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LEARNING OBJECTIVES  Relate the perspective, historical background, and meaning of the communication pro-

cess in organizations.  Identify the dimensions of nonverbal communication.  Discuss the specific dimensions of interpersonal and interactive communication pro-

cesses.  Describe the decision-making process and behavioral decision making.  Present the styles and techniques of decision making.  Explore the creative process.

Communication and decision making are frequently discussed dynamics in organizational behavior, but they are seldom clearly understood. Both are basic prerequisites for the attainment of organizational strategies and effective human resource management, but they remain big problems facing modern management. Both are extremely broad topics and of course are not restricted to the organizational behavior field. Both take up a lot of an active human being’s life, and even higher proportions of a typical manager’s time. The compre- hensive study reported in Chapter 14, that directly observed a wide cross section of what were called “Real Managers” in their day-to-day behaviors, found that they devote about a third of their activities to routine communication—exchanging and processing routine information and over 10 percent in decision making.1 More important, however, is the finding that the communication activity made the biggest relative contribution to effective managers and decision making accounts for a smaller but still critical input. A recent study also found that when the quality of managers’ communication is high, managers’ inten- tions and organizational policies are clearer to employees, resulting in better perceptions of human resource management effectiveness. 2 In other words, there seems little doubt that communication and decision making play an important role in managerial and organiza- tional success.

First, the background of the role of communication in management and organizational behavior is briefly discussed. This discussion is followed by a precise definition of com- munication and presentation of nonverbal communication. Next, the heart of the chapter is concerned with interpersonal and interactive communication. An interpersonal process, as opposed to a linear information flow perspective of communication, is taken throughout. The balance of the chapter is concerned with the decision-making process with particular attention given to behaviorally oriented styles and techniques.

CHAPTER 8 Communication and Decision Making

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EBSCO Publishing : eBook Business Collection (EBSCOhost) - printed on 12/29/2017 8:47 PM via LOUISIANA STATE UNIV AT SHREVEPORT AN: 999823 ; Luthans, Fred, Luthans, Kyle W., Luthans, Brett C..; Organizational Behavior : An Evidence-based Approach Account: s3563253

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BACKGROUND OF THE ROLE OF COMMUNICATION

Early discussions of management gave very little emphasis to communication. Although communication was implicit in the managerial function of command and the structural principle of hierarchy, the early theorists never fully developed or integrated it into man- agement theory. At the same time, they did generally recognize the role of informal com- munication in relation to the problem of supplementing the formal, hierarchical channels. But the pioneering theorist Chester Barnard, in his classic Functions of the Executive, was the first to develop the idea of the central, important role communication plays in the orga- nization.

Since the original contributions by Barnard before WWII, the dynamics of communi- cation have been one of the central concerns of organizational behavior and management theorists and especially practitioners. There has been a deluge of books and articles that deal specifically with interpersonal and organizational communication. Unfortunately, practically all this vast literature gives only a surface treatment of the subject and is seldom an evidence-based approach. For example, there have been complaints about an uncritical acceptance of the effectiveness of open communication, when a contingency perspective would be more in line with the evidence.3

One exception was the “Real Managers Study,” reported in Chapter 14 and mentioned in the introductory comments of this chapter. One part of this study combined direct obser- vation of managers in their natural setting with self-report measures to try to determine how they communicated.4 The model shown in Figure 8.2 gives the results. The first dimension of the managerial communication model represents a continuum ranging from the humanistic interactor (who frequently interacts both up and down the organization sys- tem and exhibits human-oriented activities) to the mechanistic isolate (who communicates very little, except on a formal basis). The other dimension describes a continuum from the informal developer (who communicates spontaneously in all directions and exhibits activ- ities related to developing his or her people) to the formal controller (who uses formally scheduled communication interaction and exhibits monitoring/controlling activities).5 This empirically derived model describes two major dimensions of managerial communication. It provides a framework for how managers communicate on a day-to-day basis and can be used as a point of departure for formally defining communication and the interpersonal processes of communication in today’s organizations.

The Definition of Communication

The term communication is freely used by everyone in modern society, including members of the general public, organizational behavior scholars, and management practi- tioners. Despite this widespread usage, very few members of the general public—and not a great many more management people—can precisely define the term. Part of the problem is that communication experts have not agreed on a definition themselves.

Most definitions of communication used in organizational behavior literature stress the use of symbols to transfer the meaning of information. For example, one analysis stresses that communication is the understanding not of the visible but of the invisible and hidden. These hidden and symbolic elements embedded in the culture give meaning to the visible communication process.6 Of equal, if not more, importance, however, is the fact that com- munication is a personal process that involves the exchange of behaviors and information. Today, of course, this personal process is not just face-to-face, but is increasingly carried out via social media, blogs, wikis, texting, smart phones, and e-mail. Despite the emer-Co

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gence of these technologies, the still personal aspects have been noted in no uncertain terms by most organizational behavior scholars. For example, Ivancevich and Matteson noted that “communication among people does not depend on technology but rather on forces in people and their surroundings. It is a process that occurs within people.”7 This personal perspective of communication has been made particularly clear by Nickerson, who has found that many people tend to assume that the other person has the same knowl- edge that they do, and they communicate on this basis.8 The result is often communication breakdown.

In addition to being a personal process, communication has other implications. A com- munication expert emphasizes the behavioral implications of communication by pointing out that “the only means by which one person can influence another is by the behaviors he performs—that is, the communicative exchanges between people provide the sole method by which influence or effects can be achieved.”9 In other words, the behaviors that occur in an organization are vital to the communication process. This personal and behavioral exchange view of communication takes many forms. The growing importance of the role that electronic media and information technology10 plays in communication is certainly recognized by organizational behavior research and application. There is also considerable research interest in areas such as virtual teams.11 However, more directly relevant to the personal perspective taken here are the areas of nonverbal and interpersonal communica- tion.

NONVERBAL COMMUNICATION

The opposite end of the continuum from the tangible, often sophisticated electronic media and information technology is nonverbal communication. Although verbal communication has long been recognized as being important, nonverbal communication is particularly rel- evant to the study of organizational behavior. Sometimes called the “silent language,” non- verbal communication can be defined as “nonword human responses (such as gestures, facial expressions) and the perceived characteristics of the environment through which the human verbal and nonverbal messages are transmitted.”12 Thus, whether a person says something or, equally important, does not say anything, communication still can take place.

Body Language and Paralanguage

There are many forms of nonverbal communication. Probably the most widely recog- nized is body language. Body movements convey meanings and messages. This form of communication includes facial expressions and what people do with their eyes, feet, hands, and posture. For example, good salespeople, advertisers, and even poker players capitalize on their knowledge of people’s eyes. As explained by Preston:

when an individual is excited or aroused, the pupils of the eyes will dilate. When hag- gling over a price, the buyer will unconsciously signal and alert a seller that a particular price is acceptable.… Some colors or shapes cause more excitement than others, and the reaction registers in the shopper’s eyes. With this research information, marketing peo- ple redesign their products to better appeal to buyers in a competitive environment. Good poker players watch the eyes of their fellow players as new cards are dealt. The pupil dilation very often will show if the card being dealt improves the player’s hand.13Co

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Besides the obvious meanings attached to things such as a firm handshake or touching the other person when making an important point, at least one communication expert believes that what the person does with the lower limbs is the key to body language. He explains:

That is where the tension and anxiety show. The person may claim to be relaxed, yet the legs are crossed tightly, and one foot thrusts so rigidly in the air that it appears to be on the verge of breaking off. Insight: People concentrate on hiding their tension from the waist up. Their real state is revealed in their legs and feet.14

Even a person’s clothing can become important in body language. In addition to dress- ing for success, physical appearance in general seems important. From her research with clients, one consultant concluded that physical attractiveness is “the single most important quality in determining your success at every stage in your life. People who are attractive are judged to be nicer people, more intelligent, more capable, more desirable mates and better employees.”15

Besides the truly silent dimensions of nonverbal communication such as body lan- guage, time (for example, being late or early), or space (for example, how close one gets during a conversation or seating arrangements in a committee meeting), there are also ways in which people verbalize what are an important dimension of nonverbal communication. Sometimes called paralanguage, these include things such as voice quality, tone, volume, speech rate, pitch, nonfluencies (saying “ah,” “um,” or “uh”), laughing, and yawning. For example, tone of voice (genuine or fake) is important in customer service. Also, who says a word (for example, whether the boss or a coworker asks for “volunteers”) and in what environmental context it is said (for example, in the boss’s office or out on the golf course) make a difference.

