Chapter 10 Decision Making by Individuals and GroupsDawn Ostroff’s Decision Making at the CW Television NetworkKnowledge ObjectivesFundamentals of Decision MakingDecision-Making ProcessOptimal versus Satisfactory DecisionsDecision-Making StylesSlide 8Gathering InformationIntuition StyleEvaluating AlternativesNurturing Alternative Decision StylesDegree of Acceptable RiskCognitive BiasesMount Everest ExpeditionsGroup Decision MakingSlide 17Group Decision-Making PitfallsVroom-Yetton MethodWho Should Decide?Slide 21Slide 22Vroom-Yetton Model and the Civil WarValue of Individual vs. Group Decision MakingSlide 25The Strategic LensQuestions10-1Michael A. HittC. Chet MillerAdrienne ColellaChapter 10 Decision Decision Making by Making by IndividualsIndividualsand Groupsand GroupsSlides by Ralph R. Braithwaite10-2Dawn Ostroff’s Decision Making Dawn Ostroff’s Decision Making at the CW Television Networkat the CW Television NetworkDawn Ostroff•What are your thoughts about Ostroff’s decision-making process regarding programming at the “new” network?•Given the nature of the decisions needed, did she used the knowledge and wisdom of her advisors wisely?•What are your thoughts about the “creative and somewhat risky tactics” that were adopted?•Do you think the network will survive and be successful in the future?Exploring Behavior in Action10-3Knowledge ObjectivesKnowledge Objectives1. Describe the fundamentals of decision making, including the basic steps and the need to balance ideal and satisfactory decisions.2. Discuss four important decision-making styles, emphasizing the effectiveness of each one.3. Explain the role of risk-taking propensity and reference points.4. Define cognitive bias and explain the effects of common types of cognitive bias on decision making.5. Discuss common pitfalls of group decision making.6. Describe key group decision-making techniques.7. Explain the factors managers should consider in determining the level of associate involvement in managerial decisions.10-4Fundamentals of Decision Fundamentals of Decision MakingMakingDecisions are choices of actions from among multiple feasible alternatives.Making decisions is one of the primary activities of senior managers.Decisions are also made by managers at all levels and by associates in high-involvement organizations.10-5Decision-Making ProcessDecision-Making ProcessAdapted from Exhibit 10-1: The Decision-Making ProcessDefine the ProblemIdentify CriteriaGather and Evaluate DataList and Evaluate AlternativesSelect Best AlternativeImplement and Follow UpFeedback10-6Optimal versus Satisfactory Optimal versus Satisfactory DecisionsDecisionsOptimal decision Satisficing decision10-7Decision-Making StylesDecision-Making StylesCarl JungIndividuals’ predispositions can affect decision process at two critical stagesGathering Gathering (Perceiving) (Perceiving) of Informationof InformationSensing styleSensing styleIntuition styleIntuition styleEvaluating Evaluating (Judging) of (Judging) of AlternativesAlternativesThinking styleThinking styleFeeling styleFeeling style10-8Decision-Making Decision-Making StylesStylesAdapted from Exhibit 10-2: Influence of Decision StylesImplement and Follow UpPerceptual InfluencesIntuitionSensingJudgmental InfluencesFeedbackIdentify CriteriaGather and EvaluateInformationList and Evaluate AlternativesSelect Best AlternativeDefine the ProblemUsing abstractions and describing the “big picture”Using the five senses to identify factual detailsFeelingThinkingSubjective values with emotional and personal factorsObjective analysis, rational procedures10-9Gathering InformationGathering InformationSensingSensingA decision style focused on gathering concrete information directly through the senses, with an emphasis on practical and realistic ideas.IntuitionIntuitionA decision style focused on developing abstractions and figurative examples for use in decision making, with an emphasis on imagination and possibilities.10-10Intuition StyleIntuition StyleValuable when:•A high level of ambiguity exists•Few or no precedents exist•Facts are limited•Facts don’t clearly indicate which way to go•Time is limited and there is pressure to make the right decision•Several plausible alternative solutions exist with good arguments for each10-11Evaluating AlternativesEvaluating AlternativesThinkingThinkingA decision style focused on objective evaluation and systematic analysis.FeelingFeelingA decision style focused on subjective evaluation and the emotional reactions of others.10-12ManagerialAdviceNurturing Alternative Nurturing Alternative Decision StylesDecision StylesWhat are your thoughts about the comment that many accountants believe that more data is better and they hide behind “a mass of data”?What are your thoughts that some marketers have “blind spots” when it comes to having to do data analysis?What are you thoughts about the Six Thinking Hats concept of Edward de Bono?Edward de Bono10-13Degree of Acceptable RiskDegree of Acceptable Risk•Risk exists when the outcome of a chosen course of action is not certain•Risk-taking propensity (Willingness to take chances)Reference Point10-14Cognitive BiasesCognitive BiasesConfirmation biasSeeking information that confirms early beliefs and ideasEase of recall biasRelying too much on information that is easy to recall from memoryAnchoring biasEmphasizing too much the first piece of information encounteredSunk-cost biasNot treating past investments (time, effort, money) as sunk-costs when deciding to continue an investmentCognitive BiasesMental shortcuts involving simplified ways of thinking10-15ExperiencingStrategic OBMount Everest ExpeditionsMount Everest ExpeditionsGeorge Mallory (R) and Andrew Irvine•What role do “sunk costs” play in many decisions?•Why would someone like Rob Hall ignore his pre-determined turnaround time?•Have you experienced the “perils of sunk cost” in your work or personal lives? Give examples.Rob HallSir Edmund Hillary (L) and Tenzing Norgay10-16Group Decision MakingGroup Decision Making•Some members may arrive with their own expectations, problem definitions, and pre-determined solutions•Some members may have given more thought to the decision situation and what is to be accomplished•Focus of the team leader may be in developing a collaborative team rather than developing individual decision making skills10-17Decision-Making ProcessDecision-Making ProcessAdapted from Exhibit
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