Ch10 - Decision Making by Individuals and Groups Fin

8/13/2019 Ch10 - Decision Making by Individuals and Groups Fin

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Decision Making by Individuals and Groups

Case scenarios Solutions Applications

Case ask to identify

characteristics of managerial

decision making

Refer to notes 4 characteristics:

-risk

-uncertainty

-lack of structure

-conflictCase ask to identify models of

decision making

The 3 models:

-rational

-bounded rationality

-garbage can

Refer to characteristics of the

model

Case mention managers make

a decision sequentially and

systematically

The rational model A logical step by step

approach ith a thorough

analysis of alternati!es and

their consequences

Case mention that managers

only ant "good enough#solutions and refer to shortcuts

The bounded rationality model Select the first alternati!e

because the costs in time andeffort are too great to optimi$e

Case mention managers makedecisions randomly and

unsystematically

The garbage can model

Shos that under high

uncertainty% decision making

in organi$ation can be anunsystematic process

&hen the !arious factors'problem% solution%

participants and choice

opportunity( connects% a

decision is made

The quality of the decision

depends on timing

&hat is the procedure of the

decision making process

The decision making process Step by step

&hat are the challenges facing

decision making processes

)ust refer to challenges section Refer to *ote

To use preference and non

preference to make decisions

more effecti!ely

+ problem sol!ing model Refer to *ote

&hy do people use group

decision making process

Synergy

Social decision scheme

Refer to *ote

,actors affecting group

decision making

roupthink

roup polari$ation

.efine the to factors

Symptoms of roupthink /o

to pre!ent it

Refer to notes Symptoms of roupthink

Table 0120 g 33

&hat are the group decision

techniques

Refer to notes -*ominal group techniques

-5rainstorming

-Self-managed teams

-.ialectical inquiry

-6uality circles and quality

teams

-.e!il#s ad!ocacy

-.elphi#s technique

/o can technology aid

decision making

Refer to notes -e7pert system

-decision support system

-roup decision support


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system

&hat are the ethical issues in

decision making

Refer to notes -is it legal8

-is it balanced8

-ho ill it make me feel

about myself8

Decision makingA conscious process of making choices among one or more alternati!es ith the intention of

mo!ing toard some desired state of affairs2

Characteristics of Managerial Decision Making

9ack of

structure

- no specificguidelines

rogrammed .ecisions A Simple% routine matter for hich a manager

has an established decision rule decisions that

ha!e been encountered ; made in the past2


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This model illustrates that decisions are not made step-by-step2 ecti!e of the

.ecision

@anagers need to determine hat is to be accomplished by the decision2

ather and

e!aluate data

and diagnose the

situation

@anagers must gather sufficient info on hy the problem occurred% hich

in!ol!es thorough diagnosis of situation and fact finding2

9ist and e!aluate

alternati!es

?se hat-if analysis to determine the !arious factors that could influence the

outcome2 =t is important to generate ide range of options and creati!e

solutions2

Select the best

course of action

=f problem is diagnosed correctly and sufficient alternati!es are unidentified%

this step is much easier2

=mplement the

decision

@onitor to see if decision met its ob>ecti!e

ather ,eedback

,ollo up Constent monitoring and periodic feedback are essential in this stage

Case for


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Challenges in Decision making process

roblem

=dentification

erceptual 5ias

Selecti!e attention% influence from others% mental models

.iagnostic skills

.efining problems in terms of solutions

=dentifying problem effecti!ely

9ook at the organi$ation e7ternallyRational

.ecision @odel

oals - Clear% compatible and agreed upon

rocessing =nformation - eople can process all information

Standards -

=nfo 6uality - eople rely on factual information

.ecision Fb>ecti!e - @a7imi$ation hich is the optimal choice

@aking Choice @a7imi$e B to get the greatest benefit at the loest cost hich is the best

possible outcome

Fptimi$e - Achie!ing the best possible balance among se!eral goods

Satisfice B Selecting the good enough alternati!e choosing the option

although not necessarily the best or perfect

=mplementingand

.ecision

Futcome

ost .ecisional )ustification B )ustifying choices by unconsciously inflatingquality of option