Improving Nonverbal Effectiveness

The study of those with high emotional intelligence, or EI (discussed in Chapter 7), reveals that one of the key characteristics of these successful, effective people is their abil- ity to read the nonverbal cues and react accordingly in a social situation.16 Although EI is developed over time, as with other forms of communication, there are specific guidelines that can be used to increase the accuracy of interpreting others’ nonverbal behavior. Here are some specific suggestions to improve nonverbal communication:

1. Look at what is happening in the situation. When nonverbal behavior is an emotional response, it reflects what is going on at the moment and can be used to better under- stand the person’s nonverbal behavior.

2. Consider the discrepancies between the nonverbal behavior and the verbal state- ments. If there is a mismatch, then this should be a signal for closer examination of what is going on. Sometimes the nonverbal signals are more accurate than the verbal ones.

3. Watch for subtleties in the nonverbal behavior. For example, the difference between a real smile and a fake one can usually be detected.17

Cultural differences must also be recognized in nonverbal communication. For exam- ple, in the first of the lead author’s numerous trips to Albania starting almost 20 years ago to assist this small Eastern European country in the transformation to a market economy,18Co

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the audience responded to talks on the importance of human resource management by shaking their heads from side to side. I interpreted this as: “Oh, wow, they don’t agree with me. I have a problem here.” However, at the end of my talk, the Albanians enthusiastically cheered and gave one of the warmest and most heartfelt receptions I have ever received. Later, when I expressed my puzzlement to some of them, saying that they didn’t seem to be agreeing with me during the talk, I learned that in Albania shaking the head from side to side means “yes, I agree” and shaking it up and down means “no, I don’t agree.” This one nonverbal gesture, with a completely opposite meaning in this culture, had a huge impact on my reading the other person—especially when they then became inconsistent because they sometimes remembered that Americans had a different meaning for the direction of head shakes.

The following are a few guidelines affecting communication in various cultures: expect more physical closeness in Latin America; the use of “thumbs up” is fine almost anywhere except Australia; and take your hands out of your pockets when meeting a Japa- nese person. The accompanying OB in Action: Nonverbal and Verbal Communication gives some further guidelines for both nonverbal and verbal communication in European cultures. Overall, nonverbal dimensions are extremely important to interpersonal commu- nication and must be given as much recognition as the mounting attention given to elec- tronic media and information technology.

One of the best ways of coping with different cultures and customs is to be careful in the use of both verbal and nonverbal communication. This means saying and doing the right things and, perhaps even more import- ant, not saying or doing the wrong things. Here are some guidelines that U.S. managers are finding useful in treading their way through the intercultural maze of foreign countries:

1. In Europe, act as if you are calling on a rich old aunt. Dress well, do not chew gum, do not smoke without first seeking permission, do not use first names unless invited to do so by the other party, be punctual to meetings, and, if you are unsure of the proper dress, err on the side of conservatism.

2. When in France, speak English to your hosts. They know how to speak English and typically are appalled at the performance of foreigners trying to communicate in their tongue. Stick to the language you know best. Also, be on time for all engage- ments. The French are sticklers for promptness.

3. Remember that Germans differ from the French in a number of ways. One of these is that they are even bigger sticklers for promptness. Also, remember that gentlemen walk and sit to the left of all women and men of senior business rank. Do not get on the wrong side.

4. In Britain, social events are not used for discussing business. This is left at the office. Also, remember

that the British religiously keep engagement cal- endars, so if you are inviting some people to lunch or dinner, send your invitation well in advance or you are likely to find that date already filled in your prospective guest’s calendar. If you are attending a formal dinner, it is common to toast Her Majesty’s health after the main course. This is the signal that you may now smoke. Do not light up prior to this time. Also, remember that although promptness is valued, if you are invited to dinner at 8 P.M., you may show up five or ten minutes late, but it is not good manners to show up early.

5. In Italy, it is common to shake hands with every- one. However, do not expect them to remember your name. No one does on the first introduction. Also, get in the habit of calling people by their title. For example, university graduates often pre- fer to be addressed as such, and there are different titles depending on the individual’s field of study.

6. In Spain, punctuality is taken seriously only when attending a bullfight. Most offices and shops close for siesta from 1:30 P.M. to 4:30 P.M., and restau- rants do not usually reopen until after 9 P.M. or get into full swing before 11 P.M. An early dinner in Spain often ends around midnight; a late dinner goes into the wee hours of the morning. If you are invited to dinner and are unaccustomed to late hours, take an afternoon nap. You are going to need it if you hope to last through dessert.

OB IN ACTION: NONVERBAL AND VERBAL COMMUNICATION

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INTERPERSONAL COMMUNICATION

In today’s world, interpersonal communication represents the middle ground between elec- tronic media and information technology on the one extreme and nonverbal communica- tion on the other. At the heart of the study of organizational behavior is interpersonal communication.

In interpersonal communication, the major emphasis is on transferring information from one person to another. Communication is looked on as a basic method of effecting behavioral change, and it incorporates the psychological processes (perception, learning, and motivation) on the one hand and language on the other. However, it must be noted that the explosion of advanced information technology is also having an impact on this human interaction process. For example, in a University of Southern California commencement address by Disney’s Michael Eisner, he noted:

As any drama coach can tell you, when accompanied by varied intonation and facial expressions, identical words can come across completely differently. If a person says “you dope” with a smile over the dinner table, it can be endearing. But, in the hard, cold cathode-ray light of e-mail, the same two words stand there starkly and accusingly. I’m afraid that spell check does not check for anger, emotion, inflection or subtext.

As an academic analysis noted: “Human communication has always been central to organizational action. Today, the introduction of various sophisticated electronic commu- nication technologies and the demand for faster and better forms of interaction are visibly influencing the nature of [interpersonal] communication.”19 Thus, listening sensitivity and nonverbal communications are also closely associated with interpersonal communication. For example, Bill Marriott, Jr., of the highly successful hotel chain, spent nearly half his time listening and talking to frontline employees. It is important to note that he listened and then talked to his people.

Importance of How to Talk to Others

In interpersonal communication, knowing how to talk to others can be very useful. One communication expert noted that when communicating with the boss, it is important to understand his or her preferred communication style. Here are some examples:20

1. The Director. This person has a short attention span, processes information very quickly, and is interested only in the bottom line. So it is best to present this type of manager with a bulleted list of conclusions and forget all of the background informa- tion.

2. The Free Spirit. This manager is a creative, big-picture type of person who likes to consider alternative approaches to doing things, but is not very good on follow- through. In communicating with this type of manager it is important to be patient and to be prepared for changes in direction. The manager often likes to assimilate what he or she is being told and to consider several alternatives before making a decision.

3. The Humanist. This manager likes everyone to be happy and is very concerned with the feelings of others. So any suggestions or recommendations that are given to him or her will be passed around the entire department for full consensus before any action is taken. In dealing with this type of manager, patience and tact are very important.Co

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4. The Historian. This manager likes to know the whole picture and thrives on details. This individual wants to be given a thorough analysis and background information, especially if it is presented in linear fashion. This type of manager does not jump from subject to subject, but instead remains focused on the topic under consideration until it has been exhaustively reviewed and a decision is made.

In addition to these hints on how to talk with one’s boss is the whole upward communica- tion process, which is generally inhibited in traditional hierarchically structured organiza- tions.

The Importance of Feedback

The often posed philosophical question—Is there a noise in the forest if a tree crashes to the ground but no one is there to hear it?—demonstrates some of the important aspects of interpersonal communication. From a communications perspective, the answer is no. There are sound waves but no noise because no one perceives it. There must be both a sender and a receiver in order for interpersonal communication to take place. The sender is obviously important to communication, but so is the neglected receiver who gives feed- back to the sender and becomes an important component of the upward process.

