ABSTRACT
The increased complexity of modern organizations and their environments has created an important class of problems involving interdependencies that span subsystem boundaries. The subsystems may be functional departments within a firm, subsidiaries of a corporation, or autonomous organizations. Because of the interdependence of the subsystems, separate or individual decision making will not result in optimal returns. A joint decision problem is said to exist if cooperative action by the subsystems will result in a total reward greater than that which would result from individual action by the subsystems. The concern in this paper is the alternative decision technologies that may be employed in situations necessitating joint action. A technology is a formal structure for arriving at a decision given some objective. The three technologies to be considered are centralization, decentralization, and decentralization by guidelines. This paper is intended to suggest certain aspects of joint decision technologies that may be important to organizational design. The analysis focuses on aspects of information, computation, and implementation of the three technologies. The technologies will be discussed both at an abstract level and in the context of a model of marketingproduction decision making within a firm. A deterministic, single-period model is used, and a dynamic extension is suggested.
