Chapter 10: Decision Making
Tools And techniques for making better decisions
- Nominal Group Technique -Delphi Technique - Majority Rule -Consensus - Group Decision Support Systems (GDSS) -Decision trees
10.4
Decision Making in Groups
Step 2: Immersion
Decision maker consciously thinks about the problem and gathers information.
The emergence of self-appointed mindguards
Happens when one or more members protect the group from information that runs counter to the group's assumptions and course of action.
Step 1: Problem Recognition
Recognize the problem that you have.
Farming Bias
Refers to the tendency of decision makers to be influenced by the way problems are presented.
Step 3: Incubation
The individual sets the problems aside and does not think about it for awhile. At this time, the brain is actually working on the problem unconsciously.
Step 4. Illumination
The insight moment when the solution to the problem becomes apparent to the person, sometimes when it is least expected.
Fluency
The number of ideas a person is able to generate
Hindsight Bias
The opposite of overconfidence bias, as it occurs when looking backward in time and mistakes seem obvious after they have already occurred. Ex: Buying scratch off ticket 5 times and lost and hoping the next one will be a win but turn out to be lost. Decision makers to remember this bias before passing judgement on other people's action.
Anchoring
The tendency for individuals to rely too heavily on a single piece of information Ex: Plan crash and burn down, and stating that everyone is dead but actually two survive from the crash. Rely to heavily on the information of the plane crash down.
How Do you know if your decision making process if Creative?
Three factors to evaluate the level of creativity int he decision making process. 1. Fluency 2. Flexibility 3. Originality
satisfice
To accept the first alternative that meets minimum criteria.
Nonprogrammed decisions
Unique, nonroutine, and important. These decision require conscious thinking, information gathering, and careful consideration of alternatives.
Overconfidence bias
What occurs when individuals overestimate their ability to predict future events. Ex: Able to predict this weekend football game. To avoid this bias, take the time to stop and ask yourself if you are being realistic in your judgment.
Escalation of Commitment
When individuals continue on a failing course of action after information reveals it may be a poor path to follow. Ex: Fixing a used car that you know you can sell it, donate it but you continue to fix it that cause more money.
Step 5: Verification and application
When the decision maker consciously verifies the feasibility of the solution and implements the decision.
Decision Making Model: Use this Model When
When to use which decision making.
Decision rule
automated response to problems that occur routinely.
Illusions of unanimity
Occur, based on self-censorship and direct pressure on the group.
Self- Censorship
Occurs, when members of the group minimize their own doubts and counterarguments.
An unquestioned belief in the group''s inherent morality
Occurs, which may incline members to ignore ethical or moral consequences of their actions.
Avoid Decision Making Traps
Overconfidence bias, hindsight bias, Anchoring, framing bias, Escalation of Commitment
Brainstorming
A Process of generating ideas that follows a set of guidelines, including not criticizing ideas during the process, the idea that no suggestion is too crazy, and building on other ideas.
Majority Rule
A decision making rule in which each member of the group is given a single vote and the option receiving the greatest number of vote is selected.
Analysis Paralysis
A decision- making process in which more and more time is spent on gathering information and thinking about it, but no decision actually get made.
Consensus
A decision-making rule that groups may use when the goal is to gain support for an idea or plan of action. This decision- making rule is inclusive, participatory, cooperative, and democratic.
Delphi Technique
A group process that utilizes written responses to a series of questionnaires instead of physically bringing individuals together to make a decision.
Stereotyped views of outgroups
Are seen when groups discount rival's abilities to make effective responses.
Making Intuitive Decisions: Intuitive Decision- making model
Arriving at decision without conscious reasoning. The model argues that in a given situation, experts making decisions scan the environment for cues to recognize patterns. Intuitive: using or based on what one feels to be true even without conscious reasoning; instinctive.
Decisions in categories
Can be classified into three categories based on the level at which they occur. -Strategic decision -tactical decisions -Operational decisions
Making Creative Decisions
Creativity: The generation of new ideas that are original, fluent, and flexible.
Making "Good Enough" Decisions The Bounded Rationality Model
Individuals knowingly limit their options to a manageable set and choose the first acceptable alternative without conducting an exhaustive search for alternatives. Part of the approach is satisfice.
Group Decision Support Systems
Interactive computer-based systems that are able to combine communication and decision technologies to help groups make better decision. -Higher information sharing.
Direct Pressure
Is exerted on any members who express strong arguments against any of the group's stereotypes, illusions, or commitments.
Illusion of Invulnerability
Is shared by most of all of the group members, which creates excessive optimism and encourages them to take extreme risks.
Idea quotas
A set number of ideas a group must reach before they are done with brainstorming -Recommended to avoid process loss and maximize the effectiveness of brainstorming.
Decision Criteria
A set of parameters against which all of the potential options in decision making will be evaluated.
Nominal Group Technique (NGT)
A technique designed to help with group decision making by ensuring that all member participate fully.
Groupthink
A tendency to avoid a critical evaluation of ideas the group favors. Ex: In a group, you was felt the decision was heading in the wrong direction but you didn't speak up? Characterized by 8 Symptoms: 1. Illusion of invulnerability 2.Collective Rationalizations 3. An unquestioned belief in the group's inherent morality. 4. Stereotyped views of outgroups. 5. Direct Pressure. 6. Self- Censorship 7. Illusions of Unanimity 8. The emergence of self-appointed mindguards.
Wildstorming
A variation of brainstorming in which the group focuses on ideas that are impossible and then imagines what would need to happen to make them possible.
Tactical decision
Decisions about how things will get done.
Operational decisions
Decisions employees make each day to make the organization function.
Rational Decision- making model
Def: A series of steps that decision makers should consider if their goal is to maximize their outcome and make the best choice.
Strategic Decision
Def: Decisions that are made to set the course of an organization.
Programmed decisions
Def: Decisions that occur frequently enough that we develop an automated response to them. - Decision rule is the automatic response. Ex: What to eat, what to wear, which route should take to go home, and etc.
Decision Making
Def: Making Choices among alternative courses of action, including inaction.
Decision trees
Diagrams where answers to yes or no question lead decision makers to address additional questions until they reach the end of the tree.
Flexibility
How different the ideas are from each other. If individuals are able to generate several unique solutions to a problem, they are high on flexibility. - Able to generate several distinct solutions to a problem, your decision process is high on flexibility.
Originality
How unique a person's ideas are.
Collective Rationalizations
occurs, in whcih members downplay negative information or warnings that might cause them to reconsider their assumptions.