The importance of feedback cannot be overemphasized because effective interper- sonal communication is highly dependent on it. Proper follow-up and feedback require establishing an informal and formal mechanism by which the sender can check on how the message was actually interpreted. There is even research evidence that a graphical feed- back format has a more positive impact on performance than does a strictly tabular, numer- ical feedback format.21

In general, feedback makes communication a two-way process and is a big problem with much of e-mail that turns out to be only one-way. As electronic communication becomes more interactive, such problems can be overcome. There is continuing research evidence that feedback not only improves communication but also, in turn, leads to more effective manager and organizational performance.22 For example, when businesses have secret salaries so that no one knows what anyone else is earning, or family-owned enter- prises do not tell the employees how well the company is doing, many people believe that they are being paid less than they should.23 On the other hand, when information is shared, even though this means giving up some control, the results are often well worth the effort.24

Table 8.1 summarizes some characteristics of effective and ineffective feedback for employee performance. The following list explains these characteristics in more detail:

1. Intention. Effective feedback is directed toward improving job performance and making the employee a more valuable asset. It is not a personal attack and should not compromise the individual’s feeling of self-worth or image. Rather, effective feed- back is directed toward aspects of the job.

2. Specificity. Effective feedback is designed to provide recipients with specific infor- mation so that they know what must be done to correct the situation. Ineffective feed- back is general and leaves questions in the recipients’ minds. For example, telling an employee that he or she is doing a poor job is too general and will leave the recipient frustrated in seeking ways to correct the problem.Co

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3. Description. Effective feedback can also be characterized as descriptive rather than evaluative. It tells the employee what he or she has done in objective terms, rather than presenting a value judgment.

4. Usefulness. Effective feedback is information that an employee can use to improve performance. It serves no purpose to berate employees for their lack of skill if they do not have the ability or training to perform properly. Thus, the guideline is that if it is not something the employee can correct, it is not worth mentioning.

5. Timeliness. There are also considerations in timing feedback properly. As a rule, the more immediate the feedback, the better. This way the employee has a better chance of knowing what the supervisor is talking about and can take corrective action.

6. Readiness. In order for feedback to be effective, employees must be ready to receive it. When feedback is imposed or forced on employees, it is much less effective.

7. Clarity. Effective feedback must be clearly understood by the recipient. A good way of checking this is to ask the recipient to restate the major points of the discussion. Also, supervisors can observe facial expressions as indicators of understanding and acceptance.

8. Validity. In order for feedback to be effective, it must be reliable and valid. Of course, when the information is incorrect, the employee will feel that the supervisor is unnec- essarily biased or the employee may take corrective action that is inappropriate and only compounds the problem.

As a developmental tool, multisource 360-degree feedback has received increasing attention as a process to communicate to a target manager about strengths and weaknesses. The multiple sources include peers (coworkers), managers, direct reports, and sometimes even customers (thus the term 360 degrees). This 360-degree feedback approach draws its conceptual roots from several different areas. One is the traditional organizational develop- ment technique of using surveys to assess employees’ perceptions. These surveys measure items such as satisfaction with management, supervisors, pay, work procedures, or formal policies of the organization. The survey information is then fed back to those that generated it, with the goal of developing an action plan to improve the organization.

Another area in which 360-degree feedback has strong conceptual roots is the perfor- mance appraisal literature. Today’s environment has forced organizations to provide much more information than the traditional performance review, thus spawning such creative efforts as 360-degree feedback.25 It is now recognized that managers can improve their

TABLE 8.1. Luthans and Martinko’s Characteristics of Feedback for Effective and Ineffective Interpersonal Communication in Human Resource Management

Effective Feedback Ineffective Feedback

1. Intended to help the employee 1. Intended to belittle the employee

2. Specific 2. General

3. Descriptive 3. Evaluative

4. Useful 4. Inappropriate

5. Timely 5. Untimely

6. Considers employee readiness for feedback 6. Makes the employee defensive

7. Clear 7. Not understandable

8. Valid 8. Inaccurate

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performance through increased multisource information.26 Social cognitive theory (see Chapter 1), in particular the dimension of self-awareness, can also be used as an explana- tion.27 Specifically, social cognitive theory posits that humans have the ability to assess their own capabilities and skills, and they often evaluate themselves quite differently than others do. Therefore, the 360-degree feedback provides managers with an external source of information designed to increase their self-awareness.28 This enhanced self-awareness may improve managerial effectiveness by providing individuals with another source of outside information regarding what others expect of him or her. A recent study found that self-awareness from 360-degree feedback (closing the discrepancy between self and oth- ers’ ratings) can be improved through combining the feedback with systematic coaching.29

Other Important Variables in Interpersonal Communication

Besides feedback, other variables, such as trust, expectations, values, status, and com- patibility, greatly influence the interpersonal aspects of communication. If the subordinate does not trust the boss, there will be ineffective communication.30 The same is true of the other variables mentioned. People perceive only what they expect to perceive; the unex- pected may not be perceived at all. The growing generation gap can play havoc with inter- personal communication. For example, here are some guidelines to communicate better with Generation X (those born between 1965 and 1980) and Generation Y (those born between 1981 and 2000):31

1. In terms of technology, for Gen X keep it up-to-date and motivating (music at work, BlackBerrys, and fast computers) and Gen Y (learn from them).

2. In terms of collaboration, for Gen X limit face-to-face meetings and offer alternatives such as conference calls, video, and Web conferencing and for Gen Y try to leverage social networks to encourage team collaboration and knowledge sharing.

3. In terms of the work ethic, for Gen X trust them and offer flexibility to telecommute and for Gen Y accept their expectations of new rules (e.g., productivity not hours at their desk).

4. In terms of socializing, for Gen X invite but do not push them to participate and for Gen Y appeal to their career goals to attend a networking event.

Giving attention to, and doing something about, these interpersonal variables such as trust and recognizing age differences can spell the difference between effective and ineffective communication.

INTERACTIVE COMMUNICATION IN ORGANIZATIONS

Although closely related, interpersonal communication discussed above is more at the micro, individual level, whereas interactive communication is more at the macro, organi- zational level. The classical hierarchical organizational structure discussed in Chapter 3 gave formal recognition only to vertical communication. Nevertheless, most of the classi- cal theorists saw the need to supplement the vertical with some form of horizontal system. Horizontal communication is required to make a coordinated, cross-functional effort in achieving organizational goals. The horizontal requirement becomes more apparent as the Co

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organization becomes larger, more complex, and more subject to the flattening and net- working of structures, covered in Chapter 3. Well-known companies such as Virgin Atlan- tic, Patagonia, Costco, and Apple have moved to such a horizontal model of organization. These and other modern network and team designs, formally incorporate horizontal flows into the structure. However, as is the case with vertical (downward and upward) flows in the organization structure, the real key to horizontal communication is still found in people and behaviors. Because of the dynamic, interpersonal aspects of communication, the inter- active form seems more appropriate than just the horizontal form. The horizontal flows of information (even in a horizontal structure) are only part of the communication process that takes place across an organization.

The Extent and Implications of Interactive Communication

Most management experts today stress the important but often overlooked role that interactive communication plays in today’s organizations. In most cases the vertical com- munication process still overshadows the horizontal. For example, the study of “Real Man- agers” reported at the beginning of the chapter found that approximately 100 interactions per week reportedly occurred between managers and their employees (both to them and from them). “While there was far more communication downward (between managers and their employees) than upward (between managers and top managers above them in the organization), there were no specific differences determined by initiation of interaction.”32 The horizontal communication in this study was mainly represented by the networking activity (socializing/politicking and interacting with outsiders) that was shown to be related to successful managers (those promoted relatively fast) more than any other activ- ity.33 Other studies have also found a relationship, although complex, between communi- cation activities and leadership.34

Just as in other aspects of organizational communication, there are many behavioral implications contained in the interactive process.35 Communication with peers, that is, with persons of relatively equal status on the same level of an organization, provides needed social support for an individual. People can more comfortably turn to a peer for social support than they can to those above or below them. The result can be good or bad for the organization. If the support is couched in terms of task coordination to achieve over- all goals, interactive communication can be good for the organization. On the other hand, “if there are no problems of task coordination left to a group of peers, the content of their communication can take forms which are irrelevant to or destructive of organizational functioning.”36 In addition, interactive communication among peers may be at the sacrifice of vertical communication. Persons at each level, giving social support to one another, may freely communicate among themselves but fail to communicate upward or downward. In fact, the “Real Managers” study showed that networking had the least-relative relationship with effective managers (those with satisfied and committed employees and high-perform- ing units), but routine communication activities (exchanging and processing information) had the highest.37

The Purposes and Methods of Interactive Communication

Just as there are several purposes of vertical communication in an organization, there are also various reasons for the need for interactive communication. Basing his inquiry on Co

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several research studies, a communications scholar has summarized four of the most important purposes of interactive communication:

1. Task coordination. The department heads may meet monthly to discuss how each department is contributing to the system’s goals.

