Module 14: Communication & Module 5: Decision Making

Informal communication systems skip over hierarchical levels and between departments and functions. They can connect

anyone in an organization to anyone else

A listener's emotional state or ________ may filter what he hears in a message. For example, if management has not honored past commitments, the listener will look for the catch.

past experiences

Barriers to Effective Communication

physical conditions, filtering, selective perception, information overload, semantics, denotation and connotation, emotional disconnects, credibility

The middle of the communication process connecting the sender and receiver is called

the channel

Studies have shown that an audience reacts initially to ________. If you appear nervous, your audience will pick up on that and become nervous as well.

the demeanor of the speaker and not to what is being said

Business Communication Channels

A communication channel is the medium, mean, manner or method through which a message is sent to its intended receiver. The basic channels are written (hard copy print or digital formats), oral or spoken, and electronic and multimedia. Within those channels, business communications can be formal, informal, or unofficial. Finally, communications can be rich or lean. Channel richness refers to the amount and immediacy of information that can be transmitted. Face-to-face communication is very high in richness because it allows information to be transmitted with immediate feedback. A tweet is very low in richness because it allows only 140 characters to be transmitted with no feedback. On the other hand, face-to-face communication is limited to one person communicating with a few other people in close proximity, whereas a tweet can go out to thousands of followers around the world. The following diagram shows the richness of different types of communication.

Circumstance and Time-Related Barriers

A variety of difficulties can also arise from the circumstances in the midst of which a decision maker must work. One of the most common issues is stress, which can arise from a great number of sources. If the decision maker is experiencing abnormal levels of stress either in his personal life or work environment, that can often lead him to poor decisions that are out of character. He may be less objective or less disciplined in following the decision-making process he usually trusts. Recognizing high stress levels can provide the opportunity to intentionally protect against those tendencies. Also, when time is a restricting factor, that often contributes to poor decisions. Unsurprisingly, evidence suggests that when decision makers feel rushed for time, their judgment often suffers. This is true even when there actually is sufficient time for the decision-making process: just the feeling of a lack of time causes problems. It is important to commit to taking sufficient time for decisions if at all possible (and it usually is).

Intuitive vs. Rational

According to Daniel Kahneman, who you'll read more about in the next section, each of us has two separate minds that compete for influence. One way to describe this is a conscious and a subconscious perspective. The subconscious mind is automatic and intuitive, rapidly consolidating data and producing a decision almost immediately. The subconscious mind works best with repeated experiences. The conscious, rational mind requires more effort, using logic and reason to make a choice. For example, the subconscious mind throws a ball and hits the target, while the conscious mind slowly describes the physics and forces required to complete the action.

Step 6: Select the Best Alternative

After a careful evaluation of alternatives, you must choose a solution. You should clearly state your decision so as to avoid confusion or uncertainty. The solution might be one of the particular options that was initially listed, an adaptation of one of those options, or a combination of different aspects from multiple suggestions. It is also possible that an entirely new solution will arise during the evaluation process.

Step 5: Evaluate Alternatives

After creating a somewhat full list of possible alternatives, each alternative can be evaluated. Which choice is most desirable and why? Are all of the options equally feasible, or are some unrealistic or impossible? Now is the time to identify both the merits and the challenges involved in each of the possible solutions.

Message Sent—But Was It Received?

After delivering a message, how does the sender know if the receiver got the message that was intended? Is it the job of the sender or receiver to make sure that the communication has been understood? The answer is that both ends of the communication chain have some responsibility to verify what was both said and heard. In the workplace, however, the manager has the primary responsibility because a main part of her role is to gather and disperse information so organizational goals can be achieved. Managers need to have strategic conversations by asking questions and collecting feedback. One technique to gather feedback is active listening. Active listening is a communication technique that has been around for many years and that has been used successfully in all types of endeavor—not just business. Parenting classes, marital relationships, public schools, counseling, and tutoring are just some of the areas where active listening is a valued skill. As the name implies, the focus of active listening as a tool for improving communication is on listening rather than talking. (Think here of the expression "You have two ears and one mouth for a reason.") It is a process where the listener sets aside his own thoughts to concentrate more clearly what the speaker is actually saying instead of what the listener thinks the speaker is saying. It takes practice to master the basic techniques of active listening, and you will probably feel awkward applying the technique in the beginning. But because the point is to increase effectiveness by decreasing the possibility of misunderstandings, it is worth a little discomfort. The basic method is briefly summarized in these steps: Look at the speaker and make eye contact to indicate that the speaker has your undivided attention. Note the body language of the speaker to help process the speaker's message. Is the speaker angry, frustrated, frightened, rebellious, or tentative? Classic signs of anger include arms folded tightly in front of the body or held rigidly at the side. Fright or guilt may be shown by the refusal to look at you directly in the eyes or continually shifting gaze away from the listener's face. The speaker may be feeling confrontational if his arms are on his hi

Information-Related Barriers

Almost every decision is based at least in part on information that the decision maker trusts. The reliability and use of that information can potentially lead to multiple problems. One of the most obvious information-related problems occurs when the information is either incorrect or incomplete. Trusting information that is faulty leads to many wrong deductions and conclusions. If information is incomplete, even if the decision maker is aware of that fact, uncertainty is introduced, and any decision based on that partial information could prove to be misguided. On the other hand, a contrasting problem can arise when there is too much information available. An information overload can make it difficult to grasp the big picture and recognize which pieces of information are most important. Another problem it can create is that large sets of data may contain data that seems contradictory, leading the analyst to confusion or uncertainty and an inability to synthesize it as a whole. An overabundance of information can also lead to an inability to process everything to the decision maker's satisfaction. The result can be a harmful delay in the decision-making process as the over-abundance of information is being considered for an undue amount of time. Similarly, if the decision maker is excessively concerned to find every possible piece of information, the same problem can arise.

