? chapter 10 decision making by individuals & groups nelson & quick
TRANSCRIPT
??Chapter 10Chapter 10
Decision Making by Decision Making by Individuals & GroupsIndividuals & Groups
Nelson & QuickNelson & Quick
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
The Decision-Making Process
Recognize the problem andthe need for a decision
Identify the objective ofthe decision
Gather and evaluate dataand diagnose the situation
List and evaluatealternatives
The Decision-Making Process
Select the bestcourse of action
Implementthe decision
Gatherfeedback
Follow up
Models of Decision-Making
Effective decisionEffective decision
a timely decision that meets a desired objective and is acceptable to those individuals affected by it
Garbage Can Model
Bounded Rationality Model
Rational Model
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
Rational ModelRationality - a logical,step-by-step approachto decision making, with athorough analysis ofalternatives and theirconsequences
1. Managers suggest the first satisfactory alternative
2. Managers recognize that their conception of the world is simple
3. Managers are comforable making decisions without determining all the alternatives
4. Managers make decisions by rules of thumb or heuristics
Bounded Rationality Model
Bounded Rationality - a theory that suggests that there are limits upon how rational a decision maker can actually be
Garbage Can Model -
a theory that contends
that decisions in
organizations are
random and unsystematic
Garbage Can Model
Problems
Solutions
Choiceopportunities
Participants
From M.D. Cohen, J.G. March, and J.P. Olsen in Administrative Science Quarterly 17 (March 1972) 1.25. Reprinted by permission of the Administrative Science Quarterly
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: Successful Managers Take Risks
Escalation of Commitment
• Why it occurs– humans dislike inconsistency– optimism– control
• How to deal with it– split responsibility for decisions– provide individuals with a graceful exit– have groups make the initial decision
The tendency to continue tocommit resources to a losingcourse of action
Cognitive Style
Cognitive Style - an individual’s preference for gathering
information and evaluating alternatives
Jungian theory offers a way of understanding andappreciating differences among individuals.
Jung’s Cognitive Style
Style
Sensing/thinking
Sensing/feeling
Intuiting/thinking
Intuiting/feeling
Ideal Organization
Facts/ Impersonal Control
Facts & Org. relationships
Broad issues/ Impersonal & ideal
Serve humankind/General values
ST
SF
NT
NF
Z Problem-Solving Model
Look at the facts
and details
Can it beanalyzed
objectively?
What alternativesdo the facts
suggest?
What impactwill it have on
those involved?
Sensing Intuition
Thinking Feeling
Figure from Type Talk at Work by Otto Kroeger and Janet M. Thuesen. Copyright © 1992 by Otto Kroegerand Janet M. Thuesen. Used by permission of Dell Publishing, a division of Random House. Inc.
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
Four Stages of Creative Process
• Preparation - experience/ opportunity to build knowledge base
• Incubation - reflective, often unconscious thought
• Illumination - insight into problem
• Verification - thinking, sharing, testing the decision
Influences on Creativity
• Individual examples– Cognitive Processes
• Divergent Thinking• Associational Abilities
– Personality Factors• breadth of interests• high energy• self confidence
• Organizational ex.– Flexible organization
structure– Participative
decision-making– Quality, supportive
relationships with supervisors
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.)
Participative Decision Making
• 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
one’s own well-being
Individuals who are affectedby decisions influence themaking of those decisions
Two Brains, Two Cognitive Styles
Left Hemisphere Right Hemisphere
VerbalSequential, temporal,
digitalLogical, analytic
RationalWestern thought
Nonverbal, visuospatialSimultaneous, spatial,
analogicalGestalt, synthetic
IntuitiveEastern thought
Ideal = “brain-lateralized” making use ofeither or both sides, depending on situation
From Left Brain, Right Brain by Springer and Deutsch © 1989, 1985, 1981 by Sally Springer and Georg Deutsch. Used with permission by W.H. Freeman and Company
Group Decision-Making
• Role of synergy - a positive force in groups that occurs when group members stimulate new solutions to problems through the process of mutual influence and encouragement in the group
• Role of social decision schemes - simple rules used to determine
final group decisions
(prediction 80% correct)
Majority Wins
Truth Wins
Two-thirds Majority Wins
First-shift rule
Group Decision-Making
1) more knowledgethrough pooling of group resources2) increasedacceptance & commitment dueto voice in decisions3) greater under-standing due toinvolvement indecision stages
1) pressure ingroups to conform2) domination byone forceful memberor dominant clique3) amount of timerequired, becausegroup is slowerthan individualto make a decision
Advantages
Disadvantages
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
GroupDecision
Techniques
Self-Managed Teams
Dialectical Inquiry
Brainstorming
Devil’s Advocacy
Delphi Technique
Nominal Group Technique
Quality Circles & Quality Teams
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
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
• How will it make me feel about myself