What is involved in the decision making process? What are the alternative decision-making models? What are key decision-making traps and issues? What can be done to stimulate creativity in decision making? Copyright © 2010 John Wiley & Sons, Inc. 9-2

Decision making  The process of choosing a course of action for dealing with a problem or opportunity. Copyright © 2010 John Wiley & Sons, Inc. 9-3

Copyright © 2010 John Wiley & Sons, Inc. Define Problem Caution: Not too broad or narrow Caution: focus on problem, not symptom Caution: ID the right problem Analyze Alter- natives Determine exact information needed ID effect on stake-holders Make a Choice Consider time, cost, impact, and ethics Who makes the decision? (team or leader) Take Action Ensure that all affected parties have have input Necessary to secure ‘buy in’ from all Evaluate Results Have desired outcomes been attained? Has team performance been effective? 9-4

Ethics – the philosophical study of morality or standards regarding good character and conduct. Ethical reasoning in decision-making examines the consequences of a decision on all stakeholders. Copyright © 2010 John Wiley & Sons, Inc. 9-5

Moral dilemma  A situation where the decision maker faces two or more ethically uncomfortable alternatives.  Either alternative is potentially beneficial or harmful. Copyright © 2010 John Wiley & Sons, Inc. 9-6

Copyright © 2010 John Wiley & Sons, Inc. Carefully review for ethical dilemmas Define problem Consider implications for stakeholders, common good Analyze Alternatives Choose best ‘ends’ and right ‘means ’ Make a Choice Utility, rights, justice, caring; transparency, public scrutiny Double check Assure consistency of intended and taken actions Take Action Utility, rights, justice, caring; transparency, public scrutiny Double check Check actual ends and means vs. intended ends and means Evaluate Results Utility, rights, justice, caring; transparency, public scrutiny Double check 9-7

Ethical double checks  Criteria  Utility – all stakeholders satisfied?  Rights – are all rights respected?  Justice – is it right?  Caring – is it fair to all concerned? Copyright © 2010 John Wiley & Sons, Inc. 9-8

Ethical Double Checks  Spotlight Questions  Would my family approve this decision?  How would I feel if the decision was published?  Would this decision be ok with the person I most admire? Copyright © 2010 John Wiley & Sons, Inc. 9-9

Programmed decisions  Involve routine problems that arise regularly and can be addressed through standard responses. Nonprogrammed decisions  Involve nonroutine problems that require solutions specifically tailored to the situation at hand.  Crisis decision – unexpected problem threatens major harm if not resolved appropriately. Copyright © 2010 John Wiley & Sons, Inc. 9-10

Decisions are made in the context of three general environments.  Certainty  Risk  Uncertainty 9-11 Copyright © 2010 John Wiley & Sons, Inc.

A decision environment is certain  When information is sufficient to predict the results of each alternative in advance of implementation. Copyright © 2010 John Wiley & Sons, Inc. 9-12

A decision environment is risky  When decision makers lack complete certainty regarding the outcomes of various courses of action, but they are aware of the probabilities associated with their occurrence. Copyright © 2010 John Wiley & Sons, Inc. 9-13

A decision environment is uncertain  When managers have so little information on hand that they cannot even assign probabilities to various alternatives and their possible outcomes. Copyright © 2010 John Wiley & Sons, Inc. 9-14

Risk Management  Programs instituted by organizations that focus on anticipating risk in situations and factoring risk alternatives into the decision- making process Copyright © 2010 John Wiley & Sons, Inc.

