Organizational Behavior : An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner 17-1 Chapter 17 Decision Making
Jan 31, 2016
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
17-1
Chapter 17
Decision Making
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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ObjectivesExplain why decision making is a social
processDefine and explain how bounded
rationality influences decision makingDescribe five models of decision
makingExplain groupthink and how it can be
avoided
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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…Objectives
Explain how experts make decisionsIdentify your personal approach to
organizational decision makingApply the leader-participation model of
decision making
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Are Individual Decisions Independent?
Individual decisions are not independent, solitary events
Instead They are closely connected to previous
decisions
And Are influenced by the social processes
that brought the decision point to a head
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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…Are Individual Decisions Independent?
Decision making at very high levels
– A lonely, individual struggle?
NO! Instead,
It involves information sharing and inter-dependence among organization members
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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The Manager’s Role in Decision Making
The manager’s job is to handle the decision process by assessing The information neededThe players who need to be involved
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Process of Rational Decision Making
1. Recognize anddefine problem
2. Identify decision objective and criteria
3. Allocate weights to criteria
4. List and developalternatives
5. Evaluate alternatives
6. Select the bestalternative
7. Implement thedecision
8. Evaluate thedecision
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Bounded Rationality - Defined
The theory of bounded rationality maintains that
people are restricted in making decisions and
settle for less than ideal solutions
They satisfice, selecting the first alternative that is satisfactory.
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Common Decision Biases
Anchoring and adjusting
Representativeness
Availability
Overconfidence
Bounded awareness
Emotional involvement
Self-serving reasoning
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Garbage Can ModelFactors:
– Problems
– Participants
– Solutions
– Choice opportunities
Above factors float randomly inside the organization and if they connect, a decision results
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Choice Shift
Occurs when groups make more extreme decisions than individuals
Risky shiftPeople support riskier decisions in a group setting than they would individually
Cautious shiftThe group decision is more conservative than individual positions
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Groupthink - Defined
Groupthink is the tendency for members of a highly cohesive group to seek consensus so strongly that they fail to do a realistic appraisal of other possibly better alternatives
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Traditional Groupthink ModelAntecedent Conditions
•Cohesion
•Insulation
•Directive leadership
•High stress & low esteem & low hope of finding solution
•Limited search and appraisal
Con
sens
us s
eeki
ng
DefectiveDecision Making
Symptoms
•Poor information search
•Selective information processing
•Failure to appraise risks
•Incomplete survey of alternatives and solutions
Groupthink Symptoms
•Self-censorship
•Pressure on dissenters
•Pressure toward uniformity
•Illusion of unanimity
•Illusion of invulnerability
•Belief in inherent morality
•Collective rationalization
•Outgroup stereotyping
Defective Decisions
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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How to Avoid Groupthink
Encourage all members to express their doubts Assign a devil’s advocate Adopt the perspectives of other constituencies Bring in qualified outsiders to discuss decisions “Sleep” on a tentative decision and have a
second chance meeting Leaders should listen to others’ opinions first Leaders should demonstrate willingness to be
criticized
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Escalation of Commitment
Occurs when people continue to commit resources to a failing course of action
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Leader-Participation Model
Contingency theory of leadershipContinuum of leadership styles ranges
from autocratic to participative stylesDecideConsult individuals and groupsFacilitateDelegate
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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…Leader-Participation Model
Choice of leadership style can affect outcomes of the decision-making process
DecisionQuality
DecisionImplementation
Cost ofDecision Making
Development
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Seven Questions for Managers to Ask about a
DecisionDecision
Significance
Importance ofCommitment
Leader’s Expertise
Likelihood ofCommitment
Group Support for Objectives
Group Expertise
TeamCompetence
?
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Types of Problems
Structured ProblemsRepetitive, routine problems for which definite procedures have been developed
Unstructured ProblemsNovel, infrequent and / or complex problems for which no procedures have beendeveloped
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Intuition - Defined
Intuition is a cognitive conclusion based on a decision maker’s previous experiences and emotional inputs
Thus, intuition and rational analysis are complementary aspects of good decision making
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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The Zone of Indifference
Zone of indifference– The range within which each person in which
he or she willingly accepts orders without consciously questioning authority
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Recognition PrimedDecision (RPD) Model
Components of the Model
Cue recognition and pattern matching
Action script activationMental simulation driven by mental
models
Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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Klein’s RPD Model
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PatternsPatternsActionScriptsActionScripts
MentalSimulations
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Organizational Behavior : An Experiential Approach 8/EJoyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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PreMortem Exercises
Designed to expose vulnerabilities in planning
Stage Activity1. Preparation Review the plan
2. Imagine a fiasco Imagine causes of failures
3. Generate reasons for failure
Individuals write down reasons for failures
4. Consolidate the lists
Individuals take turns listing reasons
5. Revisit the plan Address issues of major concern; schedule additional meeting
6. Review the list Periodically revisit the list of reasons for failure