Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 1 ©2001 by Prentice-Hall, Inc. Chapter 15

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 2 ©20 01 by Prentice Hall, Inc. Objectives Describe and explain models of decision making Apply the models of decision making.

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 3 ©20 01 by Prentice Hall, Inc. Rational Decision-Making Process 1. Recognize and define the problem 2. Identify the objective of the decision and decision criteria 3. Allocate weights to the criteria 4.List and develop the alternatives 5. Evaluate the alternatives 6. Select the best alternative 7. Implement the decision 8. Evaluate the decision

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 4 ©20 01 by Prentice Hall, Inc. Diagnostic Questions QR CR LI ST CP GC CO SI High Low No High Yes No Yes No Yes No AI GII CII GII CII AII Yes CI CII AI GII No Low Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 5 ©20 01 by Prentice Hall, Inc. Decision Criteria Quality or rationality of the decision Employee commitment to the decision Length of time to make the decision Amount of employee development Quality Acceptance EfficiencyDevelopment

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 6 ©20 01 by Prentice Hall, Inc. Diagnostic Questions QR Quality Requirement: How important is the technical quality of this decision? CR Commitment Requirement: How important is subordinate commitment to the decision? LI Leader’s Information: Do you have sufficient information to make a high-quality decision? ST Problem Structure: Is the problem well structured? CP Commitment Probability: If you were to make the decision by yourself, is it reasonably certain that your subordinates would be committed to the decision? GC Goal Congruence: Do subordinates share the organizational goals to be attained in solving the problem? SC Subordinate Conflict: Is conflict among subordinates over preferred solutions likely? SI Subordinate Information: Do subordinates have sufficient information to make a high-quality decision?

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 7 ©20 01 by Prentice Hall, Inc. Bounded Rationality Satisficing—selecting the first satisfactory alternative Available information and situation definition are incomplete Decisions made without considering all alternatives Use of heuristics, judgment shortcuts

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 8 ©20 01 by Prentice Hall, Inc. Garbage Can Model Problems Choice opportunities Participants Solutions

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 9 ©20 01 by Prentice Hall, Inc. The Garbage Can Model Characteristics of the decision 1. The problem, alternatives, and solutions can be ill defined 2. The relationship among the key variables is hard to define 3. There is turnover of participants

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 10 ©20 01 by Prentice Hall, Inc. Garbage Can Model Consequences –Problems may lead to a proposed solution or not. Problems may not be solved through the solution –Potential Solutions may be proposed. People may be attracted to solutions whether or not they solve the problem. Solutions can be independent of the problem –Participation can determine what and when problems and solutions are proposed –Choice opportunities or decision opportunities will determine which problems are proposed, what solutions are suggested, and which decision is made (a matter of timing)

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 11 ©20 01 by Prentice Hall, Inc. Garbage Can Model Consequences –solutions may be proposed even when problems don’t exist –Choices are made without solving problems –Problems may persist without being solved –A few problems are solved

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 12 ©20 01 by Prentice Hall, Inc. Symptoms of Groupthink Illusion of invulnerability Illusion of morality Stereotyping Self-censorship Illusion of unanimity Direct pressure on dissidents

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 13 ©20 01 by Prentice Hall, Inc. How to Avoid Groupthink Leaders listen to others’ opinions first Demonstrate willingness to be criticized Encourage all members to express doubts Assign a devil’s advocate Adopt perspectives of other stakeholders Bring in outsiders to discuss decision Sleep on a tentative decision

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 14 ©20 01 by Prentice Hall, Inc. Escalating Commitment Continuing on a losing course of action or throwing good resources after bad –Reasons 1) not recognizing sunk costs 2) self-justification (image management) 3) to be consistent (image management) 4) framing

Organizational Behavior: An Experiential Approach 7/E Joyce S. Osland, David A. Kolb, and Irwin M. Rubin 15 ©20 01 by Prentice Hall, Inc. Escalating Commitment To help overcome –set up specific goals –put more emphasis on the decision making process rather than the results –try to see the outcomes from a different perspective –separate initial decision makers from those evaluating the continuance of the program