Student Presentations

1. Stephanie Bower 2. Brendan Flynn 3. Michael Giordano 4. Kate Scarcella 5. John Collins 6. Sean Space 7. Eddie Ebrahimi 8. Beverly Peters

Individual DecisionMaking

Chapter 6

Essentials of Organizational Behavior, 8/e

Stephen P. Robbins

The Leader’s Responsibilityin Decision Making is...The Leader’s Responsibilityin Decision Making is...

1. manage time

2. accurately identify problems

3. consult with appropriate people

4. produce effective solutions

5. appropriately implement the solutions

6. consider impact of decisions on morale of others

1. manage time

2. accurately identify problems

3. consult with appropriate people

4. produce effective solutions

5. appropriately implement the solutions

6. consider impact of decisions on morale of others

Decision-Style Model

ConceptualConceptual

BehavioralBehavioral

AnalyticalAnalytical

DirectiveDirective

Way of ThinkingWay of Thinking

To

lera

nce

fo

r A

mb

igu

ity

To

lera

nce

fo

r A

mb

igu

ity

HighHigh

LowLow

RationalRational IntuitiveIntuitive

The Six-Step Rational Decision-Making Model

1) Define the problem

2) Identify decision criteria

3) Weight the criteria

4) Generate alternatives

5) Rate each alternative on each criterion

6) Compute the optimal decision

Assumptions of the Model

1) Problem clarity2) Known options3) Clear preferences4) Constant preferences5) No time or cost constraints6) Maximum payoff

Common Biases and Errors Overconfidence bias Anchoring bias Confirmation bias Availability bias

Common Biases and Errors

Representative bias Escalation of commitment Randomness error Hindsight bias

Bounded Rationality

Due to the limited capacity of the mind to be fully rational; decision makers construct simplified models to extract the essential features from complex problems

Typical Use of Bounded Rationality

Limited list of criteria based on most conspicuous choices

Final solution represents a satisficingsatisficing choice, not an optimum one

Satisficing - first acceptablefirst acceptable choice

Intuition

Unconscious process created out of distilled experience; resulting in a rapid decision with what appears to be very limited information

When is Intuition Used?

1) When a high level of uncertainty exists

2) When there is little precedent to draw on

3) When variables are less scientifically predictable

4) When “facts” are limited

5) When facts don’t clearly point the way

When is Intuition Used?

6) When analytical data are of little use

7) When there are several plausible alternative solutions from which to choose

8) When time is limited and there is pressure to come up with the right decision

Organizational Constraints Performance Evaluation Reward Systems Formal Regulations System-Imposed Time

Constraints Historical Precedents

Cultural Differences Cultural background can significantly

influence Selection of problems Depth of analysis Importance placed on logic and rationality Whether decisions should be made

Autocratically by individual manager Collectively in groups

Implications for Managers

Five suggestions to improve decision making:1) Analyze the situation and adjust to the national

culture and criteria of organization2) Be aware of biases3) Combine rational analysis with intuition4) Do not assume your specific decision style is

appropriate for every job5) Use creativity-stimulation techniques

Creativity - ability to produce novel and useful ideas

Helps decision maker identify all viable alternatives

The Three Components of Creativity

ExpertiseExpertise CreativityCreativitySkillsSkills

TaskTaskMotivationMotivation

CreativityCreativity

Five Organizational Factors Impeding Creativity

1) Expected evaluation

2) Surveillance

3) External motivators

4) Competition

5) Constrained choice

Video

Everyday Creativity

Gender Differences

Evidence indicates that women analyze decisions more than men

Reason is not clear

Decision Making Evaluation/ Training Tool Decision Style Profile, Published by Discovery Learning, w

ww.discoverylearning.com Standardized decision making assessment Training materials to use/ deliver training Also Multi-Rater version.

