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anchoring and adjustment heuristic
a natural tendency for people to be influenced by an initial anchor point such that they
do not sufficiently move away from that point as new information is provided
availability heuristic
a natural tendency to assign higher probabilities to objects or events that are easier to
recall from memory, even though ease of recall is also affected by nonprobability factors
(e.g., emotional response, recent events)
bounded rationality
the view that people are bounded in their decision-making capabilities, including access
to limited information, limited information processing, and tendency toward satisficing
rather than maximizing when making choices
cognitive dissonance
an emotional experience caused by a perception that our beliefs, feelings, and behavior
are incongruent with one another
confirmation bias
the processing of screening out information that is contrary to our values and
assumptions and to more readily accept confirming information
creativity
the development of original ideas that make a socially recognized contribution
decision making
the conscious process of making choices among alternatives with the intention of
moving toward some desired state of affairs
design thinking
ahuman-centered, solution-focused creative process that applies both intuition and
analytical thinking to clarify problems and generate innovative solutions
divergent thinking
reframing a problem in a unique way and generating different approaches to the issue
employee involvement
the degree to which employees influence how their work is organized and carried out
escalation of commitment
the tendency to repeat an apparently bad decision or allocate more resources to a
failing course of action
implicit favorite
a preferred alternative that the decision maker uses repeatedly as a comparison with
other choices
intuition
the ability to know when a problem or opportunity exists and to select the best course of
action without conscious reasoning
learning orientation
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beliefs and norms that support the acquisition, sharing, and use of knowledge as well as
work conditions that nurture these learning processes
prospect theory effect
a natural tendency to feel more dissatisfaction from losing a particular amount than
satisfaction from gaining an equal amount
representativeness heuristic
a natural tendency to evaluate probabilities of events or objects by the degree to which
they resemble (are representative of) other events or objects rather than on objective
probability information
satisficing
selecting an alternative that is satisfactory or "good enough," rather than the alternative
with the highest value (maximization)
self-enhancement
a person's inherent motivation to have a positive self-concept (and to have others
perceive him or her favorably), such as being competent, attractive, lucky, ethical, and
important
scenario planning
a systematic process of thinking about alternative futures and what the organization
should do to anticipate and react to those environments
Problem
a gap between a desired state and an existing state
Rational Choice Decision-Making Process
1. Identify problem or opportunity
2. Choose the best decision process
3. Discover or develop possible choices
4. Select the choice with the highest value
5. Implement the selected choice
6. Evaluate the selected choice
Mental Models
knowledge structures that we develop to describe, explain, and predict the world around
us
heuristic biases
Anchoring and adjustment heuristic, Availability heuristic, Representativeness heuristic.
action scripts
programmed decision routines that speed up our response to pattern matches or
mismatches
self-justification effect
Deliberate engagement of behaviors to maintain a favorable public image
sunk costs effect
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People feel more motivated to invest more resources in projects that have high sunk
costs.
Strategies to minimize escalation of commitment and confirmation bias
change the decision maker, create a stop loss, seek factual and social feedback, focus
on the present.
Creative Model Process
Preparation
Incubation
Illumination
Verification
prepation
Investigate information that seems relevant to the issue. Understand the problem
Incubation
Period of reflective thought, not direct attention to the issue, active divergent thinking
process.
illumination
sudden awareness of a novel, although vague and incomplete idea entering one's
consciousness.
Verification
Detailed logical and experimental evaluation of the illuminated idea
Further creative thinking
Characteristics of creative people
Cognitive and Practical Intelligence
Persistence
Knowledge and Experience
Independent Imagination
Activities that encourage creativity
redefining the problem
associative play
cross-pollination
design thinking
4 Rules of Design Thinking
1. Human Rule
2. Ambiguity Rule
3. Re-Design Rule
4. Tangible Rule
Human Rule
Design thinking is a team activity
Ambiguity Rule
-preserve ambiguity rather than seek clarity too quickly
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-question and refine the stated problem
-develop more than one solution to the problem
Re-Design Rule
review past solutions
Tangible Rule
- build several low-cost prototypes to test ideas
- don't analyze alternatives at a purely conceptual level
- tolerate failure; embrace a learning orientation
Contingencies of employee involvement
1. Decision structure
2. Source of decision knowledge
3. Decision commitment
4. Risk of conflict
divine discontent
Aversion to complacency
convergent thinking
narrowing the available problem solutions to determine the single best solution
employee involvement
the degree to which employees influence how their work is organized and carried out
