Chapter 10 (ORGB 5)

effective decision

A timely decision that meets a desired objective and is acceptable to those individuals affected by it.

participative decision making

Decision making in which individuals who are affected by decisions influence the making of those decisions.

Discuss the individual influences that affect decision making.

Decisions reflect the people who make them. The individual influences that affect decision making are comfort with risk, cognitive style, personality, intuition, and creativity.

bounded rationality

A theory that suggests that there are limits to how rational a decision maker can actually be.

devil's advocacy

A technique for preventing groupthink in which a group or individual is given the role of critic during decision making.

dialectical inquiry

A debate between two opposing sets of recommendations.

Groupthink

A deterioration of mental efficiency, reality testing, and moral judgment resulting from pressures within the group.

Intuition

A fast, positive force in decision making that is utilized at a level below consciousness and involves learned patterns of information.

Rationality

A logical, step-by-step approach to decision making, with a thorough analysis of alternatives and their consequences.

nonprogrammed decision

A new, complex decision that requires a creative solution.

Synergy

A positive force that occurs in groups when group members are stimulated to produce new solutions to problems through the process of mutual influence and encouragement within the group.

Creativity

A process influenced by individual and organizational factors that results in the production of novel and useful ideas, products, or both.

programmed decision

A simple, routine matter for which a manager has an established decision rule.

quality circle

A small group of employees who work voluntarily on company time, typically one hour per week, to address work-related problems such as quality control, cost reduction, production planning and techniques, and even product design.

nominal group technique (NGT)

A structured approach to group decision making that focuses on generating alternatives and choosing one.

quality team

A team that is part of an organization's structure and is empowered to act on its decisions regarding product and service quality.

Brainstorming

A technique for generating as many ideas as possible on a given subject while suspending evaluation until all the ideas have been suggested.

cognitive style

An individual's preferred method for gathering information and evaluating alternatives.

Explain how groups make decisions.

Group decisions are utilized for several reasons: to achieve synergy, to gain commitment to a decision, and to maximize knowledge and experience in problem-solving situations. Seven techniques utilized in group decisions are brainstorming, nominal group technique, devil's advocacy, dialectical inquiry, quality circles and quality teams, and self-managed teams.

Explain how organizations can improve the quality of decisions through participation.

Participative decision making can include employees identifying problems, generating alternatives, selecting solutions, planning implementations, and/or evaluating results. Participative management can increase employee creativity, job satisfaction, and productivity, and improve a company's economic performance.

Heuristics

Shortcuts in decision making that save mental activity.

social decision schemes

Simple rules used to determine final group decisions.

Describe the role culture plays in decision making.

Styles of decision making vary greatly among cultures and affect the way people view decisions. The dimensions proposed by Hofstede in Chapter 2 that affect decision making are: uncertainty avoidance, power distance, individualism/collectivism, time orientation, masculinity/femininity, cultural diversity, functional background, and strategic decision making.

Identify the steps in the decision-making process.

The decision-making process involves programmed decisions and nonprogrammed decisions. The first step is recognizing the problem or realizing a decision must be made. Second, the objective of the decision is identified. The third step is gathering information relevant to the problem. The fourth step is listing and evaluating alternative courses of action. Finally, the manager selects the alternative that best meets the decision objective.

Describe various models of decision making.

The rational model of decision making contends that the decision maker is completely rational in his or her approach. Bounded rationality theory suggests that constraints force decision makers to be less rational and assumes that managers satisfice and develop heuristics. The Z problem-solving model capitalizes on the strengths of four separate preferences (Sensing, Intuiting, Thinking, and Feeling), allowing managers to use preferences and nonpreferences to make decisions.

group polarization

The tendency for group discussion to produce shifts toward more extreme attitudes among members.

risk aversion

The tendency to choose options that entail fewer risks and less uncertainty.

escalation of commitment

The tendency to continue to support a failing course of action.

Satisfice

To select the first alternative that is "good enough," because the costs in time and effort are too great to optimize.