Decision-Making

Question 1

Individual Decision Making

models for IDM

Answer 1

Individual Decision Making

Herbert Simon: created two models of IDM

1. Rational-Economic Model: decision-makers maximize benefits by systematically searching for and considering all the possible alternatives before selecting the optimal one.
   
   1. use complete information about all possible alternatives and is able to process the information in an accurate unbiased way.
2. Bounded Rationality (administrative) Model: limited capabilities, time, resources and other constraints force desicion-makiers to be less than totally rational.
   
   1. satisfice rather than optimize or mazimize.
   2. consider solutions as they become available and then select the first solution that meets the minimum criteria of acceptability.

Question 2

Group Decision-Making

Answer 2

Group Decision-Making

in many situations, group decisions are better than decisions made by individuals.

better to be group decision when composed of individuals with heterogeneous skills and task is complex.

Conversely, individual decisions best for simple task with homogeneous skills set.

Question 3

Problems with Group Decision- Making

Groupthink

group polarization

Answer 3

Problems with Group Decision Making

1. groupthink: Janis (1982), suspension of critical thinking that can occur in highly cohesive groups. Especially when the leader is highly directive and group works under conditions of high stress.
2. illusion of invulnerability and unanimity
3. collective rationalization
4. unquestioned morality
5. excessive negative stereotyping
6. strong pressure to conform
7. self-appointed mindguards
8. self-consorship of dissenting views.

Leader can diminish groupthink by: encouraging skepticism and dissent among group members, appointing someone to play devil’s advocate,

bringing in outside opinions,

reducing time pressures to reach a solution,

and not stating his own opinion prior to a group discussion.!

Question 4

Group Polarization

Answer 4

Group Polarization

tendency for groups to make decisions that are more extreme (conservative/risky) in the direction of the views initially held by group members than decisions that would have been generated by individual members alone.

attributed to factors: effects of social comparison, mutual reinforcement, and diffusion of responsibility.

risky shift phenomenon: a shift in the direction of riskiness!

Question 5

Methods for improving group decision-making!

Answer 5

How to improve Group Decision Making

Osborn’s Brainstorming:

1. encrouaging group members to verblize all ideas that come to mind regardless of how absurd they may seem
2. requiring members to refrain from evaluating each other’s ideas until after the brainstorming is over

• not very effective or proven
• does not produce more or better ideas in the same amount of time than the same people doing it alone.
• Improved when: group members are heterogeneous in terms of KSAO, very familiar/friendly with each other, and have been adequately trained in brainstorming.

Question 6

Conflict Resolution

Answer 6

Conflict Resolution

functional conflict: can lead to improved productivity by increasing worker motivation, creativity, problem-solving and fostering positive change.

dysfunctional conflict: interferes with communication and performance, create a negative climate…etc.

Question 7

conflict resolution

bargaining

mediation

arbitration

Answer 7

Conflict Resolution

1. Bargaining (negotiation): most common method for resolving conflict in organizations. two sides making and revising offers/proposals
   
   1. less likely to be effective when any of the parties view it as a ‘win-lose’ situation in which gains by one party are countered by losses for another
   2. better when all parties view it as a ‘win-win’ situation in which benefits for all sides can be maximized.

Question 8

Mediation

Answer 8

If bargaining‘deadlocks’, a third-party intervention may be needed.

1. Mediation: a neutral third party uses various tactics to facilitate voluntary agreement.
2. mediator: can offer specific recommendations, they have no formal power and cannot impose a settlement.
3. mediator: clarifies issues that underlie the conflict, and open lines of communication.
   
   1. sets the stage (clarifying rules/collecting info)
   2. problem solving (posing issues/alternatives)
   3. achieving a workable agreement (pressuring the parties to reach agreement).

Question 9

Arbitration

Answer 9

Arbitrator: has more authority than a mediator and controls both the process and outcome of conflict resolution.

1. binding arbitration: two sides agree in advance to accept the settlement recommended by the arbitrator.
2. voluntary arbitration: parties agree only to the arbitration process.
3. conventional arbitration: the arbitrator is free to choose any settlement solution
4. final offer arbitration: the arbitrator must select one of the final offers made by the disputants.