Theories of Decision Making (Pols 206)

Introduction

Beyond the factors that shape individual decisions, public administration scholarship also offers competing theoretical models of how decisions are actually made — chiefly the rational decision-making theory and incrementalist theory, each with distinct assumptions, strengths, and limitations.

We shall examine two theoretical approaches: rational decision-making theory and incrementalist theory. It is imperative to understand the meaning of each to understand the theories.

Image depicting decision making 

Rational Decision Making

Decision-making requires thinking, reasoning, and a high level of consciousness. The pursuit of ends through the chief element of choice involves ratio analysis or cost-benefit analysis. The theory is concerned with the choice of the alternative that is rational — this is bound to be fundamental to the theory. The choice to make is derived from decision-making model theory: reasoning and rationality. The rational approach has to do with being sensible, deliberate, correct, and rational — to be reasonable, since life is an action.

A decision must involve conscious thinking and careful thought in steps toward goals and objectives, including:

c. Cost reduction and outputs/results/gains/benefits maximization.

d. Clear identification of goals and objectives.

e. Relevant information or data generated on all existing alternatives and methods for accomplishing them.

f. Proper evaluation of goals, methods, and resources.

g. Selection of set goals — among the goals available — and methods that maximize benefit and minimize cost.

Shortcomings

The rational model has been criticized as being less suitable in the public sector than in the private sector. In other words, pure rationality in the public sector has been considered an impossibility, for the following reasons (grounds or base of decision):

1. Political considerations

2. Quantity of decisions

3. Unpredictable socio-economic and political-economic environment

4. The implementer

Strengths

Despite its shortcomings in the public sector, the rational decision-making model has certain strengths in a number of areas, including:

1. It promotes accountability — everything is defined and quantified, including who does what, i.e., the role and status of employees.

2. Performance evaluation — the performance of the organization in general and staff in particular can easily be evaluated in various ways, with focus on materials within an organization.

3. It minimizes waste of both human and material resources — that is, it promotes efficient use of human and material resources, because everything is well defined in advance.

4. It promotes auditability of organizational dynamics — the rational theory's logic fits the private sector better than the public sector.

This is not to say it is totally irrelevant in the public sector — it has certain good elements that should be used, such as clear statement of goals, methods, and use of relevant information or data as the basis of decision.

Incrementalism Theory

This is usually regarded as the traditional approach to decision-making. It states that decision-making is an incremental process.

The theory stresses that decision-making is always made on a piecemeal basis — that is, limited additions, modifications, and adjustments to past decisions, goals, objectives, methods, and benefits. According to Charles Lindblom, the leading exponent of incrementalism, the theory has certain key elements:

a. Decisions are usually made on a routine and small-steps basis.

b. Decision-making is non-comprehensive in terms of goals, priorities, means, cost, and benefits — the means cannot be pre-determined as implied in the rational model.

c. It recognizes diverse organizational goals, needs, and aspirations that must be considered — profit and efficiency cannot always be the driving force, but rather what is relevant for society.

Limitations

- It does not promote accountability or responsibility, because decisions or actions are not clearly pre-defined.

- It does not promote thorough cost-benefit analysis, and therefore may not promote efficiency and effectiveness in the organization and management of human and material resources.

- Incrementalism encourages conservatism — an unwillingness to take risks.

- It hardly allows for radical changes in thinking and methods of doing things.

Strength

- Being a piecemeal approach, it minimizes costly mistakes in the wider sense.

- It is more realistic, because decisions are made based on what is on the ground rather than prediction, as implied in the rational model.

- Incrementalism is more suitable in the public sector.

Conclusion

In sum, rational decision-making offers precision, accountability, and efficiency but struggles with the unpredictability of the public sector, while incrementalism trades comprehensiveness for realism and caution — making it, on balance, the more workable approach for public sector decision-making.