Steven McShane

1. © 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione
C H A P T E RC H A P T E R 99
DecisionDecision
making andmaking and
employeeemployee
involvementinvolvement

2. 2
Chapter learning objectivesChapter learning objectives
1. Diagram the general model of decision making.
2. Explain why people have difficulty identifying problems and
opportunities.
3. Identify three factors that challenge our ability to choose the
best alternative.
4. Outline the causes of escalation of commitment to a poor
decision.
5. Outline the forms and levels of employee involvement.
6. Describe sociotechnical systems theory recommendations
for more successful self-directed work teams.
7. Identify the four contingencies in the Vroom–Jago model
that determine the optimal level of employee involvement.
8. Discuss the challenges that prevent employee involvement.

3. 3
3. Develop3. Develop
alternativesalternatives
1. Identify1. Identify
problemproblem
2. Choose2. Choose
decisiondecision
stylestyle
Decision making modelDecision making model
4. Choose4. Choose
best solutionbest solution
5. Implement5. Implement
solutionsolution
6. Evaluate6. Evaluate
decisiondecision

4. 4
Famous missed opportunitiesFamous missed opportunities
A Knight’s Tale was a box office
success, yet most Hollywood
studios rejected Brian Helgeland’s
proposal. They failed to see the
appeal of a film about a lowly
squire in 14th century England
who aspires to be a knight, set to
1970s rock music and reflecting
contemporary themes of youth,
freedom and equality.
© Photofest

5. 5
© Photofest
Problem identification concernsProblem identification concerns
 Perceptual biases
 perceptual defence
 political influence by others
 mental models
 Poor diagnostic skills
 need to make sense
 lack of time
 defining solutions as
problems

6. 6
© Photofest
Identifying problems effectivelyIdentifying problems effectively
 Be aware of perceptual
limitations
 Discuss the situation with
colleagues
 Create early warning signs
 Use information technology

7. 7
Problems with choosing solutionsProblems with choosing solutions
 Goal problems
 ambiguous, conflicting
 biased by personal goals
 Information processing problems
 selective attention
 limited information processing
 sequential evaluation with implicit favourite
 Maximising problems
 tend to satisfice

8. 8
Choosing solutions effectivelyChoosing solutions effectively
 Systematically evaluate alternatives
 Decision support systems
 Scenario planning
 Intuition (with caution)

9. 9
Intuitive decision makingIntuitive decision making
 Ability to know when a problem or opportunity exists
and to select the best course of action without
conscious reasoning
 Conduit for tacit knowledge
 Logical reasoning that became habit

10. 10
Escalation of commitment causesEscalation of commitment causes
 Self-justification
 Gambler’s fallacy
 Perceptual blinders
 Closing costs

11. 11
Employee involvement at Tien WahEmployee involvement at Tien Wah
Every three months, Tien Wah
Press reveals its financial
performance over the previous
quarter to employees, so they
can see how their costs affect
the company’s performance
and their bonus. This motivates
staff to discover ways to
reduce costs.
Courtesy of Tien Wah Press

12. 12
Employee involvement definedEmployee involvement defined
The degree to which employees
share information, knowledge,
rewards and power throughout
the organisation
 active in decisions previously
outside their control
 power to influence decisions
 knowledge sharing Courtesy of Tien Wah Press

13. 13
Forms of employee involvementForms of employee involvement
InformalInformal
Casual informationCasual information
exchangesexchanges
Example: Boss asksExample: Boss asks
for ideasfor ideas
FormalFormal
Codified practicesCodified practices
Example: self-Example: self-
directed teams atdirected teams at
ZIP IndustriesZIP Industries
StatutoryStatutory
Required by lawRequired by law
Example: EuropeanExample: European
codeterminationcodetermination
VoluntaryVoluntary
No legalNo legal
requirementrequirement
Example: BuildingExample: Building
design task force atdesign task force at
Great PlainsGreat Plains
DirectDirect
EmployeesEmployees
personally involvedpersonally involved
Example: StaffExample: Staff
submit safety ideassubmit safety ideas
at GPR Truck Salesat GPR Truck Sales
RepresentativeRepresentative
Reps decide forReps decide for
other employeesother employees
Example: Labour-Example: Labour-
mgt committees inmgt committees in
NZNZ

14. 14
HighHigh
MediumMedium
LowLow
Levels of employee involvementLevels of employee involvement
 High involvement − employees
have complete decision making
power (eg SDWTs)
 Full consultation − employees
offer recommendations (eg gain
sharing)
 Selective consultation −
employees give information, but
don’t know the problem

15. 15
Features of self-directed teamsFeatures of self-directed teams
 Complete entire work process
 Tasks assigned by the team, not supervisors
 Highly autonomous − responsible for inputs,
processes, outputs
 Responsible for correcting problems
 Receive team-level feedback and rewards

16. 16
Sociotechnical systems at CelesticaSociotechnical systems at Celestica
Celestica adopted
sociotechnical systems (STS)
as its template for corporate
renewal. The computer
manufacturer assigned self-
directed work teams to each
work process and identified
key variances that the teams
control in those processes.
Courtesy of Celestica Inc

17. 17
Sociotechnical systems conditionsSociotechnical systems conditions
 Primary work unit
 Semi-autonomous groups
 Control key variances
 Joint optimisation
Courtesy of Celestica Inc

18. 18
How involvement improves decisionsHow involvement improves decisions
Employee
involvement
Leads to betterLeads to better
definition of problemsdefinition of problems
More likely to selectMore likely to select
the best optionthe best option
Improves number andImproves number and
quality of solutionsquality of solutions

19. 19
Determining optimal involvementDetermining optimal involvement
 Decision quality
 Decision commitment
 Risk of conflict
 Decision structure

20. 20
Overcoming involvement challengesOvercoming involvement challenges
 Cultural differences
 better in collectivist and low power distance cultures
 Management resistance
 educate/train managers to become facilitators
 Employee and union resistance
 concerns about increased stress, giving up union
rights and union power
 solution is trust and involvement

21. 21
Overview of the next chapterOverview of the next chapter
 The creativity process
 Characteristics of creative employees
 Workplace conditions that support creativity
 Problems facing teams when making decisions
 Five structures for team decision making

22. © 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione
C H A P T E RC H A P T E R 99
DecisionDecision
making andmaking and
employeeemployee
involvementinvolvement