KIN 464 1st EditionLecture 5Outline of Current Lecture I. The Rational Approach Problem Solving and Decision-Making II. Limitations of Rational Decision MakingIII. Creative Problem Solving & Decision MakingIV. Group Decision-MakingCurrent LectureI. The Rational Approach Problem Solving and Decision-Making:a. Rational problem solving and decision-making requires:i. Utilizing a structured methodology.ii. Goal of rational decision-making is to optimize.iii. Applying creativity to the problem solving / decision making process.iv. Identify key leadership skills required for collaborative problem solving.b. Seven Steps in Rational Decision-making Approachi. Step 1: Clearly identify the problem (not the symptom).1. “a problem defined is a problem half solved” 2. Your definition of the problem guides your solutionii. Step 2: List all the facts??? pertinent to the problem1. Be careful about limiting ideas based on limiting assumptions2. Always be aware of paradigms (sacred cows) that we unconsciously cling to because our assumptions keep us in the box (assumption reversal)3. “The real voyage of discovery consists not in seeking new landscapes, but in having new eyes” - Marcel Proustiii. Step 3: List alternative courses of action to solve the problemiv. Step 4: List advantages and disadvantages of each alternativev. Step 5: Review all of the abovevi. Step 6: Draw conclusions, make recommendations and/or decisionsvii. Step 7: Take action to solve problem. Follow-up after the decision has beenimplemented to ascertain if the desired results have been achieved II. Limitations of Rational Decision Making:a. Rational decision-making is generally considered superior to intuitive approach in most situations, but it has limitations.i. Decision-makers are not always objective ii. Often do not have all the factsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.iii. Can be easily influenced by emotions or prejudicesiv. May not consider all available alternativesv. May not evaluate available information properly vi. “Listen to your gut, no matter how good something sounds on paper” (Donald Trump)vii. “I never get the accountants in before I start up a business. It’s done on gut feeling” (Richard Branson)viii. I’ve never met an HR manager who didn’t know his company’s attrition rate. But I’ve never met one who knew his company’s regrettable attrition rate” (Peter Tingling, a decision theory specialist at Simon Frazer University)b. The principle of bounded rationality, developed by Nobel Prize Scholar Herbert A. Simon recognizes that decisions are not always made rationally and logically. It states:“The capacity of the human mind for formulating and solving complex problems is very small compared with the size of the problems whose solutions are required for objectively rational behavior or even for a reasonable approximation to such objective rationality.”c. Simon suggests that people do not exhaustively search for the optimum alternative(optimizing) but instead select the first alternative that meets some minimum standard of satisfaction. This is called satisficing.i. Satisficing – From Simon’s administrative model on how decisions are actually made – instead of searching for the optimum solution, people will select the first alternative that meets some minimum standard of satisfaction for all parties involved. ii. Optimizing – selecting the best possible alternative in light of all known facts, considerations and options. This is a more ideal approach.d. Determining factor in which rational decision-making approach is used = time to gather information, formulate alternatives and decideIII. Creative Problem Solving & Decision Making:a. As we grow older we become LESS CREATIVE:i. Age 5- 98% creativityii. Age 7- 68% creativityiii. Age 12> -24%iv. As we socialize we notice that some ideas are unwelcome and we are less likely to voice out ideas in fear of being ridiculed.v. As a manager you must try and make the environment as comfortable as possible for people to voice their creativityb. Make it a practice to keep on the lookout for novel and interesting ideas that others have used successfully. Your idea has to be original only in its adaptation to the problem you are working on” - Thomas Edison c. “successfully or unsuccessfully e.g. post-it-notesd. Leadership plays a critical role in either facilitating or inhibiting creativitye. Leaders either…i. Support novel solutions and risk-taking, or…ii. Form an unsupportive atmosphere where people are unwilling to take risks.IV. Group Decision-Makinga. A participative management approachb. Advantagesi. Pooling of thoughts, experiences and ideas of many ii. “two heads are better than one.”iii. “people support what they help create”iv. More information, more alternatives, and heightened creativity and innovationv. Better understanding of the problem and decision – makes implementation easier.vi. Greater commitment to the decision.vii. Improved morale and motivation.viii. Good trainingc. Disadvantagesi. Can be time consuming and the group decision nearly always is based on compromise. ii. Conformity and groupthinkiii. Group can be dominated by one memberiv. Members may not be qualified to deal with the current problemv. Personalities of members may clashvi. Time constraintsd. The three best known techniques to stimulate group creativity are:i. Brainstorming 1. A method to generate many ideas in a short period of time. 2. Usually a small group of people are presented with a problem, and asked to recommend solutions. 3. The purpose is to generate a large quantity of ideas, from which, one or two may be acceptable. ii. Synectics1. Similar to brainstorming, with a leader to encourage the group to bemore creative.iii. Nominal Group Process1. Each group member works alone to prepare a list of ideas or possible solutions to the problem. 2. Each member then presents his/her solutions to the group. 3. The group vote privately on each other’s ideas and rank order the