2. Problem solving. The members of a department may assemble to discuss how they will handle a threatened budget cut; they may employ brainstorming techniques.

3. Information sharing. The members of one department may meet with the members of another department to give them some new data.

4. Conflict resolution. The members of one department may meet to discuss a conflict inherent in the department or between departments.38

The examples for each of the major purposes of interactive communication tradition- ally have been departmental or interdepartmental meetings, but in recent years they include teams and web conferencing. Such meetings and teams that exist in most organizations have been the major methods of interactive communication. In addition, most organiza- tions’ procedures require written reports to be distributed across departments and to teams. The quantity, quality, and human implications discussed in relation to the vertical commu- nication process are also inherent in interactive communication.

The Role of the Informal Organization

Because of the failure of the classical structures to meet the needs of interactive com- munication, not only have new organizational forms emerged, but the informal organiza- tion and groups have also been used to fill the void. Informal contacts with others on the same level are a primary means of interactive communication. The informal system of communication can be used to spread false rumors and destructive information, or it can effectively supplement the formal channels of communication. For example, communica- tion experts recognize that the hallways of an organization encourage creative, open-ended interactions because of two reasons: (1) the hallway takes away some of the sense of hier- archy, making the participants seem more equal and (2) the hallway invites multiple per- spectives—anyone who wanders by can join in, adding their ideas to the mix.39 In today’s digital world, with increasing numbers of employees at all levels having less face-to-face interaction in “hallways,” the same advantages apply to those who now commonly interact on chat rooms, blogs, PDAs, and e-mail. Face-to-face or electronically, the informal sys- tem can quickly disseminate pertinent information that assists the formal systems to attain goals. However, whether the informal system has negative or positive functions for the organization depends largely on the goals of the person doing the communicating. As in any communication system, the entire informal system has a highly personal orientation, and, as has been pointed out earlier, personal goals may or may not be compatible with organizational goals. The degree of compatibility that does exist will have a major impact on the effect that the grapevine or rumor mill has on organizational goal attainment.

Some organizational theorists are critical of the grapevine because its speed makes control of false rumors and information difficult to manage. By the same token, however, this speed factor may work to the advantage of the organization. Because the informal sys- tem is so personally based and directed, it tends to be much faster than the formal down- ward system of information flow. Important relevant information that requires quick responsive action by lower-level personnel may be more effectively handled by the infor- mal system than by the formal system. Thus, the informal system is a major way that inter-Co

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active communication is accomplished. The formal horizontal and upward systems are often either inadequate or completely ineffective. The informal system is generally relied on to coordinate the units horizontally on a given level.

THE DECISION-MAKING PROCESS

Both communication and decision making are important dynamic, personal processes rel- evant to the social cognitive framework for this text (see Chapter 1) and the study of orga- nizational behavior. After defining decision making, particular attention is given to behavioral (as opposed to economic or financial) decision making and then the styles and techniques of decision making most relevant to organizational behavior understanding and application.

Decision making is almost universally defined as choosing between alternatives. It is closely related to all the traditional management functions. For example, when a manager plans, organizes, and controls, he or she is making decisions. The classical theorists, how- ever, did not generally present decision making this way. Pioneering management theorists such as Fayol and Urwick were concerned with the decision-making process only to the extent that it affects delegation and authority, whereas the father of scientific management, Frederick W. Taylor, alluded to the scientific method only as an ideal approach to making decisions. Like most other aspects of modern organization theory, the beginning of a mean- ingful analysis of the decision-making process can be traced to Chester Barnard. In The Functions of the Executive, Barnard gave a comprehensive analytical treatment of decision making and noted: “The processes of decision … are largely techniques for narrowing choice.”40

Most discussions of the decision-making process break it down into a series of steps. For the most part, the logic can be traced to the ideas developed by Herbert A. Simon, the well-known Nobel Prize–winning organization and decision theorist, who conceptualized three major phases in the decision-making process:

1. Intelligence activity. Borrowing from the military meaning of “intelligence,” Simon described this initial phase as consisting of searching the environment for conditions calling for decision making.

2. Design activity. During the second phase, inventing, developing, and analyzing pos- sible courses of action take place.

3. Choice activity. The third and final phase is the actual choice—selecting a particular course of action from among those available.41

Closely related to these phases, but with a more empirical basis (that is, tracing actual deci- sions in organizations), are the stages of decision making of Mintzberg and his colleagues:

1. The identification phase, during which recognition of a problem or opportunity arises and a diagnosis is made. It was found that severe, immediate problems did not receive a very systematic, extensive diagnosis but that mild problems did.

2. The development phase, during which there may be a search for existing standard procedures or solutions already in place or the design of a new, tailor-made solution. It was found that the design process was a groping, trial-and-error process in which the decision makers had only a vague idea of the ideal solution.Co

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3. The selection phase, during which the choice of a solution is made. There are three ways of making this selection: by the judgment of the decision maker, on the basis of experience or intuition rather than logical analysis; by analysis of the alternatives on a logical, systematic basis; and by bargaining when the selection involves a group of decision makers and all the political maneuvering that this entails. Once the decision is formally accepted, an authorization is made.42

Whether they are expressed in Simon’s or Mintzberg’s phases, there seem to be iden- tifiable, preliminary steps leading to the choice activity in decision making. Also, it should be again emphasized, like communication, decision making is a dynamic, personal pro- cess, and there are many feedback loops in each of the phases. “Feedback loops can be caused by problems of timing, politics, disagreement among managers, inability to identify an appropriate alternative or to implement the solution, turnover of managers, or the sud- den appearance of a new alternative.”43 The essential point is that decision making is a dynamic, personal process. This process has both strategic44 and behavioral implications for organizations. Empirical evidence indicates that the decision process that involves making the right strategic choices does lead to successful decisions,45 but there are still many problems of making the wrong decisions.46 For example, casual observation and detailed analysis indicate many wrong decisions were made in the handling of the Hurri- cane Katrina clean-up, the search for weapons of mass destruction in Iraq, and the BP Deepwater Horizon oil spill.47 To go beyond the recent dominance of the role that elec- tronic media and information technology play in the analysis and practice of effective deci- sion making, most relevant to the study and application of organizational behavior is what has become known as behavioral decision making.

BEHAVIORAL DECISION MAKING

Why does a decision maker choose one alternative over another? Stated another way, how do managers make the right decisions and learn from the wrong ones?48 The answer to this question has been a concern of organizational behavior theorists as far back as March and Simon’s classic book, Organizations, in 1958. Subsequently, however, the field became more interested in such topics as motivation and goal setting, and emphasis on decision making waned. The field of behavioral decision making was mainly developed outside the mainstream of organizational behavior theory and research by cognitive psychologists and decision theorists in economics and information science. Recently, however, there has been a resurgence of interest in behavioral decision making, and it has moved back into the mainstream of the field of organizational behavior.49

Whereas classical decision theory operated under the assumption of rationality and certainty, the new behavioral decision theory does not. Behavioral decision-making theo- rists argue that individuals have cognitive limitations and, because of the complexity of organizations and the world in general, they must act in situations where uncertainty pre- vails and in which information is often ambiguous and incomplete.50 Sometimes this risk and uncertainty leads organizational decision makers to make questionable, if not unethi- cal, decisions. Because of this real-world uncertainty and ambiguity, a number of models of decision making have emerged over the years. The foundation and point of departure for developing and analyzing the various models of behavioral decision making remain the degree and meaning of rationality.Co

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Decision Rationality

The most often used definition of rationality in decision making is that it is a means to an end. If appropriate means are chosen to reach desired ends, the decision is said to be rational. However, there are many complications to this simple test of rationality. To begin with, it is very difficult to separate means from ends because an apparent end may be only a means for some future end. This idea is commonly referred to as the means-ends chain or hierarchy. Simon pointed out that “the means-end hierarchy is seldom an integrated, com- pletely connected chain. Often the connection between organization activities and ultimate objectives is obscure, or these ultimate objectives are incompletely formulated, or there are internal conflicts and contradictions among the ultimate objectives, or among the means selected to attain them.”51

Besides the complications associated with the means-ends chain, it may even be that the concept is obsolete. Decision making relevant to the national economy supports this position. Decision makers who seek to make seemingly rational adjustments in the eco- nomic system may in fact produce undesirable, or at least unanticipated, end results. Simon also warned that a simple means-ends analysis may have inaccurate conclusions.

