Transcript Slide 1

Chapter 17
Decision
Making
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-1
Objectives
Explain why decision making is a social
process
Define and explain how bounded
rationality influences decision making
Describe five models of decision making
Explain groupthink and how it can be
avoided
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-2
…Objectives
Explain how experts make decisions
Identify your personal approach to
organizational decision making
Apply the leader-participation model of
decision making
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-3
Are Individual Decisions
Independent?
 Individual decisions are not independent,
solitary events
Instead
 They are closely connected to previous
decisions
And
 Are influenced by the social processes
that brought the decision point to a head
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-4
…Are Individual Decisions
Independent?
Decision making at very high levels
– A lonely, individual struggle?
NO! Instead,
It involves information sharing and interdependence among organization
members
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-5
The Manager’s Role
in Decision Making
The manager’s job is to handle the
decision process by assessing
The information needed
The players who need to be involved
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-6
Process of Rational
Decision Making
1. Recognize and
define problem
5. Evaluate
alternatives
2. Identify decision
objective and criteria
6. Select the best
alternative
3. Allocate weights
to criteria
7. Implement the
decision
4. List and develop
alternatives
8. Evaluate the
decision
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-7
Bounded Rationality Defined
The theory of bounded rationality maintains that
people are restricted in making decisions and
settle for less than ideal solutions
They satisfice, selecting the first
alternative that is satisfactory.
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-8
Common Decision Biases
Anchoring and adjusting
Representativeness
Availability
Overconfidence
Bounded awareness
Emotional involvement
Self-serving reasoning
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-9
Garbage Can Model
Factors:
– Problems
– Participants
– Solutions
– Choice opportunities
Above factors float randomly inside the
organization and if they connect, a
decision results
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-10
Choice Shift
Occurs when groups make more extreme
decisions than individuals
Risky shift
People support riskier decisions in a
group setting than they would
individually
Cautious shift
The group decision is more conservative
than individual positions
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-11
Groupthink - Defined
Groupthink is the tendency for members
of a highly cohesive group to seek
consensus so strongly that they fail to
do a realistic appraisal of other possibly
better alternatives
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-12
Traditional Groupthink Model
Antecedent
Conditions
Groupthink Symptoms
•Self-censorship
•Cohesion
•Pressure on dissenters
•Directive
leadership
•High stress
& low
esteem &
low hope of
finding
solution
•Limited
search and
appraisal
Consensus seeking
•Insulation
•Pressure toward
uniformity
•Illusion of unanimity
Defective
Decision
Making
Symptoms
•Poor
information
search
•Illusion of
invulnerability
•Selective
information
processing
•Belief in inherent
morality
•Failure to
appraise risks
•Collective
rationalization
•Outgroup stereotyping
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
Defective
Decisions
•Incomplete
survey of
alternatives
and solutions
17-13
How to Avoid Groupthink
 Encourage all members to express their doubts
 Assign a devil’s advocate
 Adopt the perspectives of other constituencies
 Bring in qualified outsiders to discuss decisions
 “Sleep” on a tentative decision and have a
second chance meeting
 Leaders should listen to others’ opinions first
 Leaders should demonstrate willingness to be
criticized
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-14
Escalation of Commitment
Occurs when people continue to
commit resources to a failing course
of action
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Leader-Participation Model
Contingency theory of leadership
Continuum of leadership styles ranges
from autocratic to participative styles
 Decide
 Consult individuals and groups
 Facilitate
 Delegate
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-16
…Leader-Participation
Model
Choice of leadership style can affect
outcomes of the decision-making process
Decision
Quality
Decision
Implementation
Cost of
Decision Making
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
Development
17-17
Seven Questions for
Managers to Ask about a
Decision
Team
Competence
Group
Expertise
Decision
Significance
?
Importance of
Commitment
Leader’s
Expertise
Group Support
for Objectives
Likelihood of
Commitment
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-18
Types of Problems
Structured Problems
Repetitive, routine problems for
which definite procedures have
been developed
Unstructured Problems
Novel, infrequent and / or complex problems
for which no procedures have been
developed
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-19
Intuition - Defined
Intuition is a cognitive conclusion
based on a decision maker’s
previous experiences and emotional
inputs
Thus, intuition and rational analysis
are complementary aspects of good
decision making
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-20
The Zone of Indifference
Zone of indifference
– The range within which each person in which
he or she willingly accepts orders without
consciously questioning authority
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-21
Recognition Primed
Decision (RPD) Model
Components of the Model
Cue recognition and pattern
matching
Action script activation
Mental simulation driven by mental
models
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-22
Klein’s RPD Model
Situation
Cues
Mental
Simulations
which you
assess by
Action
Scripts
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
Mental
Models
that
activate
that let
you
recognize
Patterns
17-23
PreMortem Exercises
 Designed to
expose
vulnerabilities
in planning
Stage
1. Preparation
Activity
Review the plan
2. Imagine a fiasco Imagine causes of failures
3. Generate reasons Individuals write down
for failure
reasons for failures
4. Consolidate the
lists
Individuals take turns
listing reasons
5. Revisit the plan
Address issues of major
concern; schedule
additional meeting
6. Review the list
Periodically revisit the list
of reasons for failure
Organizational Behavior : An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-24