Chapter 10: Decision Making in Organizations

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Chapter 10 Decision Making in Organizations

• July 30, 2001

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Decision Making

• Definition The process of making choices among
  several alternatives.

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Decision Making A general, analytical model

• Identify the problem
• Define objectives
• Make a pre-decision (DSS)
• Generate alternatives
• Evaluate alternatives
• Make a choice
• Implement choice
• Follow up

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Decision Style Model

• Decision Style differences between people with
  respect to their orientation toward decisions (p.
  306)
• Styles
• Directive
• Analytical
• Conceptual
• Behavioural
• What is your decision style (p. 335)? How did
  this impact your decision to go to this
  University?

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Cultural Differences in Decision Making

• Problem recognition stage when does a decision
  need to be made?
• Individualistic versus collectivistic
• Who makes decisions
• Time allotted to make decisions

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The Spectrum of Organizational Decisions

• Programmed versus non-programmed decision
• Certain versus uncertain decisions
• Top-down versus empowered decisions

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Individual Decisions

• In the fall of 2001, Canadians went to the polls
  in a Federal election.
• How many have voted before?
• RATIONAL DECISIONS decisions that maximize the
  chance of attaining an individuals groups or
  organizations goal
• What are the implications of voters not making
  rational decisions?

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Individual Decisions The Models

• Rationaleconomic model
• Consider all alternatives
• Idealistic/Utopia
• Administrative model
• Satisficing decisions
• Bounded rationality
• Image theory
• Compatability test
• Profitability test
• Easy and intuitive

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The Ethical Decision

• Does it violate the obvious shall nots?
• Will anyone get hurt?
• How would you feel if your decision was reported
  on the front page of your newspaper?
• What if you did it 100 times?
• How would you feel if someone did it to you?
• Whats your gut feeling?
• Scenario
• You and your colleague are both vying for the
  same promotion. You find out he is having a
  clandestine relationship with a subordinate and
  you know that by exposing him would make you the
  front runner. What do you do?

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Individual Decisions The Flaws

• Framing Effects
• Unclear parameters
• Reliance on Heuristics
• Simple rules to solve complex problems
• Availability heuristic
• media
• Representativeness heuristic
• Bias toward implicit favourites
• Implicit favourite
• Escalation of commitment
• Organizational barriers to effective decisions
• Time constraints, politics, bounded discretion

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The Vote
Which flaws do you think come into play in the
vote?
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Group Decisions

• The Pros
• Pooling of resources
• Specialization of labour
• Decision acceptance
• The Cons
• Waste time
• Group conflict
• Intimidation by group leaders
• Which decisions do you think are best made by a
  group?

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Groupthink

• Definition the tendency for members of highly
  cohesive groups to conform to group pressures
  regarding a decision so strongly that they fail
  to think critically (p. 325).
• Symptoms
• Illusions that decisions are unanimous
• Belief that group is correct
• Defects
• Failure to consider all alternatives
• Reluctance to examine other options
• Biased and incomplete use of information
• Result
• Poor decisions

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Strategies for Groupthink

• Promote open inquiry
• Use subgroups
• Admit shortcomings
• Hold second-chance meetings

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Improving Group Decisions

• Training Individuals
• Hypervigilance
• Unconflicted adherence
• Unconflicted change
• Defensive avoidance
• The Delphi Technique
• Nominal Group Technique
• The Stepladder