Chapter 10 Nelson

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Chapter 10 Nelson Quick

• Decision Making by Individuals Groups

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The Decision-Making Process

• Programmed Decision - a simple, routine matter
  for which a manager has an established decision
  rule
• Nonprogrammed Decision - a new, complex decision
  that requires a creative solution

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The Decision-Making Process
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The Decision-Making Process
Follow up
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Problem or Symptom?

• Marys performance is declining
• Mary is unmotivated
• Mary does not have the training required to do
  the job
• Mary is being sexually harassed by John

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Models of Decision-Making

• Effective Decision
• a timely decision that meets a desired objective
  and is acceptable to those individuals affected
  by it

Bounded Rationality Model
Garbage Can Model
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Rationality - a logical, step- by-step approach
to decision making, with a thorough analysis of
alternatives and their consequences

• 1. The outcome will be completely rational
• 2. The decision maker uses a consistent system
  
  of preferences to choose the best alternative
• 3. The decision maker is aware of all
  alternatives
• 4. The decision maker can calculate the
  probability of success for
  each alternative

Strives to optimize, but optimization is rarely
realistic
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Bounded Rationality - a theory that suggests
that there are limits upon how rational a
decision maker can actually be
Bounded Rationality Model

• 1. Managers select the first satisfactory
  alternative

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Bounded Rationality - a theory that suggests
that there are limits upon how rational a
decision maker can actually be
Bounded Rationality Model

• 1. Managers suggest the first satisfactory
  alternative
• 2. Managers recognize that their conception of
  the world is simple

3. Managers are comfortable making decisions
without determining all the alternatives 4.
Managers make decisions by rules of thumb or
heuristics
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Garbage Can Model
Solutions
Choice opportunities
Problems

• Garbage Can Model -
• a theory that contends
• that decisions in
• organizations are
• random and unsystematic

Participants
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Risk and the Manager

• Risk aversion - the tendency to choose options
  that entail fewer risks and less uncertainty
• Risk takers
• accept greater potential for loss
• tolerate greater uncertainty
• more likely to make risky decisions

Evidence 1. Successful Managers Take Moderate
Risks 2. Women are more risk averse than men 3.
Older, more experienced managers are more risk
averse than younger managers
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Managing risk-taking behavior

• Model effective decision making under uncertainty
• Allow employees to fail without fear of
  punishment
• Fear of taking risks stifles creativity and
  innovation

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Escalation of Commitment
The tendency to continue to commit resources to a
failing course of action

• Why it occurs
• humans dislike inconsistency
• optimism
• control
• sunk costs
• How to deal with it
• split responsibility for decisions
• provide individuals with a graceful exit
• have groups make the initial decision

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Cognitive Style

• Cognitive Style - an individuals preference for
  gathering information and evaluating alternatives

Jungian theory offers a way of understanding and
appreciating differences among individuals.
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Jungs Cognitive Style
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Z Problem-Solving Model
Look at the facts and details
What alternatives do the facts suggest?
Sensing Intuition
Can it be analyzed objectively?
What impact will it have on those involved?
Thinking Feeling
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Influences on Decision-Making

• Intuition - fast, positive force in decision
  making utilized at a level below consciousness,
  involves learned patterns of information

• Creativity - a process influenced by
  individual and organizational factors that
  results in the production of novel and useful
  ideas, products, or both

Can teach managers to rely more fully on intuition
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Influences on Creativity

• Individual examples
• Cognitive Processes
• Divergent Thinking
• Associational Abilities
• Unconscious Processes
• Personality Factors
• breadth of interests
• high energy
• self-confidence

• Organizational examples
• Flexible organization structure
• Participative decision making
• Quality, supportive relationships with supervisors

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Creativity Killers

• Over supervision (micro-management)
• Focusing on how work is evaluated
• Internal competition
• Limits on how work is done
• Political problems
• Criticism of new ideas

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Creativity and fit

• Creativity is highest when there is a match
  between individual and organizational influences
  on creativity.
• Some individuals are more creative than others
• Some organizations require more creativity than
  others

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Organizations Can Facilitate Creative Decision
Making

• Reward creativity
• Allow employees to fail
• Make work more fun
• Provide creativity training
• Vary work groups (internal/external)
• Encourage creative stimuli (music, art, etc.)

