Although an abundance of academic literature positions organizational information processing as antecedent to decision making, little attention is paid to the possibility that decision making can be antecedent to certain elements of organizational information processing. Specifically, does the decision making process impact the type of organizational learning that takes place? Do different approaches to decision making alter the amount and variety of information made available to the organization, that is, the level of information overload? This paper examines incremental and comprehensive decision making to understand the effects of different decision making types on organizational learning and information overload. Incrementalism suggests that decision making should take place in small steps or increments. This approach analyzes only a few scenarios to make decisions resulting in few, if any, major organizational changes. However, comprehensive decision making requires the consideration of all possible scenarios and potential outcomes, resulting in a major overhaul of traditions and procedures within the organization. Consequently, each decision making approach has a different impact on organizational learning and information overload.
Slater and Narver (1995) define organizational learning as the acquisition of new information by organizational members resulting in the generation of new knowledge or insights which ultimately affect the behavior of organizational members. Organizational processes that result in sharing of knowledge, assumptions, and beliefs among organizational members represent another definition of organizational learning (Shrivastava, 1983). In acquiring new information that propels organizational learning, the amount of this new information at some point becomes excessive and overwhelming, reaching a level of information overload. Bawden et al. (1999) argue that information overload “…occurs when information received becomes a hindrance rather than a help when the information is potentially useful” (p. 249). For example, the growth of many technology firms was so dramatic during the dot.com era that it became difficult to manage the abundance of new information (Reibstein, 2002).
Business decision-making affects the method in which organizational learning occurs. In addition, different types of business decision making have different effects on information overload. These different effects are a result of: (1) volatility in business markets, necessitating quick response to changes in the marketplace (Eisenhardt, 1989, Bourgeios and Eisenhardt, 1988 and Steiner, 1979); (2) competitive pressures that require continuous scanning of the environment (Miller and Toulouse, 1998 and Eisenhardt, 1989); and (3) uncertainty, which is a hallmark of contemporary business interactions. The gap between information needed and information that is available illustrates ways that uncertainty manifests itself in the marketplace (Fredrickson and Mitchell, 1984 and Galbraith, 1973). Because information processing is an important aspect of decision making (Wu and Cavusgil, 2006 and Saaty, 1990), this paper addresses the relationship between two organizational information processing concepts, organizational learning and information overload, with respect to their roles in business decision-making. Furthermore, business decision making affects organizational learning and information overload differently than political decision making, particularly with respect to the development of alternative options, as well as the number of alternative options that become part of the decision process.
Political decision making is built on the concept of incrementalism, or as Charles Lindblom states, the process of “muddling through” (Lindblom, 1959, Lindblom, 1979 and Weiss and Woodhouse, 1992). The basic idea of incrementalism argues that decision making is more productive when taken in small steps, or increments, rather than initiating dramatic changes in policy; synoptic or comprehensive analysis are terms that describe dramatic policy changes (Lindblom, 1979 and Weiss and Woodhouse, 1992). According to Lindblom, incrementalism, or “muddling through,” is a more realistic approach to decision making because it takes into account the limitations of human cognitive abilities, as well as resource limitations that exist in addressing complex policy problems (Lindblom, 1959, Lindblom, 1979, Woodhouse and Collingridge, 1993 and Simon, 1955).
However, critics of incrementalism contend that the incremental approach is not appropriate in all policy decision making cases. They point to situations where incrementalism actually impedes decision making, suggesting that comprehensive analysis provides the best method to address certain policy circumstances (Schulman, 1975, Nice, 1987, Lustick, 1980 and Birkland, 2005). For instance, according to Schulman (1975), a comprehensive decision making approach was the most appropriate for developing the 1960s space program due to the nature of this vast and complex endeavor. Birkland (2005) agrees, suggesting that an incremental decision making approach would have been less effective in the development of the space program. Birkland (2005) also contends that in times of war (for instance, the attack on Pearl Harbor in 1941), countries adjust economic and diplomatic policies from an incremental to a comprehensive approach in order to respond to the urgent need to substantially increase the military on short notice.
