1. Copyright © Houghton Mifflin Company. All rights reserved. 8-1 Chapter 8 Decision Making and Creative Problem Solving

2. Copyright © Houghton Mifflin Company. All rights reserved. 8-2 Chapter Outline Challenges for Decision Makers u Dealing with Complex Streams of Decisions u Coping with Uncertainty u Information-processing Styles u Avoiding Perceptual and Behavioral Decision Traps

3. Copyright © Houghton Mifflin Company. All rights reserved. 8-3 Chapter Outline (continued) Making Decisions u Making Programmed Decisions u Making Nonprogrammed Decisions u A General Decision-making Model

4. Copyright © Houghton Mifflin Company. All rights reserved. 8-4 Chapter Outline (continued) Group-aided Decision Making: A Contingency Perspective u Collaborative Computing u Group Involvement in Decisions u The Problem of Dispersed Accountability u Advantages and Disadvantages of Group- aided Decision Making u A Contingency Approach is Necessary

5. Copyright © Houghton Mifflin Company. All rights reserved. 8-5 Chapter Outline (continued) Managerial Creativity u What Is Creativity? u Workplace Creativity: Myth and Modern Reality u Learning to Be More Creative

6. Copyright © Houghton Mifflin Company. All rights reserved. 8-6 Chapter Outline (continued) Creative Problem Solving u Identifying the Problem u Generating Alternative Solutions u Selecting a Solution u Implementing and Evaluating the Solution

7. Copyright © Houghton Mifflin Company. All rights reserved. 8-7 DECISION MAKING Decision making: The process of identifying and choosing alternative courses of action in a manner appropriate to the demands of the situation.

8. Copyright © Houghton Mifflin Company. All rights reserved. 8-8 DECISION MAKING (continued) Sources of Complexity for Today’s Decision Makers 1.Multiple criteria 2.Intangibles 3.Risk and uncertainty 4.Long-term implications 5.Interdisciplinary input 6.Pooled decision making 7.Value judgments

9. Copyright © Houghton Mifflin Company. All rights reserved. 8-9 PERCEPTUAL AND BEHAVIORAL DECISION TRAPS Framing error: the tendency to evaluate positively presented information favorably and negatively presented information unfavorably.

10. Copyright © Houghton Mifflin Company. All rights reserved. 8-10 PERCEPTUAL AND BEHAVIORAL DECISION TRAPS (continued) Escalation of commitment: the tendency of individuals and organizations to get locked into losing courses of action because quitting is personally and socially difficult. u “Throwing good money after bad.” u “Sunk costs justify continuing.”

11. Copyright © Houghton Mifflin Company. All rights reserved. 8-11 PERCEPTUAL AND BEHAVIORAL DECISION TRAPS (continued) Overconfidence u “Ironically, researchers have found a positive relationship between overconfidence and task difficulty. In other words, the more difficult the task, the greater the tendency for people to be overconfident.”

12. Copyright © Houghton Mifflin Company. All rights reserved. 8-12 PERCEPTUAL AND BEHAVIORAL DECISION TRAPS (continued) For Discussion: 1.What is your personal experience with these common decision traps? 2.What can you do to avoid these decision traps in the future?

13. Copyright © Houghton Mifflin Company. All rights reserved. 8-13 GROUP-AIDED DECISION MAKING Five Ways Groups Can Be Involved in Decision Making: 1.Analyzing the problem 2.Identifying components of the decision situation 3.Estimating components of the decision situation (e.g., calculating probabilities) 4.Designing alternatives 5.Choosing an alternative

14. Copyright © Houghton Mifflin Company. All rights reserved. 8-14 GROUP-AIDED DECISION MAKING (continued) When Should the Group Not Make a Decision? u When the decision will have significant impact on organizational success or failure. u When the decision has legal ramifications. u When a competitive reward is tied to a successful decision.