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Choose options that entail feer risks% preferring familiarity and certainty2

&omen are more risk a!erse than men2

Fld% more e7perienced managers are more risk a!erse than younger managers

Risk takers

Accept greater potential for loss in decisions% tolerate greater uncertainty% andin general are more likely to make risky decisions2

They are more likely to take the lead in group decisions2 Successful @anagers

take risks2?pper-management should encourage risk taking to increase creati!ity and

inno!ation2 This can be done by alloing employees to fail ithout fear of

failure2

athering

feedbackH

information

ungian Theory'Chapter 3(

A ay of understanding and appreciating differences among indi!iduals

=dentified G styles for information gathering 'sensing and intuiting( andmaking >udgment 'thinking and feeling(

The ung Cognitive !tyle

An indi!idual#s preference for gathering information and e!aluating

alternati!es2 There are 4 different cogniti!e styles:

"#!ensing$

Thinking

%!T&

.ef: Rely on facts2 They conduct an impersonal analysis ofthe situation and then conduct analytical% ob>ecti!e decision2

ros: =t is a !aluable style because it produces a simple clear

solution2 They also remember details and seldom make

factual errors

Cons: =ts eakness is they may alienate others because of

their tendency to ignore interpersonal aspects2 They also

tend to a!oid risk'#!ensing$

(eeling

%!(&

.ef: They also gather information% but the make >udgments

base on ho they affect others2 They place great importance

on interpersonal relationship but also take practical approach

in gathering information2

ros: Their strength lies in their ability to handle

interpersonal problem and take calculated risks2

Cons: They may ha!e trouble accepting ne ideas that are

against the org

)#Intuiting$

thinking

%*T&

.ef: ,ocus on alternati!e possibilities in a situation before

e!aluating the possibilities ob>ecti!ely and impersonally2

They lo!e to initiate ideas and like to focus on the long term2

They are inno!ati!e and ill take risks2ros: ood at ne business de!elopment

Cons: &eakness are ignoring arguments based on facts and

feelings of others2

"+# Int

uiting$

feeling

%*(&

.ef: They search for alternati!e possibilities%and e!aluate

them in terms of ho they ill affect the people in!ol!ed2

ros: oy participati!e decision making and are

committed to de!eloping their employees


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Cons: @ay be prone to make decisions based on personal

preferences rather than an ob>ecti!e info2 @ay also become

too responsi!e to the needs of others2

, Problem - !olving Model

The 4 cogniti!e styles can contribute in organi$ational decision making2 According to =sabel5riggs @yers% by using the + model% managers can use preference and non-preference to make

decisions more effecti!ely2

Step 0: ecti!ely Step 3:?se thinking to logically determine the

effects of each alternati!e

Step 4: &eigh the impact Step 4: ?se feeling to determine ho the

people in!ol!ed ill be affected2

/o to apply:

- +-model can help indi!idual de!elop hisHher non-preferences- ?se the +-model to rely on others to perform the non-preferred acti!ities

Individual Influence on decision Making

=ntuition (not in

lect. notes)Pg.324

,ast% positi!e force in decision making that is utili$ed at a le!el belo

consciousness and in!ol!es learned patterns of information2

Creati!ity .ef: A function of e7pertise% creati!e thinking skills and moti!ation2

A process influenced by indi!idual and organi$ational factors that result in

the production of no!el and useful ideas2

Creati!ity refers to the knoledge of employees hich are technical%

procedural and intellectual

Creati!e- thinking skills require employees to be fle7ible and imaginati!e

@oti!ation refers to employees# inner passion to sol!e problems and issues

Requirements

for creati!ity

Abo!e a!erage intelligence% =n!enti!e thinking% ersistence% Rele!ant

knoledge and


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moti!ating ork

Fpen Communication and sufficient resources

Team Trust and pro>ect commitment


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Group Decision Making

@anagers use groups to make decision for se!eral reasons:

=2 Synergy A positi!e force that occurs hen group members stimulate ne solutions to

problems through the process of mutual influence and encouragement ithin

the group2

==2 Social

.ecisionscheme

Simple rules used to determine final group decisions2

Research indicate that social decision scheme can predict a group decision as

much as E1J of the time

udgment tasks that require estimations and predictions% groups are

superior2 ,or tasks that ha!e correct solutions% competent indi!idual is more effecti!e2


