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Course Description
This is a Ph.D. level course intended to enrich students' understanding of decision making in
organizations and provide some necessary literature background for further academic research in this
area. As a foundation for organizational theory and behavior, organizational decision making has long
been considered the most important and fundamental topic in organizational research. Simon (1947), for
example, claimed decision making to be the “heart of organizations.” Price (1968) regarded decision
making as “the necessity in all organizations.” Scott (1987) also considered decision making as the basic
operation of an organization. It is the common belief that for any organization to be effective, it is
necessary to have sound decision making.
Throughout this course, we will cover different perspectives including normative, descriptive and
non-rational aspects of decision making. Various theories and approaches under these perspectives will
be investigated. We will view decision making from three levels: individual, group, and
organizational/strategic levels. In addition, we will consider the impact of uncertainty and ambiguity on
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decision making, examine the context in organizational decision making such as environment, structure
and process, explore the roles of information technology and international culture in decision making,
and discuss ethics issues related to decision making. Finally we will bring in some of the emerging
thoughts on decision making.
At the end of the course, students should have a good understanding of the main development in
the field and be able to form an integrated and yet creative line of thinking in organizational decision
making. This course will also provide students the opportunity to develop a research project in the field
through the discussion of various topics and the writing of a term paper.
Course Requirements
This course requires extensive readings, active discussions, and intelligent research work. The
final letter grade (A, B, C) will be based on the following three components, each of which will take the
form of an expanded letter grade (A+, A, A-, B+, B, B-, C+, C, C-, F).
Students are expected to come to class being prepared for and actively involved in discussing the
assigned readings, which will be selected from the list in the syllabus. For each of the weekly assigned
article, two to three students will be responsible for leading class discussions. Each discussion leader,
individually, should also submit to the instructor a two page double-spaced summary of main discussion
points at the class time. The quality of each student's discussion will be evaluated in the following
questions:
- Does the student demonstrate a basic understanding of the assigned reading materials?
- Can the student identify the common themes in the readings and use these themes to integrate
and compare the articles?
- Does the student use the readings as a base to develop new ideas or insights?
- Can the student formulate appropriate critiques of the readings and defend his/her position in
discussion with other class members?
A student’s weekly participation credit may be reduced if he/she misses portions of the class.
Each student is required to submit a written term paper on a self-selected topic in decision making.
It is due on April 13, 2006. This paper can be either theoretical, empirical, or something in between, but
must have the strong potential of becoming a full publishable paper with future additions. A theoretical
paper should follow the style of Academy of Management Review. The grading of the paper will be
based on the following criteria:
An empirical paper should follow the style of Academy of Management Journal. The grading of
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the paper will be based on the following criteria.
Some of the potential term paper topics may include, though not limited to, the followings:
In the last class of the semester, each student will also present his or her paper to the whole class
in fifteen minutes. The quality of the presentation will be based on the following criteria:
The final grade will be based on the weighted combination of the above three requirements. After
the last class, there will be a designated office hour for students to receive feedback on their class
performance, including the graded term paper (please see the schedule part for time and location).
Academic Honesty
Throughout the semester, each student is expected to follow the university’s guideline on student
conduct with regard to cheating and other dishonorable or disruptive behaviors. Severe consequences
can occur if such rules are not followed.
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Class Arrangements
Class 1. 1/12/2006
Course description and expectation sharing
Class 2. 1/19/2006
Main perspectives on organizational decision making
Readings:
BK: Chapters 1-2. Introduction and overview; Understanding how decisions happen in
organizations.
RP: March, J. G. and Simon, H. A. 1958. Decision making theory. In James G. March and
Hebert A. Simon, Organizations, p. 137-150, 169-171. John Wiley & Sons, Inc. Also in
Oscar Grusky and George A. Miller (eds.) 1981. The sociology of organizations (2nd
ed.), p. 135-150. New York: Free Press.
RP: Bell, D. E., Raiffa, H. and Tversky, A. 1988. Descriptive, normative, and prescriptive
interactions in decision making. In David E. Bell, Howard Raiffa and Amos Tversky
(eds.) Decision making: Descriptive, normative, and prescriptive interactions, p.9-32.
Cambridge University Press.
RP: Langley, A., Mintzberg, H., Pitcher, P., Posada, E., and Saint-Macary, J. 1995.
Opening up decis ion making: The view from the black stool. Organization Science,
6(3): 260-279.
Class 3. 1/26/2006
Decision making as rational choices
Readings:
BK: Chapter 15. Bounded rationality, indeterminacy, and the managerial theory of the
firm.
RP: Halpern, J. J. and Stern, R. N. 1998. Introduction: Beneath the social science debate:
Economic and social notions of rationality. In Jennifer J. Halpern and Robert N. Stern
(Eds.) Debating rationality: Non-rational aspects of decision making, pp. 1-17.
Cornell University Press.
RP: Simon, H. A. 1988. Rationality as a process and product of thought. In David E. Bell,
Howard Raiffa and Amos Tversky (eds.) Decision making: Descriptive, normative,
and prescriptive interactions, p.58-77. Cambridge University Press.
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Class 4. 2/2/2006
Decision making as rule/memory-based actions
Readings:
RP: Cohen M. D. and Bacdayan, P. 1994. Organizational routines are stored as procedural
memory: Evidence from a laboratory study. Organization Science, 5(4): 554-568.