15. Copyright © Houghton Mifflin Company. All rights reserved. 8-15 ADVANTAGES AND DISADVANTAGES OF GROUP-AIDED DECISION MAKING AND PROBLEM SOLVING Advantages 1. Greater pool of knowledge 2. Different perspectives 3. Greater comprehension 4. Increased acceptance 5. Training ground

16. Copyright © Houghton Mifflin Company. All rights reserved. 8-16 ADVANTAGES AND DISADVANTAGES OF GROUP-AIDED DECISION MAKING AND PROBLEM SOLVING (continued) Disadvantages 1. Social pressure 2. Domination by a vocal few 3. Logrolling 4. Goal displacement 5. Groupthink

17. Copyright © Houghton Mifflin Company. All rights reserved. 8-17 ADVANTAGES AND DISADVANTAGES OF GROUP-AIDED DECISION MAKING AND PROBLEM SOLVING (continued) For Discussion: Have you observed any of the above in your organizational dealings? How did the observed factor(s) enhance or degrade the final decision?

18. Copyright © Houghton Mifflin Company. All rights reserved. 8-18 CREATIVITY Creativity: the reorganization of experience into new configurations. General Types of Creativity u Art (“Ah!” reaction) u Discovery (“Aha!” reaction) u Humor (“HaHa!” reaction)

19. Copyright © Houghton Mifflin Company. All rights reserved. 8-19 CREATIVITY (continued) For Discussion: 1.Are you creative? How can you tell? 2.Which type of creativity do you find most appealing? Why? 3.How would you describe the most creative person you have ever known personally?

20. Copyright © Houghton Mifflin Company. All rights reserved. 8-20 TEN MENTAL LOCKS ON CREATIVITY 1. Looking for the “right” answer. 2. Always trying to be logical. 3. Strictly following the rules. 4. Insisting on being practical. 5. Avoiding ambiguity.

21. Copyright © Houghton Mifflin Company. All rights reserved. 8-21 TEN MENTAL LOCKS ON CREATIVITY (continued) 6. Fearing and avoiding failure. 7. Forgetting how to play. 8. Becoming too specialized. 9. Not wanting to look foolish. 10. Saying “I’m not creative.”

22. Copyright © Houghton Mifflin Company. All rights reserved. 8-22 TEN MENTAL LOCKS ON CREATIVITY (continued) For Discussion: Which of these mental locks typically stifle your own creativity? What can you do to avoid them?

23. Copyright © Houghton Mifflin Company. All rights reserved. 8-23 PROBLEM SOLVING Problem solving: the conscious process of bringing the actual situation closer to the desired situation. Problem: the difference between an actual state of affairs and a desired state of affairs. Causes: variables that, because of their presence or absence from the situation, are primarily responsible for the difference between the actual and desired conditions.

24. Copyright © Houghton Mifflin Company. All rights reserved. 8-24 PROBLEM SOLVING (continued) Stumbling Blocks for Problem Finders 1.Defining the problem according to a possible solution. 2.Focusing on narrow, low-priority areas. 3.Diagnosing problems in terms of their symptoms.

25. Copyright © Houghton Mifflin Company. All rights reserved. 8-25 PROBLEM SOLVING (continued) For Discussion: What situations can you describe where one of these problem finding mistakes led to poor problem solving?

26. Copyright © Houghton Mifflin Company. All rights reserved. 8-26 THE PROBLEM-SOLVING PROCESS A Four-Step Process 1.Identifying the problem 2.Generating alternative solutions 3.Selecting a solution 4.Implementing and evaluating the solution

27. Copyright © Houghton Mifflin Company. All rights reserved. 8-27 THE PROBLEM-SOLVING PROCESS (continued) Problems Can Be Handled Three Ways 1. Resolving the problem u Satisfice: settle for a solution that is good enough rather than the best possible.

28. Copyright © Houghton Mifflin Company. All rights reserved. 8-28 THE PROBLEM-SOLVING PROCESS (continued) Problems Can Be Handled Three Ways (continued) 2. Solving the problem u Optimize: systematically (scientifically) identify the solution with the best combination of benefits.

29. Copyright © Houghton Mifflin Company. All rights reserved. 8-29 THE PROBLEM-SOLVING PROCESS (continued) Problems Can Be Handled Three Ways (continued) 3. Dissolving the problem u Idealize: change the situation so that the problem no longer exists.