A Dynamic Model of Organizational Decision Making: Chemco Revisited Six Years After Bhopal

The authors develop a dynamic model of organization decision making that is motivated by the decision-making process at a multinational chemical firm, given the pseudonym Chemco, that they visited shortly after the Union Carbide explosion in Bhopal, India, and again six years later. Two major decisions were taken by Chemco that could be attributed in large part to the Bhopal disaster: the divestiture of one of its plants and the sale of a business. An analysis of those actions by Chemco underscores the importance of reference points and constraints in influencing organizational choices.