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The Basic Decision Making Models  Administrative Process John Pisapia www.TheStrategicL;eader.org John Pisapia Administrat...
Why? <ul><li>The work of managers, of scientists, of engineers, of lawyers--the work that steers the course of society and...
Key concepts:  BARRIERS TO EFFECTIVE DECDISIONMAKING <ul><li>Factors that influence decisions </li></ul><ul><ul><li>Choice...
Activity #1 Match the quote with the concept <ul><li>Anchoring and adjusting </li></ul><ul><li>Choice shift </li></ul><ul>...
<ul><li>Rational Decision  Process </li></ul><ul><li>Satisficing  </li></ul><ul><li>Muddling Through </li></ul><ul><li>Rec...
The Rational Model
Satisficing Model <ul><ul><li>Theory  - People are  restricted  in the information needed to make a decision. Bounded rati...
© Hoy, 2003 Muddling Through Model <ul><ul><li>Theory  - Muddling is a method of successive limited comparisons; a strateg...
Recognition Primed Decision Model (RPD) ) <ul><li>Theory  – Future  oriented decision making model  Quick decisions in Com...
What decision -making model should  I use? Adapted from Hoy, 2003 Decision  Opportunity No No No No No No No Yes Yes Yes Y...
Personal Take-Aways <ul><li>Every decision has a price (a.k.a. consequences) </li></ul><ul><li>In many cases price is obsc...
Take-Aways <ul><li>Interpersonal Take-Aways </li></ul><ul><li>When decisions affect others – impossible to please all </li...
References <ul><li>Osland, J., Kolb, D., Rubin, I., Turner, M. (2007).  Organizational Behavior: An Experiential Approach ...
Pisapia & Glick-Cuenot (2010)
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Basic Decision making Models

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Basic Decision making Models