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Group Decision Making - Phenomenon

There are G phenomena in!ol!ed in group decision making% hich are group polari$ation and

groupthink

Group Polari/ation

Tendency for group discussion to shift toard more e7treme attitudes among members2

Groupthink

A deterioration of mental efficiency'independence(% reality testing and moral >udgment% resulting

from pressures ithin the group2

,actors that fa!our de!elopment of groupthink:

/igh Cohesi!eness Cohesi!e group tend to fa!or solidarity because members

identify strongly ithin the group2

They ould ha!e shared mental models% that is% they are more

likely to think alike2

/omogenous groups 9ittle or no di!ersity among members

/ighly consequential decisions .ecision that ill ha!e an impact on group members and

outside partiesTime constraints Rush through the process due to lack of time2

9eadership style romotes groupthink if gi!es his or her opinion up frontA!oid groupthink by encouraging members to discussion

!ymptoms of Groupthink(Table 10.1 pg. 335)

Case 0++1 Columbia Disaster

Guidelines to Prevent Groupthink2

0( Ask each group member to act as critical e!aluator ho acti!ely !oices ob>ections and

doubts

G( /a!e the leader a!oid stating his opinion prior to the group decision

3( Create se!eral groups to ork simultaneously4( 5ring outside e7perts to e!aluate group#s process

( Appoint a de!il#s ad!ocate to question the group#s course of action consistently2

L(

possible

M( After consensus% encourage rethinking the position


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Group Decision Techni3ues

Technique .escription

5rainstorming

ect%hile

suspending e!aluation until all the ideas ha!e been suggested2

/oe!er% group brainstorming is less effecti!e than a comparable number of

indi!iduals orking alone2 articipants can lose focus hen discussing in agroup2

,ear of others responding negati!ely to ideas

&ith electronic brainstorming% input is anonymous

*ominal

roupTechnique

A structured approach to group decision making that focuses on generating

alternati!es and choosing one=n!ol!es four steps:

=2 =ndi!iduals list steps

==2 =deas are ritten on a chart one at a time until all ideas are listed

===2 .iscussion is permitted but only to clarify the ideas2 *F criticism=I2 A ritten !ote is taken

ood technique hen members fear criticism

.elphi

Technique

athering the >udgments of e7perts for use in decision making

=t is !aluable because it can generate a number of independent >udgment ithout

meeting face-to-face2

.e!ils

Ad!ocacy

'chapter N(

A technique for pre!enting groupthink in hich a group or indi!idual is gi!en

the role to critic during decision making

.ialectical

=nquiry

A debate beteen G opposing sets of recommendations

,orm of constructi!e conflict

6uality

Circles and

6uality

Teams

Self @anaged

Team

Technological .ids to Decision Making

@any computeri$ed decision tools are a!ailable to support the decision making process2 They

are:


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decision-making processes in either face-face

meetings or dispersed meetings

.ecision making in Iirtual &orkplace roup .ecision Support Systems

.esktop Iideoconferencing systems

=nternetH =ntranet Systems

4thical Issues in Decision Making

9egality .oes it !iolate the la8

.oes it !iolate company policy

5alance =s it fair to all8

.oes it promote in-in relationships

/o ill it make it feel about myself88

@anagerial =mplications

- .ecision making is important at all le!els of e!ery organi$ation2

*o time% manager can only select alternati!e that is good enough

.ecision process can be unpredictable and random

- =ndi!idual differ in preference for risk% style of gathering information and making

>udgment2

?nderstanding indi!idual differences can help managers ma7imi$e strengths in

employee decision style and build team that capitali$e on strength

Supporti!e en!ironment help nourish inno!ati!e ideas 'creati!ity(

Can pro!ide creati!e training

- Task of manager is to diagnose situation and implement the appropriate le!el of

participation

@anager should kno !arious group decision-making techniques and minimi$e

potential for groupthink

- All decision should be analy$ed hether they are ethical

Documents

Ch10 - Decision Making by Individuals and Groups Fin