This document traces the evolution of organizational decision making from top-down hierarchies to more distributed models. In the past, decisions were made at the top of traditional bureaucratic structures, but starting in the 1980s, organizations began flattening hierarchies and empowering employees. Today, matrix structures involve decision making across departments, while future models will break down divisions further and require even greater autonomy. As decision making authority spreads, organizations need to prepare employees to make rapid, informed choices.

1. EvolutionEvolution
Organizational Decision Making
the of
Decision Making
CEO
Beginning in the late 80s to early 90s,
organizations began to flatten.
Everyone a Decision Maker
Employees are expected to make fast and accurate decisions and exercise
greater organizational judgment within the scope of their role.
The way organizations take action has evolved.
Trace the path of organizational decision making
from the past to today and beyond.
Up until the 1980s, most large companies were
organized into what is called a traditional or
bureaucratic structure.
Top-Down Decision Making
Decision Making
CEO
Employees are prevented from making many decisions due to
high job specialization and narrow spans of control.
Decision-making
authority in this archetype
is typically vested in those
who are highest in the
vertically structured
hierarchy.
This structural
shift distributed decision
making more widely and
gave leaders broader spans
of managerial control.
In existence since the 1970s, the matrix structure is still
used by many organizations today. Matrix reporting
structures were first developed by NASA and its suppliers.
Decisions In Every Direction
Decision making in a matrix happens up, down, and across. It requires highly
specialized staffs that are also sophisticated, independent decision makers.
Decision Making
CEO
A
well-functioning
matrix can create
tremendous decision
effectiveness.
Did you know?
Employees that are empowered to
make decisions are more satisfied
with their jobs and less likely to
change companies.
In the future, organizations will be aligned in even
more sophisticated models, including team-based
structures and strategic-business units.
Decision Making of the Future
Decision Making
CEO
As divisional barriers narrow and break down, there's greater opportunity
for collaboration, problem solving, and decision making.
Is your organization prepared for the future of decision making?
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This new wave of
structured models
necessitates even greater
decision-making
autonomy.
fact: Individuals can
make faster decisions in the
workplace by utilizing a
systematic decision-making
process.
Functional
structure
Project
structure
Project
teams
Project
team
members
fact: The word
bureaucracy is derived from
the French word “bureau”
meaning office and the Greek
word “kratos” meaning rule.
Functional
structure
correlation level between decision
effectiveness and financial results.95%
A RECENT STUDY FOUND A
HIGHER THAN THOSE OF OTHER FIRMS.
6%
Companies that are most effective at decision making
generated average shareholder returns nearly
OF ALL CEOS1/2 launch an
organizational reorg during their first two years on the job.
In an effort to channel resources towards innovation
and decisions, nearly
Did you know?
There are three main types of
workplace decisions: routine,
adaptive, and innovative.
Resources:
The Decision-Driven Organization, Harvard Business Review, June 2010
Organizational Judgement is the New Decision Making, Fast Company, July 2012
How Companies Make Good Decisions, McKinsey Global Survey, December 2008
8 Basic Types of Organizational Structure, Management: A Practical Introduction
Organizational Structure, Encyclopedia of Management, 2009
Creative Commons – Attribution (CC BY 3.0) Team designed by Stephen Borengasser from the Noun Project http://thenounproject.com/term/team/43181/
Decision
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Decision
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