Management Chapter 11

electronic brainstorming

(brainwriting) allows participants to submit their ideas and alternatives over a computer network

concept of evidence based decision making stems from

- a process of conscientiously using the best available data and evidence when making managerial decisions 1. the desire to avoid the decision-making biases discussed previously 2. research done on evidence-based medicine

person factors that drive creative performance

-creativity requires motivation and domain-relevant knowledge -motivation to apply knowledge -capabilities to create new ideas, new products, and solutions -innovative cognitive style -self-efficacy -willingness to tolerate ambiguity -proactive personality

rank the ways evidence can be used in the decision process (least risky on top)

-evidence is used to make the decision -evidence is used to inform the decision -evidence is used to support the decision

advantages of group decision making

-greater commitment to a decision - a greater pool of knowledge -better understanding of the reasons for a decision

directive decision style

-low tolerance for ambiguity -oriented toward task and technical concerns when making decisions -efficient, logical, practical, and systematic in their approach to solving problems -action oriented -decisive -like to focus on facts -tend to be autocratic, exercise power and control, and focus on the short run

three key decision making blunders

-making poor allocation of resources to study alternatives -rushing to judgment -selecting readily available solutions

what things have a positive impact on creative performance behaviors

-meaningful work -positive relationships with supervisors and coworkers -informational feedback -spatial configuration of work settings

reduce the likelihood of escalation of commitment bias

-set minimum targets for performance, and have decision makers compare their performance against these targets -regularly rotate managers in key positions throughout a project -encourage decision makers to become less ego-involved with a project -make decision makers aware of the costs of persistence

disadvantages of group decision making

-social pressure -a few people dominate -goal displacement -group think

some tips for sparking creativity

-solving problems when you're groggy -daydreaming -putting effort into it

suggestions for decision makers in order to make better decisions

-studying a greater number of potential solutions -slowing down when making decisions -evaluating a broader set of alternatives

Rational Decision Making Process

1. Identify the problem or opportunity 2. Generate alternative solutions 3. Evaluate alternatives and select a solution 4. Implement and evaluate the solution chosen.

creative performance behaviors

1. Problem formulation/definition 2. Preparation/information gathering 3. Idea generation 4. Idea evaluation/validation

techniques for preventing group think

1. each member of the group should be assigned the role of critical evaluator 2. top-level executives should not use policy committees to rubber-stamp decisions that have already been made 3. different groups with diferent leaders should explore the same policy questions. 4. managers should encourage subgroup debates and bring in outside experts to introduce fresh perspectives 5. someone should be given the role of devil's advocate when discussing major alternatives. This person tries to uncover every conceivable negative factor 6. Once a consensus has been reaches, everyone should be encouraged to rethink his/her position to check for flaws -appoint a devil's advocate

3 key decision making blunders

1. rushing to judgement 2. selecting readily available ideas or solutions 3. Making poor allocation of resources to study alternative solutions

confirmation bias

1. the decision maker subconsciously decides something even before investigating why it is the right decision 2. seeks information that supports purchasing this particular phone while discounting information that does not -information is sought that confirms the already made decision and discounts information that does not -a deicions is made before investigating it

pros and cons of using intuition

PROS -it can speed up the decision-making process, which is valuable when you are under time constraints -it is useful when resources are limited -can be used along with rational decision making CONS -intuition is subect to the same types of biases associated with rational decision making -decision maker may have difficulty convincing others that the intuitive decision makes sense -a good idea may be ignored

model of intuition

TWO PROCESSES 1. automatic, involuntary, and mostly effortless 2. controlled, voluntary, and effortful

Herbert Simon

The researcher who won a Nobel Prize in 1978 for demonstrating that the rational decision making model is unrealistic

Decision Tree

a graphical representation of the process underlying decisions 1. Is the proposed action legal? 2. Does the proposed action maximize shareholder value? 3. Is the proposed action ethical? 4. Would it be ethical not to take the proposed action?

decision- tree

a graphical representation of the process underlying decisions and shows the consequences of making various choices. -used to aid in decision making

Delphi technique

a group process that anonymously generates ideas or judgments from physically dispersed experts -used when face to face discussions are impractical, when disagreements and conflict are likely to impair communication -useful when certain individuals may dominate the group

simple -rational model

a simple context is stable, with clear cause- and -effect relationships, so the best answer can be agreed upon

opportunity

a situation in which there are possibilities to do things that lead to results that exceed goals and expectations

Brainstorming

a technique used by groups to improve creativity during the decision making process -a common technique used by both individuals and groups to generate potential solutions -helps groups generate ideas by silently and individually writing them down and sharing them

inherent morality (symptoms of groupthink)

an assumption groups are prey to that encourages the group to ignore ethical implications

invulnerability (symptoms of groupthink)

an illusion that breeds excessive optimism and risk taking

expertise

an individual's combined explicit knowledge (info that can easiliy be put to words) and tactic knowledge (information gained through experience that is difficult to express and formalize) regarding and ovject, prson, situation, or decision opportunity

Decision Support Systems (DSS)

are "computer- based interactive systems that help decision makers to use data and models to solve unstructured problems."

get a feel for your batting average

benchmark your intuitions; get a sense for how reliable your hunches are; ask yourself how your intuitive judgement might be improved