Effective Decisions Accomplish an established goal and are acceptable to those affected by it. Garbage Can Model Behavioral decision Classical decision

Copyright © 2010 John Wiley & Sons, Inc. 9-17

Classical decision theory assumes a manager:  Acts rationally and in a fully informed manner.  Faces a clearly defined problem.  Knows all possible action alternatives and their consequences.  Chooses the optimum solution. Copyright © 2010 John Wiley & Sons, Inc. 9-18

Behavior decision theory  Suggests that people act only in terms of their perceptions, which are frequently imperfect. Satisficing  Decision makers choose the first alternative that appears to give an acceptable or satisfactory resolution of the problem. The ‘good enough’ rule. Copyright © 2010 John Wiley & Sons, Inc. 9-19

The garbage can model  The main components of the choice process - problems, solutions, participants, and choice situations – are all mixed together in the “garbage can” of the organization. Copyright © 2010 John Wiley & Sons, Inc. 9-20

 Systematic › Problem approach utilizing a rational, analytic thinking.  Intuitive › Problem approach that is flexible and spontaneous. › A key element of decision making under risky and uncertainty conditions. Copyright © 2010 John Wiley & Sons, Inc Teams engage in two cognitive processes:

Judgmental heuristics  Simplifying strategies or shortcuts used to make decisions.  Make it easier to deal with uncertainty and limited information. Copyright © 2010 John Wiley & Sons, Inc. 9-22

 Availability heuristic › Involves assessing a current event based on past occurrences that are easily available in one’s memory.  Representativeness heuristic › Involves assessing the likelihood that an event will occur based on its similarity to one’s stereotypes of similar occurrences Copyright © 2010 John Wiley & Sons, Inc. 9-23

Anchoring and adjustment heuristic  Bases a decision on incremental adjustments to an initial value determined by historical precedent or some reference point. Copyright © 2010 John Wiley & Sons, Inc. 9-24

Decision Bias  Confirmation – attending to only those salient cues that confirm or support a pre-existing opinion.  Hindsight– believing that an event ‘should have’ been predicted.  Framing bias - tendency to consider what we could gain from a decision vs. what we could lose. In marketing, we ‘spin’ the outcomes Copyright © 2010 John Wiley & Sons, Inc.

In choosing problems to address, try the following checklist:  What really matters?  Will the problem resolve w/o intervention?  Is this my decision to make?  Will time spent make a difference? Copyright © 2010 John Wiley & Sons, Inc. 9-26

Authority decisions  Manager or team leader uses information that he or she possesses and decides what to do without involving others. Copyright © 2010 John Wiley & Sons, Inc. 9-27

Consultative decisions  Manager or team leader solicits input from other people and then, based on this information and its interpretation, makes a final choice. Copyright © 2010 John Wiley & Sons, Inc. 9-28

Team decisions  Manager or team leader consults with others and allows them to help make the final choice. Copyright © 2010 John Wiley & Sons, Inc. 9-29

Copyright © 2010 John Wiley & Sons, Inc. 9-30

Escalating commitment  Continuation and renewed effort on a previously chosen course of action, even though it is not working.  Avoid by:  Setting limits to your involvement  Making your own decisions  Questioning the reasons for decision?  Considering costs of time and resources Copyright © 2010 John Wiley & Sons, Inc. 9-31

Creativity  Involves the development of unique and novel responses to problems and opportunities. Copyright © 2010 John Wiley & Sons, Inc. 9-32

Copyright © 2010 John Wiley & Sons, Inc Preparation – problem identified Concentration - problem framed Incubation – solution pondered Illumination – solution found Verification – problem removed

Team creativity drivers  Situation offers opportunities.  Restraints on creativity are minimized.  Creative effort is recognized and rewarded Copyright © 2010 John Wiley & Sons, Inc.

Individual creativity drivers  Task expertise  High motivation  High creativity skill set Copyright © 2010 John Wiley & Sons, Inc. 9-35

Ways of fostering creativity  Record all ideas so that the same ones are not rediscovered.  Establish high expectations for creativity.  Develop a physical space that encourages fun, divergent ideas. Copyright © 2010 John Wiley & Sons, Inc. 9-36

An interesting site with simulations and training on creative techniques and ways to enhance your own individual creativity. Brainstorming.co.uk 9-37 Copyright © 2010 John Wiley & Sons, Inc.