Transcript The context of Strategy

GRA 6820
The Psychology of
Decision Making
(Harrison, Chapter 6)
The Psychology of Decision-Making
GRA 6820
Strategic Choice
1
Overview of chapter 6
• The role of personality
• Risk behavior
• Perception in decision making
• Subconscious influences
The Psychology of Decision-Making
GRA 6820
Strategic Choice
2
The disciplines of decision making
Psychology
The Descriptive
approach
Mathematics
and statistics
The Normative
approach
The Psychology of Decision-Making
GRA 6820
Strategic Choice
Information
technology and
decision support
3
Disciplinary roots of decision science
DESCRIPTIVE THEORIES
• Psychology
• Marketing
INDIVIDUAL
• Psychiatry
• Literature
• Decision science
• Economics
• Operations research
• Philosophy/logic
• Social psychology
• Organizational behavior
GROUP • Anthropology
• Sociology
• Organization theory
• Sociology
ORGANIZATION • Industrial organization
• Political science
• Sociology
SOCIETY • Anthropology
• Macroeconomics
The Psychology of Decision-Making
PRESCRIPTIVE THEORIES
GRA 6820
Strategic Choice
• Game theory
• Organizational behavior
• Clinical psychiatry/therapy
• Finance/economics
• Planning/strategy
• Control theory/cybernetics
• Organization design
• Team theory/economics
• Legal philosophy
• Political sciences
• Social choice
Kleindorfer, P.R., Kunreuther, H.C. and Schoemaker, P.J.H. (1993).
Decision Sciences: An integrative perspective, Cambridge.
4
Factors influencing strategy
 Complexity
 Uncertainty
 Long time delays between action and reaction
 Conflicting objectives
 Multiple decision makers
We seek a rational framework to help
us sort through these issues
The Psychology of Decision-Making
GRA 6820
Strategic Choice
5
Sense-making
A characteristic of humans is trying to make sense of
incomprehensible things.
Sense-making is described as…
– Structuring the unknown, but in different ways.
– Placing stimuli into some sort of framework – a “frame of reference”
that guides interpretations.
– A thinking process that uses retrospective accounts to explain
surprises.
– Reciprocal interaction of information seeking, meaning assignment
and action.
– An interpretive process needed for organizational members to
understand and share understandings about features of the
organization.
– A process in which individuals develop cognitive maps of their
environment.
Sense may be in the eye of the beholder, but beholders
vote and the majority rules.
K.E. Weick
The Psychology of Decision-Making
GRA 6820
Strategic Choice
6
Problem structure
Degree of
Structure
Operational
Performance
Operational
Management
Management
Control
Strategic
Planning
Structured
Payroll
Production
Accounts
Receivable
Budget
Management
Portfolio
Analysis
Equipment
Scheduling
Inventory
Control
Short-term
Forecasting
Site
Location
Dispatching
Maintenance
Management
Long-term
Forecasting
Mergers and
Acquisitions
Equipment
Diagnosis
Cash
Management
Budget
Preparation
Product
Planning
Unstructured
The Psychology of Decision-Making
GRA 6820
Strategic Choice
7
Sense-making:
Multiple perspectives
Yields
choices of...
Influenced by individuals’
mental models
A real-world
situation of
concern
Actions to
improve the
situation
The Psychology of Decision-Making
Comparison of
descriptions with the
perceived reality
GRA 6820
Strategic Choice
Descriptions
of relevant
systems of
purposeful
activity
8
Definition: Problem
• A formal statement of a set of
assumptions about the world.
• The assumptions are rarely made explicit.
• Whether we see an event or situation as a
”problem” depends on our view of the
world.
– Problems do not exist independently of
the person who sees them.
– Mistaking the map for the territory.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
9
The principle of ”bounded rationality”
”The capacity of the human mind for
formulating and solving complex problems
is very small compared to the size of those
problems whose solution is required for
objectively rational behavior in the real
world or even for a reasonable
approximation to such objectivity.”