Emotional Disconnects

Almost the first thing parents learns is never to try to have a rational discussion with a screaming toddler or an angry teenager. If they wait until the young person is more receptive to what they have to say, the odds of a successful conversation improve dramatically. Adults also experience emotional disconnects that affect the chance of successful communication. For example, when a person is feeling stressed or anxious, an expressed concern is more likely to be interpreted as criticism. Constructive criticism made while an employee is emotionally fragile may be perceived as a personal attack. If possible, it is better to postpone a communication if there is a strong likelihood that the intended receiver will misinterpret it because of his emotional state.

Prospect Theory

An epoch-making idea in the field of behavioral economics, prospect theory is a complex analysis of how individuals make decisions when there is risk involved. Most strictly rational approaches to questions of financial risk rely on the principle of expected value, where the probability of an event is multiplied by the resulting value should the event occur. Notice the numerical and logical approach to that analysis. However, Daniel Kahneman and Amos Tversky, the developers of prospect theory, demonstrated through various experiments that most people alter that approach based on their subjective judgments in any given situation. One of the common examples of this is that many individuals think differently about the risk of financial loss than they do when considering situations where different levels of financial gain are concerned. In a purely rational approach, the numbers and calculations involved work the same way regardless of whether the situation is one involving potential gain or potential loss. Prospect theory is a description of how people made actual decisions in experiments. It doesn't say whether this is right or wrong. It is in the hands of decision makers to determine whether these tendencies are justifiable or if they should be overridden by a rational approach.

Anchoring

Anchoring bias is a tendency to fixate on initial information and then fail to adjust for subsequent information. When our opinion becomes anchored to that piece of information, we cannot stray very far from it. For example, in a mock jury trial, one set of jurors was asked to make an award in the range of $15 million to $50 million. Another set of jurors was asked for an award in the range of $50 million and $150 million. The median awards were $15 million and $50 million respectively with each set of jurors.

Bounded Rationality

Another theory that suggests a modification of pure rationality is known as bounded rationality. This concept revolves on a recognition that human knowledge and capabilities are limited and imperfect. Three specific limitations are generally enumerated: Decision makers do not have access to all possible information relevant to the decision, and the information they do have is often flawed and imperfect. Decision makers have limited analytical and computational abilities. They are not capable of judging their information and alternatives perfectly. They will inevitably make misjudgments in the evaluation process. Decision makers do not have unlimited time to make decisions. Real-life situations provide time constraints in which decisions must be made. In light of these limitations, the theory of bounded rationality suggests that decision makers must be willing to adapt their rational approach. For example, they must determine how much information is reasonable to pursue during the information-gathering stage; they cannot reasonably expect to gather and analyze all possible information. Similarly, decision makers must content themselves with a consideration of only a certain number of alternative solutions to the decision. Also, decision makers being far from perfect in their abilities to evaluate potential solutions must inevitably affect their approach. They must be aware of the possibility that their analysis is wrong and be willing to accept evidence to this effect. This especially includes situations in which they're relying on predictions of an uncertain future. Uncertainty and inaccuracy often arise in efforts to predict the future. For example, your career decision is fraught with uncertainty as you don't know if you will like the work or the work environment. What are decision makers to do when they are uncertain about potential results from their actions? This makes a strictly rational approach difficult and less reliable.

Studies show that family physicians that listen well produce better outcomes. Listening improves diagnoses, help doctors see the context of psychological and social issues affecting patient health, and it may even help avoid a lawsuit. What advice would you give about listening?

Ask follow-up questions to confirm your understanding.

All of the following are examples of external communication, EXCEPT:

human resources management memos

Evaluate the Alternatives

Besides the obvious landmines that exist in this decision-making process, you know the biggest flaw will be due to the lack of alternatives to evaluate. Although you may be tempted to engage deciding between these two options or neither, you know that the committee needs more alternatives in order to make the best decision. This scenario represents the types of challenges you may face and decisions you may have to make in a management role. Throughout this module you'll learn about the processes and tools that can help you make the right call when faced with tough decisions.

Combinatorial vs. Positional

Aron Katsenelinboigen proposed this description based on how the game of chess is played. A combinatorial player has a final outcome in mind, making a series of moves that try to link the initial position with the final outcome in a firm, narrow, and more certain way. The name comes from the rapid increase in the number of moves he must consider for each step he looks ahead. The positional decision-making approach is "looser," setting up strong positions on the board and preparing to react to the opponent. A player using this strategy increases flexibility, creating options as opposed to forcing a single sequence. In business, a market share strategy is positional. A dominant market share gives a firm negotiating power even with lesser product. A complex situation with many players and many solutions might require a more combinatorial strategy. Apple faced a complex environment when it entered the music streaming business. It created an ecosystem that served artists, labels, and customers without dominating the music business.

What you'll learn to do: explain barriers to effective communication

Barriers to communication are things that get in the way of a message being received. They could be physical, such as loud music playing, or emotional, such as when a person is too angry or fearful to listen to what another individual is saying. Culture, language, and social status can also represent barriers to effective communication. Managers need to be aware of barriers and how to overcome them to improve the communication process. "I already talked to him about the schedule. Wasn't he listening?" How often have you said words like these (or heard them said about a coworker)? Every time we talk or listen, there are things that get in the way of clear communication—things that interfere with the receiver getting the message from the sender. This interference is referred to as "noise," and there are various types of noise that can cause a message to be misinterpreted.

Step 3: Weigh Decision Criteria

Because the criteria identified will seldom be equally important, you will need to weight the criteria to create the correct priority in the decision. For example, you may have weighted budget, safety, and reliability as the most important criteria to consider, along with several other slightly less critical criteria.

External Communication Flows

Communications do not start and stop within the organization. External communication focuses on audiences outside of the organization. Senior management—with the help of specialized departments such as public relations or legal—almost always controls communications that relate to the public image or may affect its financial situation. First-level and middle-level management generally handle operational business communications such as purchasing, hiring, and marketing. When communicating outside the organization (regardless of the level), it is important for employees to behave professionally and not to make commitments outside of their scope of authority.

