In this module, we are going to see how companies could take their decisions in an organized context. In particular, we are going to investigate which is the process to take decisions in an organization. As a matter of fact, companies take decisions everyday and those decisions might impact the final success or failure of companies. Before investigating the main concepts of decision making process, it is important to analyze the different types of decisions that an organization might take. The first classification of decisions pertains to the distinction between conscious and unconscious decisions. With conscious decision we mean those decisions based on a structured decision making process, that considers the identification of the problem, the in depth analysis of the same and finally the look for a solution. An example of a structured decision might be those of merging together two companies through a Merger & Acquisition process. This decision generally takes several months, with a lot of stakeholders of both companies involved and with a clear distinction of the main problems to consider such as the market covering of their products, the possibility to blend together the production processes, etc. When the decision makers are selecting if merging the two companies or not, they are totally aware to be involved in taking a key decision. On the other hand, with unconscious decision we mean decisions that are part of an organized context but that the decision maker is taking in an unconscious way. The typical case is when the specific decision is considered marginal within a huge amount of variables: the impacts of the decision are clearly visible when the effects happen but not in advance. An example, is the challenger explosion. The 28th of January 1986, shuttle Challenger exploded in the cold and clear sky of Florida, 72 seconds after the launch. The federal government court of inquiry made clear the technical cause of the disaster was the break of the fag gasket because of the exceptional cold of the previous night. The following reconstruction points out that no formal violation of procedures was committed: the potential impact of low temperature was taken into consideration and judged acceptable (there were thousands of other more worrying sources of risk). So, that morning they knew the cold could have lapsed the gasket, but not in a fatal manner. As a matter of fact, most of decision making processes within an organization are a combination of conscious and unconscious decisions, both in a positive or negative way. The decisional path cumulated over time and the final result is the sum of long term effects, that often hard to foresee in advance. The second classification of decisions pertains to the distinction between planned and unplanned decisions. Sometimes decisions are in precise and predefined moments or also repeated several times within an organization. A typical example of planned decision is the budget development within a company: a detailed schedule defines when is necessary to take this decision and also the process to achieve the final budget. Planned decisions are not necessarily simple but the decision makers are able to follow a structured approach to look for the solution. Planned decisions could be solved through structured tools and regular procedures, because selection criteria are clear and information available. Thereby, also the level of risk of these kinds of decisions is pretty low. On the other hand, sometimes problems are totally unexpected and the attention of decision makers is devoted to this decision out of the blue. These decisions are mainly a reaction to some external variables and are considered unplanned. An example of an unplanned decision might be the reaction to a natural disaster: the capability to understand how to recover the operations of the company is the result of a decision making process totally unplanned. Unplanned decisions need to be solved without a precise and specific preparation: given that are totally new, structured tools and procedures are not available and experience of past similar event is likely to be tacit or absent at all. For the same reasons, these decisions might be difficult to take because also information necessary to solve the problem is not available. As a matter of fact, the level of risk of these kinds of decision is generally very high. Different roles within the organization are more likely to take different types of decision. We could use as axes to understand this concept on the one hand the continuum between planned and unplanned decisions; on the other hand, we could consider the level of risk of a decision. If we consider for example, narrow operative roles such as stagers or blue collars are more likely to take planned decisions with a pretty low level of uncertainty. Moving to broad operative tasks, due to the operational nature of their activities decisions still have a pretty low level of uncertainty; on the other hand, these kinds of roles are more likely to take both planned and unplanned decisions. Totally different situation for high managerial roles: expectable as it might be, general managers or CEO are very likely to have a main focus on unplanned decisions, that have a high level of uncertainty too. In the middle between these two roles, there are medium-low level of managerial roles as well as professional roles. The former are taking both planned and unplanned decisions whereas the latter mainly unplanned decisions but both of them with a medium level of uncertainty.