Simon, H.A. (1957). Administrative Behavior: A study of decision making
processes in administrative organizations, 4th ed. New York: The Free Press.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
10
The mind of the strategist
• “Successful business strategies result not from
rigorous analysis, but from a particular state of
mind.”
• Strategy making is in essence a creative and
partly intuitive process, often disruptive of the
status quo.
• Strategists employ analysis only to stimulate the
creative process, to test the ideas that emerge, to
work out their strategic implications or to ensure
successful execution.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
11
The anatomy of a decision
The “rational” approach to decision making
1. Define the problem.
2. Identify the criteria.
3. Weight the criteria.
4. Generate alternatives.
5. Rate each alternative on each criterion.
6. Compute the optimal decision.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
12
Phases in the strategic decision
making process
INTELLIGENCE
DESIGN
CHOICE
Subject to constraints….
•Individual
IMPLEMENTATION
FEEDBACK and
LEARNING
•Organizational
•Societal
The Psychology of Decision-Making
GRA 6820
Strategic Choice
13
Problem solving constraints
• Cultural constraints
– “Cultural Iceberg”
• Organizational constraints
– Contextual variables
– Structural variables
• Individual constraints
– Cognitive
– Personality
The Psychology of Decision-Making
GRA 6820
Strategic Choice
14
The cultural iceberg
Primarily in awareness
Primarily out
of awareness
fine arts literature
drama classical music popular music
folk dancing games cooking dress
notions of modesty conception of beauty
cosmology ideals governing childrearing rules of descent
relationship to animals patterns of superior subordinate relations
definition of sin courtship practices conception of justice incentives to work
notions of leadership tempo of work patterns of decision making
conception of cleanliness attitudes towards the dependent theory of disease
approaches to problem solving conception of status mobility eye behavior
roles in relation to status by age, sex, class, occupation, kinship etc..
conversational patterns in social contexts conception of past and future
definition of insanity nature of friendship ordering of time conception of “self”
patterns of visual perception preference for competition or cooperation
body language social interaction rate notions of adolescence
notions about logic and validity patterns of handling emotions facial expressions
arrangement of physical space ...AND MUCH, MUCH MORE...
The Psychology of Decision-Making
GRA 6820
Strategic Choice
15
Problem solving constraints:
Organizational factors
Contextual variables
• Size
• Technology
• Environmental uncertainty
• Age
• Interdependence
Structural variables
• Differentiation
• SOP formalization
• Centralization
The Psychology of Decision-Making
• Division of labor
• Status system
• Managerial
GRA 6820
Strategic Choice
16
Constraints:
Individual factors
• Stereotypical thinking
• Self imposed constraints
• Risk of failure
• Lack of a questioning
attitude
• Memory constraints
• World-view constraints
The Psychology of Decision-Making
• Functional constraints
• Problem solving language
constraints
GRA 6820
Strategic Choice
17
A model of cognition:
The human information processing
model
Schema
DATA
ACQUISITION
DATA
PROCESSING
Task
Environment
ACTION
FEEDBACK
The Psychology of Decision-Making
GRA 6820
Strategic Choice
OUTCOME
Biases
Assumptions:
– Judgment is plagued by random error and systematic
biases.
– Good judgment requires mental skills exceeding our
capabilities.
Capacity of the mind is small relative to the size of the problems.
Heuristics and rules of thumb are used to cope with problem
complexity.
Good news
 This allows us to deal with the real world.
Bad news
 This often leads to faulty data acquisition and processing.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
19
Biases in problem solving
Acquisition biases Processing biases
• Inconsistency
• Availability
• Selective perception
• Conservatism
• Frequency
• Nonlinear extrapolation
• Base rate
Information sources
• Source consistency
• Illusory correlation
– Consistent information sources
can increase confidence in
judgments, but not increase
predictive accuracy.