One way to clarify means-ends rationality is to attach appropriate qualifying adverbs to the various types of rationality. Thus, objective rationality can be applied to decisions that maximize given values in a given situation. Subjective rationality might be used if the decision maximizes attainment relative to knowledge of the given subject. Conscious ratio- nality might be applied to decisions in which adjustment of means to ends is a conscious process. A decision is deliberately rational to the degree that the adjustment of means to ends has been deliberately sought by the individual or the organization; a decision is orga- nizationally rational to the extent that it is aimed at the organization’s goals; and a decision is personally rational if it is directed toward the individual’s goals.52

At the opposite extreme from the classical economic rationality model, in which the decision maker is completely rational, is the social model drawn from psychology. Sig- mund Freud viewed humans as bundles of feelings, emotions, and instincts, with their behavior being guided largely by their unconscious desires. Obviously, if this were the complete description, people would not be capable of making effective decisions.

Although almost all contemporary psychologists would take issue with the Freudian description of humans,53 they would agree that psychological influences have a significant impact on decision-making behavior.54 Furthermore, social pressures and influences may cause managers to make irrational decisions. The well-known conformity experiment con- ducted by Solomon Asch demonstrates human irrationality.55 His study used several groups of seven to nine subjects each. They were told that their task was to compare the lengths of lines. All except one of the “subjects” in each group had prearranged with the experimenter to give clearly wrong answers on 12 of the 18 line-judgment trials. About 37 percent of the 123 naive subjects yielded to the group pressures and gave incorrect answers to the 12 test situations. In other words, more than one-third of the experimental subjects conformed to a decision they knew was wrong.

If more than one-third of Asch’s subjects conformed under “right and wrong,” “black and white” conditions of comparing the lengths of lines, a logical conclusion would be that the real, “gray” world is full of irrational conformists. It takes little imagination to equate Asch’s lines with the alternatives of a management decision. There seems to be little doubt of the importance of social influences in decision-making behavior. In addition, there are many other psychological dynamics. For example, there seems to be a tendency on the part of many decision makers to stick with a bad decision alternative, even when it is unlikely Co

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that things can be turned around. Staw and Ross have identified four major reasons why this phenomenon, called escalation of commitment, might happen:56

1. Project characteristics. This is probably the primary reason for escalation decisions. Task or project characteristics such as delayed return on investment or obvious tem- porary problems may lead the decision maker to stick with or increase the commit- ment to a wrong course of action.

2. Psychological determinants. Once the decision goes bad, the manager may have information-processing errors (use biased factors or take more risks than are justi- fied). Also, because the decision maker is now ego-involved, negative information is ignored and defensive shields are set up.

3. Social forces. There may be considerable peer pressure put on decision makers and/ or they may need to save face, so they continue or escalate their commitment to a wrong course of action.

4. Organizational determinants. Not only may the project or task characteristics lend themselves to the escalation of bad decisions—so may a breakdown in communica- tion, dysfunctional politics, and resistance to change.

Recent research supports escalation of commitment as an interactive, complementary rela- tionship between predictors of sunk costs (e.g., because of the amount of time and money previously spent, decision makers become psychologically “stuck” to continue) and proj- ect completion (e.g., deciding to continue to spend time and money will increase the prob- ability of successful completion).57

Certainly, the completely irrational person depicted by Freud is too extreme to be use- ful. However, escalation of commitment and other human dynamics covered throughout this text point out that there is little question of the important role that human complexity can and does play in management decision making.58

Decision-Making Styles

Besides the attention given to decision rationality, another approach to behavioral decision making focuses on the styles that managers use in choosing among alternatives. For instance, one decision-style typology using well-known managers as representative examples identified the following: (1) Charismatics (enthusiastic, captivating, talkative, dominant): Virgin Atlantic’s Richard Branson or Southwest Airlines’ founder Herb Kelle- her; (2) Thinkers (cerebral, intelligent, logical, academic): Amazon’s Jeff Bezos or Face- book’s Mark Zuckerberg; (3) Skeptics (demanding, disruptive, disagreeable, rebellious): Tom Siebel of the software developer Siebel Systems; (4) Followers (responsible, cau- tious, brand-driven, bargain-conscious): Peter Coors of Molson Coors Brewing Company or former Hewlett-Packard head Carly Fiorina; and (5) Controllers (logical, unemotional, sensible, detail oriented, accurate, analytical): Facebooks’s Mark Zuckerberg.59 These and other styles reflect a number of psychological dimensions including how decision makers perceive what is happening around them and how they process information.60

A simple 2  2 behavioral decision-making style matrix can be categorized into two dimensions: value orientation and tolerance for ambiguity. The value orientation focuses on the decision maker’s concern for task and technical matters as opposed to people and social concerns. The tolerance for ambiguity orientation measures how much the decision maker needs structure and control (a desire for low ambiguity) as opposed to being able to thrive in uncertain situations (a desire for high ambiguity). These two orientations with Co

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their low and high dimensions are portrayed in the matrix shown in Figure 8.5, with four styles of decision making: directive, analytical, conceptual, and behavioral.

Directive Style

Decision makers with a directive style have a low tolerance for ambiguity and are ori- ented toward task and the technical concerns. These decision makers tend to be efficient, logical, pragmatic, and systematic in their approach to problem solving. Directive decision makers also like to focus on facts and get things done quickly. They also are action ori- ented, tend to have a very short-run focus, like to exercise power, want to be in control, and, in general, display an autocratic leadership style.

Analytical Style

Analytical decision makers have a high tolerance for ambiguity and a strong task and technical orientation. These types like to analyze situations; in fact, they often tend to over- analyze things. They evaluate more information and alternatives than do directive decision makers. They also take a long time to make decisions, but they do respond well to new or uncertain situations. They also tend to have an autocratic leadership style.

Conceptual Style

Decision makers with a conceptual style have a high tolerance for ambiguity and strong people and social concerns. They take a broad perspective in solving problems and like to consider many options and future possibilities. These decision makers discuss things with as many people as possible in order to gather a great deal of information and then rely on intuition in making their decisions. Conceptual decision makers are also will- ing to take risks and tend to be good at discovering creative solutions to problems. At the same time, however, they can foster an idealistic and indecisive approach to decision mak- ing.

Behavioral Style

The behavioral style decision maker is characterized by a low tolerance for ambiguity and strong people and social concerns. These decision makers tend to work well with oth- ers and like situations in which opinions are openly exchanged. They tend to be receptive to suggestions, are supportive and warm, and prefer verbal to written information. They also tend to avoid conflict and be overly concerned with keeping everyone happy. As a result, these decision makers often have a difficult time saying no to people, and they do not like making tough decisions, especially when it will result in someone being upset with the outcome.

Style Implications

Research reveals that decision makers tend to have more than one dominant style.61 Typically managers rely on two or three decision styles, and these will vary by occupation, job level, and culture. These styles can be used to note the strong and weak points of deci-Co

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sion makers. For example, analytical decision makers make fast decisions, but they also tend to be autocratic in their approach to doing things. Similarly, conceptual decision mak- ers are innovative and willing to take risks, but they are often indecisive. These styles also help explain why different managers will arrive at different decisions after evaluating the same information. Overall, the analysis of decision-making styles is useful in providing insights regarding how and why managers make decisions, as well as offering practical guidelines regarding how to deal with various decision-making styles.

