Let’s assume that decision governance in a firm includes an incentive mechanism which is designed to financially reward decision makers in proportion to the number of options they consider in a decision situation. What could go wrong?
Let’s say that a new decision process for capital allocation needs to be introduced in a firm. Based on factors which accelerate social learning, what can be done to accelerate the adoption of the new process?
Social learning accelerates under conditions where respected models demonstrate behaviors, reinforcement and repetition increase exposure, observability clarifies benefits, similarity between the observer and model exists, perceived risk is low, and benefits are high.
Social learning is the notion that individuals acquire beliefs, attitudes, and behaviors through observing and interacting with others. How can social learning influence a decision maker’s behavior?
An important question that power, as control of resources, raises for decision governance is this: How to make sure that specific decision governance is credible when specific individuals whom it assigns roles have different levels of power (occupy different levels in a power hierarchy)?
What if decision authority is assigned against the power hierarchy? That is, what if individuals who have more power are given lower decision rights through decision governance?
Understanding the factors that stabilize or destabilize various sources of power legitimacy can provide valuable insights into how institutions maintain authority and when they risk losing it.
The legitimacy of power refers to the justification and acceptance of authority by those subject to it. What can be the sources of legitimacy of a decision maker’s power, and how is this related to decision processes and decision outcomes?
If the behavior of a decision maker is shaped by the psychological factors discussed as those we want to influence through decision governance, then what is the impact of having low power or high power on each factor?
Power significantly influences decision-making behavior, often leading to overconfidence, insensitivity to others’ perspectives, and increased risk-taking.
Given some factors which influence goal selection, what can we do to help a team member select a goal that the team needs to achieve? In other words, how can we align an individual’s goals to the team goals? This is the topic in the rest of this text.
Understanding how individuals choose goals can provide insight into human decision-making and inform strategies for influencing the choice of goals through decision governance.
Goal stability and change are influenced by a complex interplay of commitment strength, feedback mechanisms, external pressures, cognitive dissonance, and social reinforcement. Understanding these factors allows individuals and organizations to design decision making environments that either reinforce goal persistence or facilitate adaptive goal adjustments when necessary.
Understanding these mechanisms can help improve decision-making quality, improve leadership effectiveness, and help organizations design better incentive structures to align individual goals with priorities.
Goals shape how decisions are made by influencing information processing, risk preferences, decision complexity, strategy adaptation, and trade-offs between short-term and long-term objectives.
Decision governance can play a critical role in creating, maintaining, and adapting social hierarchies. The design of decision governance systems influences both the stability and adaptability of hierarchies.
Social hierarchies often arise naturally as a means of organizing around complex issues and goals by facilitating the flow of information, clarifying roles and responsibilities, and delineating decision authority. How do they influence decision processes?
Understanding explicit hierarchies and detecting implicit ones is important in decision governance because hierarchy influences possible assignments of decision rights and responsibilities.
Let’s assume that we need an incentive mechanism to stimulate employee performance by allocating bonuses based on peer opinion. How do we design it?
A bonus scheme proportional to sales performance is a common incentive mechanism used to motivate sales staff. In this text, the mechanism is used to illustrate components of incentive mechanisms.
An incentive mechanism is used to influence behavior. What are the components of an incentive mechanism, and how is that related to decision governance?
If decision governance in a firm were to develop in a manner analogous to the development of English Common Law, it would develop in response to lessons learned from cases of past decision making.
Why does decision governance change in a firm? Change to decision governance is motivated by either the implementation of principles, that is, abstract rules, or because of lessons from past decision making.
A common problem with governance is that rules accumulate over time. They are added and adapted to handle new situations, new behaviors, and, or have a broader and deeper impact. As rules accumulate, and become more interdependent and specialized, complexity of governance increases. What are the consequences?
Motivated reasoning consists of processing information in a way that aligns with one’s desires, beliefs, or goals, rather than neutrally evaluating evidence. How to mitigate it through decision governance?
Impressions of others influence our confidence in the information they provide and the predictions we form about their behavior, which can shape decisions and their outcomes.
This text is about so-called policy windows, situations in which three streams of activity – the problem, policy, and politics streams – align to create an opportunity for policy change within organizations.
This text looks at signals to look for when applying a decision process, to determine if that process cannot be incrementally improved, but needs to be significantly changed.
Incrementalism prioritizes pragmatic adjustments of the current state over transformational solutions, focusing on feasibility and continuity. What are the conditions in which it is interesting to implement incrementalism through decision governance, and what risks does that create?
When a decision process is adapted to comply with a policy, it will include new components – new actions, roles, responsibilities, among others. At the same time, the process needs to be further adapted to ensure that when it is executed, data is collected that can be used as evidence of compliance later on.
Given a specific policy that an organization needs to comply with, how can we adapt the organization’s decision processes to comply with that policy? Or, how does that organization’s decision governance change to help ensure compliance?
This text outlines how the mechanisms for public policy compliance influence various stages of decision-making. If we understand how this influence can occur, we can build decision governance in ways that ensure compliance with the right amount of resources.
Public policies create requirements and constraints on how and what decisions can be made, and as such are a critical input to the design of decision governance frameworks.
Public policies shape decisions and consequently incorporate decision governance. It is interesting to understand how public policy develops and changes, as this helps understand how decision governance can develop and change.
Decision governance is used to change decision-making processes in organizations. This text outlines various models of such processes, which were proposed in research on organizational theory.
Models of individual decision-making in psychology identify psychological factors that shape individual decision-making. Decision governance will influence these factors, which makes it necessary to at the very least be aware of them, as a basis of thinking about how they may interplay with guidelines and processes introduced through governance.
This text is an outline of common approaches in economics research for modeling group decision-making, focusing on their main concepts, applications, and the questions they raise for the design of decision governance.
Decision-making models in economics are simplified descriptions of how decisions are made. Understanding these models is useful for designing decision governance.
Designing effective decision governance systems requires drawing on a wide range of academic disciplines, each of which provides valuable insights into different aspects of decision-making.
How do alternative decision governance designs impact attention, memory, competence, expectations, reputation, and how do they in turn affect the steps a decision maker takes to reach a goal?
What if the level of detail given about an option influences the perceived probability that the events it describes will occur?
If we know who the stakeholders are, when designing decision governance, then we need to know their interests, so that we can make sure these are met through the decision process.
As decision governance influences how decisions are made, everyone who participates in preparing a decision, makes the decision, and lives with the consequences of it, is a stakeholder in the design and change of decision governance.
Decision Governance refers to values, principles, practices designed to improve the quality of decisions.
To override a decision, you need to know a decision was made (observability), have rights to override it (authority), and believe that doing so will lead to a better outcome, including preventing undesirable outcomes (superiority).
If the decision maker is distracted, they should pay the price of reaching their goal after more effort. A simple simulation can be done to show just how much distraction may cost relative to a case when the agent’s attention is directed to the goal.
Social distance, in the context of decision making, refers to the decision maker’s perception of similarity to others that may somehow matter for the decision at hand.
What are the parameters of a decision situation that we want to influence through decision governance?
If we want to influence preferences away from specific options, we should invest more effort to change high-level construal of their distant outcomes, rather than low-level construal of their immediate outcomes.
If we need to design governance that influences attention, then it matters if we know or not the goal of the decision maker. This text provides a simple simulation that illustrates the differences between the time it takes for the decision maker to reach the goal in both cases, all else being equal.