MBA Discussions
CHAPTER 11
Decision Making and Creativity
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After reading this chapter, you should be able to:
11.1 Compare rational and nonrational models of decision making.
11.2 Describe eight decision-making biases.
11.3 Explain evidence-based decision making.
11.4 Compare the four styles of decision making.
11.5 Describe how to assess the ethics of decision making.
11.6 Outline the basics of group decision making.
11.7 Explain how creativity relates to decision making.
11.8 Describe the implications of chapter content for you and managers
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Decision Making
Process for identifying and choosing alternative solutions that lead to a desired state of affairs.
Two ways or systems of thinking:
Rely on intuition, involves mental short cuts.
Can be quick, requires little cognitive effort.
Can also be thought of as nonrational decision making.
Utilize analytical and conscious thought.
Slow, logical, and requires cognitive effort.
Can also be thought of as rational decision making.
Employing both systems in parallel possible when approaching a task.
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Decision making: identifying and choosing among alternative solutions that lead to a desired state of affairs.
The rational model and several nonrational models have been proposed as ways managers make decisions.
Psychologist Daniel Kahneman describes two kinds of thinking, which he labels System 1 and System 2.
System 1 is our automatic, instinctive, and emotional mode of decision making.
System 2 is our slow, logical, deliberate mode of decision making.
System 1 distracts us from considering the long-term implications of decisions, and System 2 can be too time-consuming and ineffective when we don't have the cognitive or emotional energy needed to drive this mode of thinking.
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Figure 11.2 Rational Decision Making
Explains how managers should make decisions.
Assumes managers are completely objective and possess complete information.
Occurs in four stages.
Access the text alternate for slide image.
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Rational model of decision making explains how managers should make decisions.
The rational model of decision making assumes that managers are completely objective and possess complete information when making decisions.
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The Four-Stage Model
Stage 1.
Identify the problem or opportunity.
Determine the actual versus the desirable.
Stage 2.
Generate alternative solutions.
Need to slow down to evaluate a broader set of alternatives.
Invest in studying a greater number of potential solutions.
Stage 3.
Evaluate alternatives and select a solution.
Consider ethics.
Consider feasibility.
Consider whether it removes the causes and solves the problem.
Stage 4.
Implement and evaluate.
Stakeholders evaluate how effectively the solution solves the problem.
If the solution fails, you can return to Stage 1.
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Stage 1: Identify the Problem or Opportunity—Determining the Actual versus the Desirable.
Problem: difference or gap between actual and desired situations.
Opportunity: a situation in which results that exceed goals and expectations are possible.
The goal in Stage 1 is to make improvements that change conditions from their current state to more desirable ones.
Stage 2: Generate Alternative Solutions—Both the Obvious and the Creative.
Brainstorming is a common technique used by both individuals and groups to generate potential solutions.
Managers may struggle during this stage if they rush to judgment, select readily available ideas or solutions, or make poor allocations of resources to study alternative solutions.
Decision makers are encouraged to slow down and use System 2 thinking when making decisions, to evaluate a broader set of alternatives, and to invest in studying a greater number of potential solutions.
Stage 3: Evaluate Alternatives and Select a Solution—Ethics, Feasibility, and Effectiveness.
Alternatives need to be evaluated not only on costs and quality criteria, but also on whether or not an alternative is ethical, feasible, and if it would solve the problem.
Stage 4: Implement and Evaluate the Solution Chosen.
After a solution is implemented, the evaluation phase is used to assess its effectiveness.
If the solution is effective, it should eliminate or significantly reduce the difference between the earlier, actual problem state and the desired outcome.
If the gap is not closed, either the problem was incorrectly identified or the solution was inappropriately conceived or executed.
If the solution fails, either the problem needs better identification or one of the previously identified, but untried, solutions can be implemented.
This process can continue until all feasible solutions have been tried or the problem has changed.
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Rational Decision Making: The Pros and Cons
The problem: We are rarely rational when making decisions in complex situations.
Why? The conditions for optimization are hard to meet, given cost, time, and resource constraints.
There are three benefits to at least trying this approach.
