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Information Acquisition, Decision Making, and Implementation in Organizations

Author

Listed:
  • Hideshi Itoh

    (Waseda Business School, Waseda University, Tokyo 169-8050, Japan)

  • Kimiyuki Morita

    (School of Economics, Senshu University, Kanagawa 214-8580, Japan)

Abstract
We study the value of divergence in values and preferences in organizations by combining three stages of a decision process—ex ante information acquisition, interim project choice, and ex post project execution—into a tractable model. A key insight is that our unified model provides predictions different from models without the execution decision stage. We consider an organization that consists of a decision maker who selects a project and an implementer who acquires costly information before project choice and executes the selected project. They have intrinsic and possibly divergent preferences over projects. We show that, although the implementer’s dual role generates a disadvantage of designing conflicts in terms of the implementation motivation, it simultaneously boosts the implementer’s motivation for information acquisition to influence the decision maker’s project choice more under divergent preferences. Our results provide managerial insights that designing conflicts is beneficial only in environments where additional information is sufficiently precise and must be accompanied by a manager who is balanced and incorporating feedback.

Suggested Citation

  • Hideshi Itoh & Kimiyuki Morita, 2023. "Information Acquisition, Decision Making, and Implementation in Organizations," Management Science, INFORMS, vol. 69(1), pages 446-463, January.
    • Handle: RePEc:inm:ormnsc:v:69:y:2023:i:1:p:446-463
    DOI: 10.1287/mnsc.2022.4373
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    References listed on IDEAS

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