MANAGEMENT SCIENCE, Vol. 21, No. 6, February, 1975, Printed in U.S.A.

DIFFUSE DECISION-MAKING IN HIERARCHICAL
ORGANIZATIONS: AN EMPIRICAL EXAMINATION*

C. R. SHUMWAY, P. M. MAHER, M. R. BAKER,
W. E. SOUDER, A. H. RUBENSTEIN AND A. R. GALLANT

Abstract: The applied research resource allocation decision process in a complex, hierarchical federal organization is explored in this paper. This decision process includes the identification of research objectives and the funding of projects selected to achieve the objectives. The hierarchical, geographical, and temporal diffuseness of participation in the decision process is described. Several a priori conjectures are presented concerning how the decision to fund research projects might be made in such a hierarchically and spatially diffused organization. The conjectures are empirically tested using data for 181 projects from the 1970 budget cycle, and their implications are discussed.

*Processed by Burton V. Dean, Departmental Editor for Research and Development; received April 30, 1973, revised October 20, 1973. This paper was with the authors 1 month for revision.
Work in this area has been supported at Northwestern University by the Office of Naval Research, NASA, NSF, and the Army Research Office. We are indebted to Terry Connolly for much of the conceptual overview to diffuse decisions and to Fred Rogers for programming services.
Texas A&M University, University of Alberta, University of Cincinnati, University of Pittsburgh, Northwestern University, and North Carolina State University, respectively.
1Parts of these conditions are drawn from Connolly [1].