Organizational Behavior 14e Chapter 8 Pdf

Organizational Behavior, 14e Chapter 8 Decision Making...

Organizational Behavior, 14e Chapter 8 Decision Making and Problem Solving Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1  Learning Outcomes After studying this chapter, you should be able to: 1. Summarize the nature of decision making and problem solving, including the ways in which the two differ from one another. 2. Discuss the rational approach to decision making. 3. Discuss the primary behavioral aspects of decision making. 4. Discuss group decision making in organizations. 5. Discuss the nature of creativity, including the ways in which it relates to decision making and problem solving. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2  8-1 The Nature of Decision Making Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3  The Nature of Decision Making Decision making – the process of choosing from among several alternatives Problem solving – a special form of decision making that requires finding the answer to a question Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4  Figure 8.1 Elements of Decision Making A decision maker has a goal, evaluates the outcomes of alternative courses of action in terms of the goal, and selects one alternative to be implemented. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5  Types of Decisions Programmed decision – a decision that recurs often enough to develop decision rules − Decision rule – a statement that tells decision makers which alternative to choose based on the characteristics of the decision situation Nonprogrammed decision – a decision that recurs infrequently and for which there is no previously established decision rule Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6  Table 8.1 Characteristics of Programmed and Nonprogrammed Decisions Programmed Nonprogrammed Characteristics Decisions Decisions Type of decision Well structured Poorly structured Frequency Repetitive and routine New and unusual Goals Clear and 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 Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7  Decision-Making Conditions The range of available information can be considered as a continuum. − Condition of certainty – a manager knows what the outcomes of each alternative of a given action will be and has enough information to estimate the probabilities of various outcomes − Condition of risk – the decision maker cannot know with certainty what the outcome of a given action will be but has enough information to estimate the probabilities of various outcomes − Condition of uncertainty – the decision maker lacks enough information to estimate the probability of possible outcomes Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8  Figure 8.2 Alternative Outcomes under Different Decision- Making Conditions The three decision- making conditions of certainty, risk, and uncertainty for the decision about whether to promote a new video game to the market. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9  8-2 The Rational Approach to Decision Making Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10  The Rational Approach to Decision Making Rational decision-making approach – a systematic, step-by-step process for making decisions Assumptions: − Managers follow a systematic, step-by-step process. − Organizations are dedicated to making logical choices. − Organizations want to do what makes the most sense economically. − Decision makers are completely objective and have complete information. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11  Figure 8.3 The Rational Decision- Making Approach The rational model follows a systematic, step-by-step approach from goals to implementation, measurement, and control. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12  Evaluating, Choosing, and Implementing The evaluation process usually includes: − Describing the anticipated outcomes (benefits) of each alternative − Evaluating the anticipated costs of each alternative − Estimating the uncertainties and risks associated with each alternative Planning may require a contingency plan – alternative actions to take if the primary course of action is unexpectedly disrupted or rendered inappropriate Implementation may result in post-decision dissonance – doubt about a choice that’s already been made Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13  Strengths and Weaknesses of the Rational Approach Strengths Weaknesses Forces decision in a logical, Rigid underlying assumptions often sequential manner unrealistic In-depth analysis enables the Information limited by time or cost decision maker to choose on the constraints, manager’s ability to basis of information rather than process information emotion or social pressure Not all alternatives easily quantified Outcomes unknown due to unpredictability of future Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14  Evidence-Based Decision Making Evidence-based management (EBM) – the commitment to identify and utilize the best theory and data − Face the hard facts and build a culture in which people are encouraged to tell the truth, even if it’s unpleasant − Be committed to “fact-based” decision making − Treat your organization as an unfinished prototype − Look for the risks and drawbacks in what people recommend − Avoid basing decisions on untested beliefs, what was done in the past, or uncritical “benchmarking” of what winners do Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15  8-3 The Behavioral Approach to Decision Making Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16  The Administrative Model Administrative model of decision making – argues that managers use bounded rationality, rules of thumb, suboptimizing, and satisficing in making decisions − Bounded rationality – decision makers cannot deal with all the information pertaining to a problem, so they tackle some subset of it − Suboptimizing – knowingly