The quality of the decision is likely to be enhanced.
Greater transparency surrounds the process.
Greater responsibility accompanies this approach.
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The rational model is based on the premise that managers optimize when they make decisions.
Optimizing: solving problems by producing the best possible solution.
The conditions needed to optimize—having complete information, leaving emotions out of the decision-making process, honestly and accurately evaluating all alternatives, having abundant and accessible time and resources, and having people willing to implement and support decisions—are all rarely met.
The benefits of trying to follow a rational process as much as realistically possible are:
The quality of decisions may be enhanced, in the sense that they follow more logically from all available knowledge and expertise.
It makes the reasoning behind a decision transparent and available to scrutiny.
If made public, it discourages the decider from acting on suspect considerations (such as personal advancement or avoiding bureaucratic embarrassment).
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Nonrational Decision Making
Actual decisions are often generally nonrational.
The normative model.
Guided by bounded rationality.
Our ability to make decisions restricted or bounded by a series of constraints, for example, resources and personal attributes.
Manageable amounts of information sought, rather than complete or optimal amounts.
Results in satisficing when arriving at a solution.
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Nonrational models of decision making explain how managers actually make decisions.
The nonrational models typically build on assumptions that decision making is uncertain, that decision makers do not possess complete information, and that managers struggle to make optimal decisions.
Bounded rationality: the notion that decision makers are “bounded” or restricted by a variety of constraints when making decisions.
Decision-making constraints include any personal characteristics or internal and external resources that reduce rational decision making.
Personal characteristics include personality and the limited capacity of the human mind.
These limitations result in the tendency to acquire manageable rather than optimal amounts of information, and therefore people satisfice when making decisions.
Satisficing: choosing a solution that meets some minimum qualifications, one that is “good enough.”
Satisficing resolves problems by producing solutions that are satisfactory, as opposed to optimal.
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Intuitive-Based Nonrational Decision Making
FIGURE 11.3 A Model of Intuition
SOURCES: Kahneman, Daniel, and Gary Klein. “Conditions for Intuitive Expertise: A Failure to Disagree.” American Psychologist 64, no. 6 (September 2009): 515–26. https://DOI: 10.1037/a0016755; Sadler-Smith, Eugene, and Erella Shefy. “The Intuitive Executive: Understanding and Applying ‘Gut Feel’ in Decision-Making.” Academy of Management Executive 18, no. 4 (2004): 76–91; and Miller, C. Chet, and R. Duane Ireland. “Intuition in Strategic Decision Making: Friend or Foe in the Fast-Paced 21st Century?” Academy of Management 19, no. 1 (February 2005). https://doi.org/10.5465/ame.2005.15841948.
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Intuition: judgments, insights, or decisions that come to mind on their own, without explicit awareness of the evoking cues and without explicit evaluation of the validity of these cues.
As profiled in Figure 11.3, there are two forms of intuition: holistic hunches and automated experiences.
Holistic hunch: a judgment that is based on a subconscious integration of information stored in memory.
Automated experience: a choice that is based on a familiar situation and a partially subconscious application of learned information related to it.
Intuition is represented by two distinct processes: one is automatic, involuntary, and mostly effortless, while the second is controlled, voluntary, and effortful.
There are two sources of intuition: expertise (i.e., explicit and tacit knowledge) and feelings.
Explicit knowledge: information that can easily be put into words.
Tacit knowledge: information gained through experience that is difficult to express and formalize.
An intuitive response builds on the interaction between one’s expertise and feelings in a given situation.
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Pros and Cons of Intuitive Decision Making
Pros
Useful when a quick decision is required.
Good when resources are limited or difficult or costly to acquire.
Cons
Susceptible to bias.
May be difficult to gain acceptance.
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On the positive side, intuition can speed up the decision-making process.
Intuition may be a practical approach when resources are limited and deadlines are tight.
On the negative side, intuition is particularly susceptible to decision-making biases.
Also, the decision maker may have difficulty convincing others that the intuitive decision makes sense, so a good idea may be ignored.
Intuition and rationality are complementary, and managers should attempt to use both when making decisions.
