Which types of decisions exist?
Decision-making is not a one-size-fits-all concept, and this blog post delves into the intricacies of the topic. It explores the nature of decisions and their implications for organizational culture.
"Decisions are primarily determinations; they transform the indefinite into the definite, the unclear into the clarified." (Boos and Buzanich-Pöltl, S. 119)
In an organization, countless decisions are made daily, ranging from the cafeteria's weekly menu to high-level management choices. How is this continuous stream of decisions managed to prevent chaos? Decisions must be interconnected, meaning that a decision already made serves as a reference for future decisions, providing guidance. Organizations evolve based on their decisions.
A useful framework is provided by Luhmann's inspired triangle of organizational development, which identifies three distinct decision dimensions (or "decision premises") for categorizing substantive decisions: Programs, Communication Paths, and Personnel. (vgl. Boos and Buzanich-Pöltl, S. 122f)
- Programs encompass all factual decisions related to areas such as corporate strategy, goals, purpose, business plans, or investments. They specify what needs to be done when a particular condition arises or what goals should be achieved.
- Communication Paths describe all steps related to decision-making: Organizational chart definitions, meeting formats, and processes determine responsibilities and competencies, essentially the organizational structure and workflow.
- Personnel refers to any decisions related to employees, such as hirings, promotions, or dismissals. A decision for or against an employee establishes subsequent decisions
Together, these three decision premises influence a fourth decision dimension: the decision premise of culture. Decisions made about programs, communication paths, or personnel contribute to the culture, significantly shaping a company's DNA. Therefore, it is crucial to make, document, communicate, and track decisions carefully, as the survival of the company practically depends on them.
At Apollo.ai, we envision that companies can make good and sustainable decisions. A decision is sustainable when it is interconnected and binding. Binding decisions, in turn, lead to a binding organizational culture.
