Making Choices: Models and Biases in Individual and Group Decision Making
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Making Choices: Models and Biases in Individual and Group Decision Making
- 1. Chapter 12 Individual and Group Decision Making
- 2. Decision Making Identifying and choosing solutions that lead to a desired end result First, determine responses or actions necessary to alleviate a problem Second, choose the best alternative Decision Making
- 3. Models of Decision Making The Rational Model Nonrational models -- Managers use logical approach Explain how decisions actually -- Focus on how decisions should made made Optimizing : Bounded rationality : choosing the best possible solution Constraints that restrict rational decision making Satisficing : Choosing a solution that meets a minimum standard of acceptance Models of Decision Making
- 4. The Rational Models Four step when making decisions : Step 1 Step 2 Step 3 Step 4 Models of Decision Making
- 5. Nonrational Models - Simon’s Normative model the constrain include any personal or enviromental characteristic that reduce rational decision making - The garbage can model decision result from a complex interaction between four independent streams of events : problems, solutions, participants, and choice opportunities Models of Decision Making
- 6. Integrating Rational and Nonrational Model Models of Decision Making
- 7. LO. 2 DECISION – MAKING BIASES The mistakes are people made when making decision generally associated with a host of bias that occur when we use JUDGMENTAL HEURISTICS.
- 8. Eight biases that affect decision making : Availability heuristic Representativeness heuristic Confirmation bias Anchoring bias Overconfidence bias Hindsight bias Framing bias Escalation of commitment bias
- 9. LO. 3 IMPROVING DECISION MAKING THROUGH EFFECTIVE KNOWLEDGE MANAGEMENT There are two types of knowledge that impact the quality of decision : Tacit knowledge Explicit knowledge
- 10. Decision Making Styles Tolerance for Ambiguity High Analytical Conceptual Low Directive Behavioral Tasks and Technical People and Social Concerns Concerns Value Orientation
- 11. Intuition
- 13. Group Development in Decision Making
- 14. Advantages & Disadvantages Group Development in Decision Making
- 15. Group vs Individual Performance Group Development in Decision Making
- 17. Computer-Aided Decision Making Improve information processing & decision making within virtual teams Creativity & Innovation • important during brainstorming & discussion • highliting individual characteristic
- 18. Creativity & Innovation CREATIVITY is thinking up new things. INNOVATION is doing new things. ~ Theodore Levitt Process of developing something new or unique Three types… Creation Synthesis Modification 12-21
- 19. Creativity Use when….. No readily available alternative seems to exist Existing information is ambiguous or incomplete Outcome is unpredictable 12-22
- 20. Model of Creativity 12-23
Editor's Notes
- People with a directive style have a low tolerance for ambiguity and are task-oriented. They are efficient and action-oriented but tend to be autocratic. People with an analytic style have a higher tolerance for ambiguity and a tendency to overanalyze a situation. They tend to consider more information and take longer to make decisions but can be autocratic. Those with a conceptual style have a high tolerance for ambiguity and tend to focus on the people or social aspects of work. They take a broad perspective and like to consider numerous options, but can be indecisive when making decisions. People with a behavioral style are the most people-oriented of the four possibilities. They are supportive and receptive, but have a tendency to avoid conflict and to be too concerned about others.
- Intuition, also referred to as a hunch or a gut feeling, often plays a role in the decision-making process. The technical definition of intuition is making a choice without the use of conscious thought or logical inference. Intuition is automatic and involuntary and there are two types: A holistic hunch represents a judgment that is based on a subconscious integration of information stored in memory. It just “feels right.” Automated experiences represent a choice that is based on a familiar situation and partially subconscious application of previously learned information related to that situation, such as driving a car and riding a bike. Intuition comes from two sources: expertise and feelings The intuitive response is based on an interaction between one’s expertise and feelings in a given situation. Drawbacks with this approach include the difficulty in getting others to agree with you based on known logic or information. It is also susceptible to the availability and representativeness heuristics. On the positive side, however, using intuition is a fast decision-making method. Many people validate their intuitive decisions using the rational process.
- The final topic in this chapter is creativity, defined as the process we use to develop something new or unique. Creativity Involves the use of intuition, ingenuity, and insight. Rather than the decision making being narrowed down to “one best decision,” seeking a solution is open to creating new possibilities and many alternatives. This approach is best to use when there is an ambiguous situation that the decision maker hasn’t dealt with before at all, and it is difficult to predict the outcome of the solution chosen. There are three types of innovation: Creation – creating something entirely new Synthesis – combining or synthesizing two existing things Modification – improving or changing things.
- Creativity Involves the use of intuition, ingenuity, insight Rather than narrowing down to “one best decision,” opening to create new possibilities, many alternatives Creativity training can improve one’s creativity and thinking skills It is best to use when there is an ambiguous situation that you haven’t dealt with before at all and it is difficult to predict the outcome of the solution you choose
- This model illustrates the process underlying organizational creativity and innovation. Organizational creativity is directly influenced by organizational characteristics and the creative behavior that occurs within work groups. In turn, a group’s creative behavior is influenced by group characteristics and the individual creative behavior/performance of its members. Individual creative behavior is directly affected by a variety of individual characteristics. Finally, individual, group, and organizational characteristics all influence each other within this process.