CH. 7 Decision Making & Creativity

Elements of rational choices
1.Subjective expected utility -determines choice with highest value (maximization)

2.Decision making process – systematic stages of decision making

Rational Decision Making Process
1. identify problem or opportunity
2. choose best decision process
3. discover or develop alternatives
4. select choice w/ highest value
5. implement the selected choice
6. evaluate the selected choice
Five problem identification challenges
Stakeholder framing
Decisive leadership
Solution-focused problems
Perceptual defense
Mental models
Making Choices Rational v. OB observations
review diagram on pg. 194
anchoring and adjustment heuristic
We are anchored by and don’t move far from an initial anchor point (e.g. opening bid)
availability heuristic
we estimate probabilities by how easy we can recall the event, even though other factors influence ease of recall
representativeness heuristic
we estimate probability of something by its similarity to something known rather than by more precise statistics
Emotions and Making Choices
-Emotions form preferences before we consciously evaluate those choices
-Moods and emotions influence how well we follow the decision process
-We ‘listen in’ on our emotions and use that information to make choices
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
Evaluating Decisions better
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
Creative Process Model
Creative Process Model
characteristics of creative people:

Independent imagination

cognitive & practical intelligence

subject knowledge/
experience

persistence

Creative Work Environments
-Learning orientation
Encourage experimentation
Tolerate mistakes
-Intrinsically motivating work
Task significance, autonomy, feedback
-Open communication and sufficient resources
-Unclear/complex effects of team competition and time pressure on creativity
The view that people should and typically do use logic and all available information to choose the alternative with the highest value is known as:
A) subjective expected utility maximization.
B) the rational choice paradigm.
C) bounded rationality.
D) decision making.
E) intuition.
B. rational choice paradigm
A nonprogrammed decision is applicable in any:
A) routine situation where the company has a ready-made solution.
B) decision that does not relate directly to the employee’s job description.
C) nonroutine situation in which employees must search for alternative solutions.
D) decision that is clearly within the employee’s job description.
E) decision that affects the employee’s performance.
C) nonroutine situation in which employees must search for alternative solutions.
One school of management thought states that organizational decisions and actions are influenced mainly by what attracts management’s attention, rather than by the objective reality of the external or internal environment. Which of the following practices is closely associated with this argument?
A) Rational choice paradigm
B) Programmed decision making
C) Perceptual defense
D) Decisive leadership
E) Stakeholder framing
E. stakeholder framing
The concept of bounded rationality holds that:
A) our perception of a rational reality is bounded by nonrationality.
B) decision makers process limited and imperfect information and therefore rarely select the best choice.
C) decision makers have limited alternatives to make decisions.
D) decision makers are bound to project images of themselves as rational thinkers.
E) our realities are bounded by our own perceptions so that everyone’s reality is different.
B) decision makers process limited and imperfect information and therefore rarely select the best choice.
The most accurate view of intuition is that it is:
A) a trait that people acquire mainly through heredity.
B) more likely to be found in men than women.
C) acquired more quickly by people whose careers extend to several unrelated industries.
D) the ability to know when an opportunity exists and select the best course of action without conscious reasoning.
E) an unacceptable way of making decisions in an organizational setting.
D) the ability to know when an opportunity exists and select the best course of action without conscious reasoning.
Which of the following statements is true about scenario planning?
A) It is unwittingly selective in the acquisition and use of evidence.
B) It is the process of planning a solution based on employee preferences.
C) It is a disciplined method for imagining possible futures.
D) It is an act of reframing the problem in a unique way and generating different approaches to the issue.
E) It is the act of calculating the conventionally accepted right answer to a logical problem.
C) It is a disciplined method for imagining possible futures.
Which of the following refers to calculating the conventionally accepted “right answer” to a logical problem?
A) Divergent thinking
B) Convergent thinking
C) Logical validity
D) Escalation of commitment
E) Confirmation bias
B. convergent thinking
What do impromptu storytelling, morphological analysis, and artwork have in common?
A) They are forms of cross-pollination.
B) They increase the risk of bounded rationality.
C) They are forms of associative play.
D) They significantly weaken the creative process.
E) They used mainly to improve the rational choice process.
C. They are forms of associative play.
Which of the following is the lowest level of employee involvement?
A) Consult with individuals
B) Ask employees for specific information
C) Describe the problem to employees and ask for information
D) Create a team to make the decision
E) Create a team to make recommendations
B. ask employees for specific information
Employees should NOT make the decision alone (without the manager’s involvement) when:
A) their goals and norms conflict with the organization’s objectives.
B) they lack commitment to decisions made by the boss alone.
C) they possess more knowledge than the manager.
D) the employees are likely to disagree with each other regarding the preferred solution.
E) the problem calls for a nonprogrammed decision.
A. their goals and norms conflict with the organization’s objectives.