Decision Making and Creativity Chapter Six

Decision Making at Radical Ron Sangha/ BC Business Radical Entertainment founder Ian Wilkinson (third from right) meets with employees every week to reinforce the electronic games developer’s emphasis on creative decision making and employee involvement.

Decision Making Defined Ron Sangha/ BC Business Decision making is a conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs.

Rational Choice Decision Process

Rational Choice Decision Process Identify problem/opportunity Problem is a gap between what is and what ought to be Choose decision process Meta-decision -- e.g. programmed?, involve others? Develop (and identify) alternatives Search, then build Choose best alternative Alternative that maximizes payoff Implement choice Evaluate choice

Problem Identification Process Problems and opportunities are not announced or pre-defined need to interpret ambiguous information Problem identification uses both logical analysis and unconscious emotional reaction during perceptual process need to pay attention to both logic and emotional reaction in problem identification

No Problem, Houston? NASA’s space shuttle Columbia disintegrated during re-entry, killing all seven crewmembers. A special accident investigation board concluded that NASA’s middle management continually resisted attempts to recognize that the Columbia was in trouble, and therefore made no attempt to prevent loss of life.

Problem Identification Challenges Stakeholder framing Perceptual defense Mental models Decisive leadership Solution-focused problems

Identifying Problems Effectively Be aware of perceptual and diagnostic limitations Understand mental models Discussing the situation with colleagues -- see different perspectives

Making Choices: Rational vs OB Views Goals Rational: Clear, compatible, agreed upon OB: Ambiguous, conflicting, lack agreement Processing Information Rational: People can process all information OB: People process only limited information Evaluation Timing Rational: Choices evaluated simultaneously OB: Choices evaluated sequentially more

Making Choices: Rational vs OB (con’t) Standards Rational: Evaluate against absolute standards OB: Evaluate against implicit favorite Info Quality Rational: People rely on factual information OB: Rely on perceptually distorted information Decision Objective Rational: Maximization -- the optimal choice OB: Satisficing -- a “good enough” choice

Emotions and Making Choices Emotional marker process forms preferences before we consciously think about choices Moods and emotions influence the decision process affects vigilance, risk aversion, etc. We ‘listen in’ on our emotions and use that information to make our choices

Intuitive Decision Making Ability to know when a problem or opportunity exists and select the best course of action without conscious reasoning Intuition as emotional experience Gut feelings are emotional signals Not all emotional signals are intuition Intuition as rapid unconscious analysis Uses action scripts

Making Choices more Effectively Systematically evaluate alternatives Balance emotions and rational influences Scenario planning

Escalation of Commitment The tendency to repeat an apparently bad decision or allocate more resources to a failing course of action Four main causes of escalation: Self-justification Prospect theory effect Perceptual blinders Closing costs

Evaluating Decisions Better Separate decision choosers from evaluators Establish a preset level to abandon the project Involve several people in the evaluation process

Decision Making and Creativity Employee Involvement Decision Making and Creativity

Employee Involvement at Thai Carbon Black Thai Cabon Black, the Thai-Indian joint venture, relies on employee involvement to boost productivity and quality. Employees submit hundreds of suggestions in little red boxes located around the site Participatory management meetings are held every month

Employee Involvement Defined The degree to which employees influence how their work is organized and carried out Different levels and forms of involvement

Employee Involvement Model Potential Involvement Outcomes Employee Involvement Better problem identification Synergy produces more/better solutions Better at picking the best choice Higher decision commitment Contingencies of Involvement

Contingencies of Involvement Higher employee involvement is better when: Decision Structure Problem is new & complex (i.e nonprogrammed decision) Knowledge Source Employees have relevant knowledge beyond leader Decision Commitment Employees would lack commitment unless involved Risk of Conflict Norms support firm’s goals Employee agreement likely

Creativity in Decision Making Decision Making and Creativity

Creative Process Model Verification Insight Incubation Preparation

Characteristics of Creative People Above average intelligence Persistence Relevant knowledge and experience Inventive thinking style

Creative Work Environments Learning orientation Encourage experimentation Tolerate mistakes Intrinsically motivating work Task significance, autonomy, feedback Open communication and sufficient resources Team competition and time pressure have complex effect on creativity

Creative Activities Review abandoned projects • Explore issue with other people Redefine the Problem • Storytelling • Artistic activities • Morphological analysis Associative Play • Diverse teams • Information sessions Internal tradeshows Cross- Pollination

Decision Making and Creativity Chapter Six

Solutions to Creativity Brainbusters Decision Making and Creativity

Double Circle Problem

Nine Dot Problem

Nine Dot Problem Revisited

Word Search FCIRVEEALTETITVEERS

Burning Ropes One Hour to Burn Completely After first rope burned i.e. 30 min. One Hour to Burn Completely