Transcript Introduction to the Field of Organizational Behavior

Decision Making
and Creativity
McGraw-Hill/Irwin
McShane/Von Glinow OB 5e
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Decision Making at Google
Google is a hotbed of
creativity and innovation by
giving staff 20 percent of
their time to work on pet
projects, using evidencebased experiments to test
ideas, and involving
employees in organizational
decisions.
7-2
Decision Making Defined
Decision making is a
conscious process of
making choices among
one or more alternatives
with the intention of moving
toward some desired state
of affairs.
7-3
Rational Choice Decision Process
4
7-4
Rational Choice Decision Process

Identify problem/opportunity
• Symptom vs problem

Choose decision process
• e.g. (non)programmed

Develop/identify alternatives
• Search, then develop

Choose best alternative
• Subjective expected utility

Implement choice
 Evaluate choice
7-5
Problem Identification Process

Problems and opportunities are not
announced or pre-defined

Use logical analysis and nonconscious
emotional reaction during perceptual process
7-6
No Problem, Houston?
NASA’s space shuttle Columbia
disintegrated during re-entry, killing
all seven crewmembers. A special
accident investigation board
concluded that NASA’s middle
management continually resisted
attempts to recognize that the
Columbia was in trouble, and
therefore made no attempt to
prevent loss of life.
7-7
Problem Identification Challenges

Stakeholder framing

Perceptual defense

Mental models

Decisive leadership

Solution-focused problems
7-8
Identifying Problems Effectively
1.
Be aware of perceptual and
diagnostic limitations
2.
Fight against pressure to
look decisive
3.
Maintain “divine discontent”
(aversion to complacency)
4.
Discussing the situation
with colleagues -- see
different perspectives
7-9
Making Choices: Rational vs OB Views
Rational Choice
Paradigm Assumptions
Observations from
Organizational Behavior
Goals are clear, compatible, and
agreed upon
Goals are ambiguous,
conflicting, and lack agreement
People are able to calculate all
alternatives and their outcomes
People have limited information
processing abilities
People evaluate all alternatives
simultaneously
People evaluate alternatives
sequentially
more
7-10
Making Choices: Rational vs OB Views
Rational Choice
Paradigm Assumptions
Observations from
Organizational Behavior
People use absolute standards
to evaluate alternatives
People evaluate alternatives
against an implicit favorite
People make choices using
factual information
People make choices using
perceptually distorted information
People choose the alternative
with the highest payoff (SEU)
People evaluate alternatives
sequentially
7-11
Biased Decision Heuristics
People have built-in decision heuristics that bias
evaluation of alternatives
1. Anchoring and adjustment – initial information (e.g.,
opening bid) influences evaluation of subsequent
information
2. Availability heuristic – we estimate probabilities by how
easy we can recall the event, but other factors influence
ease of recall
3. Representativeness heuristic -- we estimate
probabilities by how much they represent something
(e.g. stereotypes) in spite of better probability info
7-12
Paralyzed by Choice
Research has found that when
decision makers are presented with
more options, they are less likely to
make any decision at all. This
paralysis of choice occurs even
when there are clear benefits of
selecting any alternative (such as
joining a company retirement plan).
7-13
Emotions and Making Choices
1.
Emotions form preferences before we
consciously evaluate those choices
2.
Moods and emotions influence how well we
follow the decision process
3.
We ‘listen in’ on our emotions and use that
information to make choices
7-14
Intuitive Decision Making

Ability to know when a problem or opportunity
exists and select the best course of action
without conscious reasoning

Intuition as emotional experience
• Gut feelings are emotional signals
• Not all emotional signals are intuition

Intuition as rapid nonconscious analysis
• Uses action scripts
7-15
Making Choices more Effectively
1.
Systematically evaluate alternatives against
relevant factors
2.
Be aware of effects of emotions on decision
preferences and evaluation process
3.
Scenario planning
7-16
Postdecisional Justification

Tendency to inflate quality of the selected
option; forget or downplay rejected
alternatives

Results from need to maintain a positive selfidentity

Initially produces excessively optimistic
evaluation of decision
7-17
Escalation of Commitment

The tendency to repeat an apparently bad
decision or allocate more resources to a
failing course of action
 Four main causes of escalation:
• Self-justification
• Prospect theory effect
• Perceptual blinders
• Closing costs
7-18
Evaluating Decisions More Effectively
1.
Separate decision choosers from evaluators
2.
Establish a preset level to abandon the
project
3.
Find sources of systematic and clear
feedback
4.
Involve several people in the evaluation
process
7-19
Involvement at Thai Carbon Black



Thai Cabon Black, the ThaiIndian joint venture, relies on
employee involvement to
boost productivity and quality.
Employees submit hundreds
of suggestions in little red
boxes located around the site
Participatory management
meetings are held every
month
7-20
Employee Involvement Defined


The degree to which
employees influence how their
work is organized and carried
out
Different levels and forms of
involvement
7-21
Employee Involvement Model
Potential Involvement
Outcomes
Employee
Involvement
Contingencies
of Involvement

Better problem
identification

Synergy produces
more/better solutions

Better at picking the
best choice

Higher decision
commitment
7-22
Contingencies of Involvement
Higher employee involvement is better when:
Decision
Structure
Knowledge
Source
Decision
Commitment
Risk of
Conflict
• Problem is new & complex
(i.e nonprogrammed decision)
• Employees have relevant knowledge
beyond leader
• Employees would lack commitment
unless involved
1. Norms support firm’s goals
2. Employee agreement likely
7-23
Going for WOW at Nottingham-Spirk
Team members at Nottingham-Spirk Design Associates Inc.
give coworker Craig Saunders (standing) a “WOW” rating for
one of the firm's creative products, the SwifferVac.
Nottingham-Spirk’s work environment supports creativity.
7-24
Creativity Defined
Developing an original idea that makes a
socially recognized contribution
• Applies to all aspects of the decision process –
problems, alternatives, solutions
7-25
Creative Process Model
Verification
Insight
Incubation
Preparation
7-26
Characteristics of Creative People

Above average intelligence

Persistence

Relevant knowledge and experience

Independent imagination traits
• Higher openness to experience personality
• Lower need for affiliation motivation
• Higher self-direction/stimulation values
7-27
Creative Work Environments

Learning orientation
• Encourage experimentation
• Tolerate mistakes

Intrinsically motivating work
• Task significance, autonomy, feedback

Open communication and sufficient resources

Team competition and time pressure have
complex effect on creativity
7-28
Creative Activities
Redefine
the Problem
• Review
abandoned
projects
• Explore issue
with other
people
Associative
Play
CrossPollination
• Storytelling
• Diverse teams
• Artistic activities
• Information
sessions
• Morphological
analysis
• Internal
tradeshows
7-29
Decision Making
and Creativity
McGraw-Hill/Irwin
McShane/Von Glinow OB 5e
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Solutions to
Creativity
Brainbusters
McGraw-Hill/Irwin
McShane/Von Glinow OB 5e
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Double Circle Problem
7-32
Nine Dot Problem
7-33
Nine Dot Problem Revisited
7-34
Word Search
FCIRVEEALTETITVEERS
7-35
Burning Ropes
After first rope burned
i.e. 30 min.
One Hour to Burn Completely
7-36