Basic Decision making Models

  1. 1. The Basic Decision Making Models Administrative Process John Pisapia www.TheStrategicL;eader.org John Pisapia Administrative Processes
  2. 2. Why? <ul><li>The work of managers, of scientists, of engineers, of lawyers--the work that steers the course of society and its economic and governmental organizations--is largely work of making decisions and solving problems. It is work of choosing issues that require attention, setting goals, finding or designing suitable courses of action, and evaluating and choosing among alternative actions. </li></ul><ul><li>The first three of these activities--fixing agendas, setting goals, and designing actions--are usually called problem solving ; the last, evaluating and choosing, is usually called decision making . </li></ul><ul><li>Herbert Simon, Nobel Laureate 1988 </li></ul><ul><li>We all face decision making situations Life of leaders – decisions, decisions, decisions, … </li></ul><ul><li>DecisionMaking Problem Solving </li></ul>www.TheStrategicLeader.org
  3. 3. Key concepts: BARRIERS TO EFFECTIVE DECDISIONMAKING <ul><li>Factors that influence decisions </li></ul><ul><ul><li>Choice shift – group discussion, exaggeration, extremes </li></ul></ul><ul><ul><li>Groupthink – cohesive group seeks consensus, clouds objectivity </li></ul></ul><ul><ul><li>Escalation of commitment – continued commitment of resources to a failing course of action </li></ul></ul><ul><li>Common decision biases </li></ul><ul><ul><li>Anchoring and adjusting </li></ul></ul><ul><ul><li>Representativeness </li></ul></ul><ul><ul><li>Availability </li></ul></ul><ul><ul><li>Overconfidence </li></ul></ul><ul><ul><li>Bounded awareness </li></ul></ul><ul><ul><li>Emotional involvement </li></ul></ul><ul><ul><li>Self-serving reasoning </li></ul></ul>www.thestrategicleader.org
  4. 4. Activity #1 Match the quote with the concept <ul><li>Anchoring and adjusting </li></ul><ul><li>Choice shift </li></ul><ul><ul><li>Groupthink </li></ul></ul><ul><li>Escalation of commitment </li></ul><ul><li>Representativeness </li></ul><ul><li>Availability </li></ul><ul><li>Overconfidence – </li></ul><ul><li>Bounded awareness </li></ul><ul><li>Emotional involvement </li></ul><ul><li>Self-serving reasoning </li></ul><ul><li>The first answer is the only answer and there is no other!” </li></ul><ul><li>“ I’m sticking to my idea!” </li></ul><ul><li>“ Go with the flow.” </li></ul><ul><li>“ It won’t fail this time if we try harder.” </li></ul><ul><li>“ If it looks like this, then it will happen like this!” </li></ul><ul><li>“ This is more important because I remember it!” </li></ul><ul><li>“ I’m always right!” </li></ul><ul><li>“ That’s not relevant to me, so forget it!” </li></ul><ul><li>“ My friends always have great ideas!”“My enemies always have terrible ideas!” </li></ul><ul><li>“ If it was a good idea, then it was my idea!”“If it was a bad idea, then it wasn’t my fault!” </li></ul>www.TheStrategicLeader.org
  5. 5. <ul><li>Rational Decision Process </li></ul><ul><li>Satisficing </li></ul><ul><li>Muddling Through </li></ul><ul><li>Recognition Primed Decision (RPD) </li></ul><ul><li>Garbage Can </li></ul><ul><li>Leader Participation </li></ul>What? Theory - The Basic Models:
  6. 6. The Rational Model
  7. 7. Satisficing Model <ul><ul><li>Theory - People are restricted in the information needed to make a decision. Bounded rationality is present therefore select the first alternative that is minimally acceptable. </li></ul></ul><ul><ul><li>Assumptions -people: </li></ul></ul><ul><ul><ul><li>Definition of situation and available - information is incomplete and inadequate </li></ul></ul></ul><ul><ul><ul><li>Have limited information needed for decision </li></ul></ul></ul><ul><ul><ul><li>Engage in limited search for solutions </li></ul></ul></ul><ul><ul><ul><li>Settle for less optimal solutions </li></ul></ul></ul><ul><ul><li>Actions : Managers </li></ul></ul><ul><ul><ul><li>are comfortable in making decision without first examining all alternatives </li></ul></ul></ul><ul><ul><ul><li>accept a “good enough” decision because cost are too great otherwise – bounded discretion </li></ul></ul></ul><ul><ul><ul><li>use management shortcuts in making decisions </li></ul></ul></ul>www.TheStrategicLeader.org
  8. 8. © Hoy, 2003 Muddling Through Model <ul><ul><li>Theory - Muddling is a method of successive limited comparisons; a strategy of evolution. </li></ul></ul><ul><ul><li>Assumptions </li></ul></ul><ul><ul><li>2 types - Objectives are not necessary; objectives are necessary </li></ul></ul><ul><ul><li>Trial and error--small incremental changes--until noise subsides. </li></ul></ul><ul><ul><li>Make changes, compare to existing state, then decide next move . </li></ul></ul><ul><ul><li>Actions – </li></ul></ul><ul><ul><li>Small, limited set of alternatives is considered: all options are similar to the existing situation. </li></ul></ul><ul><ul><li>The decision maker decides on an option, considers the consequences, and if reasonable, then moves down that path. </li></ul></ul><ul><ul><li>If the difficulties subside, continue on that path </li></ul></ul><ul><ul><li>If the difficulties persist, then a different option is pursued and the direction changed. </li></ul></ul>
  9. 9. Recognition Primed Decision Model (RPD) ) <ul><li>Theory – Future oriented decision making model Quick decisions in Complex situations- Based on pattern recognition cues </li></ul><ul><ul><li>Assumptions – able to: </li></ul></ul><ul><ul><li>Recognize salient features of problem </li></ul></ul><ul><ul><li>Generate possible course – </li></ul></ul><ul><ul><li>Compare to constraints of situation </li></ul></ul><ul><ul><li>Select first course of action that is not rejected. </li></ul></ul><ul><ul><li>Actions </li></ul></ul><ul><ul><li>If Then - - Recognize situation as typical – and know course of action - effective with experienced users </li></ul></ul><ul><ul><li>IF??? . .Then - more concerned with situation rather than CA - sees patterns that are not relevant </li></ul></ul><ul><ul><li>IF - Then ??? - more concerned with action and reaction </li></ul></ul><ul><ul><li>the user’s experience is too focused in one area or has been distorted by uncommon results </li></ul></ul><ul><ul><li>IF??? – Then??? - the user lacks experience in general </li></ul></ul>
  10. 10. What decision -making model should I use? Adapted from Hoy, 2003 Decision Opportunity No No No No No No No Yes Yes Yes Yes Yes Yes Yes Sufficient Information? Important? Sufficient Time? Important? Important? Important? RPD Muddling Satisficing RPD Muddling Sufficient Time? Muddling Satisficing Rational How?
  11. 11. Personal Take-Aways <ul><li>Every decision has a price (a.k.a. consequences) </li></ul><ul><li>In many cases price is obscure </li></ul><ul><li>Do it if you are willing to pay the price </li></ul><ul><li> Process is Important </li></ul>How? www.thestrategicleader.org
  12. 12. Take-Aways <ul><li>Interpersonal Take-Aways </li></ul><ul><li>When decisions affect others – impossible to please all </li></ul><ul><ul><li>Whatever decision you make – some people will be happy and some will not </li></ul></ul><ul><ul><li>Build and maintain a trusting decision making environment – will keep the zone of acceptance broad </li></ul></ul><ul><ul><li>Better to make a decision that is informed and satisfies your conscience </li></ul></ul><ul><li>Organizational Take-Aways </li></ul><ul><li>Different approaches for different situations </li></ul>www.TheStrategicLeader.org
  13. 13. References <ul><li>Osland, J., Kolb, D., Rubin, I., Turner, M. (2007). Organizational Behavior: An Experiential Approach (8th ed) pp. 468-488. Upper Saddle River, NJ: Pearson Education Inc. </li></ul><ul><li>Pisapia, J. (1998). Decision Making and Problem Solving . Working paper. </li></ul><ul><li>Trout, J. (1999). The Power of Simplicity. New York: McGraw Hill, Inc. </li></ul>www.TheStrategicLeader.org
  14. 14. Pisapia & Glick-Cuenot (2010)

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