Decision Making AgendaDecision Making Agenda

The Leader’s Responsibility... Quality–Acceptance–Time 5 Decision Styles Compliance when... D1 Acceptance when... D5 7 Rules for using D1 – D5 (2 pp) Decision Making Task: (3 pp)

The Leader’s Responsibility... Quality–Acceptance–Time 5 Decision Styles Compliance when... D1 Acceptance when... D5 7 Rules for using D1 – D5 (2 pp) Decision Making Task: (3 pp)

Student Presentations

1. Stephanie Bower 2. Brendan Flynn 3. Michael Giordano 4. Kate Scarcella 5. John Collins 6. Sean Space 7. Eddie Ebrahimi 8. Beverly Peters

Decision Making AgendaDecision Making Agenda

ModelsPrinciples/Concepts/Styles/Rules

ActivityCase Study Groups

Applicationto your Workplace

ReflectionStrengths and Development Needs

ModelsPrinciples/Concepts/Styles/Rules

ActivityCase Study Groups

Applicationto your Workplace

ReflectionStrengths and Development Needs

Decision Making Styles:Factors to ConsiderDecision Making Styles:Factors to Consider

QUALITY (effectiveness)

technically optimum solution

rational and realistic solves the problem,

fits the criteria

QUALITY (effectiveness)

technically optimum solution

rational and realistic solves the problem,

fits the criteria

ACCEPTANCE (effectiveness)

commitment for success

creative ownership support to implement consider impact on

morale

ACCEPTANCE (effectiveness)

commitment for success

creative ownership support to implement consider impact on

morale

TIME(efficiency)

implement effectively

avoid waste

TIME(efficiency)

implement effectively

avoid waste

5 Decision Styles5 Decision Styles

Type 1 = Leader depends on own knowledge & decides alone* seek no extra information from staff

Type 2 = Leader seeks information, then decides alone* seek some information from selected staff

Type 3 = Leader consults with individuals, then decides alone* share problem, seek information and ask advice from selected staff

Type 4 = Leader consults whole team and then decides alone* meet staff to discuss possible alternatives and use their feelings/opinions as input

Type 5 = Leader shares problem with whole team & they mutually decide* define the problem, provide relevant information and participate in discussion

* accept group decision

Type 1 = Leader depends on own knowledge & decides alone* seek no extra information from staff

Type 2 = Leader seeks information, then decides alone* seek some information from selected staff

Type 3 = Leader consults with individuals, then decides alone* share problem, seek information and ask advice from selected staff

Type 4 = Leader consults whole team and then decides alone* meet staff to discuss possible alternatives and use their feelings/opinions as input

Type 5 = Leader shares problem with whole team & they mutually decide* define the problem, provide relevant information and participate in discussion

* accept group decision

Compliance When...Compliance When...

Task is routine No extra effort is required No special creativity is needed Supervision or systems are in place

Task is routine No extra effort is required No special creativity is needed Supervision or systems are in place

Acceptance When...Acceptance When...

Creativity High energy Enthusiasm Initiative or Special effort is required Close supervision is impossible

Creativity High energy Enthusiasm Initiative or Special effort is required Close supervision is impossible

Decision Making GuideDecision Making Guide

Components D1 D2 D3 D4 D5

Quality of Information

Leader has all the

information

Not all Information Available

Not all Information Available

Not Available to Leader

Not Available to Leader

Acceptance Needed to Implement

Not Necessary Not NecessarySome

Acceptance Required

Some Acceptance

Required

Consensus Required

Time Available No Time No Time Some Time Time Available Time Available

Decision Process

Leader decides alone

Decides alone after

consulting one people

Decides alone after

consulting a few

Decides alone after

consulting most or all

Leader and group decide

together

Decision Making Impact

Decision

Type

Limited

Time

High

Manager

Expertise

Incongruent

Goals

High

Complexity

Commitment

Needed

Conflict

Over

Solutions

Multiple

Solutions

Type 5 **** **** **** ****

Type 4 **** *** ** *** ***

Type 3 * *** ** * *

Type 2 ** ** *

Type 1 *** *

Decision Case 1

You are the supervisor of a manufacturing operation that employees 12 workers. Due to a recent crisis, another manufacturing operation in a different part of the plant is short-handed and cannot complete their current task. You have been asked to provide replacement workers for the next three days. All of your workers are equally skilled at the tasks required and all are motivated workers. Further, you know each of them well and are aware of no problems which would interfere with any of your workers moving to this other operation for the time required. You also know that demand on your unit is somewhat low at the moment and you can cover for the loss of three workers without significant overload for your current workers.

Decision Case 2

You are the manager of a unit consisting of route delivery sales people (e.g.., beer, soda, or bakery delivery). Your sales/delivery force consistently produces good but not stellar results. Your boss has just stormed into your office for the 6th time this month to complain about seeing all the company trucks clustered around a donut shop in the east end of town. He has seen this same group of trucks, all from your unit, at the donut shop repeatedly and thinks it reflects badly on the company. He wants you to do something to change it.

