2. Everyday we as individuals make decisions. We make minor decisions like what we are
going to eat?; what direction we are going to take?; and whether or not we are even going to get
out of bed. Then of course we make major decisions, for example should you continue your
education for another two years to earn your masters degree? Should you purchase your dream
home now or wait? You want a child, but can you afford to support a child? During all these
decisions we go through a process. In this paper I am going to analyze different decision making
techniques and processes. I am also going to analyze decision making on the three different areas
of the public sector and which model they primarily use. The three areas I am going to focus on
are healthcare, nonprofit organizations, and government as whole.
Before I start on the different processes of decision-making, it is important to identify the
two types of decisions. First, there is programmed decisions, which is repetitive and routine, for
which a procedure or decision rule has been established or may be easily specified (Denhardt,
Denhardt, and Aristigueta 2012, 124). An example would be which route we choose to take to
get to our destinations. Typically we have a small process, we find out the time to determine how
bad the traffic will be and whether or not we need to take an alternate route to avoid time delays.
The second type of decision is non-programmed. This type occurs infrequently and is poorly
structured (124). An example would be going to a new class on the first day. You are unaware of
how the professor will want you to sit or their method of teaching, so you have to just wait and
try your best to make an informed decision until you get it right.
There are many different decision making techniques and processes organizations use on
a daily basis. There are four steps in basic decision making, 1. Identifying the problem, 2.
Gathering the facts, 3. Making the decision, and 4. Implementing the decision (Starling 2012,
252). First you need to identify the problem and then ask yourself “When does the problem
3. require a decision?” (Starling 2012, 252). It is important to prioritize which decisions need to be
made first and which can be prolonged. If the decision can be put off towards a later time, then
this might be beneficial because more information can become available aiding in the decision
making process (Starling, 2012, 252).
Second, when gathering facts you can use different limits in aiding your decision making
process. “You can use upper limits of a decision which refer to the ever-present limitations that
determine how far the administrator can go.” (Starling 2012, 254). Or you can use “…lower
limits of a decision which refer to what, at least, must occur for the problem to be solved.”
(Starling, 2012, 254). Third, when making the decision you can use a series of different analysis
and models to analyze which decision is most beneficial. For example, cost-benefit analysis
(weighing cost and benefit); cost-effective analysis (How much output does one get for a given
expenditure?); or decision tree (pictorial representation of decision alternatives, states, of nature,
and outcomes of each course of action), etc. (Starling 2012, 260-267). These are just to name a
few, but depending on the organizations problem is which analytical technique they will use.
Fourth, implementing and evaluating the decision is the final step in the basic decision
making process. Just like the decision making step, you have a series of practices to aid you.
When you evaluate you must translate goals in measurable indicators so you can collect and
compare data (Starling 2012, 277). It is important to define your goals early so when you get the
final step you know exactly what needs to be done to ensure it is doing what you intended it to
do. There are three different types of people who make decisions within public sector
organizations. 1. Authoritative (individual alone makes a decisions on behalf of a group. This
usually happens when decisions need to be made quickly); 2. Consultative (Individual makes
4. decision after seeking input from group members); 3. Group (Decisions are made on a
consensus).
Healthcare
There is an average of 11,500 hospitals in the United States (American Hospital
Association 2014, 1). These hospitals range from nonprofit, for profit, government, psychiatric,
etc. The healthcare industry has many stakeholders that participate in the decision making
process. Whether it is the patient, physician, nurse, or insurance company, important decisions
are constantly being made. Public policies are also a huge determining factor on decision making
in hospitals (Longest 2012, 208). “The importance of public policies to these hospitals, combined
with the turbulent and often unpredictable context in which public policies are established
creates significant strategic decision making challenges for public hospitals” (Longest 2012,
211).
In terms of patient and physician decision making relationships in the past, physicians
were the primary decision maker when it came to treating patients. The term “doctor knows best”
was what everyone believed and hardly ever questioned. The physician would rarely consult
patients on different treating options, but with complex diseases and many different treating
techniques it became necessary to involve the patient more (Tham and Letendre 2014, 177).
“The task of developing a richer understanding of the patient’s preferences becomes the fulcrum
for integrating responsible choices in health care.” (Tham and Letendre 2014, 181). The classic
decision making process is the best process to follow when deciding patient care. The physician
could use the RAPID (Recommend, agree, input, decide, and perform) technique when
discussing options.
5. New policies like the Patient Protection and Affordable Healthcare Act has hospitals
working to restructure the way they use to keep medical records, along with introducing new
insurance plans. “In recent years, the healthcare sector has invested heavily in medical
information systems to improve decision making while reducing medical costs and integrating
medial data from multiple sources.” (Ben-Assuli and Leshno 2013, 46). New information
systems help not only medical physicians and nurses, but hospital administration staffs keep
records of medical history, medications, allergies, laboratory test results, radiology images, and
billing history (Ben-Assuli and Leshno 2013, 464). In order to decide what information system is
right for the specific hospitals, hospital managers can use the cost effective analysis. Another
method identified by Ben-Assuli and Leshno is the decision tree, which can be used in clinical
decision making (Ben-Assuli and Leshno 2013, 466).