Incrementalism is a well known concept in the business academic literature even though its roots lie in the policy discipline (Idenburg, 1993, Hallgren and Wilson, 2007, Fredrickson and Mitchell, 1984, Miller and Toulouse, 1998 and Eisenhardt, 1989). While searching several scholarly databases, very few academic writings were found that examine the information processing consequences of decision making. To that end, this paper addresses the gap in the literature with respect to organizational learning and information overload as consequences of incremental or comprehensive decision making.
The next section reviews the literature on incremental and comprehensive decision making in both political science and business. Comparisons are made as to how each of these two disciplines view the concepts of incrementalism and comprehensive analysis. Following this discussion is a review of organizational learning and information overload, specifically focusing on the relationship between these concepts and different types of business decision-making. Propositions address the impact of different types of decision making on organizational learning and information overload.
This paper reviews the literature on decision making in political science and business based on the seminal work of Charles Lindblom in his classic study of incrementalism, or “muddling through.” In business environments, the decision making approach will vary depending on the volatility, level of uncertainty, and the strength of the competition. This paper concludes that, in most cases, comprehensive decision making is more successful in turbulent, competitive business environments. Conversely, an incremental approach works best in stable, predictable, less competitive business environments.
This paper also concludes that in business settings, decision making enhances organizational learning; that is, the more decisions that are made, the more the organization learns. Organizational learning occurs in both comprehensive and incremental approaches. Furthermore, organizational learning occurs in the case of both productive and harmful decision making. When productive or good decisions are made, organizations tend to repeat this behavior expecting positive outcomes as in previous situations (Collins et al., 2009). In the case of harmful decisions, there is a chance that the organization will actually learn more than when good decisions are made (Hosma et al., 2009). When bad decision making occurs, there is a tendency to apply extra effort and carefully assess each step made in the process to determine where the flaws exist. The organization then learns to avoid, or repair steps in the process that causes these negative outcomes (Hosma et al. 2009). On the other hand, when decision making is good or the consequences from making poor decisions are minimal, then there is the chance that the organization may become complacent, making it easy for competitors to take advantage of this potential opportunity (Hosma et al., 2009). The technology market provides multiple examples of this occurrence; for instance, laptop computers, cell phones/smart phones, and video games, have all had major players lose their position in the marketplace because either they became complacent, or competitors were able to learn from decisions made by market leaders, then extend this knowledge in other, more innovative ways (Wu and Cavusgil, 2006).
Another conclusion of this manuscript is that a close relationship exists between decision making approaches and the resultant type of organizational learning. In the case of simple incremental decision making, the organization experiences adaptive learning; with both disjointed and strategic decision making, the organization experiences generative learning. Comprehensiveness generates major organizational changes, resulting in transformative learning. Transformative learning is apparent in the technology field where major, or comprehensive decisions can “make or break” the firm. One reason this occurs is because comprehensive decision making produces a substantial amount of information, which could very likely result in information overload.
According to this paper, the type of decision making approach strongly impacts the level of information overload within an organization; that is, the type of decision making within the organization can either increase, or decrease the chance that information overload will occur. This is one of the advantages of incrementalism: Information overload is less likely to occur with incremental decision making due to the consideration of fewer alternatives, resulting in the production of less information. Conversely, due to the nature of comprehensive decision making, the organization generates more and more information, in the hopes to address all alternatives and consequences. This decision making environment is much more susceptible to information overload.
Future research could test the propositions in this manuscript by looking at decision making within various business environments; this should include business organizations that make decisions incrementally, as well as organizations that use a comprehensive approach. Information overload and organizational learning measurements could utilize previous models and measurement scales (Eppler and Mengis, 2004, Grise and Gallupe, 2000, Kock, 2000 and O'Reilly, 1980). If possible, empirical analysis should take place within similar industries, to lessen the effects of decision making differences that may be unique to certain industries.