Confirmation Bias

Confirmation bias is the tendency to seek out or prefer information and opinions that we believe will confirm our own judgment. We want to be confirmed, so we pay more attention to information that we think supports us, and we ignore or diminish the significance of information to the contrary. We also tend to accept information at face value that confirms our preconceived views while being critical and skeptical of information that challenges these views. For example, if you believe your new diet of bananas and almonds is the healthiest foods to eat, you will search for and accept any supporting information on the virtues of bananas and almonds, and ignore and discount any contradictory information.

Denotation and Connotation

Confusion can also arise from the use of language by people from different educational levels, culture, and dialect. For instance, the terms lift and braces denote two entirely different meanings in the United States and in England. A Londoner might reasonably ask her partner if he was planning on wearing braces with his pants. Some words have a connotation for one group of people that is not shared by another. "That's sick!" could be a compliment or an insult, depending upon the listener. (You probably already know that slang does not belong in written business communications.) Fortunately for all of us, paying attention to the context of the message often reduces confusion. The meaning of homophones (buy, by, bye; meet, meat, mete; pair, pare, pear) and homographs (read, read; lead, lead) are often easily understood by their context or pronunciation.

Halo Effect

Halo effect concerns the preferential attitude that we have toward certain individuals or organizations. Because we are impressed with their knowledge or expertise in a certain area or areas, we unconsciously begin to give their opinions special credence in other areas as well. This would, for example, be exhibited when sports stars express their political opinions and the public gives strong weight to what they say. There is no logical reason to think that they have sound political opinions just because they have great skill in the realm of sports.

Dean lives in Silver Spring, MD. His 15-year-old car has broken down, and he thinks he needs a new car. He remembers that the first step of the rational decision-making process is "define the problem." What should he consider?

Dean should consider all his transportaion options, such as the Metrorail, Uber, or taxis, not just getting a new car

Downward Communication Flows

Downward communication is when company leaders and managers share information with lower-level employees. Unless requested as part of the message, the senders don't usually expect (or particularly want) to get a response. An example may be an announcement of a new CEO or notice of a merger with a former competitor. Other forms of high-level downward communications include speeches, blogs, podcasts, and videos. The most common types of downward communication are everyday directives of department managers or line managers to employees. These can even be in the form of instruction manuals or company handbooks. Downward communication delivers information that helps to update the workforce about key organizational changes, new goals, or strategies; provide performance feedback at the organizational level; coordinate initiatives; present an official policy (public relations); or improve worker morale or consumer relations.

Common Missteps in Communication

Each step in the communication-process model introduces the potential for missteps to occur. In the opening scenario, two e-mail messages were described. They were both internal to the company, but they achieved much different results. What was different about the messages that caused the different outcomes? The first misstep can occur when the information to be communicated is not encoded correctly. Consider the e-mail sent by management to announce Mathias's appointment. Management had clear information to convey, and a simple e-mail conveyed it. Mathias's e-mail had a different purpose. He wanted to convey to his superiors that he was following their directions and was working on a plan to cut costs. But when he put the information into text, he didn't encode it well. He wanted to convey that he was working on the problem but had not made any decisions. What he actually conveyed was that he was going to cut costs by whatever means necessary and soon. Because the information was not encoded accurately, the wrong information was sent. The first step in good communications is being able to clearly and concisely convey information, whether written, spoken, graphic, or numerical. If information is not encoded properly, nothing else matters. Later on we will look at specific suggestions for how to tailor messages to take the needs of the receivers into consideration Missteps also occur during decoding when the receiver interprets the message differently than the sender intended. In Mathias's case, the message he sent was "I'm thinking about ways to cut costs and I will let you know when I have a plan." But employees interpreted the message as "I'm going to do whatever I have to in order to cut costs." Because feedback is a message sent in the opposite direction, from the receiver to the sender, all of these problems can occur during feedback. In many cases feedback is not important and is not wanted. Much information that is communicated is intended to keep people informed, and acknowledgement or response is not expected. When management sent the notice about Mathias's appointment it did not expect every employee to respond. Sometimes, though, feedback is important to be certain that both the sender and receiver

Cognitive Biases

Even when circumstances are conducive to good decisions and a sufficient supply of accurate information is available, there are still a number of ways in which decision makers might be at fault in their manner of judgment. For instance, their perception can be distorted. Understanding how this happens is relevant for managers because they make many decisions daily. They must also deal with many people making assessments and judgments. Faulty ways of thinking during the analysis stage are often referred to as cognitive biases. A few common ones follow:

Generate Alternatives

Feeling confident from the previous week's successful meeting, you are anxious to hear the replacement solutions. However, there are only two options offered: stay with current system but add staffing, or go with a new vendor in the field, who happens to be run by your boss's daughter.

The Sender

For the majority of everyday business communications, a manager needs only to focus on presenting a professional image. On different occasions, she may want to present herself as a serious and responsible leader, a technical expert, or informally casual. But when uncertain what a situation calls for, always err on the side of professionalism. Studies have shown that an audience reacts initially to the demeanor of the speaker and not to what is being said. If you appear nervous, your audience will pick up on that and become nervous as well.

Framing Bias

Framing bias is the tendency to be influenced by the way that a situation or problem is presented. Framing a message with a positive outcome has been shown to be more influential than framing a message with a negative outcome. For example, public health messages that depict nonsmokers as happy and popular with sparkling white smiles has proven more effective than displaying a smoker's diseased lung. Numerous studies have demonstrated framing effects in our everyday lives. We are more likely to enjoy meat labeled 75 percent lean meat as opposed to 25 percent fat. 93 percent of PhD students registered early when the framing was in terms of a penalty fee for late registration, with only 67 percent registering early when the framing was in terms of a discount for earlier registration. More people will support an economic policy if the employment rate is emphasized than when the associated unemployment rate is highlighted.[1] It is important to be aware of this tendency because, depending on how a problem is presented, we might choose an alternative that is disadvantageous simply because of how it is framed.