• Data presentation
• Framing
The Psychology of Decision-Making
• Data presentation
GRA 6820
Strategic Choice
Biases in problem solving
Decision
environment
Processing
heuristics
• Time pressure
• Habits/rules of thumb
• Information overload
• Anchoring and adjustment
• Distractions
• Representativeness
• Emotional stress
• Justifiability
• Social pressures
• Law of small numbers
• Regression bias
• Best guess strategy
The Psychology of Decision-Making
GRA 6820
Strategic Choice
Biases in problem solving
Output bias
• Question format
• Scale effects
• Wishful thinking
• Illusion of control
Feedback bias
• Outcome irrelevant learning
structures
• Misperception of chance
occurrences
• Failure/success attributions
• Logical fallacies in recall
• Hindsight
The Psychology of Decision-Making
GRA 6820
Strategic Choice
Feedback biases and learning
Mental model
Double
loop
learning
(governing variables
and relationships)
Choosing
Single loop
learning
Acting
Observing
consequences
(match/mismatch
with expectations)
The Psychology of Decision-Making
GRA 6820
Strategic Choice
23
Heuristics and biases in decision making
Availability Judgments distorted by easily recalled events
Selective perception Expectations bias observations
Illusory correlation Encourages belief that unrelated variables are correlated
Conservatism Ignoring full effect of new information
Law of small numbers Overestimating representativeness of small groups
Regression bias Failure to allow for regression to the mean
Wishful thinking Probability of desired events judged too highly
Illusion of control Overestimating personal control over outcomes
Logical reconstruction “Logical” reconstruction of inaccurately recalled events
Hindsight bias Overestimation of predictability of past events
The Psychology of Decision-Making
GRA 6820
Strategic Choice
24
The Psychology of Decision-Making
GRA 6820
Strategic Choice
25
The Psychology of Decision-Making
GRA 6820
Strategic Choice
26
The Psychology of Decision-Making
GRA 6820
Strategic Choice
27
The Psychology of Decision-Making
GRA 6820
Strategic Choice
28
Bias
Believing chance is
predictable
Selective perception
Anchoring and
adjustment
Seeing opportunities
incrementally
Seeking only
confirming evidence
Framing biases
Reasoning by
inappropriate
analysis
Teisberg, E.O. (1991). ”Why do good
managers choose poor strategies?”
Harvard Business School Case 9-391172.
The Psychology of Decision-Making
Escalating
commitment
irrationally
1.
2.
3.
4.
5.
1.
2.
3.
4.
Use frameworks for strategic analysis
Use multiple perspectives
Devil’s advocate
Consider improbable or unpopular assumptions
Re-evaluate over time
Use frameworks for strategic analysis
Devil’s advocate
Consider improbable or unpopular assumptions
Re-evaluate over time
1.
2.
3.
4.
1.
2.
3.
4.
1.
2.
3.
Use frameworks for strategic analysis
Use multiple perspectives
Devil’s advocate
Consider improbable or unpopular assumptions
Use multiple perspectives
Devil’s advocate
Consider improbable or unpopular assumptions
Re-evaluate over time
Use frameworks for strategic analysis
Use multiple perspectives
Consider improbable or unpopular assumptions
1.
2.
3.
4.
5.
1.
2.
3.
1.
2.
3.
Use frameworks for strategic analysis
Use multiple perspectives
Devil’s advocate
Consider improbable or unpopular assumptions
Re-evaluate over time
Use multiple perspectives
Devil’s advocate
Re-evaluate over time
Use multiple perspectives
Devil’s advocate
Re-evaluate over time
1.
2.
3.
4.
5.
Use frameworks for strategic analysis
Use multiple perspectives
Devil’s advocate
Consider improbable or unpopular assumptions
Re-evaluate over time
GRA 6820
Strategic Choice
Antidotes to counteract
biases
Underestimating
uncertainty
Antidote
29
Decision traps
Russo and Schoemaker, Decision Traps 1989
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Plunging in.
Frame blindness.
Lack of frame control.
Overconfidence in your judgment.
Shortsighted shortcuts.
Shooting from the hip.
Group failure.
Fooling yourself about feedback.
Not keeping track.
Failure to audit your decision process.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
30
Decision traps – summary
(Russo and Schoemaker, 1989)
Plunging in
Frame blindness
Beginning to gather information and reach conclusions without first
taking a few minutes to think about the crux of the issue you’re
facing or to think through how you believe decisions like this should
be made.
