DUE:11/16 @ 3PM

What's the benefit of studying this topic?

All managers make decisions in order to be successful leaders. Because diversity and multi-cultural influences will increase in most work units and teams, understanding the essential decision making process from a view of diversity adds critical skill to your performance.

Readings:

· Adler Ch. 8 describes basic decision making approach and then delineates aspects of multi-cultural impact.

· Lecture 10 (below)

Review:

· Power Point outlines role of individual perspective/responsibility for managing effective decisions. (Scroll down to locate power point).

· Select 1 or more video clip to add ideas. (See last section of this web page).

Module 10 Decision Making for Leading Multi-cultural Groups

Introduction:

A multinational corporation was expanding its product line at an existing operation in Greece. Headquarter leaders determined that an up and coming talent with Greek parents might be especially effective. During the interview for the job, he consistently expressed his keen desire to get ahead. Two days after arriving, the new manager called his workforce together. As the group gathered they were jovial and appeared pleased to hear from their new leader. They, too, were aware of his Greek heritage. The new manager began by saying "I've decided it is very important to have a clear product strategy. I also believe you should offer competitive ideas–so that we get the best." Then he asked the workers for their input. The group became silent, with most people's eyes dropping to study the floor.

What happened? What side-tracked the manager's decision? What process did the manager use–or did he? And what role might cultural differences have played? In thinking about the last question, it may be helpful to consider likely cultural values often linked to Greek culture; while valuing competition its society places importance on avoiding uncertainty or minimizing risk. People often hold a strong regard for positional leadership and its power, which can create distance and diminish informal discussions.

At-a-glance definitions:

Decision: A determination, agreement, or declaration. Decisions can be viewed as findings and factual; but they can also be thought about as a judgment or opinion or ruling.

Decision Making: An approach or process, often using 5 steps or activities, which include

· Set managerial objectives. What do we want to achieve in the process? This activity may also be called recognizing the problem to solve.

· Search for alternatives by gathering information. Don't just go with some have called "the first right answer."

· Compare and evaluate the alternatives.

· Make a choice among the alternatives.

· Implement the decision chosen.

Follow up or monitor progress. This is a sixth step frequently added to assure performance information and accountability (Harrison, 1999).

Research Trends:

The topic of decision making and how to improve upon the factors within that process, especially using technology software, continues to hold the interest of researchers.

Over the past two decades there have been more and more studies about decision processes linked to performance. (More than 2600 publications of research in 2005-12). This research was focused on robustness of information, metrics to add reliability, and dissemination comparisons for assuring adherence to decisions.

Decisions of effective leadership are another studied area. (Approximately 525 published articles in peer reviewed journals 2005-12). Themes of research included impact of participation and increased use of technology. Studies also appeared organized by sector with emphasis on education and public sector leadership decisions.

Decision making and cultural values are represented by a smaller group of reported research. (94 studies in the past 6 years). Emphasis is on more effective marketing through the use of cultural factors, particularly Hofstede's cultural dimension studies (Business Source Complete Data Base 2012.

Constraints:

There are several factors that work against our taking the ideal approach to decision making. These factors include:

· The myth of maximization. You may tend to believe that more information may lead to a better decision. Sometimes, the reverse is true; more information only clouds the issue.

· The need for "satisficing."If you have taken other management courses, you may be familiar with this term. It means, simply, "I can live with it." Satisficing occurs when the organization opts for a course of action that may not be the ideal (the maximized), but is acceptable.

· Time and cost. In this highly competitive environment, we don't always have the luxury of gathering exhaustive amounts of information. More than one company (IBM, for example) has learned the hard way that sometimes it is necessary to go with incomplete information in order to get one with it. Tom Peters (1994) refers to this as the "Ready, Fire, Aim" approach -- an approach that he says is necessary in today's frenetic workplace.

· Communication failures. Miscommunication can take many forms -- failure to listen; overload and "noise;" failure to present an unambiguous message, etc.

· Precedent. Often, how people make decisions depends on what occurred previously. For example, if Company A had great success with a direct mail marketing campaign for one product, its marketing people may assume that such an approach will work the next time.

