An organization’s Decision-making Profile Characteristics (DMPC) are the cultural, structural, and contextual characteristics that impact organizational decision-making. The PDMC were developed out of an extensive review of business, management, and organizational literature about organizational decision-making and decision-making impacts.
Decision-making Authority concerns how final decision-making is distributed across the owner organization. Decision-making Authority is about who controls and feels empowered to make final project decisions.
Decision-making Processes concern the degree of formalization for making and communicating decisions, which can impact clarity and responsiveness.
Decision-making Style is the organization’s approach to incorporating information, communication, and relationships in the making of decisions. Decision-making Styles are about how an owner organization approaches decision-making in relation to what types of information are deemed important for final decision-making and the nature of the relationship between employers and employees when making decisions.
- An Analytical Style is driven by analysis compared to intuition when making a decision. There is a focus on formal research from qualified experts in the owner organization.
- A Participation Style is committed to employee participation in decision-making and supporting strong human relationships at work. Owner organization leaders and managers seek out collaboration and building morale with all employees.
- An Adaptive Style has informal managerial activities, roles, and relationships and can adapt to changing circumstances. There is an open flow of communication, the freedom for employees to adapt to different roles and processes depending on changing circumstances, and comfort with informal decision-making practices.
- An Authoritative Style uses rigid processes, contracting, checklists, and issues orders to employees. This is a style that values commitment and compliance from employees and expects employees will not challenge project decisions.
Decision-making Culture guides values used in decision processes. The types of cultures owner organizational leaders and managers promote shapes decision-making. Within an organization, there may be several subcultures, but the overall culture type reflects the predominant patterns.
- Command Culture is an organizational culture that has a single or small group of leaders determining all decisions. Cultural value is placed on the leadership to make decisions that direct the organization’s future while employees carry out the decisions of their leadership.
- Symbolic Culture is an organizational culture that makes decisions based on a strong vision or mission. Leadership’s role is to inspire and motivate employees to make decisions based on a shared vision.
- Formal Culture is an organizational culture that relies on formal structures and planning systems to make decisions. Value is placed on planning and process as the means to successful decision-making and leadership’s role is to process the information gathered through formal structures.
- Experimental Culture is an organizational culture that encourages employees to experiment and share new ideas for decision-making. An autonomous culture where employees are collective actors in decision-making and leaders select and nurture the best ideas.
- Learning Culture is an organizational culture that encourages interaction and learning with key stakeholders for collaborative decision-making. Value is placed on ongoing dialogue with important stakeholders and employee learning and improvement during decision-making. Leadership is viewed as a role that should facilitate and empower employee learning and interaction.
Owner Flexibility is an organization’s ability to adapt their processes for making decisions. Owner flexibility is measured by the owner organization’s openness to new ideas and willingness to change decisions once made.
- Open To New Ideas is the level to which an owner organization is open to information from multiple sources that introduce new ideas and challenge beliefs..
- Open To Change is the level to which an owner organization is open to change a project decision after the decision has been made when new information is known.
Risk Tolerance is the organization’s appetite for risk. This measures how comfortable an organization is taking on investments that are high risk, high reward on projects.
External Business Environment is the larger business context for the owner organization. External business environment is measured by the level of sustained growth, whether the owner organization is in a high-risk industry, and the level of industry stability. The External Business Environment can impact how much risk an owner is willing to take on and how fast decisions may be made.
- Sustained Growth is the level in which the owner organization’s larger External Business Environment is able to support sustained growth.
- High-risk Industry is the level in which the owner organization’s larger External Business Environment is hostile, risky, or stressful. In such environments, a false step could be the organization’s undoing.
- Industry Stability is the level in which the owner organization’s larger External Business Environment is economically, socially, and politically stable or predictable.