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Test Your OB Knowledge 1
When making a decision, bounded rationality often prevails, involving all of the following EXCEPT:
satisficing.
the rational model.
intuition.
time constraints.
financial constraints.
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The answer is B, the rational model.
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Decision-Making Biases
Judgmental heuristics.
Cognitive shortcuts or biases that are used to simplify the process of making decisions.
Can help managers make decisions but can lead to bad decisions.
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Judgmental heuristics: cognitive shortcuts or biases that are used to simplify the process of making decisions.
Because heuristics derive from knowledge gained from past experience, they can help managers make decisions, but they can also lead to bad decisions, particularly for people facing severe time constraints.
Eight biases that commonly affect decision making are described in the chapter.
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Heuristics, or Biases, in Decision Making
Confirmation bias.
Overconfidence bias.
Availability bias.
Representativeness bias.
Anchoring bias.
Hindsight bias.
Framing bias.
Escalation of commitment bias.
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Confirmation bias: pertains to how we selectively gather information.
With the confirmation bias, the decision maker (1) subconsciously decides something even before investigating why it is the right decision; and (2) seeks information that supports the decision while discounting information that does not.
This bias leads us to collect information that supports our beliefs or views.
Overconfidence bias: results in us overestimating our skills relative to those of others and overestimating the accuracy of our predictions.
This bias grows in strength when people are asked moderate to extremely difficult questions rather than easy ones.
Entrepreneurs often fall prey to this bias when deciding to start and sustain new ventures.
Availability heuristic: represents a decision maker’s tendency to base decisions on information that is readily available in memory.
This leads us to overestimate the importance of information we recently received or thought about, even if it is not the best or most accurate information. This heuristic is likely to cause people to overestimate the occurrence of unlikely events.
Representativeness heuristic: is used when people estimate the probability of an event occurring.
It reflects the tendency to assess the likelihood of an event occurring based on one’s impressions about similar occurrences.
The representativeness bias leads us to look for information that supports previously formed stereotypes.
Anchoring bias: occurs when decision makers are influenced by the first information received about a decision, even if it is irrelevant.
This bias happens because initial information, impressions, data, feedback, or stereotypes anchor our subsequent judgments and decisions.
Hindsight bias: occurs when knowledge of an outcome influences our belief about the probability that we could have predicted the outcome earlier. The danger of this bias is that, in retrospect, we get overconfident about our foresight, which leads to bad decisions.
Framing bias: relates to the manner in which a question is posed or framed. Framing is important because it shows that our decisions are influenced by the manner in which a problem or question is framed.
Escalation of commitment bias: refers to the tendency to stick to an ineffective course of action when it is unlikely that the bad situation can be reversed.
Researchers recommend the following actions to reduce the escalation of commitment bias:
Set minimum targets for performance, and have decision makers compare their performance against these targets.
Regularly rotate managers in key positions throughout a project.
Encourage decision makers to become less ego-involved with a project.
Make decision makers aware of the costs of persistence.
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Test Your OB Knowledge 2
Century Y Corporation invested $1 million to fix a computer system despite severe technical problems and complaints about the system not being “user-friendly.” The decision maker was likely influenced by which judgmental bias?
Framing bias.
Hindsight bias.
Escalation of commitment bias.
Representativeness bias.
Anchoring bias.
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The answer is C, escalation of commitment bias.
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Evidence-Based Decision Making
The process of conscientiously using the best available data and evidence.
An approach used when making, informing, or supporting a decision.
Coupled with big data, EBDM can:
Make information transparent and usable.
Allow organizations to measure and collect all types of performance information to enhance productivity.
Allow for more narrow segmentation of customers.
Be used to develop new products.
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Evidence-based decision making (EBDM): a process of conscientiously using the best available data and evidence when making managerial decisions.
Evidence is used in three different ways: to make a decision, to inform a decision, and to support a decision:
Evidence is used to make a decision whenever the decision follows directly from the evidence.
Evidence is used to inform a decision whenever the decision process combines hard, objective facts with qualitative inputs, such as intuition or bargaining with stakeholders.
