Ch.7 decision making and creativity

Question 1

What is the rational choice paradigm of decsision making ?

Answer 1

The View in decision making that people should - and typically do - use logic and all available information to choose the alternitive with the highest value

Question 2

Subjective expected utility ?

Answer 2

The probability (expectation) of satisfaction (utility) reulting from choosing a specific alternative in a decsion
(estimating the best possible alternative) (maximization)

Question 3

rational choice decision making process (6- steps)

Answer 3

1. identify problem or oppertunity
2. choose best decision process
3. discover/ develop alternative solutions
4. choose best alternative
5. implement the selected alternative
6. evaluate decision outcomes

Question 4

Problems with identification

stakeholder framing

Answer 4

Stakeholders filter info to amplify or suppress the seriousness of the situation to corporate decision makers because of their intrests

Question 5

Problems with identification

mental models

Answer 5

Our minds creates its own mental framing through preconcived mental models
(visual or relational images in our mind)
blind us from seeing problems or opportunities

Question 6

Problems with identification

decisive leadership

Answer 6

Being decisive includes quickly forming an opinion on weather an event signals a problem or opportunity.
Many leaders quickly announce problems or oppertunitys before having the chance to logically assess the situation

Question 7

Problems with identification

soulution-focused problems

Answer 7

Decision makers have the tendancy to define problems as veiled solutions. (it provides comforting closure to the otherwise ambiguous and uncertain problems

Question 8

Problems with identification

Perceptual Defence

Answer 8

Blocking out bad news as a coping mechanism.

inherently overlooking negative information

Question 9

Problems with the Rational Choice Paradigm

Answer 9

Impossible to apply in reality, the model assumes people are logical information processing machines. in reality people have diffuculty recoginzing the problems, and cannot simultaneously process huge volumes of information.

Question 10

Problem Identification challenges

Answer 10

influenced by cognitive and emotional biases

Question 11

Identifying problems or opportunities more effectively

Answer 11

Becoming aware of the five problem identification biases

for leaders to never be satisfied with “good enough” (maximization)

Question 12

what are the five problem identification biases

Answer 12

1. stakeholder framing
2. mental models
3. vdecisive leadership
4. soulution focused problems
5. perceptual defence

Question 13

what is bounded rationality?

Answer 13

the view that people are bounded un their decision making capabilities, including access to limited info, limited info pro, and a tendency toward satisfying rather than maximization when making choices

Question 14

Rational choice paradigm assumptions vs obeservations from O.B (Goals)

Answer 14

r.c: Goals are clear, compatible, and agreed upon

O.B:Goals are ambiguous, conflicting, and lack agreement

Question 15

Problems information processing (biased based heuristic’s)

Answer 15

People have built in decision heuristics that bias evaluation of alternatives

1. anchoring and adjustment heuristic
2. availibility heuristic
3. representativeness heuristic

Question 16

Problems with maximization

Answer 16

people tend to satitisfice rather then Maximize, people choose the first alternitive that is “good enough”.

Question 17

Paralyzed by choice

Answer 17

when presented with a large. number of complex choices people are more likely to not make a choice at all

Question 18

emotions and making choices (3 ways emotions affect the evaluation of alternatives)

Answer 18

1. emotions from preference before we fully evaluate the 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

Question 19

Intuition

Answer 19

Ability to know when a problem or opportunity exists and select the best course of action without conscious reasoning

Question 20

intuition and decision making

Answer 20

gut feelings are emotional signals, but not all emotions signal intution
intuition relies on action scripts: it shortens the decision making process by jumping from problem identification to selection of a soulution

Question 21

ways to make choices more effectivley

Answer 21

• systematicly evaluate alternatives against relevant factors
• Be aware of effects of emotions on decision prefrences and the evaluation process
• scenario planning (planning for future environments or complications)

Question 22

what is Escalation of commitment ?

Answer 22

the tendency to repeat an apparently bad decision or allocate more resources to a failing course of action.

Question 23

what causes esclation of commmitment

Answer 23

• self justification: trying to appear rational and effectively continuing to invest
• prospect theory effect: feeling more dissatisfaction from losses than satisfaction from gaining
• closing costs ( financial and reputation decreased from a failure in a project)

Question 24

conformation bias in decision making

Answer 24

-inflate positive qualities of selected option, downplay rejected alternatives
(caused by the need to maintain a positive self concept)

Question 25

Ways to evaluate decisions more effectiivly

Answer 25

• Separate decision makers from those who will later evaluate the decisions
• establish a preset level to abandon the project
• find clear feedback
• involve lots of people in the evaluation process

Question 26

creativity

Answer 26

• the the development of original ideas that make a socially recognized contribution
• creativity applies to all aspects of the decision making process (problems alternatives, solutions)

Question 27

the creativity process model

Answer 27

1. preparation ( investigating a problem or opportunity)
2. incubation (generating difffrent approches to the issue)
3. illumoination (lightbulb)
4. verification (logical evaluation)

Question 28

four charicteristics of creative people.

Answer 28

1. Cognitive and practical intelligence
2. Persistance
3. Knowledge and experience
4. Independent imagination

Question 29

creative work environments include

Answer 29

-learning orientation, encourages experimentation, tolerates mistakes
- intrinsically motivating work, feedback, interesting work, autonomy
- open communication and sufficient resources
competition and pressure to a certain extent

Question 30

activities that encourage creativity

Answer 30

1. redefining the problem.
   - review old projects, explore issues with others
2. associative play
   - story telling, artistic activities
3. cross-pollination
   - diverse teams, info sharing,

Question 31

employee involvment in decision making

Answer 31

different levels (low-high)
1.decide alone 
2.recive info from others
3. consult with others 
4.consult with a team 
5.facilitate team decisions 
varies from situation to situation

Question 32

emplyee involvement

Answer 32

• the degree to which employees influence how their work is organized and carried out
• diffrent levels and forms of involvement

Question 33

outcomes of employee involvement

Answer 33

• better problem identification
• more/better solutions
• better at choosing the best choice
• higher decision commitment

Question 34

contingencies of employee involvement

Answer 34

higher employee involvement is better when:

1. decision structure (problem is new and complex)
2. Knowledge source (employees have relevant knowledge beyond leader)
3. decision commitment: employees would lack commitment unless involved
4. risk of conflict (norms support firms goals, employee engagement likely)