3. Develop alternatives 1. Recognize that problem/opportunityexists 2. Diagnose/ AnalyzeCauses Decision Making Steps 4. Choose best solution 5. Implement solution 6. Evaluate decision

Decision-Making Contingencies HIGH LOW TECHNICAL KNOWLEDGE (Problem Solution – Steps 3+) LOW HIGH GOAL CONSENSUS (Problem Identification – Steps 1 & 2) RATIONAL APPROACH COMPUTATION BARGAINING COALITION FORMATION JUDGMENT INTUITION TRIAL AND ERROR BARGAINING JUDGMENT “Garbage Can Model”

Garbage Can Model: Implications  Problems may persist without solutions being attempted.  Solutions may be attempted without solving problems.  Solutions may be proposed to problems that do not exist.  A few problems are solved.  d7LAN_FB1Nc d7LAN_FB1Nc d7LAN_FB1Nc

With 600 jobs in jeopardy, would you make a decision that would result in: A) a 100% chance of saving 200 jobs? OR A) a 100% chance of saving 200 jobs? OR B) a 33 1/3% chance of saving 600 jobs and a 66 2/3% chance of saving no jobs? B) a 33 1/3% chance of saving 600 jobs and a 66 2/3% chance of saving no jobs?

With 600 jobs in jeopardy, would you make a decision that would result in: C) a 100% chance of losing 400 jobs? C) a 100% chance of losing 400 jobs?OR D) a 33 1/3% chance of losing no jobs and a 66 2/3% chance of losing 600 jobs? D) a 33 1/3% chance of losing no jobs and a 66 2/3% chance of losing 600 jobs?

A and C are exactly the same A) a 100% chance of saving 200 jobs A) a 100% chance of saving 200 jobsEquals C) a 100% chance of losing 400 jobs C) a 100% chance of losing 400 jobs

B and D are exactly the same B) a 33 1/3% chance of saving 600 jobs and a 66 2/3% chance of saving no jobs B) a 33 1/3% chance of saving 600 jobs and a 66 2/3% chance of saving no jobsEquals D) a 33 1/3% chance of losing no jobs and a 66 2/3% chance of losing 600 jobs D) a 33 1/3% chance of losing no jobs and a 66 2/3% chance of losing 600 jobs

A,B,C,D are all statistically equal That is, they all have the same long- run “expected value” That is, they all have the same long- run “expected value” But A is preferred over B and D over C. But A is preferred over B and D over C.

FramingFraming To prevent the way a problem is presented (framing) from biasing the decision: To prevent the way a problem is presented (framing) from biasing the decision: – Try to look at problem in different ways Re-word it Re-word it Put yourself in the position of other people Put yourself in the position of other people Leave the problem and come back to it later Leave the problem and come back to it later

Myers-Briggs Test Has 4 dimensions: Has 4 dimensions: – Extraversion vs. Introversion – Judger vs. Perceiver (decisive vs. flexible) (decisive vs. flexible) – Sensing vs. Intuiting Sensing - Look at the facts, details Sensing - Look at the facts, details Intuiting - Get a general overview, the “big picture” Intuiting - Get a general overview, the “big picture” – Thinking vs. Feeling Thinking - Analyze objectively, reason Thinking - Analyze objectively, reason Feeling - Consider the impact on people Feeling - Consider the impact on people

Myers-Briggs Types Higher and lower positions in each of the dimensions are used to classify people into one of sixteen different personality types Higher and lower positions in each of the dimensions are used to classify people into one of sixteen different personality types.

Vroom’s Normative Decision Model (Leader-Participation Model)  Helps gauge the appropriate amount of participation for subordinates  5 levels of leader participation styles ranging from highly autocratic to highly democratic.

Vroom’s Normative Decision Model Styles  A1 – Leader makes decision alone  A2 – Leader obtains information from subordinates, then makes decision alone  C1 – Leader obtains suggestions from subordinates individually, then makes decision alone  C2 – Leader obtains suggestions from subordinates collectively, then makes decision alone  G – Decision by group consensus

Vroom Model  Participation is permitted primarily to: Enhance Decision Quality Enhance Decision Quality Foster Subordinate Morale Foster Subordinate Morale  Series of questions asked about the situation (leader expertise, importance of subordinate commitment, etc.)

Trends Toward Greater Participation by Lower-Level Employees  Education  Technology  Downsizing  Deregulation  Globalization

Creative People Background Knowledge Background Knowledge Curiosity Curiosity Open-mindedness Open-mindedness Self-Confidence Self-Confidence Not afraid to be different Not afraid to be different Persistence Persistence Relaxed and playful attitude Relaxed and playful attitude

Creative Organizations Selection: Creative people identified by past achievements, tests Selection: Creative people identified by past achievements, tests Free time to create Free time to create Freedom to choose problems Freedom to choose problems Low Bureaucracy Low Bureaucracy Long time orientation Long time orientation Tolerate Failures Tolerate Failures Reward Successes Reward Successes