PARTICIPATIVE DECISION-MAKING TECHNIQUES

Most of the behaviorally oriented techniques, at least traditionally, have revolved around participation. Used as a decision-making technique, participation involves individuals or groups in the process.62 It can be formal or informal, and it entails intellectual and emo- tional as well as physical involvement. The actual amount of participation in making deci- sions ranges from one extreme of no participation, wherein the manager makes the decision and asks for no help or ideas from anyone, to the other extreme of full participation, where everyone connected with, or affected by, the decision is completely involved. In practice, the degree of participation will be determined by factors such as the experience of the per- son or group and the nature of the task. The more experience and the more open and unstructured the task, the more participation there will tend to be.63 Individual personality traits of managers can also influence the practice of participative decision making. 64

In today’s organizations there is an awakened interest in participation. Participative techniques have been talked about ever since the early human relations movement, and now, because of competitive pressures, the elimination of old hierarchical superior-subor- dinate relationships and the emergence of teams, horizontal structures, and boundary-span- ning information technologies, organizations, teams, and individual managers are effectively using them.65 For example, through the use of information technology, a Dal- las-based engineer with Raytheon was faced with a technical decision. After searching for related problems in their online project library, he e-mails a colleague in the firm’s West Coast office who is trying to answer the same question—and they participate with each other to solve the problem.66

Participation techniques are being applied informally on an individual or a team basis or formally on a program basis. Individual participation techniques are those in which an employee somehow affects the decision making of a manager. Group participation utilizes consultative and democratic techniques. In consultative participation, managers ask for and receive involvement from their employees, but the managers maintain the right to make the decision. In the democratic form, there is total participation, and the group, not the individ- ual head, makes the final decision by consensus or majority vote.

There are many positive and negative attributes of participative decision making. Bal- ancing these attributes in evaluating the effectiveness of participative decision making is difficult because of moderating factors such as leadership style or personality of the parties involved;67 situational, environmental, and contextual factors;68 and ideology.69 Also, even though there is general research support,70 the different forms of participative tech- niques can have markedly different outcomes. For example, informal participation was found to have a positive effect on employee productivity and satisfaction; representative participation had a positive impact on satisfaction, but not on productivity; and short-term participation was ineffective by both criteria.71Co

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One problem is the tendency toward pseudoparticipation. Many managers ask for par- ticipation, but whenever subordinates take them up on it by making a suggestion or trying to make some input into a decision, they are put down or never receive any feedback. In some cases managers try to get their people involved in the task but not in the decision- making process. This can lead to a boomerang effect regarding employee satisfaction. If managers claim to want participation from their people but never let them become intellec- tually and emotionally involved and never use their suggestions, the results may be nega- tive. Also, participation can be very time consuming, and it has the same general disadvantages of committees such as pinpointing responsibility. From a behavioral stand- point, however, the advantages of participative decision making far outweigh the disadvan- tages. Most of the benefits are touched on throughout this text. Perhaps the biggest advantage is that the participative approach to decision making recognizes that each person can make a meaningful contribution to the attainment of organizational objectives.

CREATIVITY AND GROUP DECISION MAKING

Despite the increasing impact of advanced information technology on decision making, there is still a critical need for behaviorally oriented decision-making techniques. Unfortu- nately, generally only the participative behavioral techniques discussed so far have been available to managers, and there have been only a few scattered attempts to develop new techniques for helping make more creative and problem-solving types of decisions. Yet as knowledge management recognizes, it is these creative decisions that are still a major chal- lenge facing today’s management.

The Process of Creativity

A key challenge facing organizations in today’s highly competitive environment is to be more creative and innovative.72 This is particularly true given the fact that many firms continue to downsize in an effort to become more efficient, but such a dramatic change on employees has been found to have a negative effect on the company’s creativity.73 Ironi- cally, as the accompanying OB in Action box indicates, some firms have used creativity to eliminate the need to downsize at all.

Noted creativity researcher Teresa Amabile proposes that creativity is a function of three major components: expertise, creative-thinking skills, and motivation.74 Expertise consists of knowledge: technical, procedural, and intellectual. Creative-thinking skills determine how flexibly and imaginatively people can deal with problems and make effec- tive decisions. Motivation is the inner passion to solve the problem at hand, and this often results in decisions that are far more creative than expected. Her most recent research also indicates that this creative process is generally better off when given plenty of time, for example, AT&T’s legendary Bell Labs, operating under its corporate philosophy that big ideas take time, produced world-changing innovations such as the transistor and the laser beam.75

Very simply, creativity results in people looking at things differently.76 Research shows that, in contrast to the average person, creative people seem better able to do things such as abstracting, imaging, synthesizing, recognizing patterns, and empathizing.77 They also seem to be good intuitive decision makers,78 know how to take advantage of good ideas,79 and are able to break old paradigms or ways of thinking and make decisions that sometimes seem to fly in the face of rationality. For example,Co

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former Chrysler president Robert Lutz was out for a drive several years ago, wondering how he could revive the flagging automotive company, when he got an idea for a new high-priced sports car. Lutz’s subconscious, visceral feeling defied what everyone told him about what U.S. car buyers were looking for in the 1990s, yet he pushed ahead with this strong sense of being right. The result—the Dodge Viper—became a massive hit.80

Such intuitive decision makers draw from their tacit knowledge. This type of knowledge is not readily explainable, is acquired through observation and experience, and seems to be in the unconscious.81 Often, this tacit knowledge is important to effective decisions that ratio- nality would discount.

How can today’s decision makers increase their own creativity and generate more interesting and profitable solutions to difficult problems?82 A number of useful ideas have been offered by both successful professional managers and creativity researchers.83 Michael Eisner, former CEO and chairman of the Walt Disney Company, long contended creativity was not a “bolt out of the blue,” but rather the result of careful thought and exam- ination. In fact, early in his career one of his bosses wanted to have him fired because every time the boss suggested a new idea, Eisner would ask the manager if he could “think about it and get back to you.” The boss was convinced that creativity was based on rapid responses, whereas Eisner believes that creativity is typically a result of careful, deliberate thought, an idea that is often echoed by many successful managers.84 In fact, Eisner often said, in contrast to stereotypical views of the creative process, that creativity is a disci- plined process. In an interview, he explained his thinking this way:

Discipline is good for the creative process, and time limits are good. An infinite amount of time to do a project does not always make it creatively better. The image of an artist being temperamental and acting like a 16-month-old child is usually false. It’s a cliché that we’ve helped perpetrate in the movie business. Artists are always depicted as cra- zies. But in reality, insane artists are rare. In fact, some of the most creative people I’ve ever met—Steven Spielberg, George Lucas, I. M. Pei, Frank Stella, and Frank Gehry, just to name a few—are the most organized, mature individuals you’ll ever meet. Not many creative people have the urge to cut off an ear.85

Creative ideas from both individuals and groups are scarce. One of the problems may be that students educated in business schools know how to crunch numbers, read a balance sheet, and develop a Web page, but they have no knowledge of the creative process or how to develop creative solutions to problems. For example, General Foods held a competition in which student teams from prestigious business schools were given the charge to develop a new marketing plan that would stem the plunging sales of Sugar-Free Kool-Aid. Although they used quantitative analysis and the right terminology, they offered very few original ideas that the company could or would be able to use. The marketing manager con- cluded, “There were a couple of ideas that were of interest, but nothing we haven’t looked at before.”86 A starting point for getting around this problem would be to understand the meaning and dimensions of creativity.

Psychological Definition and Analysis of Creativity

A simple, but generally recognized, psychological definition of creativity is that it involves combining responses or ideas of individuals or groups in novel ways.87 Creative thinking reaches out beyond what is now known into what could be. It draws on observa- tion, experience, knowledge, and the indefinable ability each person has to arrange com-Co

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mon elements into new patterns. For instance, how would you respond to the problem of coming up with as many uses for a newspaper as possible? Compare your solution with the following proposal from a 10-year-old boy:

You can read it, write on it, lay it down and paint a picture on it.… You could put it in your door for decoration, put it in the garbage can, put it on a chair if the chair is messy. If you have a puppy, you put newspaper in its box or put it in your backyard for the dog to play with. When you build something and you don’t want anyone to see it, put news- paper around it. Put newspaper on the floor if you have no mattress, use it to pick up something hot, use it to stop bleeding, or to catch the drips from drying clothes. You can use a newspaper for curtains, put it in your shoe to cover what is hurting your foot, make a kite out of it, shade a light that is too bright. You can wrap fish in it, wipe windows, or wrap money in it.… You put washed shoes in newspaper, wipe eyeglasses with it, put it under a dripping sink, put a plant on it, make a paper bowl out of it, use it for a hat if it is raining, tie it on your feet for slippers. You can put it on the sand if you have no towel, use it for bases in baseball, make paper airplanes with it, use it as a dustpan when you sweep, ball it up for the cat to play with, wrap your hands in it if it is cold.88

Obviously, this boy describing the uses of a newspaper was very creative, but what caused his creativity?