The best decision making process for hospitals in terms of administration and
management would be the rational model. The process of going through the different phases
(pre-analysis phase, analytic phase, design phase, choice phase, and implementation phase) can
help staff and management make well planned decisions that could benefit the hospital as a
whole. Whether they are trying to build and renovate sections of the hospital or converting to
new technological programs, the rational model is ideal. And just like other aspects of decision
making the cost benefit analysis and cost effective analysis will also be beneficial.
Nonprofit Organizations
Like the healthcare sector, nonprofit organizations have many stakeholders contributing
to their decision making. “A nonprofit organization is formed for the purpose of serving a public
or mutual benefit other than the pursuit or accumulation of profits for owners or investors.”
6. (Luckhert 2014, 1). Nonprofit organizations can be either member serving or public serving.
There are many types of nonprofit organizations ranging from charities, foundations, social
welfare or advocacy organizations, professional trade associations, and religious associations.
Within the broad types of nonprofit organizations there are groups that focus on arts and culture,
education, animals, environment, health, religion, etc. (Luckhert 2014, 1). In the United States
the Internal Revenue Service (IRS) recognizes about 1.5 million nonprofit organizations. There
are millions of other smaller nonprofit organizations but due to revenues not exceeding $5,000
they are not recognized.
Nonprofit organizations face a plethora of problems ranging from finances, media, and
management. In regards to finances the primary source of funding for nonprofit organizations
comes from outside sources. The negative of having outside sources is the fact that the
stakeholders providing the funds want to direct where the money will go (Gaver and Im 2014, 2).
This leaves nonprofit organizations limited on where funds can be dispersed, adding to the
difficultly of decision making.
Not only the stakeholders have a role in decision making, but the emotional intelligence
skills of nonprofit organizations leaders can make a difference. “Emotional intelligence skills is a
strategy for the development of the nonprofit organizational leader’s ability to assess the impact
and consequences of decisions, while simultaneously improving the quality and effectiveness of
the decision making process.” (Hess and Bacigalupo 2013, 202). Leadership plays a big role
when it comes to nonprofit organizations. The needs of the nonprofit organization can constantly
change along with the commitments. “As head of a knowledge-based entity, the non-profit leader
is faced with the responsibility of delivering the best possible decision to achieve or further the
mission of the non-profit enterprise.” (Hess and Bacigalupo 2013, 203). Decision making in
7. nonprofit organizations starts with the board members who are responsible for the day-to-day
operations and the overall management (Hess and Bacigalupo 2013, 205). Before making
decisions they must use different techniques in process that will benefit the majority of the
constituents associated with the organization.
Hess and Bacigalupo describe that when making decisions in a nonprofit organization it
is beneficial to use the ability model. The ability model necessitates that you use the following
skills: 1. Perceiving emotions; 2. Using emotions; 3. Understanding emotions; and 4. Managing
emotions. “In the non-profit decision making process, the acknowledgement of individual
emotions is critical in determining not only the motivations behind decisions but also the impact
of those decisions on both internal and external stakeholders.” (Hess and Bacigalupo 2013, 208).
Performance management systems generate useful information to help with the decision
making process in nonprofit organizations (Le Roux and Wright 2010, 575). Performance
management contributes to the strategic decision making that leaders use in nonprofit
organizations. “Setting strategic direction and obtaining performance data allows leaders to judge
the performance of existing management systems, and make decisions on the reorganization of
these system for the purposes of closer coordination and greater effectiveness.” (Le Roux and
Wright 2010, 575).
When making decisions in nonprofit organizations strategic planning is beneficial.
Strategic planning consists of four major steps: 1. Defining the mission and desired outcomes; 2.
Aligning the activities, core processes, and resources; 3. Implementing; 4. Assessing. (Starling
2012, 233). The decision making model that fits nonprofit organizations can be either the rational
model or the organizational process model depending on the situation. There are also many
8. techniques that can be used, but cost benefit analysis and cost effective analysis could be the
most useful.
Government
Government has three main levels, federal, state, and local. Each level deals with
decision making in different ways. There are hundreds of problems that all levels of government
deal with. Whether it is about public polices, crisis management, or deciding where funds should
be allocated, government officials must go through a decision making process. The decisions that
the government makes can affect thousands of people. So regardless of what the final decisions
is on a problem, there is no possible way to please everyone. Especially when there are two
different political parties that influence decision making to their specific views and beliefs.
