1. Steps in Decision Making
Problem Identification (need Goal Consensus)
Monitor the decision environment
Define the problem
Specify decision objectives
Diagnose the problem
Problem Solution (need Technical Knowledge)
Develop alternative solutions
Evaluate alternatives
Choose the best alternative
Implement the chosen alternative

2. Contingency Framework
GOAL CONSENSUS
(Problem Identification)
HIGH
LOW
HIGH 1 2
INDIVIDUAL:
INDIVIDUAL:
RATIONAL APPROACH
COMPUTATION
BARGAINING
COALITION FORMATION
ORGANIZATION:
ORGANIZATION:
MANAGEMENT SCIENCE
CARNEGIE MODEL
TECHNICAL KNOWLEDGE
(Problem Solution) 3 4
INDIVIDUAL:
INDIVIDUAL:
JUDGMENT
TRIAL AND ERROR
BARGAINING, JUDGMENT
INSPIRATION, IMITATION
ORGANIZATION:
ORGANIZATION:
INCREMENTAL DECISION
PROCESS MODEL
CARNEGIE , INCREMENTAL
PROCESS MODELS,
EVOLVING INTO GARBAGE
CAN MODEL
LOW

3. Garbage Can Model Extreme Problem Uncertainty Streams of Events
i.e., low goal consensus and low technical knowledge
Streams of Events
Problems
Solutions
Participants
Choice opportunities

4. Garbage Can Model: Implications
Solutions may be proposed to problems that do not exist.
Choices may be made without solving problems.
Problems persist without being solved.
A few problems are solved.

5. Escalation of Commitment
Escalation occurred when the British government continued funding the Concorde supersonic jet long after its lack of commercial viability was apparent. Some scholars now refer to escalation of commitment as the “Concorde Fallacy.”
Causes:
Gambler’s fallacy
Self-justification
Sunk costs
© Corel Corp. With permission

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

7. Group Decision Making ADVANTAGES: More background knowledge
More alternatives generated
More understanding of the decision
More support for decision
Helps fulfill social needs
DISADVANTAGES:
Time consuming, inefficient
Ineffective Compromise decisions
Groupthink, social pressure, conflict
Lack of clear responsibility 23

8. Conditions for Groupthink
Team leader’s opinion is known
Team is highly cohesive
Team is isolated from outside influences
Team has recent decision failures

9. Creative Organizations
Decentralized / Low Bureaucracy
Open channels of communication
Creative people identified by tests, past achievements
Free time to create
Freedom to choose problems
Assignment of nonspecialists to problems
Long-time orientation (Resources allocated without expectation of immediate payoff)
Tolerate Failures
Reward Successes 20

10. Creative People Background Knowledge Curiosity Open-mindedness
Self-Confidence
Not afraid to be different
Persistence
Relaxed and playful attitude 19

11. Increasing Your Creativity
Mental Exercises
Keep Optimistic Attitude
Speak to Lead Users
Maintain an Idea Notebook 19

12. Improving Decision-Making Effectiveness
Work on enhancing your creativity
Learn from past decisions, but don’t waste time regretting past
Distinguish between idea getting and evaluating
Seek advice, when practical
As a group leader, don’t dominate the discussion
When possible, “sleep on” decisions, but don’t procrastinate beyond when a decision should be made 27