Tailoring a Message to an Audience

Have you ever had to converse with a young child and really needed him to listen to you? You probably knelt down so that you were at eye level. You may have even put your hand gently on his arm to focus his attention on you. Speaking clearly and slowly in words that you knew he understood, you made exaggerated facial gestures of fear or surprise or happiness to emphasize your points. In brief, you tailored your message to your audience so that it would be effective. Although the channel of communication you select to transmit your message is important, so also is knowing the intended audience. Effective communicators seem to instinctively adjust their styles to their audience, but it is a skill that can also be learned. The way the information is conveyed should complement the audience, whether it is one person or a roomful of people. Three factors are involved in tailoring a message: the sender, the message itself, and the audience.

Hindsight Bias

Hindsight bias is the tendency to believe falsely that we would have accurately predicted the outcome of an event after that outcome is actually known. When something happens and we have accurate feedback on the outcome, we appear to be very good at concluding that this outcome was relatively obvious. For example, a lot more people claim to have been sure about the inevitability of who would win the Super Bowl the day after the game than they were the day before. What explains hindsight bias? We are very poor at recalling the way an uncertain event appeared before we realize the actual results of the event, but we can be exceptionally talented at overestimating what we actually knew beforehand as we reconstruct the past. Just listen to a call-in sports show after a big game, and hindsight bias will be on full display. We seek out or prefer information and opinions that we believe will confirm our own judgment. We want to be confirmed, so we pay more attention to information that we think supports us, and we ignore or diminish the significance of information to the contrary.

Horizontal and Diagonal Communication Flows

Horizontal communication involves the exchange of information across departments at the same level in an organization (i.e., peer-to-peer communication). The purpose of most horizontal communication is to request support or coordinate activities. People at the same level in the organization can work together to work on problems or issues in an informal and as-needed basis. The manager of the production department can work with the purchasing manager to accelerate or delay the shipment of materials. The finance manager and inventory managers can be looped in so that the organization can achieve the maximum benefit from the coordination. Communications between two employees who report to the same manager is also an example of horizontal communication. Some problems with horizontal communication can arise if one manager is unwilling or unmotivated to share information, or sees efforts to work communally as threatening his position (territorial behavior). In a case like that, the manager at the next level up will need to communicate downward to reinforce the company's values of cooperation. Diagonal communication is cross-functional communication between employees at different levels of the organization. For example, if the vice president of sales sends an e-mail to the vice president of manufacturing asking when a product will be available for shipping, this is an example of horizontal communication. But if a sales representative e-mails the vice president of marketing, then diagonal communication has occurred. Whenever communication goes from one department to another department, the sender's manager should be made part of the loop. A manager may be put in an embarrassing position and appear incompetent if he isn't aware of everything happening in his department. Trust may be lost and careers damaged by not paying attention to key communication protocols. Diagonal communication is becoming more common in organizations with a flattened, matrix, or product-based structure. Advantages include: Building relationships between senior-level and lower-level employees from different parts of the organization. Encouraging an informal flow of information in the organization. Reducing the chance of a message being distorte

What you'll learn to do: differentiate between typical communication flows within an organization

How does communication move within an organization? Is there a pattern to the kinds of communication that come from senior management, from middle management and from workers? What do typical information flows tell us about the kind of information that is communicated within the organization? And what does it tell us about who controls the flow of information? This section describes how information in an organization follows established and predictable routes.

Credibility

In communication, the validity of the message is tied to the reputation of the sender. If the receiver doesn't trust the sender, he will view the message itself with skepticism or suspicion. If the sender is trustworthy, the receiver will likely believe the message despite her personal opinions about that subject. In other words, the trustworthiness of a communication, regardless of format, is heavily influenced by the perceived credibility of the source of that communication. Source credibility describes the sender's positive characteristics that affect the receiver's acceptance of a message. A manager's source credibility is based on experience, knowledge, and interpersonal skills. Managers who deal openly and candidly with employees will find it easier to solicit the kind of feedback that tells them whether their message has been understood.

Formal and Informal Communication Systems

In most organizations there are both formal and informal information systems. Formal communication systems are the methods used to convey information necessary for conducting the business of the organization. Formal communications conform to rules and regulations prescribed by the profession or law (for example, formal reporting procedures for tracking injuries in the workplace). This is information that flows within the chain of command or within task responsibilities. The message may be procedures to provide regular progress reports to managers. It may be scheduled meetings to exchange information on the status of a project. Human resources may arrange seminars to convey new policies and procedures. The formal communication system makes sure necessary information flows through the organization and that dissemination of this information is controlled. Not everyone in an organization has access to progress reports or attends project meetings. Formal communication systems ensure that information is available to those who need it and not to others. Not all communication in an organization is formal, and not all communication is controlled. Informal communication systems are outside of the formal system. Informal systems can connect almost anyone in an organization to anyone else. They skip over hierarchical levels and between departments and functions. In the opening scenario we saw how misinformation spread through the informal system can harm an organization. However, informal communication systems are not necessarily disruptive. In many organizations, the informal network is the primary way information is spread and work gets done. There are some organizations where getting a job done depends more on who you know than what you know. There are two main types of informal communication systems: social networks and the grapevine. A social network is a system of personal relationships that cross hierarchical, departmental, and organizational boundaries. A simple social network system is shown in the following diagram. In a social network, an individual can reach out to anyone else in his network for information or assistance. Through the linking member, he can also seek help from another group. People with large

Step 2: Establish Decision Criteria

In this step, the decision maker needs to determine what is relevant in making the decision. This step will bring the decision maker's, and any other stakeholder's, interests, values and preferences into the process. To continue our example, let's assume you are married. Some of the criteria identified might include budget, safety, functionality, and reliability.

Decision Criteria

In your kickoff meeting, you spend time finding out the important factors, such as what systems it will need to run (payroll, benefits, disability, leave of absence, etc.), how many employees it will need to handle, software compatibility, and the budget. After an extensive list of requirements is compiled on the white board, you label the list "decision criteria."

