1. Decision Making, Creativity, and Ethics
Chapter 9
Decision Making, Creativity, and Ethics

2. Decision Making, Creativity, and Ethics
Questions for Consideration
Is there a right way to make decisions?
How do people actually make decisions?
What kinds of shortcuts do people use in making decisions?
What factors affect group decision making?
 Should the leader make the decision, or encourage the group to participate?
How can we get more creative decisions?
 What is ethics, and how can it be used for better decision making?

3. How Should Decisions Be Made?
Decision making occurs as a reaction to a problem or an opportunity.
A problem is a discrepancy between some current state of affairs and some desired state, requiring consideration of alternative courses of action.
Opportunities occur when something unplanned happens, giving rise to thoughts about new ways of proceeding.
Material pertinent to this discussion is found on pages

4. Exhibit 9-1 Steps in the Rational Decision-Making Model
Making a Decision
Define the
problem
Identify the
criteria
Develop
alternatives
Allocate weights
to the criteria
Evaluate the
Select the
best alternative
Material pertinent to this illustration is found on pages
This model assumes that the problem is clear and unambiguous, that the decision-maker has complete information; that the decision-maker can identify all relevant criteria; that there will be clear and constant preferences among the criteria and alternatives, that there are no time or cost constraints; and that the rational decision-maker will choose the alternative with maximum payoff.
A brief discussion with students will lead them to realize that these conditions are rarely, if ever, fully met! You might want to get them to consider how they chose their college major, or what school to attend after high school.

5. Assumptions of the Rational Decision-Making Model
Problem Clarity
The problem is clear and unambiguous
Known Options
The decision-maker can identify all relevant criteria and viable alternatives
Clear Preferences
Rationality assumes that the criteria and alternatives can be ranked and weighted
Material pertinent to this discussion is found on pages

6. Assumptions of the Rational Decision-Making Model
Constant Preferences
Specific decision criteria are constant and the weights assigned to them are stable over time
No Time or Cost Constraints
Full information is available because there are no time or cost constraints
Maximum Payoff
The choice alternative will yield the highest perceived value
Material pertinent to this discussion is found on pages

7. How Do Decision-Makers Identify & Select Problems
Problems that are visible tend to have a higher probability of being selected than ones that are important. Why?
It is easier to recognize visible problems
Decision-makers want to appear competent and “on-top of problems”
Decision-makers’ self-interest affects problem selection because it is usually in the decision-maker’s best interest to address problems of high visibility and high payoff. This demonstrates an ability to perceive and attack problems
Material pertinent to this discussion is found on pages
It’s likely that decision-makers identify and select problems that are visible to people in power in organizations, and for which they will receive some acknowledgment and reward for having done work on solving.

8. Bounded Rationality Bounded Rationality Satisficing
Limitations on one’s ability to interpret, process, and act on information
Satisficing
Identifying a solution that is “good enough”
Material pertinent to this discussion is found on page 289.

9. Intuitive Decision Making
A subconscious process created out of distilled experience
Best used:
When time is short
When policies, rules, and guidelines do not give clear cut advice
When there is a great deal of uncertainty
When detailed numerical analysis needs a check and balance
Material pertinent to this discussion is found on pages

10. Judgment Shortcuts or Heuristics
Framing
The selective use of perspective
Statistical Regression to the Mean
Failure to recognize that performances tend towards the average, rather than extremes
Availability Heuristic
The tendency of people to base their judgments on information readily available to them
Material pertinent to this discussion is found on pages

11. Heuristics or Judgment Shortcuts
Representative Heuristic
The tendency to assess the likelihood of an occurrence by trying to match it with a preexisting category
Ignoring the Base Rate
Ignoring the statistical likelihood of an event when making a decision
Escalation of Commitment
An increased commitment to a previous decision in spite of negative information
Material pertinent to this discussion is found on pages

12. Answer part A before reading part B.
Exhibit 9-2 Scenario 1
Answer part A before reading part B.
A: Threatened by a superior enemy force, the general faces a dilemma. His intelligence officers say his soldiers will be caught in an ambush in which 600 of them will die unless he leads them to safety by one of two available routes. If he takes the first route, 200 soldiers will be saved. If he takes the second, there’s a one-third chance that 600 soldiers will be saved and a two-thirds chance that none will be saved. Which route should he take?
B: The general again has to choose between two escape routes. But this time his aides tell him that if he takes the first, 400 soldiers will die. If he takes the second, there’s a one-third chance that no soldiers will die, and a two-thirds chance that 600 soldiers will die. Which route should he take?
Material pertinent to this discussion is found on pages

