Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Chapter 11 Decision Making, Creativity & Ethics

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Decision Making Decision Making occurs as a reaction to a problem or opportunity Classic decision making process is the Rational Model, designed to maximize outcomes –Define the problem –Identify criteria for selecting a solution –Allocate weights to criteria to reflect relative importance –Develop a list of alternatives –Rate/Evaluate the alternatives against the criteria –Multiply out the factors and select the best alternative Works best when there are few alternatives to a clearly defined problem In the real world, this rarely occurs because of ill-defined problems, unclear alternatives and selection criteria

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Decision Making Bounded Rationality –Suggests that most people are limited in their ability to process and act on information, making it difficult to identify and consider every alternative Intuitive Decision Making –A subconscious process created out of experience –It complements the rational process but leverages experience –Intuition is the use of pattern recognition and requires decision makers to have analyzed the outcomes of previous decisions after- the-fact Framing – a term for a judgment short cut –The selective use of perspective alters the way we view a situation to formulate a decision –Lets try reading Exhibit 11-2 on page 414. Complete A before going on to B

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Heuristics Heuristics are judgment shortcuts used to simplify decisions –Statistical Regression to the Mean – when a poor performance follows and exceptional one, or an exceptional performance follows a poor one, simply to support the average behaviour –Availability heuristic – the tendency to base decisions on available info –Representative heuristic – making an assumption that the next outcome is predictable by previous representative outcomes –Escalation of Commitment – throwing good money after bad

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Group Decision Making Strengths –Benefits from more complete info –Benefits from increased diversity of views –Leads to increased acceptance of the solution (agreement vs. alignment) Weaknesses –Takes time to achieve a decision –The richness offered by diverse views might be compromised by conformity pressures –Group decision can be dominated by a few loud people –Ambiguous decision – no one person feels “responsible” for the decision. Generally group decisions are more accurate, widely accepted, creative, but individual decision are quicker

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Groupthink vs. Groupshift Groupthink – when group members become so enamoured with seeking agreement that the norm for consensus overrides the full expression of all views Symptoms of Groupthink –Overconfidence – because the group has explained away any downside –Eroded morality – because the group is righteous –Rationalized resistance –Peer pressure – ejection form the group for dissenting –Minimizing doubts – suppression of diverse views –Abstention means yes

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Groupthink vs. Groupshift Groupshift – a tendency where one’s initial position becomes exaggerated because of interactions within the group –Conservative group members become more conservative and aggressive members become more aggressive –For aggressive people, the desire to show their willingness to take risks shows their daring –For aggressive decisions, again, there is no one person responsible for the decision, no ownership

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Group Decision Making Techniques Interacting Groups – by far the most common way to make decisions. Simply get people in a room to discuss and make the decision These techniques are designed to leverage the value that group decision making offers while minimizing the weaknesses of group decision making Brainstorming – an idea generating process encouraging any idea while withholding criticism. Strives to reduce pressures for conformity

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Group Decision Making Techniques Nominal Group technique – restricts discussion and interpersonal communication during a decision making process –Members independently write down suggestions –Each member presents one of their ideas in turn –The group discusses each idea for clarity –The group members silently and independently rank the ideas This technique can be further enhanced by isolating group members physically –Members submit a list of ideas to a facilitator –The facilitator collects and disseminates the list of ideas to each member –Members ask questions of the facilitator who gets clarifying responses from the originator, then distributes these response to all members –Members separately vote on each idea to select an winner

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Leader’s Influence on Group Decisions Vroom and Jago developed a decision tree to help direct leaders in the decision making methods Exhibit 11-5 shows an illustration of this mechanical technique –The facts are that no manager in the real world has the time or the info to use this model The leader’s influence on decision making is significant whether they are in the room or not Leader’s need to be open to allow individuals to feel comfortable in expressing their diverse opinions However, leaders’ tendencies to hire like personalities tends to reduce openness and diverse perspectives

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Creativity Creativity is the process of creating concepts, products or procedures that are novel or original and are potentially useful to the organization Why do we care?: Because creativity allows us to increase our options in decision making. Organizations can promote creativity by: –Challenging people –Providing freedom in decision making –Providing resources for decision making –Developing diverse groups where people support diverse opinions –Supervisory function that nurtures creativity –Organizational support that nurtures creativity

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Creativity But in reality, organizations curb creativity by –Forcing evaluations (performance evaluations) –Surveillance –External motivators (creativity is driven by internal motivators) –Competition – a win-lose situation with peers –Constrained Choice – limiting or constraining how work is to be done –Maybe the single biggest factor – Freedom to be creative without repercussions (the freedom to be wrong)

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Ethics in Decision Making Ethics need to be an important criteria in the decision making process 3 Ethical Decision Making Criteria –Utilitarianism – criteria that seek to acquire the greatest good for the greatest number of people Promotes efficiency and productivity but might compromise rights of minorities –Rights – criteria that seek to make decisions that protect and respect fundamental rights and liberties for people Protects freedom and privacy but can cause an overly legalistic environment that harms efficiency and productivity –Justice – criteria driven by the imposition of rules that ensure that there is equitable distribution of benefits of a decision Protects the underrepresented and less powerful, but reduces risk- taking and innovation

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Factors Affecting Ethical Decision Making Stages of Moral Development – the higher a person’s moral development the less likely to be influenced by outside forces Locus of Control – People with an internal locus of control are more likely to take responsibility for their actions and less likely to be influenced by outside forces Organizational Environment – Similar to groupthink, the organization’s expectations for decision making will affect outcomes. Increasing morals in decision supported by: –defined ethics statements –high moral behaviour by senior managers –Realistic performance goals –Performance evaluations that evaluate the means as well as the ends

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP Thinking Like a Child So many sources advocate the innocence of child-like thinking. –The BrainStore (p 426) leverages children to help generate ideas –Many martial arts disciplines promote basic unsophisticated thinking to help advance students –Markus Mettler says “…kids know how to talk without letting their thinking get in the way”. Adults are conditioned to control their thinking from criticisms in their past Chapter 12

Organizational Behaviour Dave Ludwick, P.Eng, MBA, PMP