By nttcPayday Loans

by Jim Stewart

Just My Opinion

June 7th, 2011 at 4:21 pm

Decision-Making: Structured verses Unstructured

Structured. “Structured,” means having processes in place to handle a situation.  The implication is that structured problems are recurring ones.  Because they recur, we put processes and procedures in place to handle them.  The hiring process is a good example.  The process is in place.  What you have to do to bring in an additional resource is well defined.  While justifying the additional head count may require some work and persuasion, the process to follow is defined.

Note that structure creates a box within which we begin to think.  The box allows us to quickly and confidently make decisions and implement them. Knowing that the process you’ve used is a well-known and approved process creates a bit of justification for the decision.  (Murninghan, Mowen, 2002)

In order to present an example of this, let’s look at an emergency room where patients have potential heart problems.  In these cases, the cost of a wrong diagnosis, either type one or type two, is very large.  Running diagnostic tests and keeping a patient in a room until the tests have definitively answered the question is a very expensive process.  And, letting a patient go home that really does have a heart problem is potentially deadly.  By evaluating large numbers of patients across large quantities of data, we can find the key variables that will reduce our chance for error.  The key variables can be checked very quickly and a decision made in confidence. (Gladwell, 2005)  We may not be able to spend a lot of time in evaluating a time-sensitive, critical situation, but we can spend time in preparing for that situation, creating structure and confidence for a defensible solution.

Matching up structured with time, we want to look at handling repetitive tasks.  As we watch how an Emergency Medical Technician (EMT) responds to a situation, they immediately begin checking specific things; heartbeat, breathing, blood pressure, etc.  They know that specific items “trump” other issues.  The training around checking vitals helps the EMT make decisions about how to treat the patient.

We’ve discussed creating structure around critical events, but it is just as important to create structure around repetitive situations so that we do not spend a lot of time on very minor decisions.  As an example a fast-food manager may create a rule around giving free fries or a drink to a customer if their order was slow in arriving.

Unstructured. “Unstructured” means “decision processes that have not been encountered in quite the same form and for which no predetermined and explicit set of ordered responses exists in the organization”.  (Mintzberg, et al., 1976, 246)  This means that the company does not have a process in place to handle this.  If a process is not in place to help the decision-maker through making a decision, she is more susceptible to censure post-decision.  She is less confident in knowing she has considered all of the options and variables.  She is hesitant to start the process because of her lack of confidence and fear of repercussions of making a bad decision.  She would enter into the decision-making process knowing that she was going to learn as she went and have to repeat steps as she learns.

There are a number of mitigating tactics to help with unstructured decisions. Rarely is a situation completely unique.  A more robust decision-making process may be required, but can the company assist with guidelines to help the process?  As an example, one company has a number of “rules of thumb” that are not necessarily universally true, but are preferences built over time.  One of these rules is “buy” verses “make”.  In the absence of an obvious, right choice, this eases the decision-making process by reducing the variables to be considered.

A decision-maker’s experience may assist in limiting the solution set or the selection variables. But, she does not have to content herself with personal experience.  As an example, in choosing an overseas flight, she may want to consult with a frequent international traveler.

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