Team Problem Solving and

Decision Making

Chapter 1Chapter 144

Introduction (1 of 2)

Effective decisions are consistently related to:Higher individual performanceOrganizational productivityFirm financial performance

Behavior and human relations vary with:Centralized decision-making authorityDecentralized (participative) decision-making authority

Joint decisions or influence sharingEmpowerment

Introduction (2 of 2)

Reasons for failed decisions:following bandwagon behaviorignoring ethics

Decisions are made to solve problems and take advantage of opportunities, which can occur at the same time.

Problem Solving and Decision Making

Problem – exists whenever there is a difference between what is actually happening and what the individual or group wants to be happening

Problem solving – the process of taking corrective action in order to meet objectives

Decision making – the process of selecting an alternative course of action that will solve a problem

Decision-Making Styles

Reflexive Style

Reflective Style

Consistent Style

Decision-Making Model

Step 1. Define the problemStep 1. Define the problem

Step 2. Set objectives and criteriaStep 2. Set objectives and criteria

Step 3. Generate alternativesStep 3. Generate alternatives

Step 4. Analyze alternatives and select oneStep 4. Analyze alternatives and select one

Step 5. Plan, implement the decision, and controlStep 5. Plan, implement the decision, and control

Exhibit 13.1

Cost-Benefit Analysis

Technique for comparing the cost and benefit of each alternative course of action

Costs are both financial and non-financial

Approach is popular in the nonprofit sectorBenefits are often difficult to determine in

quantified dollars

Creativity

Creativity – the ability to develop unique alternatives to solve problems

Creative process has four stages:1. Preparation

2. Possible solutions

3. Incubation

4. Evaluation

How people respond to creative ideas affects the group’s behavior

Responses That Kill Creativity

It isn’t in the budget.It costs too much.We’ve never done it before.Has anyone else ever tried it?It won’t work in our company.That’s not our problem.We tried that before.It can’t be done.That’s beyond our responsibility.Its too radical a change.

We did all right without it.We’re doing the best we can.We don’t have the time.That will make other equipment

obsolete.We’re too small / big for it.Why change it? It’s still working

OK.We’re not ready for that.Let’s form a committee.Let’s get back to reality.

Exhibit 13.3

Techniques for Generating Creative Alternatives: (1 of 2)

Brainstorming Process of suggesting many alternatives, without evaluation, to solve a problem

Synetics Process of generating novel alternatives through role-playing and fantasizing

Nominal Grouping Process of generating and evaluating alternatives through a structured voting method

Techniques for Generating Creative Alternatives: (2 of 2)

Consensus Mapping

Process of developing a group consensus solution to a problem

Delphi Technique Polls a group through a series of anonymous questionnaires

Why Decisions Fail

Rush-to-judgmentManagers accept the first alternative to solve the

problem

Misuse of resourcesManagers spend their time and money during

decision-making on the wrong things

Applying failure-prone tactics of power and persuasion to make decisions

Group Problem Solving and Decision Making

Advantages

Better decisions

More alternatives

Acceptance

Morale

Disadvantages

Time

Domination

Conformity and

groupthink

Responsibility and

social loafing

The Normative LeadershipDecision Making Model

Has a time-driven and developmental-driven decision-tree

It enables the user to select one of five leadership styles appropriate for the situation to maximize decisions

Normative model because it:provides a sequential set of questions that are rules (norms)

to followto determine the best leadership style for the given situation

Normative Model:Leadership Participation Styles (1 of 2)

DecideThe leader makes the decision alone and announces it to the

followersConsult Individually

The leader tells followers individually the problem, gets information and suggestions, and then makes the decision

Consult GroupThe leader holds a group meeting and tells followers the

problem, gets information and suggestions, and then makes the decision

Normative Model:Leadership Participation Styles (2 of 2)

FacilitateThe leader holds a group meeting and acts as a facilitator to

define the problem and the limits within which a decision must be made

DelegateThe leader lets the group diagnose the problem and make

the decision within stated limits

Does Decision Making Apply Globally? (1 of 2)

Decision making styles and the decision making model are based on the U.S. approach to decision makingPeople from different cultures do not necessarily

make decisions the same way

Decision making styles do vary with culture based on time orientation

Does Decision Making Apply Globally? (2 of 2)

High Power Distance CulturesAutocratic decisions are madeParticipation is not acceptableNormative leadership decision model would not be used

Low Power Distance CulturesGreater use of participation in decision making