Setting out to solve the wrong problem (Type 3 error) because you
have created a mental framework for your decision, with little
thought, that causes you to overlook the best options or lose sight
of important objectives.
Lack of frame Failing to consciously define the problem in more ways than one or
control being unduly influenced by the frames of others.
Overconfidence in Failing to collect key factual information because you are too sure
your judgments of your assumptions and opinions.
Relying inappropriately on ”rules of thumb” such as implicitly
Shortsighted trusting the most readily available information or anchoring too
shortcuts much on convenient facts.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
31
Decision traps - summary
Believing you can keep straight in your head all the information
Shooting from the you’ve discovered, and thereby ”winging it” rather than following a
hip systematic procedure when making the final choice.
Group failure
Assuming that with many smart people involved, good choices will
follow automatically, and therefore failing to manage the group
decision-making process.
Fooling yourself Failing to interpret the evidence from past outcomes for what it
really says, either because you are protecting your ego or because
about feedback you are tricked by hindsight.
Not keeping track
Assuming that experience will make its lessons available
automatically, and therefore failing to keep systematic records to
track the results of your decisions and failing to analyze these
results in ways that reveal their key lessons.
Failure to audit Failing to create an organized approach to understand your own
your decision decision making, so you remain constantly exposed to all of the
above mistakes.
process
The Psychology of Decision-Making
GRA 6820
Strategic Choice
32
Mental models
• Personal theories of how things work
– The most important factors.
– The causal and correlational relationships that
link them.
• These models have different names:
– Conceptual structures
– World views
– Schema
– Cognitive maps
– Institutional models
The Psychology of Decision-Making
GRA 6820
Strategic Choice
33
How do mental models affect
behavior?
Events
Sale of a new office building.
Property prices up 10% compared to last year.
Patterns
Annual new construction activity over the past 50 years.
Structure
Demand
Expected earnings
construction activity Supply
New
Demand
Mental models
Application of economic supply and demand models to
real estate market behavior.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
34
Reflexive loop - our
beliefs affect what data
we select next time
The ladder of inference
I take
ACTION
based on my
beliefs
I adopt
BELIEFS
about the world
I draw
CONCLUSIONS
I make
ASSUMPTIONS
based on the
meanings I add
I add
MEANING
(cultural and personal)
I select
DATA
from what I observe
Observable “data” and
EXPERIENCES
(as a video recorder might
capture)
35
The Psychology of Decision-Making
GRA 6820
Strategic Choice
Skills for working with mental
models
• Becoming more aware of your own thinking
and reasoning.
 Reflection
• Inquiring into others’ thinking and reasoning.
 Inquiry
• Making your own thinking and reasoning
more visible to others.
 Advocacy
The Psychology of Decision-Making
GRA 6820
Strategic Choice
36
Strategic learning:
Barriers to learning
Real World
•Unknown structure
•Dynamic complexity
•Time delays
•Inability to conduct
controlled experiments
Decisions
Information Feedback
Strategy, Structure,
Decision Rules
Mental Models
•Selective perception
•Missing feedback
•Delay
•Bias, distortion, error
•Ambiguity
•Implementation failure
•Game playing
•Inconsistency
•Performance as a goal
•Selective perception
•Missing feedback
•Delay
•Bias, distortion, error
•Ambiguity
•Inability to infer dynamics
from cognitive maps
The Psychology of Decision-Making
GRA 6820
Strategic Choice
37
Reflection as a resource
Ask yourself the following...
– What really led me to think that way?
– What was your intention? What were you attempting to
accomplish?
– Did you achieve the results you intended?
– How might your comments have contributed to the difficulties?
– Why didn’t you say what was in your left-hand column?
– What assumptions are you making about the other person or
people?
– What are the costs of operating this way? What were the payoffs?
– What prevented you from acting differently?
The Psychology of Decision-Making
GRA 6820
Strategic Choice
38
Applying the Ladder of Inference
The ladder provides a means to ask questions...
– What is the observable data behind that statement?