Organizational Communication Flows

Information can flow in four directions in an organization: downward, upward, horizontally, and diagonally. The size, nature, and structure of the organization dictate which direction most of the information flows. In more established and traditional organizations, much of the communication flows in a vertical—downward and upward—direction. In informal firms, such as tech start-ups, information tends to flow horizontally and diagonally. This, of course, is a function of the almost flat organizational hierarchy and the need for collaboration. Unofficial communications, such as those carried in the company grapevine, appear in both types of organizations.

Upward Communication Flows

Information moving from lower-level employees to high-level employees is upward communication (also sometimes called vertical communication). For example, upward communication occurs when workers report to a supervisor or when team leaders report to a department manager. Items typically communicated upward include progress reports, proposals for projects, budget estimates, grievances and complaints, suggestions for improvements, and schedule concerns. Sometimes a downward communication prompts an upward response, such as when a manager asks for a recommendation for a replacement part or an estimate of when a project will be completed. An important goal of many managers today is to encourage spontaneous or voluntary upward communication from employees without the need to ask first. Some companies go so far as to organize contests and provide prizes for the most innovative and creative solutions and suggestions. Before employees feel comfortable making these kinds of suggestions, however, they must trust that management will recognize their contributions and not unintentionally undermine or ignore their efforts. Some organizations have even installed "whistleblower" hotlines that will let employees report dangerous, unethical, or illegal activities anonymously to avoid possible retaliation by higher-ups in the company.

What you'll learn to do: describe the barriers to individual decision making and common styles of decision making

Making decisions is easy. Making the right decision is hard. When making decisions, you will face many barriers, including the quality of information you have, the amount of time allowed, and several cognitive biases that will influence your decisions. In addition to these barriers, we'll also look at some common styles of decision making, including satisficing, optimizing, intuitive, rational, combinatorial, and positional.

In early 2017, United Airlines employees literally dragged a passenger off the plane. The video went viral. The CEO, Munoz, apologized for "having to re-accommodate . . . customers." Many customers found the response to be horribly callous and responded on Twitter and Facebook. Munoz apologized again on the next day with "I want you to know that we take full responsibility and we will work to make it right." What was the problem with his first message?

Munoz's phrasing didn't reflect an understanding of the audience and how the event was perceived.

Weigh Decision Criteria

Next, you ask the members to weigh the importance of each of the criteria. Early on, everyone weighted his criteria as critical, but eventually the group was able to agree on some less critical needs, such as customization of the web interface (brand colors, logos, etc). Comfortable with the group's progress, you task all the members to bring potential solutions to next week's meeting.

Barriers to Individual Decision Making

Obviously, not all decisions prove to be good ones. Sometimes that is due to unfortunate situations that would have been impossible to foresee. Other times, however, the problem with the decision could have been avoided. What are the potential barriers that we should be aware of during the decision-making process?

Step 4: Generate Alternatives

Once you have identified the issue and gathered relevant information, now it is time to list potential options for how to decide what to do. Some of those alternatives will be common and fairly obvious options, but it is often helpful to be creative and name unusual solutions as well. The alternatives you generated could include the types of cars, as well as using public transportation, car pooling and a ride-hailing service.

Robust Decisions

One final adaptation of the rational process that is becoming more prominent, especially in areas such as energy production and natural resource preservation, is the practice of making "robust" decisions. Robust decisions revolve around the inability to predict the future with certainty. Rather than rely on an imperfect analysis to determine the "best" decision, a robust decision provides a plan that will work in light of numerous uncertainties. It supposes that a number of situations are all possible and provides a solution pathway that will be successful if any of those situations should arise. This pathway could potentially be a single solution that works in any of the likely future scenarios, or it might provide separate responses to be enacted depending on how the future uncertainties unfold.

Heuristics

One of the approaches that might stem from a recognition of bounded rationality is the use of heuristics. These are analytical and decision-making tools that help simplify the analysis process by relying on tried and tested rules of thumb. A heuristic simplifies a complex situation and allows the decision maker to focus only on the most important pieces of information. For example, a business might use their proven experiences and that of many other companies to conclude that a new product line requires a certain amount of time to gain market share and become profitable. Though there are many complex factors involved in market analysis, the business might use this proven rule to guide its decision making. When a proposed decision contradicts this rule, the company might discard it even if a complex and seemingly rational analysis might seem to support it. Of course, there are exceptions to most rules, and the use of heuristics might prevent a company from following courses of action that would be beneficial. Likewise, heuristics that were once reliable rules might become obsolete because of changing markets and environments. Nonetheless, most analysts recognize heuristics as useful tools when used properly.

Styles of Decision Making

Optimizing vs Satisficing; Intuitive vs Rational; Combinatorial vs Positional

Oral Communications

Oral channels depend on the spoken word. They are the richest mediums and include face-to-face, in-person presentations, mobile phone conferences, group presentations, telephone, video meetings, conferences, speeches, and lectures. These channels deliver low-distortion messages because body language and voice intonation also provide meaning for the receiver. They allow for immediate feedback of the communication to the sender. They are also the most labor-intensive channels in terms of the number of people involved in the transaction. Oral channels are generally used in organizations when there is a high likelihood of the message creating anxiety, confusion, or an emotional response in the audience. For instance, a senior manager should address rumors about layoffs or downsizing in face-to-face meetings with management staff. This allows the receiver (audience) to get immediate clarification and explanations, even if the explanation is a simple but direct: "At this time, I just don't know." Oral communications are also useful when the organization wants to introduce a key official or change a long-established policy, followed up with a written detailed explanation. Senior managers with high credibility usually deliver complex or disturbing messages. For example, a senior manager will usually announce plans to downsize in person so that everyone gets the same message at the same time. This will often include a schedule so people know when to expect more details.

Overconfidence Bias

Overconfident bias is particularly easy to understand. It basically amounts to the idea that an individual decision maker trusts his own judgment (usually his intuition) and allows that judgment to override evidence to the contrary. His opinion counts more strongly to him than that of experts who are more knowledgeable and often more than factual data that contradicts his views. From an organizational standpoint, as managers and employees become more knowledgeable about an issue, the less likely they are to display overconfidence. And overconfidence is most likely to arise when employees are considering issues outside of their area of expertise.