Mindset or perception traps:

How people gather information and the interaction between minds and the situation is selective and complex. Perception can lead people into errors or what decision science experts term "traps".

Judgment under Uncertainty:

Bazerman (2006) a recognized researcher on decision methodologies, believes that decision makers look for certainty even though many decisions are made in the face of uncertainty. The main premise of Bazerman is understanding risk and uncertainly will increase the likelihood of a quality decision making process. Two concepts determine alternatives under uncertainty:

· Probability (the likelihood that any particular outcome will occur); and

· Expected value (weighing all potential outcomes associated with the alternative by their probabilities and summing them).

When approaching uncertainty, Bazerman identifies systematic ways to increase your awareness of uncertainty and risk. He concludes that the process of framing is critical in developing a manager's ability to make effective decisions.

To date there's little psycho-social research examining the impact of cultures which appear to place priorities on reducing uncertainty. However, as cultural awareness grows, interest can expand around use of risk and holding expectations for avoiding as much uncertainty as possible. Those who are acculturated to pay particular attention to avoiding unknowns or uncertainties can contribute ideas to deliberation when crossing cultural borders. Their critical thinking and drive for added discussion/information gathering may shape future decision making processes in important ways. In the meantime, you as a manager can be especially thoughtful about how and how much time to spend on gathering information, thinking critically about that information, to make good decisions.

Decision-Making: Hindsight Bias and the Assessment of Human Performance:

Alex Agase, former Northwestern University football coach, once quipped if you want to give him advice, do it on Saturday between 1 and 4 o'clock, during the 25 seconds between plays. Not on Monday. He knew the right thing to do on Monday.

Despite Agase's lament, Monday morning quarterbacking is still a favorite American pastime at work. Clearly the interception could have been avoided by running the ball. Since the outcome is so clear, Monday morning quarterbacks question why the coach couldn't anticipate it. We tend to expect that others should know by foresight what we have learned by hindsight. The problem is that this bias is not confined to football. It is quite pervasive and has the potential to adversely impact a wide variety of human behaviors, particularly turning leaders away from telling more of the plan's story,

Being Smart After the Fact

Proclamations about human error are most always made "after the fact," rarely before. As noted by Reason (1990), the most significant psychological difference between individuals who were involved in events leading up to a disaster and those who are called upon to investigate after it occurred is knowledge of the outcome. Investigators have the luxury in hindsight of knowing how things are going to turn out; front line operators and their supervisors do not. While most people would not expect much credit for picking a horse after it has won the race, many investigators are unaware of the influence of outcome knowledge on their perceptions and reconstruct ions of the incident. Given the advantage of a known outcome, what would have been a bewildering array of non-convergent events becomes assimilated into a coherent, causal framework for making sense out of what happened. In fact, it may be difficult to imagine it happening any other way. "Why couldn't they see it?" is the question that is often asked. Such hindsight results in expectations by investigators that participants should have anticipated the incident by foresight; it also blinds them to what actually would have been known had the roles been reversed. If investigations of human error are to be fair and impartial, appropriate actions and decisions need to be determined before the mishap; not from the comfortable vantage point of hindsight.

Process vs. Outcome

Russo and Schoemaker (1989) observed that many managers have difficulty improving their decision-making processes. Instead they focus on outcomes which limit clearer understanding of process methods. These researchers had managers choose between one of two potential new products to market. It was given that Product A had a 50% chance of succeeding, while product B had a 60% chance of succeeding. In both cases, success meant a profit of one million dollars; failure resulted in no profit. The company chose to market Product B. It failed, and Product A is later marketed by a competitor, and it succeeds. Did the company make the right decision?