– Does everyone agree on what the data is?
– Can you run through your reasoning?
– How did we get from that data to these abstract
assumptions?
– When you said “[your inference],” did you mean ”[my
interpretation of it]”?
The Psychology of Decision-Making
GRA 6820
Strategic Choice
39
Uncovering mental models
• Skills do not come easily and must be exercised.
• Here are some steps to consider...
– Identify the conclusion or claim someone is making.
– Ask for data or evidence leading to that conclusion.
– Inquire into the reasoning that connects the data with the
claim.
– Infer a possible belief or assumption.
– State your inference and test it on the person.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
40
Balancing Inquiry and Advocacy
• A palette of conversational and dialogue skills.
• Protocols for balancing inquiry and advocacy.
• Conversational recipes...
– Post hoc examination of conversations.
– Seeking generic strategies for improving use of recipes.
– Ask for other’s perspectives (inquiry).
The Psychology of Decision-Making
GRA 6820
Strategic Choice
41
Protocols for balancing Advocacy and Inquiry:
For improving advocacy
What to do...
What to say...
• State your assumptions, and describe
the data that led you to them.
• Explain your assumptions.
• Make your reasoning explicit.
• Explain the context of your point of
view: who will be affected by what you
propose, how they will be affected, and
why.
• Give examples of what you propose,
even if they are hypothetical or
metaphorical.
• As you speak, try to picture the other
people’s perspectives on what you are
saying.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
“Here’s what I think, and here’s
how I got there.”
“I assumed that...”
“I came to this conclusion because...”
“To get a clear picture of what I’m
talking about, imagine you’re the
customer who will be affected...”
42
Protocols for balancing Advocacy and Inquiry:
Improving advocacy
What to do...
What to say...
• Encourage others to explore your
“What do you think about what I just said?” or
model, your assumptions and your data. “Do you see any flaws in my reasoning?” or
“What can you add?”
• Avoid defensiveness when your ideas
are questioned. If you are advocating
something worthwhile, then it will only
get stronger by being tested.
• Reveal where you are least clear in your “Here’s one aspect which you might help
me think through...”
thinking. Rather than making you
vulnerable, it defuses the force of
advocates who are opposed to you, and
invites improvement.
“Do you see it differently?”
• Even when advocating: listen, stay
open, encourage others to provide
different views.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
43
Protocols for balancing Advocacy and Inquiry:
For facing points of view you do not
agree with
What to do...
What to say...
• Again, inquire about what has led “How did you arrive at this view?” or “Are you
taking into account data that I have not
the person to that view.
considered?”
• Make sure you truly understand
the view.
“If I understand you correctly, you’re saying
that...”
• Explore, listen, and offer owns
views in an open way.
“Have you considered…?”
• Listen for the larger meaning that “When you say such-and-such, I worry that it
may come out of honest, open
means...”
sharing of alternative mental
models.
• Raise you concerns and state what “I have a hard time seeing that, because of this
reasoning...”
is leading you to have them.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
44
Protocols for balancing Advocacy and Inquiry:
Improving inquiry
What to do...
What to say...
• Gently walk others down the ladder “What leads you to conclude that?” or
“What data do you have for that?” or
of inference and find out what data
“What causes you to say that?”
they are operating from.
• Use nonaggressive language,
Instead of “What do you mean?” or
particularly with people who are not “What ‘s your proof?” say “Can you help
me understand your thinking here?”
familiar with these skills. Ask in a
way which does not provoke
defensiveness.
• Draw out their reasoning. Find out
“What is the significance of that?” ”How
as much as possible about why they does that relate to your other concerns?
“Where does your reasoning go next?”
are saying what they say.
• Explain your reasons for inquiring,
“I’m asking you about your assumptions
and how your inquiry relates to your because...”
own concerns, hopes and needs.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
45
Protocols for balancing Advocacy and Inquiry:
Improving inquiry
What to do...
What to say...
“How would your proposal affect...?” or
• Test what they say by asking for
this similar to...?” or “Can you
broader contexts, or for examples. “Is
describe a typical example?”