Filtering

Personal and particular experiences color how people view the world and how they communicate. A message sender sees the world through one set of filters (experiences and values) and the receiver sees it through a different set of filters. Each message has to pass, therefore, through at least two sets of filters. The more similar people are in lifestyle, experience, culture, and language, the more similar their mental filters are likely to be and the less distortion should occur. This is why people who come from very different social and economic situations than their audience must work extra hard to say exactly what they mean to avoid confusion. Also, the fewer people involved in the transmission of a message, the greater the chance that it will be received as the sender intended. In business, however, messages may be summarized by a manager and relayed through an administrative assistant who has clarified or edited the message. Messages exposed to many filters should be repeated in various ways to make sure they were understood as the sender intended.

Pro-Innovation Bias

Pro-innovative bias is the opposite of the status-quo bias. Rather than prefer things to stay the same, the innovation bias gives preference to any new and innovative idea simply because it represents something new. The feeling is that new ideas must be better than old ones. Even if no objective evidence supports the new idea as useful and helpful, it is still attractive just by virtue of being new.

Which Channel Is Best?

Quite simply, the best channel is the one that most effectively delivers the message so that it is understood as the sender intended. Nuanced or emotionally charged messages require a rich medium; simple, routine messages don't need the personal touch. If you want to advise your department that at 2 p.m. you want to have a five-minute stand-up meeting in the hallway outside of your office to congratulate them on meeting a goal, then send a quick e-mail. You really don't want people to reply with questions. E-mail is a lean medium but works very well when the content of the message is neither complex nor emotionally charged. On the other hand, a telephone call is a more appropriate channel to apologize for having to cancel a lunch date. The speaker can hear the sincerity in your voice and can express their disappointment or offer to reschedule. A good rule of thumb is the more emotional the context of the message, the richer the medium should be to deliver the message. But remember—even face-to-face business meetings can be followed up with a written note to ensure that both parties are truly on the same page. If a meeting results in assignments or agreements, then a written note will be useful documentation for future reference.

Data, Logic, and Facts

Rational decision making is defined not only by adherence to a careful process, but also by a logical, data-driven manner of following the steps of that process. The process can be time-consuming and costly. It is generally not worthwhile on everyday decisions. It is more useful for big decisions with many criteria that affect many people. In the evaluation stage, the process usually requires numeric values. The next stage will use these to calculate a score for each alternative. Some properties are not easily measured, and factors that rely on subjective judgment may not be trusted. If they are not fully weighted, the final analysis will lean toward whatever is easiest to measure. In a company, the final decision usually belongs to an executive, who takes the analysis as a guide but makes his own decision.

________ is the tendency to either "under notice" or "over focus on" stimuli that cause emotional discomfort or contradict prior beliefs.

Selective perception

Selective Perception

Selective perception is the tendency to either "under notice" or "over focus on" stimuli that cause emotional discomfort or contradict prior beliefs. For instance, some people live purposefully healthy lifestyles by frequently exercising and eating only nutritious food but still smoke cigarettes. Psychologists believe that they are selectively ignoring the evidence that smoking is dangerous to their health. They have chosen to disregard the information that would make them feel guilty or fearful about this habit. This is called perceptual defense. Selective perception can also be vigilant, meaning people are extra sensitive to things that are significant to them. If a manager doesn't like a particular employee, for example, she may be super critical of that person's behavior and notice every time he is a minute late to a meeting. On the other hand, a favorite employee coming late to work one morning might elicit concern that she had car trouble. Selective perception introduces bias into the communication process.

Semantics

Semantics is the study of the meaning of words and phrases. You might hear one person say to another "Let's not argue semantics," meaning he doesn't want to get caught up in trivial and unimportant details or playing with words. But semantics is extremely important in effective communication. There are some semantic rules in English that may trip up non-native English speakers, such as the concept of subject-verb agreement and gender pronouns. These can cause confusion, as seen in the following examples: Six man is coming to the meeting on Tuesday. (How many men are coming?) Rachel is going to introduce the speaker at the conference. He may be asking you for information about her to make the job easier. (Who is asking for information, Rachel or the speaker?) When your audience involves people whose native language is not English or individuals of different educational backgrounds, messages need to be direct and clearly stated to help ensure they are understood.

Semantics is extremely important in effective communication. Misunderstandings can cause confusion. Which of the following might cause semantic confusion?

She's a total filly!

Status-Quo Bias

Some decision makers prefer to avoid change and maintain the status quo. This desire, perhaps unrecognized, often leads them to favor ideas that do not lead to significant changes. Evidence and ideas that support change are neglected as a result.

Physical Conditions

Sometimes "noise" is just exactly that—loud or distracting sounds that make it impossible to hear or concentrate. Or the general level of background noise can be so intense that it is hard to focus for long on one particular voice. A room may be so hot or so cold that people can't get comfortable and cannot pay attention. Outside activities may be a distraction to those with a view out windows. Finally, it may be lunchtime or too close to quitting time to keep people focused. Fortunately, with some awareness and advance planning, physical barriers to effective communication are some of the easiest to overcome.

Electronic (Multimedia) Communications

Television broadcasts, web-based communications such as social media, interactive blogs, public and intranet company web pages, Facebook, and Twitter belong in this growing category of communication channels. Electronic communications allow messages to be sent instantaneously and globally. People can talk face-to-face across enormous distances. Marketing and advertising can be targeted to many different types of customers, and business units can easily communicate in real time. This is especially important when customers must be advised of product recalls or security issues. Although extremely effective, the widespread utilization of electronic communications for business purposes can also be risky. In recent years, the private communications and customer files of many large corporations have been hacked and their data stolen. In 2016, New Jersey Horizon Blue Cross Blue Shield was fined $1.1 million for failing to safeguard the personal information of medical patients. The company stored unencrypted sensitive data including birth dates and Social Security numbers on laptops that were stolen out of their main offices.