13. Scenario 2
Linda is 31, single, outspoken, and very bright. She majored in philosophy in university. As a student, she was deeply concerned with discrimination and other social issues, and participated in anti-nuclear demonstrations. Which statement is more likely:
a. Linda is a bank teller
b. Linda is a bank teller and active in the feminist movement.
Material pertinent to this discussion is found on pages

14. Group Decision Making Strengths of Group Decision Making
Generates more complete information and knowledge
Offers increased diversity of views
Generates higher-quality decisions
Leads to increased acceptance of a solution
Weaknesses of Group Decision Making
More time consuming
Conformity pressures in groups
Discussion can be dominated by one or a few members
Decisions suffer from ambiguous responsibility
Material pertinent to this discussion is found on pages

15. Effectiveness and Efficiency
Accuracy: Group Decisions
Speed: Individual Decisions
Creativity: Group Decisions
Acceptance: Group Decisions
Efficiency: Individual Decisions
Material pertinent to this discussion is found on pages

16. Groupthink and Groupshift
Phenomenon in which the norm for consensus overrides the realistic appraisal of alternative courses of action
Groupshift
Phenomenon in which the initial positions of individual members of a group are exaggerated toward a more extreme position
Material pertinent to this discussion is found on page

17. Symptoms of Groupthink
Illusion of Invulnerability
Assumption of Morality
Rationalized Resistance
Peer Pressure
Minimized Doubts
Illusion of Unanimity
Material pertinent to this illustration is found on pages
Rationalized Resistance. Group members rationalize any resistance to the assumptions they have made. No matter how strongly the evidence may contradict their basic assumptions, members behave so as to reinforce those assumptions continually.
Peer Pressure. Members apply direct pressures on those who momentarily express doubts about any of the group’s shared views or who question the validity of arguments supporting the alternative favoured by the majority.
Minimized Doubts. Those members who have doubts or hold differing points of view seek to avoid deviating from what appears to be group consensus by keeping silent about misgivings and even minimizing to themselves the importance of their doubts.
Illusion of Unanimity. There appears to be an illusion of unanimity. If someone doesn’t speak, it’s assumed that he or she is in full accord. In other words, abstention becomes viewed as a “Yes” vote.

18. What Causes Groupshift?
Discussion creates familiarization among group members
Group discussion motivates individuals to take risks
Group diffuses responsibility
Material pertinent to this discussion is found on pages

19. Group Decision-Making Techniques
Interacting Groups
Brainstorming
Nominal Group Technique
Electronic Meeting
Material pertinent to this illustration is found on pages
Interacting Groups: Members meet face-to-face and rely on both verbal and nonverbal interaction to communicate with each other.
Brainstorming: An idea-generation process that specifically encourages any and all alternatives, while withholding any criticism of those alternatives.
Nominal group technique: A group decision-making method in which individual members meet face-to-face to pool their judgments in a systematic but independent fashion.
Electronic meeting: A meeting where members interact on computers, allowing for anonymity of comments and aggregating of votes.

20. Exhibit 9-3 Nominal Group Technique
Individual Activity
Group Activity
Individual Activity
Individuals silently
Individuals take turns
Individuals silently rank
Team members receive
write down
describing solutions
(or vote on) each
description of problem.
possible solutions.
to each other;
solution presented.
Group then discusses
and evaluates ideas.
Material pertinent to this illustration is found on page 299.

21. Exhibit 9-4 Evaluating Group Effectiveness
Material pertinent to this illustration is found on pages

22. Leader Behaviours with GroupsAI
You solve the problem or make a decision yourself using whatever facts you have at hand.
AII
You obtain the necessary information from subordinates and then decide on the solution to the problem yourself. CI
You share the problem with relevant subordinates one-on-one, getting their ideas and suggestions. However, the final decision is yours alone.
Material pertinent to this discussion is found on pages
The Leader-Participation Model is a theory by Vroom and Yetton that provides a set of rules to determine the form and amount of participative decision-making in different situations. A major assumption of this work is that a leader can recognize a situation as needing certain behaviours, and flex his or her behaviour based on the contingency factors in the situation.

