Organizational behavior core concepts by kinicki chapter7

Models of Decision Making• Decision making – identifying and choosing solutions that lead to a desired result... Models of Decision Making• The Rational Model – logical four-step appr

Decision Making: How Individuals and Groups

Arrive at Decisions

Learning Objectives

• Summarize pros and cons of involving

groups in the decision-making process

• Explain how participative management affects performance

• Describe techniques used to improve the quality of group decisions

Models of Decision Making

• Decision making

– identifying and choosing solutions that lead

to a desired result

Models of Decision Making

• The Rational Model

– logical four-step approach to decision making.

The Rational Model

1 Identifying the problem

2 Generating alternative solutions

3 Selecting a solution

4 Implementing and evaluating the

solution

Rational Model

• Identifying the Problem

– Problem – exists when the actual situation and the desired situation differ

• Generating Solutions

– For routine decisions alternatives are readily available through decision rules

– Decision maker actually uses the criteria

Simon’s Normative Model

Decision making is characterized by:

1 Limited information processing

2 Use of judgmental heuristics

3 Satisficing

Simon’s Normative Model

• Bounded rationality

– constraints that restrict decision making

Simon’s Normative Model

Limited Information Processing

• Tendency to acquire manageable rather than optimal amounts of information

• Difficult for managers to identify all

possible alternative solutions

What is a rule of thumb that people use to

reduce information processing demands?

A Decision maker

B Judgmental heuristics

Simon’s Normative Model

• Judgmental heuristics

– rules of thumb or shortcuts that people use

to reduce information processing demands.

Simon’s Normative Model

• Availability heuristic

– tendency to base decisions on information readily available in memory.

• Representativeness heuristic

– tendency to assess the likelihood of an

event occurring based on impressions about

Simon’s Normative Model

• Satisficing

– choosing a solution that meets a minimum standard

Dynamics of Decision Making

• Knowledge management

– implementing systems and practices that increase the sharing of knowledge and information throughout an organization

Forms of Knowledge

• Tacit knowledge

– information gained through experience that

is difficult to express and formalize

• Explicit knowledge

– information that can be easily put into words and shared with others.

General Decision Making Styles

• Decision making styles

– combination of how individuals perceive and respond to information

General Decision Making Styles

• Tolerance for ambiguity

– extent to which a person has a high need for

Decision Making Styles

Escalation of Commitment

• Escalation of

commitment

– sticking to an ineffective course

of action too long

Escalation of Commitment

Psychological and Social Determinants

1 Tend to bias facts so that they support

previous decisions

2 Take more risks when a decision is

stated in negative terms

Escalation of Commitment

Project Characteristics

• Tendency to attribute setbacks to

temporary causes that are correctable with additional expenditures

Escalation of Commitment

Contextual determinants

• Culture of the decision makers

• Political climate of the escalation situation

Recommendations To Reduce

Escalation of Commitment

• Set minimum targets for performance,

and have decision makers compare their performance with these targets

• Have different individuals make the initial and subsequent decisions about a

project

Recommendations To Reduce

Escalation of Commitment

• Provide more frequent feedback about

project completion and costs

• Reduce the risk or penalties of failure

• Make decision makers aware of the costs

of persistence

What is the process of using imagination to

develop a new process?

A Originality

B Innovation

C Creativity

• Creativity

– process of using intelligence, imagination, and skill to develop a new or novel product, object, process, or thought

Stages of the Creative Process

Group Involvement

• Minority dissent

– extent to which group members feel comfortable disagreeing with other group members, and the

extent to which group members participate

in decision making

Advantages and Disadvantages of Group-Aided Decision Making

Group Problem Solving

Rules for Brainstorming

1 Defer judgment

2 Build on the ideas of others

3 Encourage wild ideas

4 Go for quantity over quality

5 Be visual

6 Stay focused on the topic

Group Problem Solving

Techniques

• Nominal Group Technique

– process to generate ideas and evaluate solutions.

• Delphi technique

– process to generate ideas from physically dispersed experts

Group Problem Solving

Techniques

• Computer-aided decision making

– reduces consensus roadblocks while collecting more information in a shorter period of time

Computer-aided Decision Making