Decision Case 3

You are the Safety and Loss Control Manager for an underground mine. Your mine has had a long and celebrated history of a very low lost time accident rate and has recently completed 1.5 million man hours without a lost time accident. However, in the past little while it has come to your attention that there were three close calls with rock bolts in one section of the mine. You believe this situation needs to be corrected before someone gets injured but there are too many alternatives for the right answer to be obvious. You are the safety person so you don’t understand either the geology or the mechanics of rock bolts. However, the Superintendent has identified you as the person to finalize the plan of response.

Decision Making Task, Group Decision Making Task, Group

• As a group...

4. Discuss examples from your experience of recent decisions. What style was used?

5. Choose one to report that was effective. Why did it work well?

6. Choose one to report that “bombed”. Why didn’t it work?

• As a group...

4. Discuss examples from your experience of recent decisions. What style was used?

5. Choose one to report that was effective. Why did it work well?

6. Choose one to report that “bombed”. Why didn’t it work?

Decision Making and Expectations Decisions can be made in any style as long

as expectations are clear Difficulty will arise if widely varying

expectations Natural practice of good leaders Ask question, “Have I made my expectations

clear.

Ethics

What is ethics? The right way to behave The law A set of rules The truth The greatest good for the most people

Ethical Decision Making

Moral Reasoning Capacity Collaboration between moral philosophy and moral psychology

and has been very influential in recent literature. Kohlberg’s six identifiable stages are classified into three levels of reasoning about moral dilemmas: Pre-Conventional - reasoning based on self-interest. The

individual aims to win rewards and avoid punishment.

Conventional - reasoning based on conformity to social norms and expectations such as family or peer-group pressures.

Post-conventional - reasoning based on universal ethical principles, centered on the notion of justice.

Outcome Based Ethical Principles Beneficence - decisions should maximize potential

benefits and minimize potential harm or risk to others.

Egoism – decisions should maximize benefits to oneself

Justice – decisions should result in a fair and equitable distribution of benefits as well as burdens

Utilitarianism – decisions should result in the greatest good for the greatest number

From Ethical Decision Challenge, Center for Applied Research, 1998

Rule-Based Ethical Principles Cultural Relativism – do what is consistent with the

laws and norms of one’s own nation Golden Rule – do unto others as you would have

others do unto you Kant’s Categorical Imperative – do what they would

want anyone else to do who was facing the same set of circumstances

Organizational relativism – do what is consistent wit the goals and norms of one’s own organization

Professional ethic – do what would be condoned or supported by one’s professional colleagues and peers

Respect for persons – do what will maintain the autonomy of others

From Ethical Decision Challenge, Center for Applied Research, 1998

Stages of Moral Development

LevelLevel Stage DescriptionStage Description

PrincipledPrincipled

ConventionalConventional

Pre-conventionalPre-conventional

1. Sticking to rules to avoid physical punishment

2. Following rules only when it’s in your immediate interest

3. Living up to what is expected by people close to you

4. Maintaining conventional order by fulfilling obligations to which you have agreed

6. Following self-chosen ethical principles, even if they violate the law

5. Valuing rights of others; upholding non-relative values and rights regardless of the majority’s opinion

Organizational Constraints Performance Evaluation Reward Systems Formal Regulations System-Imposed Time

Constraints Historical Precedents

Cultural Differences Cultural background can significantly

influence Selection of problems Depth of analysis Importance placed on logic and rationality Whether decisions should be made

Autocratically by individual manager Collectively in groups

Outcome Based Ethical Principles Beneficence - decisions should maximize potential

benefits and minimize potential harm or risk to others.

Egoism – decisions should maximize benefits to oneself

Justice – decisions should result in a fair and equitable distribution of benefits as well as burdens

Utilitarianism – decisions should result in the greatest good for the greatest number

From Ethical Decision Challenge, Center for Applied Research, 1998

Rule-Based Ethical Principles Cultural Relativism – do what is consistent with the

laws and norms of one’s own nation Golden Rule – do unto others as you would have

others do unto you Kant’s Categorical Imperative – do what they would

want anyone else to do who was facing the same set of circumstances

Organizational relativism – do what is consistent wit the goals and norms of one’s own organization

Professional ethic – do what would be condoned or supported by one’s professional colleagues and peers

Respect for persons – do what will maintain the autonomy of others

From Ethical Decision Challenge, Center for Applied Research, 1998