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Chapter 9

The document discusses various aspects of decision making including the decision making process, models of decision making, individual influences on decision making, group decision making, and the role of culture in decision making. It provides details on rational decision making, bounded rationality, problem solving models, escalation of commitment, cognitive styles, risk aversion, intuition, creativity, and preventing groupthink.

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20 views

Chapter 9

The document discusses various aspects of decision making including the decision making process, models of decision making, individual influences on decision making, group decision making, and the role of culture in decision making. It provides details on rational decision making, bounded rationality, problem solving models, escalation of commitment, cognitive styles, risk aversion, intuition, creativity, and preventing groupthink.

Uploaded by

digibap102
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Decision Marking

Learning Objectives

1. Identify the steps in the decision-making process.


2. Describe various models of decision making.
3. Discuss the individual influences that affect decision making.
4. Explain how groups make decisions.
5. Describe the role culture plays in decision making.
6. Explain how organizations can improve the quality of
decisions through participation.
Types of Decisions

Programmed Nonprogrammed
Decision
Decision
a simple, routine matter
for which a manager has a new, complex decision
an established decision that requires a creative
rule solution
Recognize the problem and
Decision the need for a decision
Making
Process
Identify the objective of
the decision

Gather and evaluate data


and diagnose the situation

List and evaluate


alternatives
Select the best
Decision
course of action
Making
Process
Implement
the decision

Gather feedback

Follow up
Rationality
a logical, step-by-step approach to decision making,

with a thorough analysis of alternatives and their

consequences
Models of Decision Making

Effective a timely decision that meets a


desired objective and is acceptable
Decision to those individuals affected by it
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
Bounded Rationality
a theory that suggests that there are constraints that

force a decision maker to be less than completely

rational
Bounded Rationality
Model

1. Managers select the first alternative that is


satisfactory
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
Z Problem-Solving Model
Escalation of Commitment
the tendency to continue to commit resources to a failing

course of action
Escalation of Commitment

• Why it occurs
• people dislike inconsistency
• overly optimistic
• illusion of control
• sunk costs
• How to deal with it
• split responsibility for decisions
• closely monitor decision makers
• provide individuals with a graceful exit
• have groups make the initial decision
Cognitive Style
an individual’s preference for gathering information

and evaluating alternatives


Risk Aversion
the tendency to choose options

that entail fewer risks and less uncertainty


Risk and the Manager

• Many decisions involve some element of risk.


• Individuals differ in terms of risk aversion.
• Risk aversion is determined by individual
tendencies and organizational factors.
• To encourage risk taking, must view failure as
“enlightened trial and error.”
Personality, Attitudes, and Values
Influences on
Decision Making

Intuition – fast, Creativity – a


positive force in process influenced
decision making by individual and
utilized at a level organizational
below consciousness, factors that results
involves learned in the production of
patterns of novel and useful
information ideas, products, or
both
Influences on Creativity
• Individual:
• Cognitive Processes
• Divergent Thinking
• Associational Abilities
• Unconscious Processes
Creative performance is
• Personality Factors highest when there is a
• breadth of interests match or fit between the
• high energy individual and
• self-confidence organizational influences.
• Organizational:
• Flexible organization structure
• Participative decision making
• Quality, supportive relationships with supervisors
Four Types of Creativity

Responsive Proactive

Expected Contributory
Group Decision Making

• Synergy – occurs when group members stimulate new


solutions to problems through the process of mutual
influence and encouragement within the group.
• Social decision schemes – simple rules used to
determine final group decisions

Truth Wins Majority Wins


Two-thirds Majority
Group Decision Making
1. more knowledge through pooling of
group resources
Advantages 2. increased acceptance and
commitment due to voice in
decisions
3. greater understanding due to
involvement in decision stages

1. pressure in groups to conform


2. domination by one forceful member
Disadvantages or dominant clique
3. amount of time required, because
group is slower than individual to
make a decision
Limits of Group Decision
Making

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
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 devil’s advocate
• Evaluate the competition carefully
• After consensus, encourage rethinking the
position
Special Decision-Making Groups

• Quality circles – small groups that meet voluntarily to


address work-related problems.

• Quality teams – a team that is part of an organization,


empowered to act on its decisions regarding quality

• Self-managed teams – more broadly focused than above


two types
Hofstede’s Dimensions
• Styles of decision
making vary by
culture
Beyond the Book:
Decisions in Japan

“Teamwork” and “Collaboration” look much


different in Japan than in the United States. In
Japanese firms, workers (especially lower level)
tend to remain silent during meetings, avoid sitting
next to upper management, and rigorously avoid
using their boss’ first name. Upper management,
meanwhile, steer clears of direct feedback or
delivering the “hard truth.” At all levels, harmony
and restraint, rather than independence and risk-
taking, are prized values.
Decision Making in the Virtual
Workplace

Beyond the Book Group Decision


Support Systems

Tools
for
Virtual Teams
Desktop
Internet/Intranet
Videoconferencing
Systems
Systems
Participative Decision Making

Occurs when individuals who are affected


by decisions influence decision-making

Organizational Individual
Foundation Foundation

Supportive organizational culture People must be psychologically


Team-oriented work design equipped
Motivation to act autonomously
Employees must be able to see benefit
Beyond the Book:
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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