Chapter 7 - Decision making and Creativity Flashcards
Define Decision Making.
The conscious process of making choices among alternatives with the intention of moving towards some desired state of affairs.
Define rational choice paradigm.
During decision making when people use logic and all of the available information to choose the alternative with the highest value.
Define subjective expected utility (SEU).
The probability (expectancy) of satisfaction (utility) resulting from choosing a specific alternative in a decision.
What are the 2 pieces of information that all rational choice decisions rely on?
- The valence or expected satisfaction of outcomes (utility).
- The probability of those good or bad outcomes occurring (expectancy) by choosing that particular alternative.
Rational choice decision-making process.
- Identify problem or opportunity.
- Choose the best decision process.
- Discover or develop possible choices.
- Select the choice with the highest value.
- Implement the selected choice.
- Evaluate the selected choice.
What is the most important step in decision making?
Identifying problems and opportunities.
-Problems are conclusions that we form from ambiguous and conflicting information.
List the problems with problem identification…
- Stakeholder Framing - information are highly selective, thus decision makers sees this as a problem.
- Solution-focused problems - seeking out solutions while defining the problem.
- Decisive Leadership - leaders announcing problems or opportunities before having a chance to logically assess the situation.
- Perceptual Defence - screen out information that threatens our self-concept.
- Mental Models - we only imagine how things should happen.
Define bounded rationality.
The view that people are bounded in their decision-making capabilities, including having access to limited information, limited information processing and tendency towards satisfying rather than maximising when making choices.
What’s the problem with goals?
Organisational goals are often ambiguous or in conflict with each other.
What are the problems with information processing?
- Decision makers do not process ALL information about all alternatives and their consequences.
- Decision makers asses alternatives sequentially rather than all at the same time partly because all the alternatives are not usually available to the decision maker at the same time.
- And as a new alternative comes alone it is compared to an implicit favourite. (bias)
Define implicit favourite.
A preferred alternative that the decision maker uses repeatedly as a comparison with other choices.
Define heuristic.
Enabling a person to discover or learn something for themselves.
Explain Anchor and adjustment heuristic.
We are influence by an initial anchor point and do not sufficiently move away from that point as new information is provided.
Explain Availability heuristic.
The tendency to estimate the probability of something occurring by how easily we can recall those events.
*we recall emotional events more clearly.
Explain Representativeness heuristic.
We pay more attention to whether something resembles something else than t more precise statistics about its probability.
Define Satisficing.
Selecting an alternative that is satisfactory or ‘good enough’, rather than the alternative with the highest value (maximisation).
What do people Satisfice?
- Decision makers rely on sequential evaluation of new alternatives against an implicit favourite.
- Decision makers lack the capacity and motivation to process the huge volume of information required to identify the best choice.
How do Emotions affect the evaluation of alternatives?
- Emotions form early preferences - emotions. not rational logic. energise us to make the preferred choice.
- Emotions change the decision evaluation process - emotions/mood shape how we evaluate information, not just which choice we make.
- Emotions serve as information when we evaluate alternatives - ‘emotions as information’
Define intuition.
The ability to recognise when a problem/opportunity exists and to select the best course of action without conscious reasoning.
What are some strategies we could use to make choices more effectively?
- Use intuition in combination with careful analysis of relevant information (rather than decisive leadership).
- Deliberately revisit important issues later so that information is processed whilst experiencing a different mood.
- Scenario planning - thinking about what would happen if a significant environmental condition changed and what the organisation should do to anticipate and react to such an outcome.
Define escalation of commitment.
the tendency to repeat an apparently bad decision or allocate more resources to a failing course of action.
Explain the Self-Justification effect.
Appearing to be rational and competent while making a decision to convey a positive public image.
Explain the Self-Enhancement effect.
People feel better about themselves regarding things that are important to them.
-This supports a positive self-concept but it also increases the risk to escalation to commitment.
Define Prospect theory effect.
A natural tendency to feel more dissatisfaction from losing a particular amount than satisfaction from gaining an equal amount.
Define Sunk costs.
A cost that an entity has incurred, and which it can no longer recover by any means.
-Sunk costs should not be considered when making the decision to continue investing in an ongoing project, since you cannot recover the cost
What are ways to evaluate decision outcomes more effectively?
- Separation of roles minimises the self-justification effect.
- Publicly establish a pre-set level at which the decision is abandoned or re-evaluated.
- Find a source of systematic and clear feedback.
- To involve several people in the evaluation. Thus co-workers will continuously monitor each other and might notice problems sooner than someone working alone on a project.
Define Creativity.
The development of a original ideas that make a socially recognised contribution.
Define divergent thinking.
Reframing a problem in a unique way and generating different approaches to the issue.
What is the Creative Process Model.
- Preparation - developing knowledge and possibly skills about the issue or object of attention.
- Incubation - maintain a low-level awareness; come back to it.
- illumination - flickering ideas; must be written down or they can be quickly lost.
- Verification -further creativity as the ideas evolve into finished products or services.
What are some characteristics of creative people?
- Cognitive and practical intelligence - know the significance of small bits of info and are able to connect them in creative ways.
- Persistence - high need for achievement. strong task motivation. never give up.
- Knowledge and experience - try to ignore mental model.
- Independent Imagination - high openness to experience. low need for affiliation. strong personal values of self-direction and stimulation.
What is the most important condition to support creative practice in a an organisation?
- Learning orientation - leaders recognise that employees make reasonable mistakes as a part of the creative process.
- Motivation - employees tend to be more creative when they believe their work benefits the organisation and/or larger society
-»_space; jobs encourage creativity when they are challenging and aligned with the employees competencies.
List the activities that encourage creativity in an organisation.
- Redefining the problem (revisiting old projects).
- Asking people who are unfamiliar with the issue (different expertise) to explore the problem with you. - Associative play - literally in engaging in playful activities.
- Morphological analysis - involves listing different dimensions of a system and the elements of each dimension and then looking at each combination. - Cross-pollination - people from different areas of the organisation, exchange ideas.
Define Employee involvement.
The degree to which employees influence how their work is organised and carried out.
Compare the different types of involvement.
A low level of involvement occurs where employees are asked individually for specific information but the problem is not described to them.
A higher level of involvement occurs when the problem is described to them but the employees are still not entitled to make the final decision.
The highest level of involvement occurs when the entire decision-making process is handed over to employees.
What are the benefits of employee involvement?
- Improves the identification off problems and opportunities.
- Improve the number and quality of solutions generated.
- Under specific conditions, it improves the evaluation of alternatives.
- Along with improving the decision quality, involvement tends to strengthen employee commitment to the decision.
- Has positive effects n employee motivation, satisfaction and turnover. It increases skill variety, feelings of autonomy and task identity, all of which increase job enrichment and potentially employee motivation.
What are the 4 contingencies of employee involvement?
- Decision structure - Employee involvement increases with the complexity of the problem or opportunity.
- Source of Decision Knowledge - Subordinates should be involved in some level of decision making when the leader lacks sufficient knowledge and subordinates have additional information to improve decision quality.
- Decision commitment - participation tends to improve employees commitment to the decision.
- Risk of Conflict
a) if employee goals and norms conflict with the organisation’s goals.
b) the degree of involvement depends on whether employees will agree on the preferred solution.
