1. Decision Making Defined
Conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs

2. Rational Decision Making Model
1. Identify
problem
6. Evaluate
decision
2. Choose
decision
style
5. Implement
solution
3. Develop
alternatives
4. Choose
best solution

3. Problem Identification Process
Problems and opportunities are not announced or pre-defined
need to interpret ambiguous information
Involves both rational and emotional brain centres
probably need to pay attention to both in problem identification

4. Problem Identification Challenges
Perceptual bias:
Imperfect perceptions
Selective attention mechanisms
Influence from others
Mental models
Diagnostic skills:
Defining problems in terms of solutions
© Photofest

5. Identifying Problems Effectively
Be aware of perceptual and diagnostic limitations
Understand mental models
Consider other perspectives
Discuss the situation with colleagues
© Photofest

6. 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: All choices evaluated simultaneously
OB: Choices evaluated sequentially
more

7. Making Choices: Rational vs OB (con’t)
Standards
Rational: Evaluate against absolute standards
OB: Evaluate against implicit favourite
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

8. Intuitive Decision Making
Ability to know when a problem or opportunity exists and select the best course of action without conscious reasoning
Conduit for tacit knowledge
Use intuition to complete rational process

9. Choosing Solutions Effectively
Systematically evaluate alternatives
Balance emotions and rational influences
Scenario planning

10. Escalation of Commitment Causes
Self-justification
Gambler’s fallacy
Perceptual blinders
Closing costs
© Corel Corp. With permission

11. Employee Involvement Defined
The degree that employees share information, knowledge, rewards and power throughout the organization
active in decisions
employees influence how their work is organized and carried out

12. Levels of Employee Involvement
High involvement
Employees have complete decision making power (e.g.. SDWTs)
Full consultation
Employees offer recommendations (e.g.. gain sharing)
Selective consultation
Employees give information, but don’t know the problem
High
Medium
Low

13. Employee Involvement Model
Potential Involvement Outcomes
Employee Involvement
Better problem identification
More/better solutions generated
Best choice more likely
Higher decision commitment
Contingencies
of Involvement

14. Contingencies of Involvement
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

15. Creative Process Model
Verification
Insight
Incubation
Preparation

16. Characteristics of Creative People
Above average intelligence
Persistence
Relevant knowledge and experience
Inventive thinking
R. Koza, CP/K-W Record

17. Supporting Creativity
Learning orientation
Encourage experimentation
Tolerate mistakes
Intrinsically motivating work
Task significance, autonomy, feedback
Open communication and sufficient resources

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

19. Team Decision Making Constraints
Time constraints
Time to organize/coordinate
Production blocking
Evaluation apprehension
Belief that other team members are silently evaluating you
Conformity to peer pressure
Suppressing opinions that oppose team norms

20. Team Constraints: Groupthink
Tendency in highly cohesive teams to value consensus at the price of decision quality
More common when the team:
Is highly cohesive
Is isolated from outsiders
Team leader is opinionated
Faces external threat
Has recent failures
Team lacks clear guidance

21. Team Constraints: Group Polarization
Tendency for teams to make more extreme decisions than individuals alone
Riskier options usually taken because of gambler’s fallacy -- believe they can beat the odds

22. General Guidelines for Team Decisions
Ensure neither leader nor any member dominates
Maintain optimal team size
Team norms encourage critical thinking
Introduce effective team structures

23. Generating Constructive Conflict
Form heterogeneous decision making team
Ensure team meets often to face contentious issues
Members should take on different discussion roles

24. Rules of Brainstorming
1. Speak freely
2. No criticism
3. Provide many ideas
4. Build on others’ ideas

25. Evaluating Electronic Brainstorming
Benefits
Less production blocking
Less evaluation apprehension
More creative synergy
More satisfaction with process
Problems
Too structured
Technology-bound
Candid feedback is threatening
Not applicable to all decisions

26. Nominal Group Technique
Individual Activity
Team Activity
Individual Activity
Describe
problem
Write down
possible
solutions
Possible
solutions
described
to others
Vote on
solutions
presented