Evidence is used to support a decision whenever the evidence is gathered or modified for the sole purpose of lending legitimacy to a decision that has already been made.
Using evidence to support a decision has both positive and negative effects, and managers need to carefully consider when it might be appropriate to ignore disconfirming evidence.
Big data: the vast quantity of data available for decision making.
Big data involves the collection, sorting, and analysis of information, and the techniques to do so.
The analysis of big data is expected to revolutionize all aspects of our lives, and many companies are scrambling to hire qualified employees for the job.
Managers and companies that effectively utilize big data are expected to gain competitive advantage.
Big data can make information more transparent and usable; it allows organizations to measure and collect all types of performance information; it allows more narrow segmentation of customers; and it can be used to develop new products.
One problem with big data is that private or sensitive information is more easily obtained, which means it can be leaked to others.
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Four Decision-Making Styles
Figure 11.4
SOURCE: Rowe, Alan J., and Richard O. Mason. Managing with Style: A Guide to Understanding, Assessing, and Improving Decision Making. San Francisco: Jossey-Bass, 1987.
Access the text alternate for slide image.
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Decision-making style: how an individual perceives and comprehends stimuli and the general manner in which he or she chooses to respond to such information.
Decision-making styles vary along two different dimensions: value orientation and tolerance for ambiguity.
Value orientation reflects the extent to which an individual focuses on either task and technical concerns or people and social concerns when making decisions.
Tolerance for ambiguity represents the extent to which a person has a high need for structure or control in his or her life.
Figure 11-4 shows the four styles of decision making when the dimensions of value orientation and tolerance for ambiguity are combined:
Directive: People with this style have low tolerance for ambiguity and are oriented toward task and technical concerns when making decisions.
Analytical: This style has much higher tolerance for ambiguity and is characterized by the tendency to overanalyze a situation.
Conceptual: People with this style have a high tolerance for ambiguity and tend to focus on the people or social aspects of a work situation.
Behavioral: People with this style work well with others and enjoy social interactions in which opinions are openly exchanged.
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Test Your OB Knowledge 3
Maria made a decision by considering available evidence as well as using her intuition. Maria is somewhat of an autocratic manager and took a long time to make the decision due to uncertain situations. Maria’s use of evidence and style are most likely:
informing the decision and conceptual.
supporting the decision and directive.
making the decision and behavioral.
informing the decision and analytical.
informing the decision and conceptual.
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The answer is D, informing the decision and analytical.
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A Road Map to Ethical Decision Making
Figure 11.5
SOURCE: Bagley, Constance E. “The Ethical Leader’s Decision Tree.” Harvard Business School Publishing, February 2003. https://hbr.org/2003/02/ the-ethical-leaders-decision-tree.
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Decision tree: graphical representation of the process underlying decision making.
Figure 11.5 presents one decision tree that managers can use to make more ethical decisions.
A decision tree cannot provide a quick formula that managers and organizations can use to evaluate every ethical question, but it can provide a framework for considering the trade-offs between managerial and corporate actions and managerial and corporate ethics.
Steps
Is the proposed action legal?
If it is illegal, do not do it.
If it is legal, consider impact on shareholder value.
If “yes,” does the proposed action maximize shareholder value?
A decision maximizes shareholder value when it results in a more favorable financial position (e.g., increased profits) for an organization.
Whether or not an action maximizes shareholder value, the decision tree shows that managers still need to consider the ethical implications of the decision or action.
If “yes,” is the proposed action ethical?
The answer to this question is based on considering the effect of the action on an organization’s other key constituents (customers, employees, the community, the environment, suppliers) against the benefit to the shareholders.
If “no,” would it be ethical not to take the proposed action?
If an action would not directly benefit shareholders, you need to consider whether it would be ethical not to take the proposed action.
If it would not be ethical to not take the action, the action should be taken, but the effect of the action should be disclosed to the shareholders.
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Group Decision Making
Advantages.
Large knowledge pool.
Diversity in approaches.
Commitment to decision.
Better understanding of decision rationale.
Visible role modeling.
Disadvantage.
Social pressures.
Potential for few participants to be dominant.