Sometimes the lines can be blurred on which level of government is responsible for
certain problems (Frug 2014, 3). Some major issues in deciding which level is responsible for
what are, education, the environment, crime, housing, transportation, etc. The idea of
centralizing the government has been thought about but history shows us that giving supreme
power on all decisions nationwide can be a disaster (Frug 2014, 2). Which is why we need
different levels with different departments in each.
“On a local level, democracy can be a lived experience- it enables engagement in public
issues that goes far beyond voting.” (Frug 2014, 2). In local government most decisions are made
by councilors at formal council meetings through a voting process (goodgovernance.org). These
meetings are mostly open to the public to go and give opinions and voice concerns. Topics
discussed can range from roads, wastes, and city projects. Not all decisions can be made at local
council meetings so it is important for the city to prioritize what will be discussed. Lower
9. priority issues are sent to special committees that are mainly comprised of community members
(goodgovernance.org).
Both state and federal governments are modeled the same and consist of three branches:
executive, legislative, and judicial (whitehouse.gov). The governor along with other elected
leaders heads the executive branch of the state. “The legislative branch is made up of elected
representatives who consider matter brought forth by the governor or introduced by its members
to create legislation that becomes law.” (whitehouse.gov). The judicial branch is led by the state
Supreme Court which hears and appeals from lower level state courts (witehouse.gov). All
branches play a role in decision making but ultimately it is the legislative branch that approves or
denies budgets and taxes for the state or country.
There are many levels and departments in government. Decisions made by the
government have many stakeholders that incremental planning is needed to ease new policies or
laws. Most projects that start in full force within government tend to not last very long and
receive negative feedback from the citizens. The organizational decision making model best fits
the process government makes. This model sees government composed of many loosely allied
organizations, each with its own set of leaders. (Denhardt, Dendhardt Aristigueta 2012, 135). It
is rare that one leader can control so many different organizations so to accomplish necessary
complex tasks the behavior of the different departments and individuals must be coordinated.
(Denhardt, Dendhardt Aristigueta 2012, 135). The organizational process model explains the
logic of the different actions and includes the possibility of multiple agents in the decision
making process.
“An organizations influence on decision making is exercise by (a) dividing the tasks
among its members, (b) establishing standard practices, (c) transmitting objectives throughout
10. the organization, (d) providing channels of communication that run in all directions, and (e)
training and indoctrinating its members with the knowledge, skill, and values of the organization
(Denhardt, Dendhardt Aristigueta 2012, 136).
Depending on the problem trying to be solved the governmental politics model can be
used in government as well. Though it is the least used model out of the three main decision
making models. This model includes a lot of actors with different agendas, priorities, and
timetables (Denhardt, Dendhardt Aristigueta 2012, 138). With so many different actors there is a
lot of bargaining and compromises that must be made in the complex multiple level issues. There
are multiple techniques that can be used when making decisions in government like evidence
based management or the RAPID technique. Performance management works with incremental
planning because you can make changes to existing programs to enhance it. Lastly, like in other
public sector entities the cost benefit analysis and cost effective analysis are very helpful when
dealing with funds that need to be allocated.
Conclusion
In conclusion, decision making is a part of our everyday lives. We as individuals make
daily minor and major decisions that impact our overall day. No matter your age, young and old,
you take part in some sort of decision making. On a larger scale organizations and government
make decisions that can affect millions of people.
Healthcare is constantly making decisions in order to improve hospitals for patients and
other stakeholders. New policies are always being introduced forcing hospitals to accept and
incorporate into their already existing list of policies. Even today hospitals are still adapting and
changing from the Patient Protection and Affordable Health Care Act that passed in the senate
11. December, 24, 2009 and by March 2010 passed by the House of Representatives and signed into
law by President Barack Obama. Not only did this change the healthcare industry but insurance
companies as well. They were given more regulations to stop rates from spiking or the dropping
of clients due to illness. All hospitals are having to transition from paper to electronic records for
all patients creating problems within hospital ethics and privacy.
Nonprofit Organizations, regardless of size or focus, have to deal with decision making
as well. They must work with outside sources to allocate funding along with creating projects
and campaigns to raise funds for their cause. Nonprofit organization boards must make decisions
as to where and how much money can be put towards different areas of the organization.
Decision making in government entities is by far the largest and most complex due to the
three levels (federal, state, and local). There are so many stakeholders and individuals that want
to be apart of making decisions because whatever is decided in government can affect the lives
of all Americans regardless of the level. This is why voting is utilized the most in government to
attempt to give all citizens a say in decision making.
Regardless of the type of public sector entity decision making needs to happen. And
regardless of what decisions are being made it is impossible to please every single member or an
organization or citizen of the United States. This is why decision making is so extremely
important in the public sector so we can ensure all views and opinions have been heard before
making decisions final and official. If some decisions fail there are processes that can help make
changes to better suit the ever changing world.
12. References
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