• Check your understanding of what “Am I correct that you’re saying...?”
they have said.
• Listen for new understanding that
may emerge. Don’t concentrate on
preparing to destroy the other
person’s argument or promote
your own agenda.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
46
Traditional vs. Systems Thinking
Traditional Thinking Skills
• Static Thinking
Focusing on particular events
• System-as-Effect Thinking
Viewing behavior generated by a system as driven
by external forces
• Tree-by-Tree Thinking
Believing that really knowing something means
focusing on the details
• Factors Thinking
Listing factors that influence or are correlated with
some result
• Straight-Line Thinking
Viewing causality as running one way, with each
cause independent from all other causes
• Measurement Thinking
Searching for perfectly measured data
• Proving-Truth Thinking
Seeking to prove models to be true by validating
with historical data
The Psychology of Decision-Making
Systems Thinking Skills
• Dynamic Thinking
Framing a problem in terms of a pattern of behavior over time
• System-as-Cause Thinking
Placing responsibility for a behavior on internal actors who manage
the policies and plumbing of the system
• Forest Thinking
Believing that, to know something, one must understand the
context of relationships
• Operational Thinking
Concentrating on getting at causality and understanding how a
behavior is actually generated
• Closed-Loop Thinking
Viewing causality as an ongoing process with the “effect” feeding
back to influence the causes, and the causes affecting one another
• Quantitative Thinking
Accepting that one can always quantify, but not always measure
• Scientific Thinking
Recognizing that all models are working hypotheses that always
have limited applicability
GRA 6820
Strategic Choice
Richmond, B. “The “Thinking” in Systems Thinking: How Can We
Make It Easier to Master?” The Systems Thinker, Vol. 8, No. 2,
March 1997.
47
The role of personality
•
•
•
•
Jungian personality dimensions
Jung’s psychological types
Myers-Briggs Type Indicator test
Implications for decision making
The Psychology of Decision-Making
GRA 6820
Strategic Choice
48
Behavior
Orderly reason for
personal differences
Preference for…
Perceiving
Briggs
Making decisions
Jung
How and where one
uses these function
How one deals with
the world
Behavior
The Psychology of Decision-Making
GRA 6820
Strategic Choice
49
Personality dimensions
Extravert/Introvert
Thinking/Feeling
Sensing/Intuition
Judgment/Perception
• Results in four basic problems solving ”styles.”
• Each style has strengths and weaknesses.
• No one style is uniquely superior.
• Typology can be related to different inquiry,
managerial and organizational styles.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
50
Individual cognitive style
• Provides insight into yourself and your
behavior…
– as a manager.
– as a communicator.
– as a problem solver.
• Provides a logical model of human behavior
• Empirically verified
The Psychology of Decision-Making
GRA 6820
Strategic Choice
51
Jungian personality dimensions
E
I
Relate positively to outside world
Likes variety, action
Open communicator
Prefers the world of ideas
Careful with details
Dislikes sweeping statements
S
Works with known facts, rarely errs with facts
Does not look at possibilities
Likes standard solutions
T
Bases judgment on impersonal analysis and logic
Low emotionality
Has trouble dealing with others’ feelings
J
Prefers possibilities and relationships
Enjoys new problems
Reaches conclusions rapidly
F
Uses personal values in judgments
Very aware of others’ feelings
Enjoys harmony
P
Likes planned, orderly life style
Enjoys working through a schedule
The Psychology of Decision-Making
N
Flexible, spontaneous
Adapts well to change
May have trouble making decisions
GRA 6820
Strategic Choice
52
Problem solving styles
ST
SF
NF
NT
IJ
ISTJ
ISFJ
INFJ
INTJ
IP
ISTP
ISFP
INFP INTP
EP
ESTP
ESFP ENFP ENTP
EJ
ESTJ
ESFJ
The Psychology of Decision-Making
GRA 6820
Strategic Choice
ENFJ ENTJ
53
Individual benefits
• Communication
• Career choices
• Leadership style
• Team building
• Learning and teaching skills
• Problem solving
The Psychology of Decision-Making
GRA 6820
Strategic Choice
54
Cognitive style – how is it measured?
