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Definition
| the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs |
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| the view in decision making that people should - and typically do - use logic and all available information to choose the alternative with the highest value |
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| the probability (expectation) of satisfaction (utility) resulting from choosing a specific alternative in a decision |
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| the view that people are bounded in their decision-making capabilities, including access to limited information, limited information processing, and tendency toward satisficing rather than maximizing when making choices |
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| a preferred alternative that the decision maker uses repeatedly as a comparison with other choices |
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| anchoring and adjustment heuristic |
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| a natural tendency for people to be influenced by an intitial anchor point such that they do not sufficiently move away from that point as new information is provided |
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| a natural tendency to assign higher probabilities to objects or events that are easier to recall from memory, even though ease of recall is also affected by non-probability factors (e.g. emotional response, recent events) |
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| representativeness heuristic |
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Definition
| a natural tendency to evaluate probabilities of events or objects by they degree to which they resemble (are representative of) other events or objects rather than on objective probability information |
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| selecting an alternative that is satisfactory or "good enough," rather than the alternative with the highest value (maximization) |
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| the ability to know when a problem or opportunity exists and to select the best course of action without conscious reasoning |
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| a systematic process of thinking about alternative futures and what the organization should do to anticipate and react to those environments |
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| postdecisional justification |
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| the tendency to support the selected alternative in a decision by forgetting or downplaying the negative features of that alternative, emphasizing its positive features, and doing the opposite for alternatives not selected |
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| the tendency to repeat an apparently bad decision or allocate more resources to a failing course of action |
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| a natural tendency to feel more dissatisfaction from losing a particular amount that satisfaction from gaining an equal amount |
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| the degree to which employees influence how their work is organized and carried out |
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| the development of original ideas that make a socially recognized contribution |
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| reframing a problem in a unique way and generating different approaches to the issue |
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| Rational Choice Decision-Making Process |
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Definition
1. Identify problem or opportunity
2. Choose the best decision process
3. Develop alternative solutions
4. Choose the best alternative
5. Implement the selected alternative
6. Evaluate decision outcomes |
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Definition
| follow standard operating procedures, have been resolved in the past, optimal solution has already been identified and documented |
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| require all steps in the decision model because the problems are new, complex, or ill-defined |
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| Problems with the Rational Choice Paradigm |
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Definition
1. The model assumes people are efficient and logical informational processing machines.
2. It focuses on logical thinking and completely ignores the fact that emotions also influence the decision-making process. |
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| Identifying Problems and Opportunities |
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Definition
| We evaluate information the moment we perceive it by attaching emotional markers to that information, an automatic emotional response that shapes our perceptions of labeling as either a problem or opportunity. |
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| those with vested interests try to "frame" the situation by persuading decision makers that the available information points to a problem or an opportunity o does not have any importance, tends to short-circuit the decision maker's full assessment of the situation |
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Definition
| block out bad news as a coping mechanism that threatens self-concept |
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| visual or relational images in our mind of the external world, prototypes, blind us from seeing unique problems or opportunities because they produce a negative evaluation of things that are dissimilar to the mental model |
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Definition
| employees rate leaders more effective when more decisive, quickly forming an opinion or decision before logically assessing the situation |
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| solution-focused problems |
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Definition
| define problems as veiled solutions, does not describe the problem |
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| Identifying Problems and Opportunities More Effectively |
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Definition
1. Become aware of the five problem identification biases
2. Require considerable willpower to resist the temptation of looking decisive when a more thoughtful examination of the situation should occur.
3. Discuss the situation with colleagues. |
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Definition
| the tendency to see patterns on the basis of a small sample of events that are random |
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| Unstructured and often nonconscious modes of reasoning or rules of thumb that bias an individual's perceived probabilities that specific outcomes will occur. |
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| Problems with Maximization |
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Definition
Evaluation of each alternative against the implicit favorite and selection of an option that scores above a subjective minimum point considered to be good enough.
Choosing the best alternative demands more information processing capacity than people possess or are willing to apply.
Those given a large number of alternative subsequently experienced less physical stamina, more difficult performing arithmetic calculations, less resilient in the face of failure, and engaged in more procrastination.
