Decision Making and CreativityMcGraw-Hill/IrwinMcShane/Von Glinow OB 5eCopyright 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2010 The McGraw-Hill Companies, Inc. All rights reserved

Decision Making Defined Decision making is a conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs.7-*

Rational Choice Decision Process*7-*

Rational Choice Decision ProcessIdentify problem/opportunitySymptom vs problemChoose decision processe.g. (non)programmedDevelop/identify alternativesSearch, then developChoose best alternativeSubjective expected utilityImplement choiceEvaluate choice7-*

Problem Identification ProcessProblems and opportunities are not announced or pre-defined Use logical analysis and nonconscious emotional reaction during perceptual process7-*

No Problem, Houston?NASAs space shuttle Columbia disintegrated during re-entry, killing all seven crewmembers. A special accident investigation board concluded that NASAs middle management continually resisted attempts to recognize that the Columbia was in trouble, and therefore made no attempt to prevent loss of life.7-*

Problem Identification ChallengesStakeholder framingPerceptual defenseMental modelsDecisive leadershipSolution-focused problems7-*

Identifying Problems EffectivelyBe aware of perceptual and diagnostic limitationsFight against pressure to look decisiveMaintain divine discontent (aversion to complacency)Discussing the situation with colleagues -- see different perspectives7-*

Making Choices: Rational vs OB ViewsRational Choice Paradigm AssumptionsObservations from Organizational Behavior7-*

Making Choices: Rational vs OB ViewsRational Choice Paradigm AssumptionsObservations from Organizational Behavior7-*

Biased Decision HeuristicsPeople have built-in decision heuristics that bias evaluation of alternativesAnchoring and adjustment initial information (e.g., opening bid) influences evaluation of subsequent informationAvailability heuristic we estimate probabilities by how easy we can recall the event, but other factors influence ease of recallRepresentativeness heuristic -- we estimate probabilities by how much they represent something (e.g. stereotypes) in spite of better probability info7-*

Paralyzed by ChoiceResearch has found that when decision makers are presented with more options, they are less likely to make any decision at all. This paralysis of choice occurs even when there are clear benefits of selecting any alternative (such as joining a company retirement plan).7-*

Emotions and Making ChoicesEmotions form preferences before we consciously evaluate those choicesMoods and emotions influence how well we follow the decision processWe listen in on our emotions and use that information to make choices7-*

Intuitive Decision MakingAbility to know when a problem or opportunity exists and select the best course of action without conscious reasoningIntuition as emotional experienceGut feelings are emotional signalsNot all emotional signals are intuitionIntuition as rapid nonconscious analysisUses action scripts7-*

Making Choices more EffectivelySystematically evaluate alternatives against relevant factorsBe aware of effects of emotions on decision preferences and evaluation processScenario planning7-*

Postdecisional JustificationTendency to inflate quality of the selected option; forget or downplay rejected alternativesResults from need to maintain a positive self-identityInitially produces excessively optimistic evaluation of decision7-*

Escalation of CommitmentThe tendency to repeat an apparently bad decision or allocate more resources to a failing course of actionFour main causes of escalation:Self-justificationProspect theory effectPerceptual blindersClosing costs7-*

Evaluating Decisions More EffectivelySeparate decision choosers from evaluatorsEstablish a preset level to abandon the projectFind sources of systematic and clear feedbackInvolve several people in the evaluation process7-*

Involvement at Thai Carbon BlackThai Cabon Black, the Thai-Indian joint venture, relies on employee involvement to boost productivity and quality.Employees submit hundreds of suggestions in little red boxes located around the siteParticipatory management meetings are held every month 7-*

Employee Involvement DefinedThe degree to which employees influence how their work is organized and carried outDifferent levels and forms of involvement7-*

Employee Involvement ModelPotential Involvement OutcomesEmployee InvolvementBetter problem identificationSynergy produces more/better solutionsBetter at picking the best choiceHigher decision commitment7-*

Contingencies of InvolvementKnowledge SourceDecision CommitmentEmployees have relevant knowledge beyond leaderEmployees would lack commitment unless involvedRisk of ConflictNorms support firms goalsEmployee agreement likelyDecision StructureProblem is new & complex (i.e nonprogrammed decision)Higher employee involvement is better when:7-*

Going for WOW at Nottingham-SpirkTeam members at Nottingham-Spirk Design Associates Inc. give coworker Craig Saunders (standing) a WOW rating for one of the firm's creative products, the SwifferVac. Nottingham-Spirks work environment supports creativity.7-*

Creativity DefinedDeveloping an original idea that makes a socially recognized contributionApplies to all aspects of the decision process problems, alternatives, solutions7-*

PreparationCreative Process Model7-*

Characteristics of Creative PeopleAbove average intelligencePersistenceRelevant knowledge and experienceIndependent imagination traitsHigher openness to experience personalityLower need for affiliation motivationHigher self-direction/stimulation values7-*

Creative Work EnvironmentsLearning orientationEncourage experimentationTolerate mistakesIntrinsically motivating workTask significance, autonomy, feedbackOpen communication and sufficient resourcesTeam competition and time pressure have complex effect on creativity7-*

Creative Activities7-*

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