Inter- and intra-organisational decisionmaking (MOT1452)
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Summary Inter/intra
MANAGEMENT IN NETWORKS
Chapter 1
We live in an interconnected world. Chaos theory uses the metaphor of the butterfly effect to clarify
the processes in the interconnected world.
From the perspective of governance, there are 3 important characteristics of the interconnected
world:
Interdependencies. The world is inhabited by a large number of parties/actors:
governments, companies, NGO citizens etc., who all have different interests and are
dependent on each other. These dependencies result in a multitude of relationships, called a
network. Each network consists of several smaller networks itself. A network can be seen as
the ideal-typed opposite of a hierarchy: instead of vertical the relationships are fully
horizontal. There are several important aspects of interdependencies:
o There are several types of interdependencies:
Bilateral or multilateral dependencies: between 2 or more parties
Single or multidimensional dependencies: dimensions are e.g. money,
information, authorities and relationships
Synchronous vs asynchronous dependencies: actors can at one point in time
be mutually dependent, but these dependencies can also change over time
Static vs dynamic dependencies: dynamic means it changes over the course
of time.
o Interdependencies differ per topic. For example, for municipalities, the decision-
making process for the infrastructure network and the environmental network will
be very different: other parties may be involved and not have the same degree of
dominance.
o Interdependencies don’t always reveal themselves. Certainly when it comes to more
complex networks, it is virtually impossible for a single actor to oversee the entire
network.
Unstructured, wicked problem. Unstructured problems are problems that do not have a
single right answer. This can be due to the following:
o The facts we need to enable us to reach a good decision can either be clear-cut or
ambiguous
o The normative considerations we must weigh in order to reach a good decision may
be either objective or subjective
When facts are ambiguous and normative considerations or impossible to objectify, the
problem is unstructured.
Dynamics. The interconnected world is constantly in motion. This dynamic can be due to:
o The behavior of the actors in the network: new actors can join the decision-making
later or leave during
, o The content of the problem can shift, it may initially be classified as one thing, but
turn out to be useful for something else during the process, attracting new actors
These two types of dynamics can reinforce each other.
The dancing table: room with 4 corners, A, B, C and D and 2 people, P1 and P2. P1 wants the table in
corner A, P2 in corner B. If they both start pushing and pulling, no one will get what they want: this
dissatisfaction is characteristic for a complex decision-making process.
In absolute terms, both are dissatisfied and in relative terms, one could argue that the other has won
more. The result of the process is emergent: it has arisen unplanned. Neither got what they wanted.
The example is even more realistic with more actors, who do not constantly push or pull: everything
will be dynamic: the table will dance around the room.
Decision-making in an interconnected world has the following characteristics:
Unstructured, non-linear decision-making. Decision-making in a network always involves
different actors, none of which is able to solve the problem alone: it is only effective if carried
out jointly. This is the opposite of a hierarchy, where 1 actor can decide himself.
Decision-making in networks is in irregular rounds, which have intermediate winners and
losers, instead of a linear process. E.g. with the dancing table, at some points it will seem as if
P1 won, whereas a next it might be P4.
Strategic behavior, not just content, determines the behavior. An experienced actor can act
strategically: e.g. hold back the first round, the table goes to some corner but doesn’t stay
there for long. The experiences party can now demand more in the second round. This
scenario is when actors only become active during the tail-end of a decision-making process:
they see which solution is likely to be selected first, have problems with it, and block or
redirect the process.
Multiple arenas, not just one and processes don’t have a clear start/finish point. Perhaps
one of the parties in the room with the dancing table is willing to help another one out, in
exchange for help with a different problem in a different room. This shows 2 things:
o In a network decision-making often takes place in multiple arenas. Different
decision-making processes are interwoven
o As a result, no decision-making process has a clear-cut starting and finishing point.
, The problem content shifts, rather than being stable. Actors redefine their problems as time
goes by, as their initial formulation did not receive sufficient support from the network.
In a network with many different actors, there are incentives to define a problem as
unstructured. This gives the actors involved room to move. A problem can be made wicked
by broadening its scope because that means additional information is required, which leads
to more ambiguity.
