coalitions:
R
A
coalition
a group of people who
band together to win some
issue
Owners
– those who have legal control of the organization
2
Associates
1
– Suppliers and buyers of organizational resources
6
and products/services
Employee Associations
– Unions and professional associations
1
T
S
Publics
– this term refers to general groups such as families and
opinion leaders, special interests groups, and government
Directors
– board members
Organizational Theory
8-5
Internal Coalitions:
Top Management Team
– also referred to by some as the dominant coalition
Operators
– describes the workers who actually produce the firm’s
product or service
Line Managers
– all managers from the CEO down to first-line supervisors;
Analysts of the Technostructure
– systems planning and control personnel;
W
I
Support Staff
L relations, etc.
– specialists who work on matters of law, public
L
Ideology Supporters
I the
– those who share a set of beliefs that distinguish
S
organization from others.11
,
This list emphasizes the fact that coalitions are powerful, yet fundamental forces to
be reckoned with in any organization. The vast number of special interests, causes,
K
needs, and other considerations that can be conjured up by this list confirms the
A
practical approach to decision making that coalition building represents. This is
S but it does make one
not to say that coalitions are only concerned with self-interest,
aware of the importance of coalition building in managingSan organization.
A
A second major difference between the rational model and the Carnegie model has
N
to do with choosing the optimal solution in the decision-making process. March
and Simon have described that, in many cases, solutionsD
to problems are arrived
R
at through a process of satisficing. The concept of satisficing is choosing a course
A of people involved or
of action that is the most acceptable to the greatest number
affected. In a perfect world, this would not be the case. Decision makers would
always choose whatever solution was best for the organization.
Remember,
2
organizations are groups of people who must work together to accomplish
1
anything. Unfortunately, optimal solutions are not always going to be supported
6
by organizational stakeholders.
1
Another factor involved in decision making that the rational
T model overlooks is the
sheer limitations of human decision makers based on their
S bounded rationality.
Although organizational decision makers are usually well-versed in their industry,
trained in their jobs, and networked to opportunities and threats in the external
environment, they are also limited by their own cognitive ability. So, bounded
rationality refers to the limitations of the mind that restrict the ability of decision
makers to solve problems or take advantage of opportunities. Operating within this
limited framework, decision makers can make a quick list of alternatives based on
satisficing
choosing a course of
action that is the most
acceptable to the greatest
number of people involved
or affected
bounded rationality
refers to the limitations of
the mind that restrict the
ability of decision makers
to solve problems or take
advantage of opportunities
Organizational Theory
8-6
past experience and personal knowledge of the situation at hand, prioritize them
based on importance, and move on with a solution. Are all relevant alternatives
likely to be included? The answer is probably not. However, the need not to
spend too long deliberating a situation, the tendency to satisfice, and the personal
preferences of the primary decision maker usually overrule any inclination to try
to be exhaustive in identifying alternatives.
W
I
L
L
I
S
,
Input and buy-in
from key managers
aid and strengthen
the decision making
process.
K
A
8-1c Incremental Decision Making
S
A different model of decision making is the incremental decision
model. The name
S
incremental is quite descriptive, as managers make decisions
A that are only slightly
different than the ones made by their predecessors or the ones they themselves
N
made in the past.12 The idea behind the incremental model is that managers are
D
only “muddling through” as they are confronted with important decision-making
R style because the
opportunities. Many managers practice this decision making
A change what has been
chance for failure is reduced when you only incrementally
incremental decision
model
managers make
decisions that are only
slightly different than
the ones made by their
predecessors or the ones
they themselves made in
the past
happening for a long time. Although new courses of action may eventually develop
when the incremental model is practiced, they take a long2time to come about due
to the small step-by-small step process.
1
6
8-1d The Unstructured Model
1
While the Carnegie model emphasizes the need toTrecognize social and
psychological processes, the unstructured model, based on the observance of actual
S
decision makers in operating organizations, focuses more on the actual steps taken
by decision makers. The unstructured model of decision making, developed by
Henry Mintzberg, sometimes referred to as the Father of Strategic Management,
describes decision making in uncertain environments as a sequence of activities
that require smaller decisions throughout the process. 13
unstructured model
of decision making
describes decision making
in uncertain environments
as a structured sequence
of activities that require
smaller decisions
throughout the process
Organizational Theory
8-7
Mintzberg and his colleagues studied twenty-five organizational decisions as a
process from beginning to end. They outlined three major phases common to the
firms studied: the identification phase, the development phase, and the selection
phase. The identification stage involved recognizing the problem or opportunity
and gathering more information, or diagnosing. The development phase was
focused on searching for alternatives or designing a solution that was customized
to fit the situation. In the selection phase a judgment is made, followed by analysis,
bargaining, and eventual authorization. In their research, Mintzberg and his coauthors noted that sometimes major barriers would be bumped into, requiring
decision makers to go back and repeat steps they had already taken.
W
What is important to remember in any decision model is the
I fact that most critical
decisions are made over a period of time. And, as we have emphasized in this book,
L
the environment for most businesses changes over time, sometimes drastically.
L
Mintzberg’s model is realistic in that regard, particularly when an organization is
I since it accounts for
operating in an uncertain internal or external environment,
S
barriers that can arise.
8-1e Intuition in Decision Making
,
K literature looks at the
A somewhat recent school of thought in the decision making
A decision making,
importance of intuition. …
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