Optimizing vs. Satisficing

The "fog of war" refers to the uncertainty common on a battlefield. Business is not quite that bad, but there often isn't good information for a full analysis. With limitations on information, thoughtful analysis may be impossible. So what's a decision maker to do? There are two ends of a spectrum from which to approach this: satisficing and optimizing. Satisficing—a combination of the words "satisfy" and "suffice"—means settling for a less-than-perfect solution when working with limited information. Optimizing involves collecting as much data as possible and trying to find the optimal choice. Generally, decision makers don't pick one or the other—you can think of satisficing to optimizing as a spectrum, and each decision starts with an assessment of how critical it is. A branch of management called management science offers methods for solving complex problems.

The Communication-Process Model

The communication process may seem simple: one person sends a message and others receive it. The process becomes more complex, however, because the information in the message must be sent and received accurately. The communication-process model describes how the information is sent and received.

The Message

The first step in tailoring a message, of course, is to choose the right communication channel. But even then, there are questions to ask about the message itself that will influence how it is presented. Some of these questions are listed below: Which channel suits the content best? A critical or urgent message may demand the fastest channel, whether that is in-person, text-message, or e-mail. A scripted presentation requires planning and preparation. Businesses can use journalists or Twitter for brief announcements. If you want to demonstrate how your organization does something, clarify values, or construct common meanings for people across an organization, you might tell a memorable story in either an oral or written presentation. Decide which channel best suits the content. What do you want to achieve by sending the message? Is it intended to persuade or to inform? Are you just reassuring your boss that everything is on track? A face-to-face communication is much more effective than an e-mail or report in trying to convince someone to change a belief or a behavior. Does the message require interaction from the audience or is it more of an "information dump"? Don't try to deliver a rationale for a $1 million investment in a phone call, especially if you need supporting evidence. Allow enough time to answer all questions. Will visual aids help the message or will they just distract from it? Arguments that a new computer software program will increase your department's productivity will need to be backed by solid evidence presented in charts or graphs. But excessive or unfocused visuals may irritate senior-level managers who want just the concise summation and the triple bottom line (economic, social and environmental impacts). Do you have to establish your credibility? Does the audience know you? Are you speaking to people who know more than you about the topic? The answers to these questions will influence how you design your message. Most importantly, before deciding on a communication, ask yourself why the audience should care about it. When you know, then tailor the communication so that it answers that question. The story of United Airlines Flight 4311 is example of a CEO who failed to identify h

What you'll learn to do: differentiate between typical channels of business communication

The previous section looked at common barriers to communication. This section will identify different methods, or channels, of communication and how to tailor a message to its audience. What is the best way to tell your boss that you are leaving to work for a competitor? How would you communicate your concerns about a disappointing customer reaction to a rollout of a new product? Would you send a business memo to invite a coworker to join you for lunch? Effective communicators have mastered the skill of choosing the channel and style that is most appropriate for the message. Business communication is held to a higher standard than everyday communication. The consequences of misunderstandings are usually higher and the chances to recognize and correct a mistake are lower. The barriers to communication and technique for improving communication are the same regardless of where the conversation takes place.

The Rational Decision-Making Process

The rational decision-making process involves careful, methodical steps. The more carefully and strictly these steps are followed, the more rational the process is. We'll look at each step in closer detail.

What you'll learn to do: explain the concept of "rational decision making" and contrast it with prospect theory, bounded rationality, heuristics, and robust decisions

Though everyone makes decisions, not everyone goes about the process in the same way. In fact, not everyone even uses a "process" to make decisions. There are various decision-making styles, and we will focus on the rational decision-making model. We will also become familiar with a common process that many groups and individuals follow when making decisions. Though almost everyone will agree that decision making should be rational, there are also some important contrasting ideas that often balance out the "rational" aspects to the process.

Ideas that Complement and Contrast with Rational Decision Making

Though most decision makers will recognize much that is commendable in the rational decision-making process, there are also reasons to consider complementary or even contrasting ideas. Taken to its extreme, the rational method might entirely discount factors that are of known and obvious value, such as emotions and feelings, experience, or even ethical principles. This danger, along with other limitations of the rational method, has led to the development of the following concepts to provide a more balanced and holistic approach to decision making:

Step 1: Identify the Problem

Though this starting place might seem rather obvious, a failure to identify the problem clearly can derail the entire process. It can sometimes require serious thought to find the central issue that must be addressed. For example, you have taken a new job and you may initially decide you need to find a new car for commuting back and forth from work. However, the central problem is that you need a reliable way to commute to and from work.

Information Overload

We have all been in situations when we felt that too much information was coming at us. When this happens, we feel overwhelmed and fear that we will not be able to retain any information at all. Sometimes it is not just the quantity of communication but the level that causes overload. If the message contains information that is new to the receiver, including processes or concepts that are not familiar, then the chances of overload increase greatly. The sender should break up the message into more palatable or digestible bits and reduce the amount of information that has to be absorbed at any one time. One technique is to make a high-level announcement and then follow it up later with more details. The sender has the primary responsibility to check that the receiver has understood the message. This means that a manager may have to adjust a message to reflect the various experiences of the employees. A new employee may need repeated explanations before beginning an operation, whereas an experienced employee may start rolling his eyes at the same old instructions.

The Gilbreths have a large family with 12 children. They need to pick a new car that will serve everyone, including 4 teenagers who are driving age or approaching it. Their criteria include safety, gas mileage, reliability, and seating for 14. They are following the rational decision-making process so that they can have a family discussion without heated words. What is the next step?

