decision making and negotiation

8/8/2019 Decision Making and Negotiation

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Decision Making and Negotiation


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NATURE OF

DECISION MAKING-can be classified according to

frequency and informationcondition.


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PROGRAMMED DECISION is a decision

that recurs often enough for a decision rule to bedeveloped.

DECISIONRULE is a statement that tells a decision

maker which alternative to choose based on thecharacteristics of the decision situation.

Decision usually are highly structured.

The goal are clear and well known.

Decision making is already established.

The sources and channels of information

are clearly defined.


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NONPROGRAMMEDDECISION is a

decision that recurs infrequently and for whichthere is no previously established decision.

PROBLEM SOLVING is a special form of decision

making in which the issue is unique it requiresdeveloping and evaluating alternatives without the aid of

decision rule.

oorly structures because information is

ambiguous .there's is no clear procedures.

goals are often vague.


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Characteristics of Programmed and

Nonprogrammed

Characteristics Programmed Decisions Nonprogrammed Decision

Type of Decision Well structured Poorly Structured

Frequency Repetitive and routine New and unusual

Goals Clear, specific Vague

Information Readily available Not available, unclear

channels

Consequences Minor Major

Organizational Level Lower levels Upper levels

Time for Solution Short Relatively long

Basis for solution Decision rules, set procedures Judgment and creativity


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The Decision Making Process


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THERATIONALAPPROACH is a systematic,

step by step process for making decisions ; State the situational Goal

Identify the Problem

Determining decision type Evaluate alternatives

Choose an alternatives

Implement the Plan Cognitive dissonance

Control: Measure and Adjust


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State the Situational Goal rational decision makingprocess begins with the statement of situational goal,

or goal for a particular situation.

Identify the Problem purpose of problemidentification is to gather information that bears on thegoal.

Determining Decision Type decision makers mustdetermine if the problem represents a programmed ora non programmed decision.

Evaluate Alternatives evaluation involves assessing allpossible alternative in terms of predetermined decisioncriteria.


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Choose an Alternative choice of an alternativeis usually the most cial step in the decision

making process.

Implement the Plan implementation puts thedecision into action.

Cognitive Dissonance - is the anxiety a person experiences whentwo sets of knowledge or perceptions are contradictory or incongruent.

Control: Measure and Adjust in the final stage

of the rational decision making process, theoutcomes of the decision are measured andcompared with the desired goal.


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Strengths and Weakness of the Rational

Approach

The rational approach has several strengths. It

forces the decision maker to consider a

decision in a logical,sequential manner, and the indepth analysis ofalternatives enables the decisionmaker to choose on the basis of informationrather than emotion or social pressure.


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The Behavioral Approach

Bounded Rationality is the idea that decisionmakers cannot deal with information about all the aspectsand alternatives pertaining to a problem and thereforechoose to tackle some meaningful subset of it.

Behavioral Approach is characterized by ;1) the use of procedures and rules of thumbs

2)suboptimizing knowingly acceptingless than the

best possible outcome to avoidunintendednegativeeffects onother aspects of the organization.

3) satisficing is examiningalternatives onlyuntilasolution thatmeets minimalrequirements in found.


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The Practical Approach to decision

making combines the steps of the rationalapproach with the conditions in the behavioral

approach to create a more realistic process for

making decisions in organization.

The Personal Approach

Conflict model- is a very personal approach

to decision making because it deals with the

personal conflicts that people experience in

particularly difficult decision situatuions.


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Information

State situational Goal, which

maybe multiple and changing.

Control:Measure and Adjust

Monitor Environmental changes

Identification of problem

Develop adequate criteria

Generate as many alternatives as

possible as time and money

permit

Information

Information

Information

Information

Programmed or

nonprogrammed

decision

Potential for

misdiagnosis

Implementation Support the decision by

actions.

Apply Decision Rule

Rational choice of best possible alternative

based on available information

Develop contingency plans

Evaluate alternatives as

objectively as possible

Information

Nonprogrammed Programmed


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Practical Approach to Decision Making and

Guidelines1. It deals only with important life decisions marriage, schooling,

career major organizational decisions that commit the individualor the organization to a certain course of action following thedecision.

2. It recognizes that procrastination and rationalization aremechanisms by which people avoid making difficult decisions andcoping with the associated stress.

3. It explicit acknowledges that some decisions probably will bewrong and that the fear of making an unsound decision at all.

4. It provides for self reaction comparisons of alternatives withinternalized moral standard.

5. It recognizes that at times the decision maker is ambivalent aboutalternative courses of action; in such circumstances, it is verydifficult to make a wholehearted commitment to a single choice.


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Unconflicted Adherence entails continuing withcurrent activities if doing so does not entail serious risks.

Unconflicted Change involves making changes inpresent activities if doing so present no serious risks.

Defensive Avoidance entails making no changes inpresent activities and avoiding any further contact with

associated issues because there appears to be no hope offinding a better solution.

Hyper vigilance is frantic, superficial pursuit of somesatisficing strategy.

Vigilant information processing involvesthoroughly investigating all possible alternatives, weighingtheir cost and benefits before making decision, and

developing contingency plans.