Dynamic/Chaotic -intuition and evidence-based

cause and effect relationships change so fast that no pattern emerges -act to establish order and find areas where it is possible to identify patterns

stereotyped views of oppostion (symptoms of groupthink)

cause group to underestimate opponents

satisficing

choosing a solution that meets some minimum qualification, one that is "good enough" -resolved problems by producing solutions that are satisfactory as opposed to optimal

capture and validate

create the inner state to give your intuitive mind the freedom to roam; capture your creative intuitions; log them before they are censored by rational analysis

representative bias

decision making heuristic used when people estimate the probability of an event occurring based on impressions about similar occurrences

Decision Making

entails identifying and choosing alternative solutions that lead to a desired state of affairs

Framing Bias

example: customers prefer meat that is sold as 8% lean instead of 15% fat

assumptions behind nonrational models of decision making are that

explain how managers actually make decisions (nonrational models of decision making) -decision making is uncertain -decision makers do not possess complete information -managers struggle to make optimal decisions

Rational model of decision making

explains how managers should make decisions. -it assumes that managers are completely objective and possess complete information when making decisions. -- with excellent logic and optimize the organization's best interest.

decision making style

how an individual perceives and comprehends stimuli and the general manner in which he or she chooses to respond to such information -styles vary in two different dimensions: value orientation and tolerance for ambiguity

responsibility

if made public, it discourages the decider from acting on suspect considerations (such as personal advancement or avoiding bureaucratic embarrassment) and therefore encourages more responsible decisions

don't mix up your I's

instinct, insight, and intuition

Peer pressure (symptoms of groupthink)

loyalty of dissenters is questioned

Transparency

makes the reasoning behind a decision transparent and available to scrutiny

intuition

making a decision that doesn't evaluate the validity of judgments that come to mind on their own -represents judgements, insights, or decisions that "come to mind on their own, without explicit awareness of the evoking cues and of course without explicit evaluation of the validity of these cues"

hindsight bias

occurs when knowledge of previous outcomes influences decisions about the probability of future occurrences

anaytical decision style

people who have a high tolerance for ambiguity and focus on asks and technical concerns

conceptual decision style

people who have a high tolerance for ambiguity and focus on people and the social aspects of a work situation

behavioral decision style

people who have a low tolerance for ambiguity and focus strongly on people and the social aspects of a work situation

rationalization (symptoms of groupthink)

protects personal or "pet" ideas and assumptions

minority dissent

reflects the extent to which group members feel comfortable disagreeing with other group members -experience job satisfaction -relate positively to group participation

automated experiences

represent a choice that is based on a familiar situation and a partially subconscious application of previously learned information related to that situation

holistic hunch

represents a judgment that is based on a subconscious integration of information stored in memory -choosing to make a decision because it just feels right

limitations under which managers make decisions

result in acquiring manageable rather than optimal amounts of information

elicit good feedback

seek feedback on your intuitive judgments; build confidence in your gut feel; create a learning environment in which you can develop better intuitive awareness

Mindguards (symptoms of groupthink)

self-appointed protectors against adverse information

Illusion of unanimity (symptoms of groupthink)

silence of members interpreted to mean consent

self-censorship (symptoms of groupthink)

stifles critical debate

overconfidence bias

takes place because we are optimistic based on overestimates of what we are able to do

play devil's advocate

test out intuitive judgments; raise objections to them; generate counterarguments; probe how robust gut feel is when challenged

judgemental heuritstics

the cognitive shortcuts or biases we use to simplify the process of making decisions

tolerance for ambiguity

the extent to which a person has a high need for structure and control in his or her life

value orientation

the extent to which an individual focuses on either task and technical concerns or people and social concerns when making decisions

bounded rationality

the idea that decision makers are restricted by a variety of constraints when making decisions -nonrational model

creative outcome effectiveness

the joint novelty and usefulness of a product or service as judged by others

groupthink

the phenomenon that occurs when people who are members of a cohesive in-group so strive for unanimity that they fail to realistically appraise alternative courses of action

creativity

the process of producing "new and useful ideas concerning products, services, processes, and procedures"

Quality

the quality of decision may be enhanced, in the sense that they follow more logically from all available knowledge and expertise

cohesiveness

the sense of "we-ness" that overrides individual differences and motives in a group

availability bias

the tendency to base decisions on information that is recent and easily recalled from memory

escalation of commitment bias

the tendency to stick to an ineffective course of action when it is unlikely that the bad situation can be reversed

complicated -the rational model

there is a clear relationship between cause and effect, but some people may not see it, and more than one solution may be effecive

complex -intution

there is one right answer, but many unknowns obscure cause-and-effect relationships -decision makers experiment, test, and probe

open up the closet

to what extent do you experience intuition; trust your feelings ; counts on intuitive judgments ; suppress hunches; covertly rely upon gut feel?

use imagery

use imagery rather than words; literally visualize potential future scenarios that take your gut feelings into account

consensus

when all members of a group either agree with a decision or are able to support it

anchoring bias

when decision makers are influence by the first information they receive even if it is irrelevant

problem

when there is a difference between what is desired and the actual situation

goal displacement

winning an argument with a rival over shadows the primary goal of trying to solve the problem -the primary goal is overridden by a secondary goal