• Myers-Briggs Type Indicator
• Based on the concepts of Jungian
psychology
The Psychology of Decision-Making
GRA 6820
Strategic Choice
55
Why we need each other (1)
• Feelers need Thinkers
– To examine, analyze and organize.
– To stand against opposing people, or to fire people if
necessary.
– To change, reform, or withdraw priviledges.
– To maintain policy.
• Thinkers need Feelers
– To convey how others feel.
– To persuade other to solve problems.
– To help people understand one another’s views.
– To build support for a system.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
56
Why we need each other (2)
• Intuitives need Sensers
– To notice essential facts.
– To point out prolems.
– To offer illustrations based on experience.
– To point out assets and liabilities in the here and now.
– To keep track of details.
• Sensers need Intuitives
– To see possibilities in the future.
– To plan and prepare.
– To develop new ideas and systems.
– To solve problems creatively and ingeneously.
– To maintain enthusiasm.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
57
Focus of the MBTI
• The sources of our energy
– The question of introversion and extroversion
• The ways we perceive reality
– Sensingly, in concrete detail, or intuitively by
appreciating hunches and possibilities
• The ways we act
– Thinking clearly and logically, or in a more subjective
way, basing decisions on personal values ahead of logic
– feeling
• Our propensity to act
– Judging and decisiveness, or keeping options open perceiving
The Psychology of Decision-Making
GRA 6820
Strategic Choice
58
The perfect problem-solver
INTUITION:
Look for patterns,
inferences,
relationships
SENSE:
Collect data
with all 5 senses
FEELING:
Evaluate impact of
solution on stakeholders
inside and outside
the organization
THINKING:
Logically analyze data,
patterns, inferences to
reach conclusion
The Psychology of Decision-Making
GRA 6820
Strategic Choice
59
Implications for decision making
• Data acquisition
– By Sensation or by Intuition, but not both at the same
time
• Sensation – information input through the senses.
• Intuition – acquisition by imagination, seeing the whole
of a situation, the gestalt.
• Data processing
– Decisions are reached by Thinking or Feeling
• Thinking – decision based on impersonal analyses and
analytical modes of reasoning.
• Feeling – decision based on personalistic, value
judgments.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
60
The process of perception –
gathering data/information
•
(S) Sensing function
(N) Intuitive function
”The reality factor”
”The sixth sense”
perceives in terms of specifics, using the
five senses
•
perceives in terms of patterns, relations
•
”sees” possibilities
•
”sees” things one-at-time, in the concrete
•
•
has a ”present” time focus; the here and
now
has a ”future” time focus; oriented to
change, innovation
•
tends to estimate or approximate factual
details
•
occupied with and attentive to facts
•
can be criticized for being ”set in ways”
•
•
sometimes cannot ”see the forest for the
trees”
can be criticized for ”having head in the
clouds”, not enjoying the present
•
sometimes ”cannot see the tree for the
forest”
The Psychology of Decision-Making
GRA 6820
Strategic Choice
61
The process of judging –
coming to conclusion/rational process for closure
(T) Thinking function
(F) Feeling function
”The analytic factor”
”The bonding factor”
•
comes to conclusion using established
principles, logically attending to cause
and effect
•
comes to conclusion by an associative
process – by analogy,and comparison
with past experience
•
principal concern for ”truth” and the
wider principles involved
•
principal concern for the interpersonal
and intersubjective dimensions involved
•
values fairness highly; particularly
sensitive to injustice
•
values harmony highly; particularly
sensitive to conflict
•
has an atemporal time orientation;
appeals to reason, likes analysis
•
•
consistency and validity are important;
principles are applied impersonally
oriented to past events; appeals to what
is ”meaningful”, relies on the
psychological
•
compassion is important
values what is true
•
values what is good
•
The Psychology of Decision-Making
GRA 6820
Strategic Choice
62
Attitude –
observable preference, style of interacting with the world
(J) Judging
(P) Perceiving
•
•
•
•
•
•
•
•
•
•
•
needs closure on events, relationships,
ideas
wants to finish – get things done
