Topic 12: Decision Making & Creativity

Question 1

What is decision making?

Answer 1

A conscious process of making choices among alternatives with the intention of moving towards some desired state of affairs.

Question 2

What does it mean for a decision to be programmed?

Answer 2

• When there is a standard procedure to follow to select a solution
• No alternatives are considered

Question 3

How can we categorize decisions?

Answer 3

• Choice: choose between well defined alternatives.
• Evaluation: decision maker focuses on each alternative to determine it’s specific value
• Construction: decision maker assembles components of alternatives -> i.e. makes their own solution.

Question 4

What is the rational model of decision making?

Answer 4

• Made by herbet simon.

Question 5

What are the assumptions of the Rational Model?

Answer 5

• All availiable alternatives are known.
• All possible consequences are known.
• Information required costs nothing to gather.
• Decision maker is totally rational.

Question 6

What is the behavioral model?

Answer 6

1. Problem recognition.
2. Criteria for satisficing alternative.
3. Evaluate alternatives as they arise.
4. Choose first satisfactory alternative.
5. Implement chosen alternative.

Question 7

What is Satisficing?

Answer 7

• Accepting a solution that is ‘good enoough’
• A heuristic used for decision making.

Question 8

What are the assumptions of the behavioral model?

Answer 8

Real decision makers constrained by “Bounded Rationality”

They cope with it by “Satisficing”

Question 9

What are the implications of bounded rationality?

Answer 9

• All possibile alternatives and consequences cannot be generated.
• The definition of the situation, and the avaliable information ar eincomplete and inadequate.
• The decision may be based on criteria other then outcome maximisation. e.g. Moral considerations.

Question 10

Show the Rational Choice Decision Process.

Answer 10

A wheel around:

1. Identify problem or opportunity.
2. Choose the best decision process.
3. Discover or develop possible choices.
4. Select the choice with the highest value.
5. Implement the selected choice.
6. Evaluate the selected choice.

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Question 11

Why do we miss problems and opportunities?

Answer 11

• Stakeholder framing: Constructed realities.
• Mental models: e.g. cognitive biases.
• Decisive leadership: leaders are too decisive.
• Solution-focused problems: defining problem in terms of solution.
• Perceptual defense: ignoring information that threatens self-image.

Question 12

Why do we have trouble choosing solutions?

Answer 12

• Problems with goals
• Problems with information processing
• Problems with maximising

Question 13

What problems with our goals can cause us to choose solutions incorrectly?

Answer 13

• They can be too ambiguous, subjective or confusing
• Our decisions can be influenced by our own personal goals.

Question 14

What about information processing can cause us trouble when we must choose between solutions?

Answer 14

• Selective attention: Screens out important information.
• Liminted information processing capacity: Limited search for alternatives and information about them.
• Sequential evaluation of alternatives against implicit favourate.
• Judgement heuristics that bias judgement: e.g. Anchoring and adjustement, avaliability, representativeness

Question 15

What problems can there be with our ‘maximisation’ that give us trouble with we must pick between solutions?

Answer 15

• Satisficing: Selecting good enough instead of maximising.

Question 16

What is escalation of commitment?

Answer 16

The tendency to repeat an apparently bad decision or allocate more resources to a failing course of action.

Question 17

What are the causes of escalating commitment?

Answer 17

• Self justification:
  
  • Persistance shows confidence in their decisions
  • Saving face
• Prospect Theory: losses are more important then gains, more willing to take risks to avoid losses.
• Perceptual blinders: Perceptual defense screening out negative information to protect self-esteem.
• Closing costs: High or unkown costs of ending a project.

Question 18

How can the escalation of commitment be reduced?

Answer 18

• Set targets and milestones with plans of action for failure.
• Reduce ego-involvement of decisions makers. e.g. reduced penalities for mid-term failure.
• Different people make initial and continuance decisions.
• Frequent feedback of costs, target completion dates and chagnes to outcome projections.

Question 19

How can managers fail at implementing decisions? How can this be fixed?

Answer 19

• Fail to ensrure people understand what needs to be done.
  
  • Involve implementors in decision making.
• Fail to ensure acceptance and motivation for action.
  
  • Involve implementors in decision making and clearly link pay-offs to implementation.
• Fail to provite all resources for action
  
  • Include accountability of management for successful implementation.

Question 20

How can imployees be involved in firm decisions?

Answer 20

• Formal:
  
  • High involvement work systems (SDWT)
  • Work councils and committees.
• Informal:
  
  • ​Walk around management.
  • Open book management.
  • Open door policy.
• Contingent:
  
  • ​Vroom - Yetton - Jago Model.

Question 21

What are Vroom and Yetton’s leadership and decision making methods?

Answer 21

• AI: Autocratic, no input from subordinates
• AII: Autocratic, but gathers information from subordinates.
• CI: Consultative, discusses individually with subordinates.
• CII: Consultative, discusses with subordinates as groups
• GII: Dicision made by group and accepted by leader. (e.g. self directed work teams.)

Question 22

What is the garbage can model?

Answer 22

Four streams of events;

• Problems
• Solutions
• Participants
• Choice opportunites

The interactions between them are random.

Question 23

What is the creative process model?

Answer 23

1. Preperation
2. Incubation
3. Insight
4. Verification

Question 24

What personal characteristics feed into the Creative Process Model?

Answer 24

• Persistance.
• Relevant knowledge and experience.
• Inventive thinking style.
• Intellectual ability.

Question 25

What are the characteristics of a creative work environment in the Creative Process Model?

Answer 25

* Intelligence gathering. * Time. * Resources. * Making associations. * Cross-pollination. * Redefining problem * Autonomy to test and try. * Freedom to make mistakes. Great Travesty Rains Across Creative Red Aussie Flag