Decision Making and Creative Problem Solving Chapter Eight

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6 Νοε 2013 (πριν από 3 χρόνια και 7 μήνες)

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© 2013

Cengage

Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole

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1

Chapter Objectives


Specify at least five sources of decision complexity for modern managers.


Explain what a condition of risk is and what managers can do to cope with it.


Define and discuss the three decision traps: framing, escalation of
commitment, and overconfidence.


Discuss why programmed and
nonprogrammed

decisions require different
decision
-
making procedures and distinguish between the two types of
knowledge in knowledge management.


Explain the need for a contingency approach to group
-
aided decision making.


Identify and describe five of the ten “mental locks” that can inhibit creativity.


List and explain the four basic steps in the creative problem
-
solving process.


Describe how causes of problems can be tracked down with fishbone diagrams.


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Challenges for Decision Makers


Decision Making


The process of identifying and choosing alternative
courses of action to meet the demands of a situation.


Alternative courses of action must be identified,
weighed, and weeded out.


Trends in Decision Making


The complexity of decision
-
making has accelerated.

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Challenges for Decision Makers
(cont’d)


Dealing with Complex Streams of Decisions


Multiple criteria to be satisfied by a decision


Intangibles that often determine decision alternatives


Risk and uncertainty about decision alternatives


Long
-
term implications of the effects of the choice of a particular alternative


Interdisciplinary input, which increases the number of persons to be consulted
before a decision is made


Pooled decision making increases the number of persons playing a part in the
decision process.


Value judgments by differing participants in the process create disagreement over
whether a decision is right or wrong, good or bad, and ethical or unethical.


Unintended consequences occur because the results of purposeful actions cannot
always be predicted.


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Coping with Uncertainty


Types (Conditions) of Uncertainty


Certainty: Exists when a solid factual basis allows
prediction of a decision’s outcome


Risk: Exists when a decision is made on the basis of
incomplete but reliable information


Objective probabilities are based on reliable data.


Subjective probabilities are based on judgment.


Uncertainty: Exists when no reliable data exist on
which to base a decision



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5

Information Processing Styles


Thinking Style


Being deliberative, logical, precise, and objective when
making a decision


Suited to routine tasks requiring attention to detail and
systematic implementation


Intuitive Style


Being creative, following hunches and visions in
decision making


Best for rapidly changing situations requiring creativity and
intuition

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6

Avoiding Perceptual

and Behavioral Decision Traps


Framing Error


The way in which information is presented influences
one’s interpretation of it, which, in turn, may alter a
decision based on the information.


Escalation of Commitment


Continuing on a course of action can lock a person into
a losing position (“throwing good money after bad”).


Overconfidence


Believing too much in one’s own capabilities is a trap.

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A General Decision
-
Making Model


Rational (Logical) Decision Model Steps


Scan the situation; identify a signal that a decision
should be made.


Receipt of authoritative communications from superiors


Cases referred for decision by subordinates


Cases originating from the manager


Classify the decision. If it is routine, apply the
appropriate decision rule; if it is not, generate a
nonprogrammed decision through problem solving.


Monitor and follow
-
up as necessary.

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Cengage

Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole

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8

A General Decision
-
Making Model
(cont’d)


Knowledge Management


Developing a system to improve the creation and
sharing of knowledge critical for decision making


Tacit knowledge: Personal, intuitive, and
undocumented private information


Explicit knowledge: Readily sharable public
information in verbal, textual, visual, or numerical
form

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Figure 8.5: Key Dimensions of
Knowledge Management (KM)

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A General Decision
-
Making Model
(cont’d)


Improving the Flow of Knowledge


The flow of constructive tacit knowledge between
coworkers is a priority.


KM software is proving very useful and cost
-
effective in
large organizations for sharing both tacit and explicit
knowledge


Knowing what you know, what you don’t know, and
how to find what you know yields better and more
timely decisions.

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Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole

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A General Decision
-
Making Model
(cont’d)

Improving the Flow of Knowledge


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Participative management


Virtual teams


Transformational
leadership


Mentoring



Organization cultures


Training


Communication


Empowerment




Group
-
Aided Decision Making:

A Contingency Perspective


Collaborative Computing


Teaming up to make decisions via a computer network
programmed with groupware


Group Involvement in Decisions


Analyzing the problem


Identifying components of the situation


Estimating components of the situation


Designing alternatives


Choosing an alternative

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13

Group
-
Aided Decision Making:

A Contingency Perspective
(cont’d)


The Problem of Dispersed Accountability


Group
-
aided decision making: The group does
everything except make the decision.


Group decision making: The group actually makes the
final decision collectively.


Results in loss of personal/individual accountability


Individual accountability is required when:


The decision will have significant organizational impact.


The decision has legal ramifications.


A competitive reward is tied to the decision.

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A Contingency Approach Is Necessary


Individuals Versus Groups


Groups do better quantitatively and qualitatively than
the average individual.


Exceptional individuals tend to outperform the group.


Group decision
-
making performance does not always
exceed individual performance, making a contingency
approach to decision making advisable.


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Cengage

Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole

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15

Figure 8.6:
The
Problem
-
Solving Process

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16

Managerial Creativity


What Is Creativity?


The reorganization of experience into new
configurations


Creativity is a function of knowledge, imagination, and
evaluation.



Three domains of creativity:


Art


Discovery


Humor


Myth: Creative people are typically nonconformists

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17

Creative Problem Solving


Problem solving

is the conscious process of bringing
the actual situation closer to the desired situation.


Steps in Creative Problem Solving


Identifying the problem


Generating alternative solutions


Selecting a solution


Implementing and evaluating the solution

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18

Summary


Decision making is a fundamental part of management because it requires choosing
among alternative courses of action.


Managers must learn to assess the degree of certainty in a situation

whether conditions
are certain, risky, or uncertain.


Researchers have identified three perceptual and behavioral decision traps that can
undermine the quality of decisions: framing error, escalation of commitment, and
overconfidence.


Decisions, generally, are either programmed or non
-
programmed.


Managers may choose to bring other people into virtually every aspect of the decision
-
making process.


Creativity requires the proper combination of knowledge, imagination, and evaluation to
reorganize experience into new configurations.


The creative problem
-
solving process consists of four steps: (1) identifying the problem,
(2) generating alternative solutions, (3) selecting a solution, and (4) implementing and
evaluating the solution.


A clear and concise statement of the problem forms the “head” of the fishbone skeleton.


© 2013

Cengage

Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole

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r in part.

19

Terms to Understand


Decision making


Law of unintended
consequences


Condition of certainty


Condition of risk


Objective probabilities


Subjective probabilities


Condition of uncertainty


Framing error


Escalation of commitment


Programmed decisions


Decision
rule



Knowledge
management


Tacit knowledge


Explicit knowledge


Collaborative computing


Creativity


Problem solving


Problem


Causes


Satisfice


Optimize


Idealize

© 2013

Cengage

Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole

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r in part.

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