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Participative Decision Making
Individuals who are affected by decisions
influence the making of those decisions

• Organizational Foundations
• Participative, supportive organizational culture
• Team-oriented work design
• Individual Prerequisites
• Capability to become psychologically involved in
  participative activities
• Motivation to act autonomously
• Capacity to see the relevance of participation
  for ones own well-being
• Enhances autonomy, meaningfullness, creativity,
  job satisfaction, and productivity

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Group Decision Making
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Individual or Group Decision?

• Depends on the type of task
• Experience in the group must be considered
• Groups who work together for longer periods of
  time outperform the more competent members 70 of
  the time.
• As groups gain experience, the best members
  become less important to the groups success

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Group Phenomenon

• Groupthink - a deterioration of mental
  efficiency, reality testing, and moral judgment
  resulting from in-group pressures
• Group Polarization - the tendency for group
  discussion to produce shifts toward more extreme
  attitudes among members

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Antecedents of Groupthink

• High cohesiveness
• Directive leadership
• High stress
• Insulation of the group
• Lack of methodological procedures for developing
  and evaluating alternatives
• Consequential decisions
• Time constraints

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Symptoms of Groupthink

• Illusions of invulnerability members feel above
  criticism
• Illusions of unanimity members believe there is
  unanimous agreement. Silence is misconstrued as
  consent
• Rationalization viable alternatives not
  considered, unwillingness to reconsider
  assumptions
• Self-censorship members do not express doubts or
  concerns for fear of effect of dissent on
  cohesion
• Illusions of group morality members believe they
  are above reproach

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Symptoms of Groupthink (cont.)

• Stereotyping the enemy Competitors are
  stereotyped as evil or stupid. This leads the
  group to underestimate its opposition.
• Peer pressure Any members who express doubts or
  concerns are pressured by other group members to
  question their loyalty.
• Mindguards some members of the group take it
  upon themselves to protect the group from
  negative feedback. Group members are thus
  shielded from information that might lead them to
  question their actions

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Preventing Groupthink

• Ask each group member to act as critical
  evaluator
• Have the leader avoid stating his opinion prior
  to the group decision
• Create several groups to work simultaneously
• Appoint a devils advocate
• Evaluate the competition carefully
• After consensus, encourage rethinking the
  position
• See page 336 on Challenger incident

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Brainstorming
Self-Managed Teams
Nominal Group Technique
Group Decision Techniques
Delphi Technique
Dialectical Inquiry
Quality Circles Quality Teams
Devils Advocacy
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Quality teams

• Generated from the top down
• Empowered to act on their recommendations
• Make data-based decisions (management by fact)
• Are enabled with training on the use of decision
  making tools

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Technological Aids to Decision-Making

• Expert Systems - a programmed decision tool set
  up using decision rules
• Decision Support Systems - computer and
  communication systems that process incoming data
  and synthesize pertinent information for managers
  to use
• Group Decision Support Systems - systems that use
  computer software and communication facilities to
  support group decision-making processes in either
  face-to-face meetings or dispersed meetings

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• Virtual Teams groups of geographically
  dispersed coworkers who work together using a
  combination of telecommunications and information
  technologies to accomplish a task

Group Decision Support Systems
Tools for Virtual Teams
Desktop Videoconferencing Systems
Internet/Intranet Systems
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Ethics Check

• Is it legal?
• Does it violate law
• Does it violate
• company policy
• Is it balanced?
• Is it fair to all
• Does it promote win-win relationships
• How will it make me feel about myself

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Ethical decision making in organizations

• Reinforce ethical decision making among employees
  by encouraging and rewarding it.
• Socialize newcomers into the ethical standards of
  behavior in the organization.
• Groups should use structured methods to reduce
  the potential for groupthink and the unethical
  decisions that may result