Organizational behavior 4th by MShean chap008

8

Decision Making and Creativity
McGraw-Hill/Irwin

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Decision Making at Radical

Ron Sangha/ BC Business

Radical Entertainment founder Ian Wilkinson (third from
right) meets with employees every week to reinforce the
electronic games developer’s emphasis on creative
decision making and employee involvement.

McShane/Von Glinow OB4e

Slide 8-2

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Decision Making Defined

Ron Sangha/ BC Business

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.
McShane/Von Glinow OB4e

Slide 8-3

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Rational Choice Decision Process

McShane/Von Glinow OB4e

Slide 8-4

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Problem Identification Process
• Problems and opportunities are not announced or
pre-defined
– need to interpret ambiguous information
• Problem identification uses both logical analysis and
unconscious emotional reaction during perceptual
process
– need to pay attention to both logic and emotional
reaction in problem identification

McShane/Von Glinow OB4e

Slide 8-5

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Famous Missed Opportunities
The top-rated television
commercial in history -- the Apple
Macintosh “Why 1984 won’t be like
1984” -- almost wasn’t aired
because every outside director on
Apple’s board despised it. The ad
violated the mental models that
they held of what a good ad should
look like.
Apple Computer Inc. Used with permission

McShane/Von Glinow OB4e

Slide 8-6

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Problem Identification Challenges
1. Stakeholder framing
2. Perceptual defense
3. Mental models
4. Decisive leadership
5. Solution-focused
problems

Apple Computer Inc. Used with permission

McShane/Von Glinow OB4e

Slide 8-7

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Identifying Problems Effectively
• Be aware of perceptual and
diagnostic limitations
• Understand mental models
• Discussing the situation with
colleagues -- see different
perspectives

Apple Computer Inc. Used with permission

McShane/Von Glinow OB4e

Slide 8-8

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Making Choices: Rational vs OB Views
Goals

Rational: Clear, compatible, agreed upon
OB: Ambiguous, conflicting, lack agreement

Processing
Information

Rational: People can process all information
OB: People process only limited information

Evaluation
Timing

Rational: Choices evaluated simultaneously
OB: Choices evaluated sequentially
more

McShane/Von Glinow OB4e

Slide 8-9

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Making Choices: Rational vs OB (con’t)
Standards

Rational: Evaluate against absolute standards
OB: Evaluate against implicit favorite

Info Quality

Rational: People rely on factual information
OB: Rely on perceptually distorted information

Decision
Objective

Rational: Maximization -- the optimal choice
OB: Satisficing -- a “good enough” choice

McShane/Von Glinow OB4e

Slide 8-10

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Emotions and Making Choices
1. Emotional marker process forms preferences before
we consciously think about choices
2. Moods and emotions influence the decision process
• affects vigilance, risk aversion, etc.
3. We ‘listen in’ on our emotions and use that information
to make our choices

McShane/Von Glinow OB4e

Slide 8-11

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Intuitive Decision Making
• Ability to know when a problem or opportunity exists and
select the best course of action without conscious
reasoning
• Intuition as emotional experience
– Gut feelings are emotional signals
– Not all emotional signals are intuition
• Intuition as rapid unconscious analysis
– Uses action scripts

McShane/Von Glinow OB4e

Slide 8-12

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Making Choices more Effectively
• Systematically evaluate alternatives
• Balance emotions and rational influences
• Scenario planning

McShane/Von Glinow OB4e

Slide 8-13

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Escalation of Commitment
• Escalation of commitment
occurred when the British
government continued funding
the Concorde supersonic jet
long after it’s lack of
commercial viability was
apparent. Some scholars refer
to escalation of commitment
as the “Concorde fallacy.”
© Corel Corp. With permission

McShane/Von Glinow OB4e

Slide 8-14

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Escalation of Commitment Causes
1. Self-justification
2. Prospect theory effect
3. Perceptual blinders
4. Closing costs

© Corel Corp. With permission

McShane/Von Glinow OB4e

Slide 8-15

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Evaluating Decisions Better
1. Separate decision choosers from evaluators
2. Establish a preset level to abandon the project
3. Involve several people in the evaluation process

McShane/Von Glinow OB4e

Slide 8-16

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Employee Involvement Defined
The degree to which employees influence how
their work is organized and carried out
– Level of control over decision making
– Different levels and forms of involvement

McShane/Von Glinow OB4e

Slide 8-17

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Employee Involvement Model
Potential Involvement
Outcomes
• Better problem
identification

Employee
Involvement

• More/better solutions
generated

Contingencies
of Involvement

McShane/Von Glinow OB4e

Slide 8-18

• Best choice more
likely
• Higher decision
commitment

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Contingencies of Involvement
Higher employee involvement is better when:
Decision

Structure
Knowledge
Source
Decision
Commitment
Risk of
Conflict

McShane/Von Glinow OB4e

• Problem is new & complex
(i.e nonprogrammed decision)
• Employees have relevant knowledge
beyond leader
• Employees would lack commitment
unless involved
• Norms support firm’s goals
• Employee agreement likely

Slide 8-19

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Creative Process Model
Verification

Insight

Incubation

Preparation

McShane/Von Glinow OB4e

Slide 8-20

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Characteristics of Creative People
• Above average intelligence
• Persistence
• Relevant knowledge and experience
• Inventive thinking style

McShane/Von Glinow OB4e

Slide 8-21

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Creative Work Environments
• Learning orientation
– Encourage experimentation
– Tolerate mistakes
• Intrinsically motivating work
– Task significance, autonomy, feedback
• Open communication and sufficient resources

• Team competition and time pressure have complex
effect on creativity

McShane/Von Glinow OB4e

Slide 8-22

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


Creative Activities
Redefine
the Problem

Associative
Play

CrossPollination

• Review
abandoned
projects

• Storytelling

• Diverse teams

• Artistic activities

• Explore issue

with other
people

• Morphological
analysis

• Information
sessions

McShane/Von Glinow OB4e

Slide 8-23

• Internal
tradeshows

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


8

Decision Making and Creativity
McGraw-Hill/Irwin

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.


8

Solutions to Creativity

Brainbusters
McGraw-Hill/Irwin

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.