1. Organizational Behaviour Individual and Social Behaviour
Decision making

2. Decision Making
The process of developing commitment to some course of action

3. Rational Decision Making Model
Maximizing decision making
Identify the problem
Search for relevant information
Develop alternative solutions
Evaluate solutions
Choose the best solution
Implement the chosen solution
Monitor and evaluate the chosen solution

4. Bounded Rationality using less than perfect decision making processes
Reasons
time and energy
limited capability to process information
organization politics
We satisfice rather than maximize
select an acceptable solution rather than an optimal solution

5. Escalating Commitment
Continuing on a losing course of action or throwing good resources after bad
Reasons
1) not recognizing sunk costs
2) self-justification (image management)
3) to be consistent (image management)
4) framing

6. Escalating Commitment
To help overcome
set up specific goals
put more emphasis on the decision making process rather than the results
try to see the outcomes from a different perspective
separate initial decision makers from those evaluating the continuance of the program

7. Prospect Theory Framing options as losses or gains
>>>>> risk taking or risk avoidance
A gain of a given amount is much less attractive than the loss of the same amount is averse (feel losses more than gains)
Adapt more quickly to gains than losses
the reference point adjusts more quickly to gains
We perceive equal size gains (or losses) differently depending on the relative amounts that we are dealing with

8. Heuristics and Biases Processing information Availability heuristic
Confirmation bias
Law of small numbers

9. Group Decision Making Can improve decision making
more people to spot the potential problem
bring in a wider variety of ideas and solutions
better at analyzing for strengths and weaknesses
Can increase commitment to decisions

10. Group Decision Making Disadvantages Speed; takes more time Conflict
Domination
Diffusion of responsibility

11. Groupthink
Conformity among members that does not allow alternative perspectives to be heard; results in poor decision making
Includes
the leader or majority expressed opinion dominates
strong social pressures to maintain harmony
the group becomes closed to alternative ideas
pressures are put on dissenting members

12. Groupthink
Illusion of invulnerability - members are overconfident; comfortable with risky decisions
Rationalization - problems or inconsistent information are explained away
Illusion of morality - an unquestioned belief in the morality of the group’s decision
Stereotyping of outsiders - unfavorable stereotypes are created about outsiders or the other side
Pressure for conformity - members pressure each other to conform to the dominant view
Self-censorship - member suppress doubts to maintain harmony
Illusion of unanimity - because dissent is suppressed members perceive that unanimous support exists for the chosen course of action
Mindguards - some members appoint themselves to prevent inconsistent information from reaching the team

13. Groupthink To overcome
leaders should not express or support early preferences
establish norms that allow for alternative perspectives to be heard e.g. devil’s advocate
draw out quiet members and make sure everyone contributes

14. Group Polarization
Tendency for teams to make more extreme decisions than individuals
Risky shift and conservative shift
Polarization occurs because of
Persuasive arguments
Increased confidence
Social comparison

15. Group Decision Making Methods: Ordinary Brainstorming
Nominal Group Technique
Delphi Technique

16. Organizational Decision Making The Garbage Can Model
Characteristics of the decision
1. The problem, alternatives, and solutions can be ill defined
2. The relationship among the key variables is hard to define
3. There is turnover of participants

17. Garbage Can Model Consequences
Problems may lead to a proposed solution or not. Problems may not be solved through the solution
Potential Solutions may be proposed. People may be attracted to solutions whether or not they solve the problem. Solutions can be independent of the problem
Participation can determine what and when problems and solutions are proposed
Choice opportunities or decision opportunities will determine which problems are proposed, what solutions are suggested, and which decision is made (a matter of timing)

18. Garbage Can Model Consequences
solutions may be proposed even when problems don’t exist
Choices are made without solving problems
Problems may persist without being solved
A few problems are solved