accepting less than the best possible outcome to avoid unintended negative consequences on other aspects of the organization − Satisficing – examining alternatives only until a solution that meets minimal requirements is found Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17  Other Behavioral Forces in Decision Making Coalition An informal alliance of individuals or groups formed to achieve a common goal (can be positive or negative) Intuition An innate belief about something without conscious consideration (hunch, often results in better decision making) Escalation of Occurs when a decision maker stays with the decision even when it commitment appears to be wrong Risk propensity The extent to which a decision maker is willing to gamble in making a decision Ethics A person’s beliefs about what constitutes right and wrong behavior Prospect theory Argues that people making decisions under a condition of risk are more motivated to avoid losses than to seek gains Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18  An Integrated Approach to Decision Making The integrated (or practical) approach − Combines the unrealistic demands of the rational approach and the limited, short-term orientation of the behavioral approach to create a more practical approach for making decisions in organizations Hybrid approaches − Managers use a combination of rational, behavioral, and practical approaches to make decisions. − Research has shown that speed of decision making isn’t a factor in the quality of the decision. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19  Figure 8.4 Practical Approach to Decision Making with Behavioral Guidelines The practical model applies some of the conditions recognized by the behavioral approach to the rational approach to decision making. Although similar to the rational model, the practical approach recognizes personal limitations at each point (or step) in the process. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20  8-4 Group Decision Making in Organizations Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21  Figure 8.5 The Groupthink Process Groupthink can occur when a highly cohesive group with a directive leader is under time pressure; it can result in a defective decision- making process and low probability of successful outcomes. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22  Decision-Making Defects and Decision Quality Group deliberations dominated by groupthink increase the likelihood that decision-making defects will occur. Effects of groupthink: − Consideration of and focus on fewer alternatives − Failure to perceive nonobvious risks and drawbacks of an alternative − Rejection of expert opinions − Ignoring potential for setbacks or actions of competitors in not developing contingency plans Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23  Table 8.2 Prescriptions for Preventing Groupthink A. Leader prescriptions C. Individual prescriptions 1. Assign everyone the role of critical 1. Be a critical thinker. evaluator. 2. Discuss group deliberations with a 2. Be impartial; do not state preferences. trusted outsider; report back to the 3. Assign the devil’s advocate role to at group. least one group member. D. Process prescriptions 4. Use outside experts to challenge the 1. Periodically break the group into group. subgroups to discuss the issues. 5. Be open to dissenting points of view. 2. Take time to study external factors. B. Organizational prescriptions 3. Hold second-chance meetings to rethink 1. Set up several independent groups to issues before making a commitment. study the same issue. 2. Train managers and group leaders in groupthink prevention techniques. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24  Participation in Decision Making To what degree should employees be involved in the decision-making process? Benefits of participation: − Better solutions in “judgmental tasks” − Produces more and better solutions in complex problem-solving tasks − Creates a greater interest in the task Drawbacks: − Higher risk of polarization and groupthink Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25  Group Problem Solving Techniques to help the group problem-solving process work better: − Brainstorming – a technique used in the idea-generation phase of decision making that assists in developing many courses of action − Nominal group technique – members generate many ideas, discuss them, and then vote—repeating the cycle until they reach a decision − Delphi technique – a method of systematically gathering judgments from experts for use in developing forecasts Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 26  8-5 Creativity, Problem Solving, and Decision Making Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27  The Creative Individual Creativity – a person’s ability to generate new ideas or to conceive of new perspectives on existing ideas Traits of creative individuals: − Background experiences where creativity was nurtured − Certain personality traits: openness; attraction to complexity; high levels of energy, independence and autonomy; strong belief in self-confidence and self-creativity − Cognitive abilities: Not all intelligent people are creative, but all creative people are intelligent and can think convergently and divergently. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28  Figure 8.6 The Creative Process The creative process generally follows the four steps illustrated here. Of course, there are exceptions, and the process is occasionally different. In most cases, however, these steps capture the essence of the creative process. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 29  Enhancing Creativity in Organizations Clearly communicate that creativity and innovation are valued: − Use explicit goals to make creativity a part of the organizational culture. − Reward creative successes. − Don’t punish creative failures. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 30