Managers were asked to rate the quality of the decision on a scale from 1 (clearly made the wrong decision) to 7 (clearly made the right decision). Their average rating was 4.4, showing a fair degree of confusion as to the correct decision. The decision to market product B was absolutely correct. Why didn't they all respond with a 7, as any group of rational managers should have? Because they let knowledge of the outcome confuse their thinking about the worthiness of their decision. Because chance factors will sometimes have their way (accounting for 40% in this case) does not mean that clear thinking should be abandoned. Part of the problem may be cultural. In a very competitive U.S. business environment where the stakes are very high, successful outcomes are highly valued. New product managers are more likely to be rewarded for successful outcomes than they are for implementing correct decision processes which are less discernible.

Framing

Can even the way questions are framed influence the reconstructive process?

The research of Elizabeth Loftus (1980) on memory and on the reliability of eyewitness testimony provides a resounding "yes" to the above question. Loftus described the problem this way.

Human memory does not work like a videotape recorder or a movie camera. When a person wants to remember something, he or she does not simply pluck a whole memory intact out of a "memory store." The memory is constructed from stored and available bits of information; any gaps in the information are filled in unconsciously by inferences. When these fragments are integrated and make sense, they form what we call "memory" (p. 31).

Loftus' statement serves as a reminder that it is not just the shadowy figures of the underworld or those of dubious integrity that are likely to give unreliable testimony. Honest and otherwise reliable people can sincerely affirm as true what is actually false. When our memories are put to the test, we do not discriminate very well what was actually encoded from what we reconstructed to make sense of the event. Thus we can quite sincerely testify as having observed something that never took place because we may be relying on an active retrieval process that fills in the gaps. This process is a normal and integral aspect of our memory. There are many factors that influence the way the gaps are filled in. Many of these factors are subtle and contextual in nature. And outcome knowledge is one of the key ingredients in shaping context.

In one of her experiments, Loftus showed how the framing of a question can influence what is subsequently reported. With the cooperation of the Seattle Police Department, Loftus and Palmer (1974) had people view realistic films of actual and staged automobile accidents and then answer questions about what they saw. One of the questions was "About how fast were the cars going when they smashed into each other?" This question elicited a different estimate of speed than questions using the verbs collided, bumped, hit, or contacted in place of smashed. Although the subjects saw the same films, cars which were framed by the word smashed were found, on average, to be traveling nine miles per hour faster than cars which merely contacted. Smashed provided some other information as well. A week later, experimental subjects were called back and asked "Did you see any broken glass?" Fourteen percent of the subjects whose question was framed with the verb hit reported seeing broken glass, while 32% of the subjects whose question was framed with smashed reported seeing broken glass. As the reader may have already guessed, there was no footage of broken glass in the films seen by these "eyewitnesses."

Leadership and Decision Making:

What is the role that leaders can and should play in organizational decision making? Here are five suggestions:

Recognize that decision making is a continuum. Who makes the decision is not an either/or question. It's more complex than that. The continuum runs all the way from Leader makes the decision unilaterally, to Leader gathers information and then makes the decision to lead and his or her team make the decision jointly, to Leader delegates the final decision to others.

Effective leading does not depend on you having all the answers. Look around for who may also have ideas and insights. Leaders who are comfortable with themselves are also comfortable in empowering others.

Consider a brainstorm and participation/negotiation. Decisions should involve a group when the choice may be unpopular; or when it would be helpful to gather additional information prior to making a decision, or when you as a manager know that you don't have important data, observations or direct experience. (Note: Decision making ties into negotiation activities and skills see module on that topic).

Know when to delegate the decision-making process. Not every decision needs a committee. Consider who needs to take the lead. Staff is often quite willing to have the CEO make some decisions; it gives them a sense that someone is in charge.

Leadership and organizational culture are two sides of the same coin. Know whether your work culture is more hierarchical or more team focused. If the organizational culture is participatory/team-centric or one in which it is OK to speak up. You will observe workers doing so. As a result, the leader is more likely to get the information needed to make an informed decision.

If, on the other hand, the culture is characterized by "shoot the messenger" with decisions handed down, only the foolhardy are likely to want to be a player when it comes to making tough decisions. The culture of strict hierarchy is changing in many organizations, but your work as a leader means that you will observe and become skilled at knowing when you can involve others in decisions, and when you must be seen as the decision maker.