Transcript Week 7 - June 21

Student Presentations
 1.
 2.
 3.
 4.
 5.
 6.
 7.
 8.
Stephanie Bower
Brendan Flynn
Michael Giordano
Kate Scarcella
John Collins
Sean Space
Eddie Ebrahimi
Beverly Peters
Essentials of Organizational Behavior, 8/e
Stephen P. Robbins
Chapter 6
Individual Decision
Making
The Leader’s Responsibility
in Decision Making is...
1.
2.
manage time
accurately identify problems
3.
4.
consult with appropriate people
produce effective solutions
5.
6.
appropriately implement the solutions
consider impact of decisions on morale of others
Decision-Style Model
Tolerance for Ambiguity
High
Analytical
Conceptual
Directive
Behavioral
Low
Rational
Intuitive
Way of Thinking
The Six-Step Rational
Decision-Making Model
1)
2)
3)
4)
5)
6)
Define the problem
Identify decision criteria
Weight the criteria
Generate alternatives
Rate each alternative on each criterion
Compute the optimal decision
Assumptions of the Model
1)
2)
3)
4)
5)
6)
Problem clarity
Known options
Clear preferences
Constant preferences
No time or cost constraints
Maximum payoff
Common Biases and Errors
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Overconfidence bias
Anchoring bias
Confirmation bias
Availability bias
Common Biases and Errors
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Representative bias
Escalation of commitment
Randomness error
Hindsight bias
Bounded Rationality
Due to the limited capacity of the mind to
be fully rational; decision makers
construct simplified models to extract
the essential features from complex
problems
Typical Use of Bounded Rationality
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Limited list of criteria based on most
conspicuous choices
Final solution represents a satisficing choice,
not an optimum one
Satisficing - first acceptable choice
Intuition

Unconscious process created
out of distilled experience;
resulting in a rapid decision
with what appears to be very
limited information
When is Intuition Used?
1)
2)
3)
4)
5)
When a high level of uncertainty exists
When there is little precedent to draw on
When variables are less scientifically
predictable
When “facts” are limited
When facts don’t clearly point the way
When is Intuition Used?
6)
7)
8)
When analytical data are of little use
When there are several plausible
alternative solutions from which to choose
When time is limited and there is pressure
to come up with the right decision
Organizational Constraints
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Performance Evaluation
Reward Systems
Formal Regulations
System-Imposed Time
Constraints
Historical Precedents
Cultural Differences

Cultural background can significantly
influence
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Selection of problems
Depth of analysis
Importance placed on logic and rationality
Whether decisions should be made
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Autocratically by individual manager
Collectively in groups
Implications for Managers
Five suggestions to improve decision making:
1)
2)
3)
4)
5)
Analyze the situation and adjust to the national
culture and criteria of organization
Be aware of biases
Combine rational analysis with intuition
Do not assume your specific decision style is
appropriate for every job
Use creativity-stimulation techniques
Creativity - ability
to produce novel
and useful ideas
 Helps decision
maker identify all
viable alternatives

The Three Components of Creativity
Expertise
Creativity
Creativity
Skills
Task
Motivation
Five Organizational Factors Impeding
Creativity
1)
2)
3)
4)
5)
Expected evaluation
Surveillance
External motivators
Competition
Constrained choice
Video

Everyday Creativity
Gender Differences
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Evidence indicates
that women analyze
decisions more than
men
Reason is not clear
Decision Making Evaluation/ Training
Tool
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Decision Style Profile,
Published by Discovery Learning,
www.discoverylearning.com
Standardized decision making assessment
Training materials to use/ deliver training
Also Multi-Rater version.
Decision Making Agenda
The Leader’s Responsibility...
 Quality–Acceptance–Time
 5 Decision Styles
 Compliance when... D1
 Acceptance when... D5
 7 Rules for using D1 – D5 (2 pp)
 Decision Making Task: (3 pp)