Choosing among many alternatives can be cognitively and emotionally draining. |
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| emotions form early preferences |
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Definition
| emotional markers determine preference for each alternative, neuroscientific evidence states that information produced from logical analysis is tagged with emotional markers that then motivate us to choose or avoid a particular alternative, ultimately emotions not rational logic energize us to make the preferred choice. |
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| emotions change the decision evaluation process |
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Definition
| pay more attention in negative mood than in positive mood because something is wrong, decision makers rely on stereotypes to speed up choice process, emotions shape how we evaluate information. |
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Term
| intuition and making choices |
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Definition
| Intuition is both an emotional experience and a rapid nonconscious analytic process. |
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Definition
| programmed decision routines that speed up our response to pattern matches or mismatches |
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| Causes of Escalating Commitment |
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Definition
| The four main reasons why people are led deeper and deeper into failing projects are self-justification, prospect theory effect, perceptual blinders, and closing costs. |
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Definition
| individuals are motivated to maintain their course of action when they have a high need to justify their decision, when decision makers are personally identified with the project with reputation at stake, |
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Definition
| tendency to take more risks to avoid losses, choose less painful option |
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Definition
| decision makers do not see the problems soon enough, nonconsciously screen out or explain away negative information to protect self-esteem, serious problems are views as random errors |
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Definition
| persist because the costs of ending the project are high and unknown |
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Term
| Evaluating Decision Outcomes More Effectively |
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Definition
1. Separation of roles minimizes the self-justification effect
2. Publicly establish a preset level at which the decision is abandoned or reevaluated.
3. Find a source of systematic and clear feedback.
4. Involve several people in the evaluation. |
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| Benefits of Employee Involvement |
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Definition
potentially improves decision making quality and commitment, recognize problems more quickly and define more accurately, improve the number and quality of solutions generate, several people working together can generate more and better solutions than alone, improves the evaluation of alternatives
Condorcet's theory thats that the alternative selected by the team's majority is more likely to be correct that is the alternative selected by any individual team member.
strengthens employee commitment to the decision, increases skill variety, feelings of autonomy, task identity, job enrichment and employee motivation |
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Term
| Contingencies of Employee Involvement |
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Definition
1. Decision structure.
2. Source of decision knowledge.
3. Decision commitment.
4. Risk of conflict. |
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Term
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Definition
| programmed deicions are less likely to need employee involvement due to known solution, benefits of employee involvement increase with the novelty and complexity of the problem or opportunity |
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| source of decision knowledge |
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Definition
| if leader lacks sufficient knowledge employees should be involved who know where money can be saved, improve product design or quality, and realize opportunities |
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| increased participation increases commitment |
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Definition
if employee goals and norms conflict with the organization's goals, only a low level of employee involvement is advisable.
degree of involvement depends on whether employees will reach agreement on the preferred solution. |
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Definition
| We rely on creativity to find problems, identify alternatives, and implement solutions. |
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Term
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Definition
1. Preparation
2. Incubation
3. Insight
4. Verification |
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Term
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Definition
| effort to acquire knowledge and skills regarding the problem or opportunity |
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| the period of reflective thought |
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| experience of suddenly becoming aware of a unique idea |
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Definition
| beginning of creative decision making toward development of an innovative product or service |
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Term
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Definition
| calculating conventionally accepted "right answer" to a logical problem |
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Term
| Characteristics of Creative People |
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Definition
intelligence, persistence, knowledge, experience, personality qualities
Creative people recognize the significance of small bits of information and are able to connect them in ways that no one else could imagine.
higher persistence because of higher needs for achievement, strong motivation from task, and moderate/high degree of self-esteem.
higher levels of confidence and optimism.
Possess sufficient knowledge and experience on the subject, knowledge of the fundamentals.
Mental models lead to "mindless behavior" where assumptions are no longer questioned (need fresh thought insight) |
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| Creative Personality Cluster |
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Definition
1. High openness to experience.
2. Moderately low need for affiliation.
3. Strong values around self-direction and stimulation. |
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Term
| high openness to experience |
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Definition
| extent to which a person is imaginative, curious, sensitive, open-minded and original |
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| moderately low need for affiliation |
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Definition
| people are more creative when they have less need for social approval and somewhat high degree of nonconformity, makes one less embarrassed to mistakes, maintain motivation, explore criticism |
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Term
| high self-direction and stimulation values |
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Definition
| values of creative and independent thought, values of excitement and challenge, together form openness to change/to pursue innovative ways |
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Term
| Organizational Conditions Supporting Creativity |
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Definition
Intelligence, persistence, knowledge and experience, and independent imagination represent a person's creative potential, but extent to which the person has more creative output depends on a work environment that supports the creative process.
Creativity also improves with support from leaders and co-workers.
Extreme time pressure inhibits creativity, but lack of pressure does not produce higher creativity. |
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| Activities that Encourage Creativity |
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Definition
Hiring people with strong creative potential and providing a work environment that supports creativity.
1. Redefining the problem
2. Associative play - art, stimulation,
"Being creative is a bit like an emotion; we need to be stimulated." - Frost
Morphological analysis - listing different dimensions of a system and the elements of each dimension then looking at each combination (all options combined)
3. Cross-pollination - occurs when people from different areas of the organization exchange ideas.
"Creativity comes out of people bumping into each other and not knowing where to go"
Cross-pollination highlights the fact that creativity rarely occurs alone, come creative people may be individualist, but most creative ideas are generated through teams and informal social interaction. |
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