Values punctuality; sees time in terms of
decision
prefers advance clarity, order, structure
likes schedules and working to a plan
comes across as decisive
interested only in essentials
keys in on the conscious factors
can leap to conclusion and move into
action out of sheer urgency to come to
closure
can be stubborn or ”one track”
can be vulnerable in not considering
alternatives
The Psychology of Decision-Making
•
•
•
•
•
•
•
•
•
•
•
needs to ”hang loose” with events,
relationships, ideas
prefers openness to what may come
punctuality is not a high value; sees time in
terms of opportunity
has tolerance for ambiguity, open-endedness
prefers spontaneity, is adaptable to changes
tends to postpone decisions and action
never has enough information
keys in on the unconscious
can move into action out of sheer intensity of
perception
can be pulled in many different directions
can be vulnerable in not recognizing ”the
tragedy of the excluded possibility”
GRA 6820
Strategic Choice
63
Attitude –
orientation/direction of energy flow
(E) Extraversion
(I) Introversion
•
the outside world captures attention; life is
discovered mutually in the external forum
•
needs a public forum to sort out experience
•
tends to expand and propagate rather than
conserve; is expansive, energized by
interaction
•
the inner world is the world of most
important activity; life is discovered
interiorly and shared
•
needs time and space to process lifeexperience interiorly
•
tends to consolidate, defend; moderates
and controls personal disclosure and
interaction; energized by privacy and
intimacy
•
engages others easily; comfortable in new
groups
•
assumes free movement; can intrude on
others unawares; can make demads for
response by sheer force of presence
•
•
”if you don’t know where they are, you
haven’t been listening”
can appear withdrawn; is generally
cautious of others’ ”space”; can
stalemate a situation by silence
•
”the unexamined life isn’t worth living”
•
”the unlived life isn’t worth examining”
The Psychology of Decision-Making
GRA 6820
Strategic Choice
64
Problem solving styles
• ST – represents concepts of the Industrial Revolution.
• NT – stress conceptual analyses instead of precise
quantification.
• SF and NF – define different types of qualitative
analyses.
– ST and NF are polar opposites in preferences for
information gathering and processing.
– NT and SF are two forms of qualitativeness and do not
conflict to the same extent as ST-NF types.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
65
Problem solving using Type preferences (1)
1. Sensing
•
•
•
•
•
What are the facts?
What exactly is the situation?
What has been done?
What am I and others doing?
How would an outsider look at this situation?
2. Intuition
•
•
•
•
•
What are the possibilities?
What other ways are there for solving this problem?
What do the data imply?
What are the implications beyond the facts?
What is this problem analogous to?
The Psychology of Decision-Making
GRA 6820
Strategic Choice
66
Problem solving using Type preferences (2)
3.
Thinking
•
What are the pros and cons of each possibility?
•
What are the logical consequences of each possibility?
•
What is the cost of each?
•
What are the pleasant and unpleasant outcomes of each?
•
What is the consequence of not acting?
4.
Feeling
•
How much do I care about what I gain or lose in each
alternative?
•
What are the values involved for each possibility?
•
How will people concerned react to the outcome?
•
Who is committed to carry out the solution?
•
Will the outcome contribute to individual or group harmony?
The Psychology of Decision-Making
GRA 6820
Strategic Choice
67
Problem solving using Type preferences (3)
4. Perception
•
Use at each step to ensure openness to all aspects of
the problem.
5. Judgment
•
Use to set a timetable for moving on to the next step
of the decision process.
6. Introversion
•
Use to reflect at each step along the way.
7. Extroversion
•
Use to discuss each step and to implement the
solution.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
68
Contributions
A knowledge of ”cognitive type”…
– Lessens friction.
– Reveals the value of differences.
– Helps to understand and appreciate the
strengths of each type.
– Lessens waste of potential.
and…
– Opposites can supplement each other in joint
undertakings.
– Pooling preferences offers best chance of
finding a solution valid for both.
The Psychology of Decision-Making
GRA 6820
Strategic Choice
69