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Antecedent Condition Mediating Processes Consequences

Start:

Challenging or

negative feedback or

an opportunity

Additional Information

about losses from continuing

unchanged

Information about losses

from changing

Signs of more information

available and of other

unused resources

Information about deadline

and time pressure

Unconflicted

Adherence

Q. 1

Are the risks serious

if I dont change?

Q.2

Are the risks seriousif I do change?

Q.3

Is it realistic to hope to

find a better

solution?

Q.4

Is there sufficient

time to search and

deliberate?

Unconflicted

Change

Defensive

Avoidance

Hyper vigilance

Vigilance

End:

Incomplete

search appraisal,

and contingency

planning

End:

Incomplete

search appraisal,

and contingencyplanning

Maybe or Yes

Maybe or Yes

Maybe or Yes

Maybe or Yes

No

No

No

No

Janis Mann Conflict Model of Decision Making


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Related Behavioral Aspects of Decision

Making

ETHICS- are an individuals personal beliefs

about what is right and wrong or good and

bad.ESCALATION OF COMMITMENT-is the

tendency to persist in an effective course of

action when evidence reveals that the projectcannot succeed.


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Group Decision Making

Group Polarization is the tendency for agroups average post-discussion attitudes to

be more extreme than its average pre-

discussion attitudes. Group Think- is a mode of thinking that

occurs when members of a group are deeplyinvolved in a cohesive in-group desire forunanimity offsets their motivation to appraise

alternative courses of action.


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Symptoms of Groupthink

1. An illusion of invulnerability, shared by most of all members, thatcreates excessive optimism and encourages extreme risk taking.

2. Collective efforts to rationalize or discount warnings that mightled members to reconsider assumptions before recommittingthemselves to past past policy decisions.

3. An unquestioned belief in the groups inherent morality, incliningmembers to ignore the ethical and moral consequences of theirdecisions.

4. Stereotyped views of enemy leaders as too evil to warrantgenuine attempts to negotiate or as too weak or stupid tocounter whatever risky attempts are made to defeat theirpurposes.


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Time

Decision

Outcomes

Leadership

Style

Decision - Making

Defects

Groupthink

Symptoms

Group

Characteristics

The Groupthink Process


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Decision Making Defects and Decision

Quality

The group is less likely to survey a full range ofalternatives and may focus on only a few (often oneor two).

The group may not reexamine previously rejectedalternatives for nonobvious gains or some meansof reducing apparent cost even when they receive

new information.

The group may reject expert opinion that runcounter to its own views and may choose toconsider only information that supports its

preferred solution.


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Group Problem Solving


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Brainstorming-is a technique used in the ideageneration phase of decision making that

assist in development of numerousalternative courses of action.

The Nominal Group Technique another means of improving group decision making.group members follow a generate discussion-vote cycle

until they reach an appropriate decision.

The Delphi Technique -is a systematicallygathering judgments of experts for use in

developing forecasts.


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A. Leader prescriptions1. Assign everyone the role of critical evaluator.

2. Be impartial; do not state preferences.

3. Assign the devils advocate role to at least one group member.

4. Use outside experts to challenge the group.

5. Be open to dissenting points of view.

B. Organizational prescriptions1. Set up several independent groups to study the same issue.

2. Train managers and group leaders in groupthink preventiontechniques.

C. Individual prescription1. Be a critical thinker.

2. Discuss group deliberations with a trusted outsider; report back to

the group.D. Process prescriptions

1. Periodically break the group into subgroups to discuss the issues.

2. Take time to study external factors.

3. Hold second chance meeting to rethink issues before making acommitment.


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Negotiation


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Negotiation is the process inwhich two or more parties

(people or groups) reachagreement even though they

have different preferences.


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Four Approaches to Negotiation

Individual Differences the early psychologicalapproaches concentrated the personality traits ofthe negotiators.

Situational Characteristics

are the context withinwhich negotiation take place.

Game Theory was developed be economist usingmathematical models to predict the outcome ofnegotiation situations.

Cognitive Approaches which recognizes thatnegotiators often depart from perfect rationalityduring negotiation.


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Win - Win Negotiation

The Win - Win approach does not treat

negotiation as a game in which there are

winners and losers.

It approaches negotiation as an opportunity for

both sides to be winners, to get what they

want out of agreement.


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PRAM four step Approaches

PLANNING requires that each negotiator set his or her owngoal, anticipate the goal f the other, determine areas of

probable agreement, and developed strategies for reconciling

areas of probable disagreement.

RELATIONSHIP - requires that negotiators plan activities thatallow positive relationship to developed, cultivate a sense of

mutual trust.

AGREEMENT requires that each party confirm the other party's

goals, verify areas of agreement, propose and consider

positive solutions to reconcile areas of disagreement and

jointly resolve any remaining differences.

Maintenance entails providing meaningful feedback based on

performance, holding up your end of the agreement, keeping

in contact, and reaffirming trust between the parties.


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P

WIN

WIN

PLANS

P

MAINTENANCE

MRELATIONSHIPS

R

AGREEMENTS

A

THE PRAM MODEL


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