Weigh the decision criteria

Written Communications

Written communications include e-mails, texts, memos, letters, documents, reports, newsletters, spreadsheets, etc. (Even though e-mails are electronic, they are basically digital versions of written memos.) They are among the leaner business communications. With written communications, the writer must provide enough context that the words can be interpreted easily. The receiver should be alert for ambiguity and ask for clarification if needed. An e-mail sender cannot take receipt for granted. Most people receive too much e-mail and sort and filter it quickly, sometimes incorrectly. Written messages are effective in transmitting large messages. Humans are limited in the amount of data they can absorb at one time. Written information can be studied over time. Reports can include supporting data and detailed explanations when it is important to persuade the receiver about a course of action. Written communications can be carefully crafted to say exactly what the sender means. Formal business communications, such as job offer letters, contracts and budgets, proposals and quotes, should always be written.

The Audience

You can't tailor your communication to the sender if you don't know your audience. Here are some questions to consider when getting to know your audience. How big is your audience? Is it one person or a large group? One individual means getting "up close and personal" as opposed to a conference room. If a large group, is it diverse or fairly homogenous? Do you need language translators or signers for the hearing impaired? What is the status of your audience? Is the audience mostly senior-level managers, peers, or subordinates? Your body language, presentation, and formality will vary depending upon the status of the group. Although subordinates may be more easily put at ease with an informal, relaxed approach, high-level managers usually want to get straight to the point and move on to the next thing. Can you establish empathy with the audience? The more the audience trusts you, the easier it will be to retain their attention. Notice the audience—are people shifting around, avoiding eye contact, yawning, or are they nodding in agreement and focused? You may have to adapt your message to meet the mood of the audience.

Why does a manager need to understand the processes and techniques in decision making?

You have been in your new role as a manager for two months, and your boss just asked you to lead a committee in selecting a new data management system for human resources (HR). The current data management process is run on spreadsheets, but the company has grown from fifty to three hundred employees in just three years, and the spreadsheets won't work anymore. You have all the key areas from HR represented on your committee, plus finance and IT. How will you decide which new system to use?

You are looking for a used car, and you're focused on finding one that has under 100k miles and is no older than 2006. In your search, you take little notice of the state of the engine or transmission. A month after buying the 2007 Busaru Scoutbeck with 98k miles, your transmission freezes on the way home from work. Which bias trap did you get yourself into that created this scenario?

anchoring bias

One ________ technique is to ask questions to verify or confirm what you heard the speaker say.

active listening

In October 2017, President Trump sought to deflect a news story reporting on links between his campaign and Russia by tweeting the following: "Who paid for it, Russia, the FBI or the Dems (or all)?" Trump attempted to diffuse the situation by:

attempting to discredit the source.

Active listening requires control of one's own attention and thoughts. For example,

don't allow yourself to prepare a response before the speaker has finished his remarks.

The first step in good communications is to ________ encode information for the specific receiver, whether information is written, spoken, graphic, or numerical.

clearly and concisely

Sally and Aamir's company are celebrating a hard-won deal. Sally manages the team who created the product, and believes it was the high quality of the product that cinched the deal. Aamir manages the sales team, and he believes it was the long hours of work put in by his salespeople that sealed the deal. These are examples of

confirmation bias

When you receive a c*0*m*M*U*n*i*c*a*t*1*0*n, you will try to interpret it. In the communication process, this is called

decoding

The most media-rich channel for exchanging information is:

face-to-face

Dimitri has bad news for his staff that must be communicated in a short time frame. He should use:

face-to-face communication

In an interactive communication process, a key step is the last. The receiver can send ________ to the sender to indicate that the message has been received and explain how it has been interpreted.

feedback

Jon made it a habit to paraphrase any verbal information. This is a little annoying to the sender but it ensures that Jon understands the message as intended. In the communication process, paraphrasing is

feedback

Formal communications conform to rules and regulations prescribed by the profession or law. Formal information

flows within the chain of command or within task responsibilities.

Looking to the past and incorrectly believing you can predict the future based on past knowledge or understanding is the definition of:

hindsight bias

In the financial crisis, the rumor mill proved much more accurate than the announcements from executives. CEOs at major companies like Countrywide defended their companies and practices right through the crisis. Some outside analysts and commentators got the story right. But the real dirt came from people in the trenches who knew the practices were poor and credit risk was much greater than stated. The accurate information came from

informal communications

A 2010 survey of small business employees asked how many emails they can handle per day. Only six percent said they could process more than 50 emails a day. Most said they cannot keep up, once they hit more than that. More than 50 emails per day resulted in

information overload

Compare the way a novice and an experienced driver make decisions. The novice needs to rely on controlled processing, requiring focused concentration on a sequence of operations that require mental effort and are easily disrupted by any distractions. In contrast, the well-practiced driver, relying on automatic processes, can carry out the same task efficiently while engaged in other activities (such as chatting with a passenger or tuning in to a radio station). Of course, he or she can always switch to more deliberative processing when necessary, such as conditions of extreme weather, heavy traffic or mechanical failure. The two processes for decision making are ________.

rational and intuitive

Bob is very analytical in his approach to decisions. He looks at the available data and weighs each factor. His approach takes more time but often finds cost savings or improves quality. His approach is called

rational decision making

Derek Muller of Veritasium offers a bet. He will flip a coin. On heads, you will win $10, and on tails, you will pay him $10. The expected value is $0, so the bet is fair. According to prospect theory, most people will

reject this bet as too risky.

Meg is picking classes for college. She wants a career where she can help people, and she likes languages. She signs up for Arabic classes. In case this doesn't work out, she also takes economics classes. Economics majors have more success getting jobs after college than language majors. Her decision is

robust

For most of our decisions, we do not try to optimize the decision but simply make a good decision and move on. This is called

satisficing

How you communicate is one aspect of the communication equation. The other aspect is tailoring your message to your audience. Getting this aspect right requires an understanding of:

sender, message and audience

The average office employee received 121 email messages per day in 2015. If each takes 5 minutes, each employee would need a 10 hour day just to deal with email. Now imagine a top executive's situation. Each employee may have something important to say, especially in small companies. How does he or she manage? Most use the chain of command and only address messages from their direct reports and peers, usually less than 10 people. Chain of command communication is called:

upward communication

If you want to convey facts, what is the best communication choice for you?

written communication