Psychologists point out that it is much easier to provide examples of creativity than it is to identify causes. However, two widely recognized dimensions have been identified that can help explain the creative process:

1. Divergent thinking. This refers to a person’s ability to generate novel, but still appro- priate, responses to questions and problems. This is in contrast to convergent think- ing, which leads to responses that are based mainly on knowledge and rational logic. In the preceding newspaper problem, convergent thinking would answer, “you read it,” but divergent thinking would say, “make a kite out of it.” The latter—divergent thinking—is considered more creative.

2. Cognitive complexity. This refers to a person’s use of and preference for elaborate, intricate, and complex stimuli and thinking patterns. Creative people tend to have such cognitive complexity and display a wide range of interests, are independent, and are interested in philosophical or abstract problems. It is important to note, however, that creative people are not necessarily more intelligent (if intelligence is defined by standard tests of intelligence or grades in school, which tend to focus more on conver- gent thinking skills).89

Creativity Techniques for Management Decision Making

There are some techniques that managers can use to help them make more creative decisions. For example, a national survey of highly creative top managers found that they use techniques such as guided imagery, self-hypnosis, journal keeping, and lateral styles of thinking.90 Not only does encouraging creativity help the organization; it may also help the employees. On the basis of interviews in several major Japanese companies, it was found that employee creativity is managed through deliberate structural means, not to effect direct economic outcomes to the organization, but to develop the employees’ motivation, job satisfaction, and teamwork.91 In other words, even though the Japanese are not known for their creative breakthroughs in product development or technology, they effectively structure their organizations to allow their people to creatively apply their ideas. A specific Co

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example of an organization structuring for creativity would be Toyota. This Japanese firm’s designers think and work with sets of design alternatives rather than pursuing one alternative over and over. Toyota engineers gradually narrow the design sets until they come to a final solution. Analysis of the results of this seemingly slow and inefficient sys- tem concludes that the “set-based concurrent engineering” used by Toyota has made them quite effective auto developers.92

Other world-class auto manufacturers use similar creative approaches. One technique is called empathic design, which relies heavily on visual information.93 This creative tech- nique is particularly useful when creating new products because it sidesteps the built-in problem associated with customer feedback. Most customers, when asked what new prod- ucts they would like, typically respond in terms of the company’s current products and sug-

Over the last decade, millions of workers have been laid off. One of the major reasons for these layoffs has been downsizing. Unfortunately, growing research evi- dence questions whether layoffs due to downsizing really do produce long-run benefits for an organization. After all, the personnel can be let go only once, and even if the enterprise has some short-run cost savings from this one-time act, the long-run cost is being found to be greater than the short-term gain. In addition, the more indirect costs of loss of experience/knowledge and commitment of those remaining is much greater. Most organizations now agree with this argument and have begun looking for creative ways to eliminate the need for downsizing.

At Lincoln Electric, the Cleveland-based manufac- turer of arc-welding products, for example, the com- pany expanded internationally and suffered severe financial losses as a result. Rather than laying off any- one, however, the firm redeployed people from manu- facturing operations into the sales department. Result: In their first year these new salespeople generated $10 million in revenue. Commenting on its creative approach to dealing with business setbacks, Lincoln’s director of corporate relations said, “Our people are too valuable. The loss of one person costs us $100,000 to replace them. We don’t do business that way.” As a result, the company pulled out of its tailspin, returning a bonus to all employees and top management that has now averaged between 52 and 56 percent of salary for 65 straight years!

Rhino Products of Burlington, Vermont, is another example of a firm that has used creative decision mak- ing to deal with an economic downturn. When this spe- cialty dessert maker realized that it could not keep its workforce intact, the management turned to Ben & Jerry’s Ice Cream, a firm located nearby, and asked them if they would hire some of the Rhino personnel. For the next two years these workers learned new skills

and gained a better understanding of customer needs and best practices, while still being able to keep their Rhino benefits and seniority. Then, as things improved for Rhino, they were brought back. Today Rhino is going strong and is introducing new products as well as increasing the size of its workforce.

Other firms are using similar types of creative approaches to prevent downsizing decisions from neg- atively affecting the personnel. Some of these include: (1) finding personnel who are interested in reduced hours, part-time work, job sharing, leaves of absence, or sabbaticals to work in the community; (2) network- ing with local employers regarding temporary or per- manent redeployment; (3) using attrition effectively by examining whether a job needs to be filled or can be eliminated; (4) developing multistep, voluntary early retirement packages; and (5) cross training so trained people are ready to step into new job openings within the firm. Commenting on the use of these creative approaches, one expert in the field has recently noted that:

Since all downsizing alternatives are grounded in a knowledge of each employee and his or her skills, a company must start with comprehen- sive employee assessment tools. A skills data- base that helps match people with business needs is the basis of effective redeployments. A tuned-in employer community—wider than just the downsizing firm—can retrain and reabsorb workers who have been downsized, thereby keeping downsizing to a minimum and address- ing personnel shortages.

Drawing on these types of strategies, companies are finding that downsizing can be done efficiently and with minimum negative effects on the personnel. It is all a matter of learning how to use creative decision making.

OB IN ACTION: CREATIVE DECISION MAKING TO ELIMINATE DOWNSIZING

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gest that they be made smaller or lighter or less expensive. Customers are notoriously poor in providing useful ideas for new products because their thinking is too closely linked to current products and their everyday uses.94 Empathic design focuses on observing how people respond to products and services and drawing creative conclusions from the results. For example, when Nissan developed the Infinity J-30, it tested more than 90 samples of leather before selecting three that U.S. car buyers preferred. When Harley-Davidson builds a motorcycle it adjusts the motor so that it is pleasing to the customer’s ears, that is, it sounds like a Harley (and it has sued competitors that have tried to imitate this sound).

By watching how people respond in the empathic approach, companies can generate more creative and consumer-pleasing offerings. Envirosell, an international marketing research group, takes millions of photos every year of shoppers in retail stores to help answer the question: Who shops here and what do they like? Among other things, the research group has found that shoppers want wide aisles (they do not like to be bumped), good lighting (they like to see the merchandise clearly), and good signage (they want to know where things are located). Retail companies pay Envirosell large annual fees to pro- vide them with marketing information regarding how to improve their sales. Where does Envirosell get these ideas? From analyzing the pictures of shoppers in their stores.95 Instead of asking people questions about their shopping habits, the empathic design approach relies on observation to generate creative ideas and solutions. Table 8.2 provides some contrasts between the traditional method of asking customers questions and actually observing their behavior. Other creative approaches to decision making involve groups.

Group Decision Making

Creativity in decision making can apply to individuals or groups. Because individual decision making has largely given way to group decision making in today’s organizations, an understanding of group dynamics and teams, as discussed in Chapter 11, becomes rele- vant to decision making. For example, that chapter’s discussion of groupthink problems and phenomena such as the risky shift (that a group may make more risky decisions than individual members on their own) helps one better understand the complexity of group

TABLE 8.2. Inquiry Versus Innovative Observation

Traditional Inquiry Innovative Observation

People are often unreliable when it comes to explaining the types of goods and services they would be interested in purchasing.

Observers can rely on how people act in drawing conclusions regarding what types of products and services they would be willing to buy in the future.

People often give answers that they feel are acceptable to the questioner.

People give nonverbal clues through body language and spontaneous, unsolicited comments.

People are often unable to recall how they felt about a particular product or service that they received.

Observers can see how well people like a product or service on the basis of their reactions.

The questions that are asked can bias the responses There are no questions asked; all data are based on open-ended observation.

Peoples’ routines are often interrupted by someone stopping them to ask questions.

People continue doing whatever they are doing oblivious to the fat that they are being observed.

When comparing two similar products, respondents often have difficulty explaining why they like one better than the other.

By giving people an opportunity to use two similar products, observers can determine which is better liked or easier to use by simply watching how they behave.

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decision making.96 In fact, a number of social decision schemes have emerged from social psychology research.97

These schemes or rules can predict the final outcome of group decision making on the basis of the individual members’ initial positions. These have been summarized as fol- lows:98

1. The majority-wins scheme. In this commonly used scheme, the group arrives at the decision that was initially supported by the majority. This scheme appears to guide decision making most often when there is no objectively correct decision. An exam- ple would be a decision about what car model to build when the popularity of various models has not been tested in the “court” of public opinion.

2. The truth-wins scheme. In this scheme, as more information is provided and opinions are discussed, the group comes to recognize that one approach is objectively correct. For example, a group deciding whether to use test scores in selecting employees would profit from information about whether these scores actually predict job perfor- mance.