Goal displacement (secondary goals).
Groupthink
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Advantages of Group Decision Making
A group possesses more information and knowledge than one individual acting alone.
Individuals with different backgrounds and experiences bring varied perspectives to diagnosing and solving problems.
Participation and a voice in decision making are more likely to result in commitment to a decision.
Participating in a decision increases group members’ understanding about why a decision is being made and what must occur to implement it.
Less experienced group members learn about group dynamics and how to solve problems.
Disadvantages of Group Decision Making
The desire to look good in front of others leads to conformity and stifles creativity.
The quality of a group’s decision can be influenced by a few vocal people who dominate the discussion.
Goal displacement can occur when the group’s primary goal is overridden by a secondary goal such as winning an argument, getting back at a rival, or trying to impress the boss.
Groups can become victims of groupthink when members’ strivings for unanimity override their motivation to realistically appraise alternative courses of action.
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Groupthink
Groupthink occurs when:
Members become deeply involved in a cohesive in-group.
Striving for unanimity overrides motivation to realistically appraise alternative courses of action.
Symptoms
Invulnerability.
Inherent morality.
Rationalization.
Stereotyped views of opposition.
Self-censorship.
Illusion of unanimity.
Peer pressure.
Mindguards.
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Groupthink happens when members fail to exercise sufficient reality testing and moral judgment due to pressures from the group.
Groupthink is more likely when there are high levels of cohesiveness (sense of “we-ness” that overrides individual differences and motives)
Symptoms of Groupthink
Invulnerability: an illusion that breeds excessive optimism and risk taking.
Inherent morality: a belief that encourages the group to ignore ethical implications.
Rationalization: protects pet assumptions.
Stereotyped views of opposition: cause groups to underestimate opponents.
Self-censorship: stifles critical debate.
Illusion of unanimity: silence interpreted to mean consent.
Peer pressure: loyalty of dissenters is questioned.
Mindguards: self-appointed protectors against adverse information.
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Table 11.1 Preventing Groupthink
SOURCES: Thibodeaux, Wanda. “How to End Groupthink and Encourage Your Team to Be Creative.” Mansueto Ventures, December 10, 2018. https://www.inc.com/wanda-thibodeaux/how-to-end-groupthink-encourage-your-team-to-be-creative.html; Price, Dom. “Need Fresh Ideas? 5 Ways to Disrupt Groupthink.” Mansueto Ventures, October 23, 2018. https://www.inc.com/ dom-price/need-fresh-ideas-5-ways-to-disrupt-groupthink.html; and Janis, Irving L. “Victims of Groupthink.” Political Psychology 12, no. 2 (June 1991): 247–78. https:// DOI: 10.2307/3791464.
| Techniques for Preventing Groupthink |
| 1. Each member of the group should be assigned the role of critical evaluator or dissenter. This role requires the active voicing of objections and doubts. |
| 2. Top-level executives should not use policy committees to rubber-stamp decisions that have already been made. |
| 3. Different groups with different leaders should explore the same policy questions. |
| 4. Managers should encourage subgroup debates and bring in outside experts to introduce fresh perspectives. |
| 5. Someone should be given the role of devil’s advocate when discussing major alternatives. This person tries to uncover every conceivable negative factor. |
| 6. Once a consensus has been reached, everyone should be encouraged to rethink his/her position to check for flaws. |
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Preventive measures for dealing with groupthink described in Table 11.1 include:
Assigning each group member the role of critical evaluator.
Top-level executives should not use policy committees to rubber-stamp decisions that have already been made.
Use different groups with different leaders to explore the same issue.
Schedule debates among subgroups and invite participation from outside experts.
Assign the role of devil’s advocate to uncover negative factors.
Once the group has reached a consensus, all the group members should be encouraged to rethink their position to check for flaws.
Prevention is better than treatment or cure when dealing with groupthink.
Minority dissent: the extent to which group members feel comfortable disagreeing with other group members.
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Practical Problem-Solving Techniques 1
Brainstorming.
