BA 208 Chapter 8 power point

1. 10 e
Chapter 8
Problem Solving, Decision
Making, and Creativity
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Learning Objectives, 1
• Identify the steps in the rational model of decision making
• Discuss ways people make compromises in following the
decision-making model
• Describe guidelines for making decisions
• Explain how probability theory, decision trees, and computer
software can help in making decisions

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Learning Objectives, 2
• Discuss advantages and disadvantages of making decisions in
groups
• Describe guidelines for group decision making
• Describe guidelines for thinking creatively
• Discuss how supervisors can establish and maintain a creative
work climate
• Identify ways to overcome barriers to creativity

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Decision Making
• Much of a supervisor’s job is making decisions that cover all
the functions of management
• In many cases, supervisors make decisions without giving any
thought to the process of deciding

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Figure 8.1: Rational Model of Decision Making
Jump to Figure 8.1: Rational Model of Decision Making, Appendix

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Human Compromises That Affect Rational
Decision Making, 1
Simplicity: Looking back at one’s experiences and considering
ways one has handled similar problems in the past
Bounded rationality: Choosing an alternative that meets
minimum standards of acceptability
• Decision maker considers alternatives only until the one with
minimum criteria for acceptability is found
Subjective rationality: Analyzing alternatives based on intuition
and gut instincts instead of collecting impartial data

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Figure 8.3: Process of Bounded Rationality
Jump to Figure 8.3: Process of Bounded Rationality, Appendix

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Human Compromises That Affect Rational
Decision Making, 2
Rationalization: Favoring solutions believed to be justifiable to
others
• Interferes with good decisions when the decision maker focuses
more on justifying an alternative than on weighing alternatives
against previously defined criteria
Personal perspective: Assuming that everyone sees things from
the same perspective
Recency syndrome: Tendency to remember events that have
occurred recently
Stereotyping: Generalized, fixed images of others

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Guidelines for Decision Making
• Consider the consequences
• Respond quickly in a crisis
• Inform the manager
• Be decisive yet flexible
• Avoid decision-making traps

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Decision-Making Traps
• Treating every decision like a crisis
• Responding inappropriately to failure
• Overlooking precedent
• Promising too much
• Assuming that only one choice is right

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Tools for Decision Making, 1
Probability theory: Body of techniques for comparing the
consequences of possible decisions in a risk situation
• Supervisor needs to know or be able to estimate the value of each
possible outcome and the probability that this outcome will occur
in order to use the theory
Decision tree: Graph that helps decision makers use the
probability theory by showing the expected values of decisions
in varying circumstances
• Decision maker estimates the probability of each chance event
occurring
• To find the expected value of each outcome, the decision maker
multiplies the probability by the value of the outcome

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Tools for Decision Making, 2
Computer software
• Decision-making software: Computer program that leads the user
through the steps of the formal decision-making process
• Asks the user about his or her values and priorities
• Supervisor may use spreadsheet or database management software
to sort information

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Group Decision Making
Advantages
• Group members can contribute more ideas for alternatives than an
individual could think of alone
• People involved in coming up with a solution are likely to support
the implementation of that solution
Disadvantages
• An individual can usually settle on a decision faster than a group
• There is a cost to organizations when employees spend their time in
meetings instead of producing or selling
• Domination by a subgroup or one person can lead to an inferior
decision
• Groups can fall victim to groupthink

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Groupthink
Failure to think independently and realistically as a group
because of the desire to enjoy consensus and closeness
Symptoms
• Illusion of being invulnerable
• Defending the group’s position against any objections
• View that the group is clearly moral
• Stereotyped view of opponents
• Pressure against group members who disagree
• Self-censorship
• Illusion that everyone agrees
• Existence of self-appointed mindguards

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Overcoming Groupthink
Supervisors should:
• Draw forth a variety of viewpoints by inviting suggestions and
encouraging group members to listen with an open mind
• Appoint one group member to act as devil’s advocate

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Using Group Decision Making, 1
Group decision making should be used when:
• Support for a decision is needed
• Consequences of a poor decision are great
Group decision making should not be used when:
• Decisions have to be made quickly
• Cost of working in a group is not justifiable
Supervisor can have a group either make the decision or simply
provide input, leaving more decision-making responsibility to the
supervisor

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Using Group Decision Making, 2
All group members should be encouraged to participate
• Supervisors should:
• Avoid monopolizing the conversation
• Notice when participants are quiet and ask for their opinions
• React positively when people contribute ideas
Supervisors should encourage generation of ideas through
brainstorming and brain-writing

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Figure 8.6: The Brainstorming Process
Jump to Figure 8.6: The Brainstorming Process, Appendix

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Creativity
Ability to bring about something imaginative or new
• When a problem seems unsolvable, supervisors need creativity to
find a fresh approach
Steps for initiating creative ideas
• Clear away any major sources of stress
• Research what other people and organizations have done in similar
situations
• Introduce as many new situations and changes in day-to-day life
• Set up some meetings to talk out the issue with others
• Bring in new faces

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Establishing and Maintaining a Creative Work Climate
Supervisors should:
• Establish a work climate that encourages creative thinking
• Listen attentively and look for positive aspects when employees
offer suggestions
• Attempt to implement employees’ ideas and give them credit
• Acknowledge failure as a sign that people are trying
• Help employees see what can be learned from a failure

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Overcoming Barriers to Creativity
Supervisors should:
• Accept that failures by employees will occur
• Acknowledge the problem when an idea fails and not try to pass
the blame on to someone else
• Allow time for creative thinking
• Avoid isolation

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Scientific Method in Decision Making: Steps
• Watch for any signs or symptoms of problems or issues
• Define the problem as best as possible given the information
known
• Collect as much information as possible about the problem
and, if necessary, redefine the problem
• Search for possible solutions and alternatives
• Collect information about all the alternatives identified and
organize it in a logical way
• Weigh the pros and cons of each alternative
• Choose, plan, and then put into action the best alternative
• After the solution is implemented, follow up to determine if it
is having the desired effect