Post on 30-Dec-2015
Decision Making and Creativity
McGraw-Hill/IrwinMcShane/Von Glinow OB 5e Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Decision Making at Google
Google is a hotbed of creativity and innovation by giving staff 20 percent of their time to work on pet projects, using evidence-based experiments to test ideas, and involving employees in organizational decisions.
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Decision Making Defined
Decision making is a
conscious process of
making choices among
one or more alternatives
with the intention of moving
toward some desired state
of affairs.
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Rational Choice Decision Process
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Rational Choice Decision Process
Identify problem/opportunity• Symptom vs problem
Choose decision process• e.g. (non)programmed
Develop/identify alternatives• Search, then develop
Choose best alternative• Subjective expected utility
Implement choice Evaluate choice
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Problem Identification Process
Problems and opportunities are not announced or pre-defined
Use logical analysis and nonconscious emotional reaction during perceptual process
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No Problem, Houston?
NASA’s space shuttle Columbia
disintegrated during re-entry, killing
all seven crewmembers. A special
accident investigation board
concluded that NASA’s middle
management continually resisted
attempts to recognize that the
Columbia was in trouble, and
therefore made no attempt to
prevent loss of life.
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Problem Identification Challenges Stakeholder framing
Perceptual defense
Mental models
Decisive leadership
Solution-focused problems
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Identifying Problems Effectively1. Be aware of perceptual and
diagnostic limitations
2. Fight against pressure to look decisive
3. Maintain “divine discontent” (aversion to complacency)
4. Discussing the situation with colleagues -- see different perspectives
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more
Making Choices: Rational vs OB Views
Goals are ambiguous, conflicting, and lack agreement
Goals are clear, compatible, and agreed upon
People are able to calculate all alternatives and their outcomes
People evaluate all alternatives simultaneously
People have limited information processing abilities
People evaluate alternatives sequentially
Rational Choice Paradigm
Assumptions
Observations from Organizational
Behavior
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Making Choices: Rational vs OB Views
People evaluate alternatives against an implicit favorite
People use absolute standards to evaluate alternatives
People make choices using factual information
People choose the alternative with the highest payoff (SEU)
People make choices using perceptually distorted information
People evaluate alternatives sequentially
Rational Choice Paradigm
Assumptions
Observations from Organizational
Behavior
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Biased Decision Heuristics
People have built-in decision heuristics that bias evaluation of alternatives
1. Anchoring and adjustment – initial information (e.g., opening bid) influences evaluation of subsequent information
2. Availability heuristic – we estimate probabilities by how easy we can recall the event, but other factors influence ease of recall
3. Representativeness heuristic -- we estimate probabilities by how much they represent something (e.g. stereotypes) in spite of better probability info
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Paralyzed by Choice
Research has found that when
decision makers are presented with
more options, they are less likely to
make any decision at all. This
paralysis of choice occurs even
when there are clear benefits of
selecting any alternative (such as
joining a company retirement plan).
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Emotions and Making Choices
1. Emotions form preferences before we consciously evaluate those choices
2. Moods and emotions influence how well we follow the decision process
3. We ‘listen in’ on our emotions and use that information to make choices
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Intuitive Decision Making
Ability to know when a problem or opportunity exists and select the best course of action without conscious reasoning
Intuition as emotional experience• Gut feelings are emotional signals• Not all emotional signals are intuition
Intuition as rapid nonconscious analysis• Uses action scripts
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Making Choices more Effectively
1. Systematically evaluate alternatives against relevant factors
2. Be aware of effects of emotions on decision preferences and evaluation process
3. Scenario planning
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Postdecisional Justification
Tendency to inflate quality of the selected option; forget or downplay rejected alternatives
Results from need to maintain a positive self-identity
Initially produces excessively optimistic evaluation of decision
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Escalation of Commitment
The tendency to repeat an apparently bad decision or allocate more resources to a failing course of action
Four main causes of escalation:• Self-justification• Prospect theory effect• Perceptual blinders• Closing costs
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Evaluating Decisions More Effectively
1. Separate decision choosers from evaluators
2. Establish a preset level to abandon the project
3. Find sources of systematic and clear feedback
4. Involve several people in the evaluation process
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Involvement at Thai Carbon Black
Thai Cabon Black, the Thai-Indian joint venture, relies on employee involvement to boost productivity and quality.
Employees submit hundreds of suggestions in little red boxes located around the site
Participatory management meetings are held every month
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Employee Involvement Defined
The degree to which employees influence how their work is organized and carried out
Different levels and forms of involvement
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Employee Involvement Model
Potential Involvement Potential Involvement OutcomesOutcomes
Contingenciesof Involvement
Employee Employee InvolvementInvolvement
Better problem identification
Synergy produces more/better solutions
Better at picking the best choice
Higher decision commitment
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Contingencies of Involvement
Knowledge Knowledge SourceSource
Decision Decision CommitmentCommitment
• Employees have relevant knowledge beyond leader
• Employees would lack commitment unless involved
Risk ofRisk ofConflictConflict
1. Norms support firm’s goals2. Employee agreement likely
Decision Decision StructureStructure
• Problem is new & complex(i.e nonprogrammed decision)
Higher employee involvement is better when:
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Going for WOW at Nottingham-Spirk
Team members at Nottingham-Spirk Design Associates Inc.
give coworker Craig Saunders (standing) a “WOW” rating for
one of the firm's creative products, the SwifferVac.
Nottingham-Spirk’s work environment supports creativity.
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Creativity Defined
Developing an original idea that makes a socially recognized contribution
• Applies to all aspects of the decision process – problems, alternatives, solutions
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Preparation
Incubation
Insight
Verification
Creative Process Model
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Characteristics of Creative People
Above average intelligence
Persistence
Relevant knowledge and experience
Independent imagination traits• Higher openness to experience personality• Lower need for affiliation motivation• Higher self-direction/stimulation values
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Creative Work Environments
Learning orientation• Encourage experimentation• Tolerate mistakes
Intrinsically motivating work• Task significance, autonomy, feedback
Open communication and sufficient resources
Team competition and time pressure have complex effect on creativity
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Creative Activities
• Review abandoned projects
• Explore issue with other people
Redefinethe Problem
•• Storytelling
• Artistic activities
• Morphological analysis
AssociativePlay
•• Diverse teamsDiverse teams
•• Information Information sessionssessions
• Internal Internal tradeshowstradeshows
Cross-Pollination
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Decision Makingand Creativity
McGraw-Hill/IrwinMcShane/Von Glinow OB 5e
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Solutions to Creativity Brainbusters
McGraw-Hill/IrwinMcShane/Von Glinow OB 5e
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Double Circle Problem
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Nine Dot Problem
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Nine Dot Problem Revisited
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Word Search
FCIRVEEALTETITVEERS
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Burning Ropes
One Hour to Burn Completely
After first rope burnedi.e. 30 min.
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