Rules for brainstorming:
Defer judgment
Build on the ideas of others
Encourage wild ideas
Go for quantity or quality
Be visual
Stay focused on the topic
One conversation at a time
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Brainstorming: used to help groups generate multiple ideas and alternatives for solving problems.
Brainstorming begins by asking group members to silently generate ideas/alternatives for solving the problem.
These ideas/alternatives are solicited and shared in writing. It is recommended that this stage be conducted anonymously if the issue is emotional or political.
A second session is generally used to critique and evaluate the alternatives.
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Practical Problem-Solving Techniques 2
The Delphi technique.
Group process that anonymously generates ideas or judgments from physically dispersed experts.
Use when:
Face-to-face discussions are impractical.
Disagreements and conflict may occur.
Group domination is an issue.
Groupthink is likely.
Decision support systems.
Computer-based interactive systems that help decision makers use data and models to solve unstructured problems.
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Delphi technique: group process that anonymously generates ideas or judgments from physically dispersed experts.
The Delphi technique is useful in several situations, such as when face-to-face discussions are impractical, when disagreements and conflict are likely to impair communication, when certain individuals might severely dominate group discussion, and when groupthink is a probable outcome of the group process.
Decision support systems (DSS): computer-based interactive systems that help decision makers to use data and models to solve unstructured problems.
The increased globalization of organizations, the existence of big data, and the advancement of information technology have led to the development of decision support systems.
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Test Your OB Knowledge 4
Aeronautics Limited Corporation (ALC) is concerned about groupthink occurring within their design team. ALC should do which of the following in an effort to prevent groupthink?
Once a consensus is reached, disband the team.
Bring in outside experts to speak to the team.
Encourage the group to become more cohesive.
Do not allow any member to bring up negative or oppositional points.
Use the team to gain buy-in for projects top management wants to pursue.
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The answer is B. Bring in outside experts to speak to the team.
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Figure 11.6 A Model of Creativity
McGraw-Hill Global Education Holdings, LLC
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Creativity: process of producing new and useful ideas concerning products, services, processes, and procedures.
You can create something new, combine or synthesize existing things, or improve or change things.
Figure 11.6 illustrates a model of creativity in which creative performance behaviors are influenced by person factors and situational characteristics.
Creative performance behaviors influence creative outcome effectiveness.
Creative performance behaviors: four key behaviors that drive the production of creative outcomes.
Creative outcome effectiveness: the joint novelty and usefulness (quality) of a product or service as judged by others.
Researchers believe that the four behaviors constituting creative performance behaviors unfold according to the following sequence:
Accurate problem formulation/definition.
Preparation/information gathering to build a base of tacit and explicit knowledge from which creativity will flow.
Idea generation by making new mental connections regarding the creative task or problem at hand.
Idea evaluation/validation to select the most creative and promising idea from multiple options.
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Creativity Outcomes
Drivers of creative performance behaviors:
Problem formation and definition.
Preparation and information gathering.
Idea generation.
Idea evaluation and validation.
Drivers of creative outcome effectiveness:
Person factors:
Motivation.
Personality.
Self-efficacy.
National culture.
Situation characteristics:
High commitment work practices.
Organizational culture and climate.
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Person Factors
Creativity requires motivation and domain-relevant knowledge. In other words, people need to be motivated to apply their knowledge and capabilities to create new ideas, new products, and solutions to all sorts of problems.
Other drivers of creativity include the Big Five personality dimensions, self-efficacy, national culture, willingness to tolerate ambiguity, and proactive personality.
Situational Characteristics
Creative behavior is promoted by high-commitment work systems: work systems that rely on selective hiring, comprehensive training, comparatively high pay, pay contingent on performance, and good benefits.
Other important situational factors include interpersonal diversity, time pressure, positive relationships with supervisors and coworkers, mutual accountability among group members, and spatial configuration of work settings.
Companies can design the work environment to encourage casual conversations among employees who don’t generally work together.
Organizational climate and organizational culture also contribute to the expression of creative behaviors.
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Increasing Creativity
Creativity can be accomplished by:
Change your commute.
Listen to noise.
Move your lunch.
Change your workspace.
Try a creativity exercise.