Unpredictability and no consistence. The dynamics of networks invite actors to adapt their
behavior to these dynamics, which reinforces them.
Conclusion: decision-making proceeds erratically in a network. This unpredictability is the most
important regularity in decision-making processes and can be traced back to 2 components:
Content unpredictability: the content shifts continuously: solutions can determine the
problems definition instead of the other way around
Process unpredictability: no clear start- and finish point.
What barriers will in actor who wants to change something and therefore initiates an intervention
encounter?:
The more variety, the less impact and success of the intervention. The diversity in a sector is
limiting: it is likely that some companies will have good cohesion due to their characteristics,
but all the other ones will have all kinds of poor fits, which could lead to an intervention
having unforeseen effects.
Variety requires tail made interventions, but pushes the boundaries of manageability.
In a very diverse network interventions are often distorted or reinterpreted.
The following barriers to decision-making and change are thrown up by interdependencies:
Hit-and-run is tempting and will create chaos. Parties that are insufficiently aware of the
interdependencies in a network could be tempted to exploit other parties at times when
these are dependent: a hit-and-run strategy. When several parties do this, it leads to havoc
in a network.
The entirety of interdependencies can be very confusing, which can have a crippling effect.
Actors need a lot of time to assess each other, causing sluggishness.
Interdependencies lead to poor decision-making content, as dull compromises might be
made, about which none of the parties is enthusiastic.
Variety also offers opportunities for an intervening actor:
A higher probability of hitting the target with a portion of the parties. If there are more
parties, the chances of one or a few actors being responsive to the intervention are higher.
There are a number of strategies available to utilize this:
o The intervening actor is satisfied with the fact that only a limited number of actors
have responded to this intervention.
o An actor instigates an intervention from which he can learn which parties will and
will not respond, to shape a follow-up intervention that is more likely to be
successful.
o This learning can also relate to the relationships between parties in a network. By
influencing the behavior of the market leader, other actors are also changed
indirectly.
, Divide and conquer. The greater the variety, the less the cooperation between parties, which
makes orchestrating a campaign against the intervention difficult.
Reinterpretation: constructive ambiguity. The above mentioned barrier of reinterpretation
can also be positive: parties interpret the intervention in such a way that it becomes more
effective.
Interdependencies also offer an intervening actor opportunities:
Interdependencies force parties to behave moderately towards each other.
Increased complexity means more possibilities for exchange.
Interdependencies could lead to the content of the decision-making process being enriched.
When different parties with different interests and expertise join, the final decision might be
more enriched than with just one actor.
If an actor doesn’t realize he is in a network of interdependencies, he might decide on a command
and control management style, fitting with a hierarchy. He hired experts who did a certain analysis,
but others did the same resulting in differences: in wicked problems, expertise content does not
determine direction.
Suppose the actor decides to follow classic management rules: formulate explicit goals and set a
deadline. What happens to the dancing table? Other parties now know what he wants, which they
can use to strengthen their own position. They could start delaying now they know the deadline, or
block the specific goal.
Conclusion: project management in a network is not effective, but works counterproductive.
Chapter 2
There are 3 key strategies that form the core of governance in networks that are unrelated to
content:
Actors and actor analyses. At a minimum an actor analysis must always answer the following
questions:
o Which actors’ support is necessary in order to reach a decision, and what are these
actors opinions?
This might appear simple, but why would the other actors tell someone else what
they think? They don’t want to just give up strategic information.
o What are these actors’ interests?
Actors have standpoints which are dictated by underlying interests. The difference
between standpoint and interests can be shown with 2 parties who want an orange
as a standpoint, but don’t realize this comes from the interest of one wanting the
juice and the other the peel. At standpoint level, there is very little room for
negotiation
o What are these actors’ resources?
The influence an actor can exercise to achieve his interests are determined by its
power sources, which can be money, authority, knowledge, relationships and
reputation. An important aspect is the difference between production power,
meaning a positive contribution towards achievement and blockade power, to
impede something.
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