23. Leader Behaviours with Groups
CII
You share the problem with your subordinates as a group, collectively obtaining their ideas and suggestions. Then you make the decision that may or may not reflect your subordinates’ influence.
GII
You share the problem with your subordinates as a group. Your goal is to help the group concur on a decision. Your ideas are not given any greater weight than those of others.
Material pertinent to this discussion is found on pages

24. Exhibit 9-5 Revised Leadership-Participation Model
Quality requirement:
Commitment requirement:
Leader's information:
Problem structure:
Commitment probability:
Goal congruence:
Subordinate conflict:
Subordinate information:
How important is the technical quality of this decision?
How important is subordinate commitment to the decision?
Do you have sufficient information to make a high-quality decision?
Is the problem well structured?
If you were to make the decision by yourself, is it reasonably certain that your
subordinate(s) would be committed to the decision?
Do subordinates share the organizational goals to be attained in solving this problem?
Is conflict among subordinates over preferred solutions likely?
Do subordinates have sufficient information to make a high-quality decision? SI CO GC CP ST LI CR QR
Yes No
High
State
the
problem
Low AI
GII
CII
AII CI
Material pertinent to this illustration is found on pages

25. Creativity
The process of creating products, ideas, or procedures that are novel or original, and are potentially relevant or useful to an organization
Material pertinent to this discussion is found on page 302.

26. De Bono’s Six Thinking Hats
White hat
Impartial thinking, focussing strictly on the facts.
Red hat
Expression of feelings, passions, intuitions, emotions.
Black hat
A critical, deliberate, evaluating outlook.
Material pertinent to this discussion is found on page 303.

27. De Bono’s Six Thinking Hats
Yellow hat
An optimistic, upbeat, positive outlook.
Green hat
Creativity, inspiration, imagination, and the free flow of new concepts.
Blue hat
Control, an overall “managerial” perspective of the process.
Material pertinent to this discussion is found on page 303.

28. Organizational Factors Affecting Creativity
Challenge
Freedom
Resources
Work-Group Features
Supervisory Encouragement
Organizational Support
Material pertinent to this illustration is found on page 304.
Challenge: When people are matched up with the right assignments, their expertise and skills can be brought to the task of creative thinking. Individuals should be stretched, but not overwhelmed.
Freedom: To be creative, once a person is given a project, he or she needs the autonomy to determine the process. In other words, let the person decide how to tackle the problem. This heightens intrinsic motivation.
Resources: Time and money are the two main resources that affect creativity. Thus, managers need to allot these resources carefully.
Work-Group Features: Our discussion of group composition and diversity concluded that heterogeneous groups were likely to come up with more creative solutions. In addition to ensuring a diverse group of people, team members need to share excitement over the goal, must be willing to support each other through difficult periods, and must recognize each other’s unique knowledge and perspective.
Supervisory Encouragement: To sustain passion, most people need to feel that what they are doing matters to others. Managers can reward, collaborate, and communicate to nurture the creativity of individuals and teams.
Organizational Support: Creativity-supporting organizations reward creativity, and also make sure that there is information sharing and collaboration. They make sure that negative political problems do not get out of control..

29. Creativity Blocks Expected evaluation Surveillance External motivators
Competition
Constrained choice
Material pertinent to this illustration is found on page 304.
Expected evaluation. Focusing on how your work will be evaluated rather than focusing on the purpose of your work.
Surveillance. Being watched while you are working.
External motivators. Emphasizing external, tangible rewards rather than intrinsic rewards.
Competition. Facing a win-lose situation with other people rather than being able to simply do your best.
Constrained choice. Being given limits on how you can do your work rather than being encouraged to do your very best work.

30. Ethics
The study of moral values or principles that guide our behaviours, and inform us whether actions are right or wrong
Material pertinent to this illustration is found on page 304.

31. Ethics in Decision Making
An individual can use three different criteria in framing or making ethical choices.
Utilitarian criterion
Decisions are made solely on the basis of their outcomes or consequences.
Rights criterion
Decisions consistent with fundamental liberties and privileges as set forth in documents like the Canadian Charter of Rights and Freedoms.
Justice criterion
Decisions that impose and enforce rules fairly and impartially so there is an equitable distribution of benefits and costs.
Material pertinent to this discussion is found on pages
Three Ethical Decision Criteria that one can use include
utilitarianism, in which decisions are made solely on the basis of their outcomes or consequences;
rights, which calls on individuals to make decisions consistent with fundamental liberties and privileges; and
justice, which requires individuals to impose and enforce rules fairly and impartially so there is an equitable distribution of benefits and costs.
These criteria should be helpful in resolving ethical dimensions of decision-making in an organized manner, but it should be recognized that each has advantages and liabilities.
A good discussion can stem from posing the question: “Suppose a manager knows she will have to get some workers to do overtime on the weekend. Describe the decision-making process based on utilitarianism, rights, and justice.”