Student Presentations
 1.
 2.
 3.
 4.
 5.
 6.
 7.
 8.
Stephanie Bower
Brendan Flynn
Michael Giordano
Kate Scarcella
John Collins
Sean Space
Eddie Ebrahimi
Beverly Peters
Decision Making Agenda

Models
Principles/Concepts/Styles/Rules

Activity
Case Study Groups

Application
to your Workplace

Reflection
Strengths and Development Needs
Decision Making Styles:
Factors to Consider
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QUALITY
(effectiveness)
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technically optimum
solution
rational and realistic
solves the problem,
fits the criteria
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ACCEPTANCE
(effectiveness)
commitment for
success
creative ownership
support to implement
consider impact on
morale
TIME
(efficiency)
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
implement effectively
avoid waste
5 Decision Styles
Type 1
= Leader depends on own knowledge & decides alone
* seek no extra information from staff
Type 2
= Leader seeks information, then decides alone
* seek some information from selected staff
Type 3
= Leader consults with individuals, then decides alone
* share problem, seek information and ask advice from selected staff
Type 4
= Leader consults whole team and then decides alone
* meet staff to discuss possible alternatives and use their feelings/opinions as input
Type 5
= Leader shares problem with whole team & they mutually decide
* define the problem, provide relevant information and participate in discussion
* accept group decision
Compliance When...
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Task is routine
No extra effort is required
No special creativity is needed
Supervision or systems are in place
Acceptance When...
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Creativity
High energy
Enthusiasm
Initiative or
Special effort is required
Close supervision is impossible
Decision Making Guide
Components
Quality of
Information
Acceptance
Needed to
Implement
Time Available
Decision
Process
D1
Leader has all
the
information
D2
D3
D4
D5
Not Available to
Leader
Not all
Information
Available
Not all
Information
Available
Not Available to
Leader
Not Necessary
Not Necessary
Some
Acceptance
Required
Some
Acceptance
Required
No Time
No Time
Some Time
Time Available
Time Available
Leader decides
alone
Decides alone
after
consulting
one people
Decides alone
after
consulting a
few
Decides alone
after
consulting
most or all
Leader and
group
decide
together
Consensus
Required
Decision Making Impact
High
Conflict
Decision
Limited Manager Incongruent High
Type
Time
Over
Multiple
Complexity Needed
Solutions
Solutions
****
****
****
****
****
***
**
***
***
*
Expertise Goals
Type 5
Type 4
Type 3
*
***
**
Type 2
**
**
*
Type 1
***
*
Commitment
*
Decision Case 1

You are the supervisor of a manufacturing operation that
employees 12 workers. Due to a recent crisis, another
manufacturing operation in a different part of the plant is shorthanded and cannot complete their current task. You have been
asked to provide replacement workers for the next three days.
All of your workers are equally skilled at the tasks required and
all are motivated workers. Further, you know each of them well
and are aware of no problems which would interfere with any of
your workers moving to this other operation for the time required.
You also know that demand on your unit is somewhat low at the
moment and you can cover for the loss of three workers without
significant overload for your current workers.
Decision Case 2

You are the manager of a unit consisting of route
delivery sales people (e.g.., beer, soda, or bakery
delivery). Your sales/delivery force consistently
produces good but not stellar results. Your boss has
just stormed into your office for the 6th time this
month to complain about seeing all the company
trucks clustered around a donut shop in the east
end of town. He has seen this same group of
trucks, all from your unit, at the donut shop
repeatedly and thinks it reflects badly on the
company. He wants you to do something to change
it.
Decision Case 3