3. The two-thirds majority scheme. This scheme is frequently adopted by juries, who tend to convict defendants when two-thirds of the jury initially favors conviction.

4. The first-shift rule. In this scheme, the group tends to adopt the decision that reflects the first shift in opinion expressed by any group member. If a car-manufacturing group is equally divided on whether or not to produce a convertible, it may opt to do so after one group member initially opposed to the idea changes her mind. If a jury is deadlocked, the members may eventually follow the lead of the first juror to change position.

Besides the listed schemes, there are also other phenomena, such as the status quo ten- dency (when individuals or groups are faced with decisions, they resist change and will tend to stick with existing goals or plans), that affect group decision making. Suggestions such as the following can be used to help reduce and combat the status quo tendency and thus make more effective group decisions:99

 When things are going well, decision makers should still be vigilant in examining alter- natives.

 It can help to have separate groups monitor the environment, develop new technologies, and generate new ideas.

 To reduce the tendency to neglect gathering negative long-term information, managers should solicit worst-case scenarios as well as forecasts that include long-term costs.

 Build checkpoints and limits into any plan.  When limits are reached, it may be necessary to have an outside, independent, or sepa-

rate review of the current plan.  Judge people on the way they make decisions and not only on outcomes, especially

when the outcomes may not be under their control.  Shifting emphasis to the quality of the decision process should reduce the need of the

decision maker to appear consistent or successful when things are not going well.  Organizations can establish goals, incentives, and support systems that encourage

experimenting and taking risks.

Although just simple guidelines, proactively following them can make group decisions more effective by helping overcome the many problems that still plague most groups.Co

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SUMMARY At every level of modern society, communication is a problem. One of the problems when applied to organizations has been the failure to recognize that communication involves more than just linear information flows; it is a dynamic, interpersonal process that involves behavior exchanges. Various electronic media, information technology, and nonverbal approaches are also important to communication in today’s organizations. The explosion of electronic media and information technology is having a huge impact on communication in organizations; e-mail alone has revolutionized the way people communicate, let alone social media, “groupware,” and “chat rooms” on the Internet. Yet, communication is still a dynamic, interpersonal and interactive process.

Besides communication, this chapter was also devoted to the process and techniques of decision making. Decision making is defined as choosing between two or more alterna- tives. However, viewed as a process, the actual choice activity is preceded by gathering information and developing alternatives. Most relevant to the study of organizational behavior is behavioral decision making, which includes the completely economic rational- ity model on one extreme, and the irrationally based social model on the other extreme. Each of these models gives insights into decision-making rationality. Understanding human dynamics, such as irrational conformity or escalation of commitment, gives more credibility to the social model of decision making. However, the various management deci- sion styles have emerged as having the biggest practical impact on behavioral decision- making theory and practice. The techniques for decision making are currently being dom- inated by information technology, but it is the creative, problem-solving management deci- sions that may be crucial for organizational success. Understanding the strengths and weaknesses of participative techniques and the creative individual and group decision- making process and techniques can lead to more-effective decision making now and for the future.

QUESTIONS FOR DISCUSSION AND REVIEW

1. Why is feedback so important to communication? What are some guidelines for the effective use of feedback? How can 360-degree feedback help?

2. What are the major purposes and methods of interactive communication? 3. What are the three steps in Simon’s decision-making process? Relate these steps to an

actual decision. 4. Identify and describe the four major management decision-making styles. What are

some strengths and weaknesses of these styles? 5. What is the difference between divergent and convergent thinking, and what is their

relationship to the process of creativity?

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Rita Lowe has worked for the same boss for 11 years. Over coffee one day, her friend Sara asked her, “What is it like to work for old Charlie?” Rita replied, “Oh, I guess it’s okay. He pretty much leaves me alone. I more or less do my own thing.” Then Sara said, “Well, you’ve been at that same job for 11 years. How are you doing in it? Does it look like you will ever be promoted? If you don’t mind me saying so, I can’t for the life of me see that what you do has anything to do with the oper- ation.” Rita replied, “Well, first of all, I really don’t have any idea of how I am doing. Charlie never tells me, but I’ve always taken the attitude that no news is good news. As for what I do and how it contributes to the operation around here, Charlie mumbled something when I started the

job about being important to the operation, but that was it. We really don’t communicate very well.”

1. Analyze Rita’s last statement: “We really don’t communicate very well.” What is the status of manager-subordinate communica- tion in this work relationship?

2. It was said in this chapter that communica- tion is a dynamic, personal process. Does the situation described verify this contention? Be specific in your answer.

3. Are there any implications in this situation for interactive communication? How could feedback be used more effectively?

Michelle Adams is the maintenance supervisor of a large taxicab company. She had been very con- cerned because the cabdrivers were not reporting potential mechanical problems. Several months ago she implemented a preventive maintenance program. This program depended on the drivers’ filling out a detailed report in writing or into the office computer system when they suspected any problem. But this was not happening. On a num- ber of occasions a cab left the garage with major problems that the previous driver was aware of but had not reported. Calling out the field repair teams to fix the breakdowns not only was costing the company much time and trouble but also was very unsafe in some cases and created a high degree of customer ill will. The drivers them- selves suffered from a loss of fares and tips, and in some cases their lives were endangered by these mechanical failures. After many oral and written

threats and admonishments, Michelle decided to try a new approach. She would respond directly to each report of a potential mechanical problem sent in by a driver with a return memo indicating what the maintenance crew had found wrong with the cab and what had been done to take care of the problem. In addition, the personal memo thanked the driver for reporting the problem and encour- aged reporting any further problems with the cabs. In less than a month the number of field repair calls had decreased by half, and the number of turned-in potential problem reports had tripled.

1. In communication terms, how do you explain the success of Michelle’s follow-up memos to the drivers?

2. Explain and give examples of the interactive communication process in this company.

Organizational Behavior Case: Doing My Own Thing

Organizational Behavior Case: Bad Brakes

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Harry Smart, a very bright and ambitious young executive, was born and raised in Boston and graduated from a small New England college. He met his future wife, Barbra, who was also from Boston, in college. They were married the day after they both graduated cum laude. Harry then went on to Harvard, where he received an MBA, and Barbra earned a law degree from Harvard. Harry is now in his seventh year with Brand Cor- poration, which is located in Boston, and Barbra has a position in a Boston law firm.

As part of an expansion program, the board of directors of Brand has decided to build a new branch plant. The president personally selected Harry to be the manager of the new plant and informed him that a job well done would guaran- tee him a vice presidency in the corporation. Harry was appointed chairperson, with final deci- sion-making privileges, of an ad hoc committee to determine the location of the new plant. At the initial meeting, Harry explained the ideal require- ments for the new plant. The members of the committee were experts in transportation, market- ing, distribution, labor economics, and public relations. He gave them one month to come up with three choice locations for the new plant.

A month passed and the committee recon- vened. After weighing all the variables, the experts recommended the following cities in order of preference: Kansas City, Los Angeles, and New York. Harry could easily see that the committee members had put a great deal of time and effort into their report and recommendations. A spokesperson for the group emphasized that there was a definite consensus that Kansas City was the best location for the new plant. Harry

thanked them for their fine job and told them he would like to study the report in more depth before he made his final decision.

After dinner that evening he asked his wife, “Honey, how would you like to move to Kansas City?” Her answer was quick and sharp. “Heav- ens, no!” she said, “I’ve lived in the East all my life, and I’m not about to move out into the hinter- lands. I’ve heard the biggest attraction in Kansas City is the stockyards. That kind of life is not for me.” Harry weakly protested, “But, honey, my committee strongly recommends Kansas City as the best location for my plant. Their second choice was Los Angeles and the third was New York. What am I going to do?” His wife thought a moment and then replied, “Well, I would consider relocating to or commuting from New York, but if you insist on Kansas City, you’ll have to go by yourself!”

The next day Harry called his committee together and said, “You should all be commended for doing an excellent job on this report. How- ever, after detailed study, I am convinced that New York will meet the needs of our plant better than Kansas City or Los Angeles. Therefore, the decision will be to locate the new plant in New York. Thank you all once again for a job well done.”

1. Did Harry make a rational decision? 2. What model of behavioral decision making

does this case support? 3. What decision techniques that were dis-

cussed in the chapter could be used by the committee to select the new plant site?

Organizational Behavior Case: Harry Smart—Or Is He?

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