RP: Baum, J. A. C., Li, S. X., and Usher, J. M. 2000. Making the next move: How
experiential and vicarious learning shape the locations of chains' acquisition.
Administrative Science Quarterly, 45(4): 766-801.
Readings:
RP: Argote, L., Devadas, R. and Melone, N. 1990. The base-rate fallacy: Contrasting
processes and outcomes of group and individual judgment. Organizational Behavior
and Human Decision Processes, 46: 296-310.
RP: Paese, P. W., Bieser, M. and Tubbs, M. E. 1993. Framing effects and choice shifts in
group decision making. Organizational Behavior and Human Decision Processes, 56:
149-165.
Class 5. 2/9/2006
Strategic decision making
Readings:
RP: Hitt, M. A. and Tyler, B. B. 1991. Strategic decision models: Integrating different
perspectives. Strategic Management Journal, 12(5): 327-351.
RP: Nutt, P. C. 1998. Framing strategic decisions. Organization Science, 9(2): 195-216.
RP: Cray, David, Mallory, Geoffrey R., Butler, Richard J., Hickson, David, J. and Wilson,
David C. 1988. Sporadic, fluid and constricted processes: Three types of strategic
decision making in organizations. Journal of Management Studies, 25(1): 13-39.
Class 6. 2/16/2006
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Ambiguity and uncertainty in decision making
Readings:
BK: Chapter 4. Organizational choice under ambiguity: Decision making in the chemical
industry following Bhopal.
RP: March, J. G. 1989. Bounded rationality, ambiguity, and the engineering of choice. In
James G. March (ed.) Decisions and organizations, p.266-293. New York: Blackwell.
RP: Mosakowski, E. 1997. Strategy making under causal ambiguity: Conceptual issues
and empirical evidence. Organization Science, 8(4): 414-442.
RP: Hodgkinson, G. P., Bown, N. J., Maule, A. J., Glaister, K. W., andPearman, A. D.
1999. Breaking the frame: An analysis of strategic cognition and decision making
under uncertainty. Strategic Management Journal, 20(10): 977-985.
Class 7. 2/23/2006
Non-rational aspect of decision making: Garbage can processes
Readings:
RP: Gibbons, R. 1998. Game theory and garbage cans: An introduction to the economics
of internal organization. In Jennifer J. Halpern and Robert N. Stern (Eds.) Debating
rationality: Non-rational aspects of decision making, pp. 36-52. Cornell University
Press.
RP: Cohen, M. D., March, J. G. and Olsen, J. P. 1972. A garbage can model of
organizational choice. Administrative Science Quarterly, 17(1): 1-25.
Class 8. 3/2/2006
Non-rational aspect of decision making: Power and politics
Readings:
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RP: Feldman, M. S. and March, J. G. 1981. Information in organizations as signal and
symbol. Administrative Science Quarterly, 26: 171-186.
3/9/2006
Spring break. No class.
Class 9. 3/16/2006
Non-rational aspect of decision making: Biases and escalation of commitment
Readings:
RP: Whyte, G. 1993. Escalating commitment in individual and group decision making: A
prospect theory approach. Organizational Behavior and Human Decision Processes,
54: 430-455.
RP: Ross, J. and Staw, B. M. 1993. Organizational escalation and exit: Lessons from the
Shoreham Nuclear Power Plant. Academy of Management Journal, 36(4): 701-732.
RP: Tetlock, P. E. 2000. Cognitive biases and organizational correctives: Do both disease
and cure depend on the politics of the beholder? Administrative Science Quarterly,
45(2): 293-326.
Readings:
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RP: Heracleous, L. 2001. Organizational change as discourse: Communicative actions and
deep structures in the context of information technology implementation. Academy
of Management Journal, 44(4): 755-778.
Readings:
RP: Leidner, D. E. and Elam, J. J. 1995. The impact of executive information systems on
organizational design, intelligence, and decision making. Organization Science, 6(6):
645-664.
Readings:
RP: Jones, T. M. and Ryan, L. V. 1997. The link between ethical judgment and action in
organizations: A moral approbation approach. Organization Science, 8(6): 663-680.
Class 12 4/6/2006
Decision making in international organizations
Readings:
RP: Lu, Y. and Heard, R. 1995. Socialized economic action: A comparison of strategic
investment decisions in China and Britain. Organization Studies, 16(3): 395-424.
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RP: White, S. 2000. Competition, capabilities, and the make, buy, or ally decisions of
Chinese state-owned firms. Academy of Management Journal, 43(3): 324-341.
RP: Hitt, M. A., Dacin, M. T., Levitas, E., Arregle, J., and Borza, A. 2000. Partner selection
in emerging and developed market contexts: Resource-based and organizational
learning perspectives. Academy of Management Journal, 43(3): 449-467.
Readings:
BK: Chapter 13. Naturalistic decision making and the new organizational context.
RP: Elsbach, K. D. and Barr, P. S. 1999. The effects of mood on individuals' use of
structured decision protocols. Organization Science, 10(2): 181-198.
RP: Zhiang Lin, Haibin Yang, and Irem Demirkan, (2005), “Exploration and exploitation in
strategic alliance formation decisions: Antecedents and consequences,” Working
Paper, University of Texas at Dallas.
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