32. Exhibit 9-6 Factors Affecting Ethical Decision-Making Behaviour
Stage of moral
development
Ethical
Organization
environment
decision-making
Material pertinent to this illustration is found on page
behaviour
Locus of
control

33. Exhibit 9-7 Stages of Moral Development6.
Following self-chosen ethical
principles even if they violate
the law. 5.
Valuing rights of others and
upholding absolute values
and rights regardless of the
majority’
s opinion. 4.
Maintaining conventional
order by fulfilling
obligations to which
you have agreed. 3.
Living up to what is
expected by people close
to you. 2.
Following rules only
when doing so is in your
immediate interest. 1.
Sticking to rules to avoid
physical punishment.
Conventional
Principled
Preconventional
Material pertinent to this illustration is found on pages
While there are no clear-cut ways to differentiate ethical from unethical decision making, there are some questions you should consider.
–    The first question you need to answer addresses self-interest vs. organizational goals.
–    The second question concerns the rights of other parties. If the decision violates the rights of someone else (their right to privacy, for instance) then the decision is unethical.
–    The final question that needs to be addressed relates to whether the decision conforms to standards of equity and justice.
Unfortunately, the answers to the questions in Exhibit 11-9 are often argued in ways to make unethical decisions seem ethical.

34. Exhibit 9-8 Is a Decision Ethical?
Yes
Unethical No
Ethical
Question 2
Does the
decision
respect the
rights of the
individuals
affected?
Question 1
Is the decision
motivated by self-
serving interests to
the exclusion of the
organization ’
s goals?
Question 3
Is the
fair and equitable?
Material pertinent to this illustration is found on pages
This is a simple framework for helping one determine whether a decision is ethical.

35. Social Responsibility
A number of Canadian corporations are beginning to acknowledge the need to accept responsibilities beyond those of the shareholder.
Not everyone agrees with this position of organizations assuming social responsibility, however.
For example, economist Milton Friedman remarked, in Capitalism and Freedom, that “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”
Material pertinent to this discussion is found on page

36. Summary and Implications
Individual decision making
Individuals think and reason before they act.
Under some decision situations, people follow the rational decision making model.
What can managers do to improve their decision making?
Analyze the situation.
Be aware of biases.
Combine rational analysis with intuition.
Don’t assume that your specific decision style is appropriate for every job.
Use creativity-stimulation techniques.
Group decision making
Organizations that use teams face additional problems and synergies with respect to decision making
Leader-participation model can be used to determine when to allow teams to make decisions
Material pertinent to this discussion is found on pages

37. Summary and Implications
Creativity
Organizations need to reward and encourage creativity
Ethics
Managers set the tone for ethics in the organization
Material pertinent to this discussion is found on pages

38. OB at Work

39. For Review
1. What is the rational decision-making model? Under what conditions is it applicable?
2. Describe organizational factors that might constrain decision makers.
3. What role does intuition play in effective decision making?
4. Describe the three criteria that individuals can use in making ethical decisions.
5. What is groupthink? What is its effect on decision-making quality?
Material pertinent to this discussion is found on page 314.

40. For Review
6. What is groupshift? What is its effect on decision-making quality?
7. Identify factors that block creativity.
8. Are unethical decisions more a function of the individual decision maker or the decision maker’s work environment? Explain.
Material pertinent to this discussion is found on page 314.

41. For Critical Thinking
1. “For the most part, individual decision making in organizations is an irrational process.” Do you agree or disagree? Discuss.
2. What factors do you think differentiate good decision makers from poor ones? Relate your answer to the six-step rational decision-making model.
Material pertinent to this discussion is found on page 314.

42. For Critical Thinking
3. Have you ever increased your commitment to a failed course of action? If so, analyze the follow-up decision to increase your commitment and explain why you behaved as you did.
4. If group decisions are of consistently better-quality than individual decisions, how did the phrase “a camel is a horse designed by a committee” become so popular and ingrained in our culture?
Material pertinent to this discussion is found on page 314.

43. Breakout Group Exercises
Form small groups to discuss the following:
1. Apply the rational decision-making model to deciding where your group might eat dinner this evening. How closely were you able to follow the rational model in making this decision?
2. The company that makes your favourite snack product has been accused of being weak in its social responsibility efforts. What impact will this have on your purchase of any more products from that company?
3. You’ve seen a classmate cheat on an exam or an assignment. Do you do something about this or ignore it?
Material pertinent to this discussion is found on page 317.