You are the Safety and Loss Control Manager for an
underground mine. Your mine has had a long and celebrated
history of a very low lost time accident rate and has recently
completed 1.5 million man hours without a lost time accident.
However, in the past little while it has come to your attention that
there were three close calls with rock bolts in one section of the
mine. You believe this situation needs to be corrected before
someone gets injured but there are too many alternatives for the
right answer to be obvious. You are the safety person so you
don’t understand either the geology or the mechanics of rock
bolts. However, the Superintendent has identified you as the
person to finalize the plan of response.
Decision Making Task, Group
• As a group...
4. Discuss examples from your experience of recent
decisions. What style was used?
5. Choose one to report that was effective. Why did
it work well?
6. Choose one to report that “bombed”. Why didn’t
it work?
Decision Making and Expectations
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Decisions can be made in any style as long
as expectations are clear
Difficulty will arise if widely varying
expectations
Natural practice of good leaders
Ask question, “Have I made my expectations
clear.
Ethics

What is ethics?
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The right way to behave
The law
A set of rules
The truth
The greatest good for the most people
Ethical Decision Making
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Moral Reasoning Capacity
Collaboration between moral philosophy and moral psychology
and has been very influential in recent literature. Kohlberg’s six
identifiable stages are classified into three levels of reasoning
about moral dilemmas:
 Pre-Conventional - reasoning based on self-interest. The
individual aims to win rewards and avoid punishment.

Conventional - reasoning based on conformity to social norms
and expectations such as family or peer-group pressures.

Post-conventional - reasoning based on universal ethical
principles, centered on the notion of justice.
Outcome Based Ethical Principles
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Beneficence - decisions should maximize potential
benefits and minimize potential harm or risk to
others.
Egoism – decisions should maximize benefits to
oneself
Justice – decisions should result in a fair and
equitable distribution of benefits as well as burdens
Utilitarianism – decisions should result in the
greatest good for the greatest number
From Ethical Decision Challenge, Center for Applied
Research, 1998
Rule-Based Ethical Principles
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Cultural Relativism – do what is consistent with the
laws and norms of one’s own nation
Golden Rule – do unto others as you would have
others do unto you
Kant’s Categorical Imperative – do what they would
want anyone else to do who was facing the same set
of circumstances
Organizational relativism – do what is consistent wit
the goals and norms of one’s own organization
Professional ethic – do what would be condoned or
supported by one’s professional colleagues and peers
Respect for persons – do what will maintain the
autonomy of others
From Ethical Decision Challenge, Center for Applied
Research, 1998
Stages of Moral Development
Level
Principled
Stage Description
6. Following self-chosen ethical
principles, even if they
violate the law
5. Valuing rights of others;
upholding non-relative
values and rights regardless
of the majority’s opinion
Conventional
Pre-conventional
4. Maintaining conventional order by
fulfilling obligations to which
you have agreed
3. Living up to what is expected by
people close to you
2. Following rules only when it’s in your
immediate interest
1. Sticking to rules to avoid physical
punishment
Organizational Constraints





Performance Evaluation
Reward Systems
Formal Regulations
System-Imposed Time
Constraints
Historical Precedents
Cultural Differences

Cultural background can significantly
influence




Selection of problems
Depth of analysis
Importance placed on logic and rationality
Whether decisions should be made


Autocratically by individual manager
Collectively in groups
Outcome Based Ethical Principles





Beneficence - decisions should maximize potential
benefits and minimize potential harm or risk to
others.
Egoism – decisions should maximize benefits to
oneself
Justice – decisions should result in a fair and
equitable distribution of benefits as well as burdens
Utilitarianism – decisions should result in the
greatest good for the greatest number
From Ethical Decision Challenge, Center for Applied
Research, 1998
Rule-Based Ethical Principles







Cultural Relativism – do what is consistent with the
laws and norms of one’s own nation
Golden Rule – do unto others as you would have
others do unto you
Kant’s Categorical Imperative – do what they would
want anyone else to do who was facing the same set
of circumstances
Organizational relativism – do what is consistent wit
the goals and norms of one’s own organization
Professional ethic – do what would be condoned or
supported by one’s professional colleagues and peers
Respect for persons – do what will maintain the
autonomy of others
From Ethical Decision Challenge, Center for Applied
Research, 1998