Slide 1Slide 2Slide 3Slide 4Slide 5Slide 6Slide 7Slide 8Slide 9Slide 10Improving Decision Making Through Effective Knowledge ManagementGeneral Decision Making StylesSlide 13Slide 14Escalation of CommitmentSlide 16Slide 17Group decision-makingSlide 19Group Problem Solving TechniquesSlide 21More Formal Group Problem Solving TechniquesSlide 23Chapter NineNineMaking DecisionsMaking DecisionsChapter Nine OutlineChapter Nine OutlineModels of Decision MakingModels of Decision Making•The Rational Model•Simon’s Normative ModelDynamics of Decision MakingDynamics of Decision Making•Contingecny Model of Decision Making•Improving Decision Making•General Decision-Making Styles•Escalation of Commitment•CreativityGroup Decision MakingGroup Decision Making•Advantages and Disadvantages of Group-Aided Decision Making•Participative Management•When to Have Groups Participate in Decision Making: The Vroom/Yetton/Jago Model•Group Problem-Solving TechniquesChapter Nine Outline Chapter Nine Outline (continued)(continued)9-2•Consists of a structured four-step sequenceConsists of a structured four-step sequence * identifying the problem * generating alternative solutions * selecting a solution * implementing and evaluating the solutionThe Rational Model of Decision The Rational Model of Decision MakingMaking•Based on the notion of bounded rationality, Based on the notion of bounded rationality, i.e. decision makers face a variety of i.e. decision makers face a variety of constraintsconstraints•Decision making is characterized byDecision making is characterized by * limited information processing * use of judgmental heuristics (rules, shortcuts) * satisficingSimon’s Normative Model of Simon’s Normative Model of Decision MakingDecision MakingAvailability Heuristic:Availability Heuristic: A decision maker’s tendency to base decisions on information that is readily available in memory.Representativeness Heuristic:Representativeness Heuristic: The tendency to assess the likelihood of an event occurring based on one’s impressions about similar occurrences..Judgmental HeuristicsJudgmental HeuristicsSatisficing:Satisficing: Choosing a solution that meets a minimum standard of acceptanceJudgmental Heuristics (cont)Judgmental Heuristics (cont)Strategies toStrategies toselect a solutionselect a solution* Aided analytic* Unaided-analytic* NonanalyticCharacteristics of Decision Task:Characteristics of Decision Task:The decision problemThe decision problem* Unfamiliarity* Ambiguity* Complexity*InstabilityThe decision environmentThe decision environment*Irreversibility* Significance *Accountability* Time and/or money constraintsCharacteristics of Decision MakerCharacteristics of Decision Maker* Knowledge * Ability * Motivation* Risk Propensity* Decision Making Style GeneratingGeneratingalternativesalternativesA Contingency Model for Selecting a A Contingency Model for Selecting a SolutionSolution1.1.Analytic Strategies are used when the Analytic Strategies are used when the decision problem is unfamiliar, ambiguous, decision problem is unfamiliar, ambiguous, complex, or unstablecomplex, or unstable2.2.Nonanalytic methods are employed when the Nonanalytic methods are employed when the problem is familiar, straightforward, or problem is familiar, straightforward, or stable.stable.3.3.Assuming there are no monetary or time Assuming there are no monetary or time constraints, analytic approaches are used constraints, analytic approaches are used when the solution is irreversible and when the solution is irreversible and significant and when the decision maker is significant and when the decision maker is accountable.accountable.4.4.Nonanalytic strategies are used when the Nonanalytic strategies are used when the decision can be reversed and is not very decision can be reversed and is not very significant or when the decision maker is not significant or when the decision maker is not held accountable.held accountable.Contingency Relationships in Decision Contingency Relationships in Decision MakingMaking5.5.As the probability of making a correct As the probability of making a correct decision goes down, analytic strategies are decision goes down, analytic strategies are used.used.6.6.As the probability of making a correct As the probability of making a correct decision goes up, nonanalytic strategies are decision goes up, nonanalytic strategies are employed.employed.7.7.Time and money constraints automatically Time and money constraints automatically exclude some strategies from being used.exclude some strategies from being used.8.8.Analytic strategies are more frequently used Analytic strategies are more frequently used by experienced and educated decision by experienced and educated decision makers.makers.9.9.Nonanalytic approaches are used when the Nonanalytic approaches are used when the decision maker lacks knowledge, ability, or decision maker lacks knowledge, ability, or motivation to make a good decision.motivation to make a good decision.Contingency Relationships in Decision Contingency Relationships in Decision Making (cont)Making (cont)Improving Decision Making Through Effective Knowledge ManagementSytems and practices that increase the sharing of knowledge and information Types of knowledgeTacit knowledge – intuition, experience, natural abilitiesExplicit knowledgeExplicit knowledge requires access to large amounts of information; tacit knowledge is obtained through observation, mentoring, collaboration, etc.General Decision Making StylesBased on how one perceives and comprehends stimuli and chooses to respondValue orientation – task and technical concerns or people and social concernsTolerance for ambiguity – need of structure or controlAnalytical ConceptualDirective BehavioralTasks and TechnicalTasks and TechnicalConcernsConcernsPeople and SocialPeople and SocialConcernsConcernsValue OrientationValue OrientationLowLowHighHighTolerance for AmbiguityTolerance for AmbiguityDecision Making StylesDecision Making Styles9-8Hands on Exercise• Which of the four styles best represents your decision-making style? Which is least reflective of your style?• How do your scores compare with the following norms: directive (75), analytical directive (75), analytical (90), conceptual (80), (90), conceptual (80), and behavioral (55)behavioral (55)?• What are the advantages and disadvantages of your decision-making style?What is Your
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