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Change your commute. Take a different route to work or walk part of the way. If you work at home, take a walk before you start.
Listen to noise. Research by a Chinese University found that a moderate level of noise, not silence, makes people more productive. Listen to music or an ambient-noise app like Coffivitiy.
Move your lunch. Go somewhere new for lunch. If you work at home, prepare a new dish or invite someone over.
Change your workspace. Instead of your home office, park at the kitchen counter or a coffee shop. In an office environment, ask to borrow an unused space.
Try a creativity exercise. Pick an everyday object like a coffeepot and write a few sentences about what it reminds you of.
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Test Your OB Knowledge 5
All of the following are drivers of creative performance behavior EXCEPT:
meaningful work.
motivation.
being good at brainstorming.
positive relationship with supervisor.
person factors.
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The answer is C, being good at brainstorming.
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Decision Making and Creativity: Putting It All in Context
Figure 11.7 Organizing Framework for Understanding and Applying OB
©2021 Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without permission of the authors.
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Figure 11.2 Rational Decision Making Text Alternate
Stage 1: Identify the problem or opportunity.
Stage 2: Generate alternative solutions.
Stage 3: Evaluate alternatives and select a solution.
Stage 4: Implement and evaluate the solution chosen.
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Intuitive-Based Nonrational Decision Making Text Alternate
The figure depicts intuitive processes, their foundations and forms.
Intuitive processes can be automatic, involuntary and effortless. They can also be controlled, voluntary, and effortful.
The foundations for these processes can be expertise, which is tacit and explicit knowledge; or the foundation can be feelings.
The form can be a holistic hunch, which is a judgment based on the subconscious integration of information stored in memory; or it can take the form of automated experience, which represents a choice based on a familiar situation and a partially subconscious application of learned information related to it.
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Four Decision-Making Styles Text Alternate
The graphic lays out the four decision-making styles, rating them on tolerance for ambiguity and value orientation.
Analytical style is high in tolerance for ambiguity and its value orientation is task and technical concerns.
Conceptual style is high in tolerance for ambiguity and its value orientation is people and social concerns.
Behavioral style is low in tolerance for ambiguity and its value orientation is people and social concerns.
Directive style is high in tolerance for ambiguity and its value orientation is task and technical concerns.
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A Road Map to Ethical Decision Making Text Alternate
The road map starts with the question, “Is the proposed action legal?” If the answer is no, don’t do it.
If the answer is yes, then ask, “Does it maximize shareholder value?” If the answer is no, ask, “Would it be ethical not to take the action?” To answer that question, weight the harm or cost that would be imposed on shareholders against the costs or benefits to other stakeholders. If the answer is no, do it, but disclose the effect of the action to shareholders. If the answer is yes, don’t do it.
If the answer is yes to “Does it maximize shareholder value?” then ask, “Is it ethical?” To answer, weigh the effect on customers, employees, the community, the environment, and suppliers against the benefit to the shareholders. If the answer is yes, do it. If the answer is No, don’t do it.
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Decision Making and Creativity: Putting It All in Context Text Alternate
The Organizing Framework for Understanding and Applying OB shows the relationship between the three categories Inputs, Process, and Outcomes.
Inputs:
Person factors: intuition, judgmental heuristics, decision-making styles, ethical values, personality, self-efficacy, and national culture
Situation factors: decision situation, organizational culture and climate
Leads to Processes:
Individual Level: rational and or non rational decision making, ethical decision making, and creativity.
Group, Team Level: rational and or non rational decision making, groupthink, minority dissent, consensus, and creativity.
Organizational Level: evidence-based decision making, and creativity.
Leads to Outcomes:
Individual Level: task performance, career outcomes, and creativity.
Group, Team Level: group and or team performance, and group cohesion and conflict.
Organizational Level: accounting and or financial performance, legal liability, innovation, and customer satisfaction.
In return, Outcomes relates to both Inputs and Processes.
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Angelo Kinicki
Behavior Organizational
A Practical, Problem-Solving Approach
3e
Angelo Kinicki
Behavior
Organizational
A Practical, Problem-Solving Approach
3e