Decision Making & Communication

Question 1

What is the rational choice paradigm? What are the two key elements of rational choice?

Answer 1

• effective decision makers identify, select, and apply the best possible alternative

Two key elements of rational choice

1. Subjective expected utility – determines choice with highest value (maximization)
2. Decision making process – systematic application of stages of decision making

Question 2

Six Steps of the Rational Choice Decision Process

Answer 2

1. Identify the problem or opportunity
2. Choose the best decision process.
3. Develop alternative solutions
4. Choose the best alternative
5. Implement the selected alternative
6. Evaluate decision outcomes

Question 3

What are the problems with the rational choice paradigm?

Answer 3

• people have difficulty recognizing problems
• people have difficult processing all the information necessary to reach the best solution
• people are influenced by cognitive and emotional biases

Question 4

What are the problem identification challenges?

Answer 4

1. Stakeholder framing
2. Mental models
3. Decisive leadership
4. Solution-focused problems
5. Perceptual defence

Question 5

What is stakeholder framing?

Answer 5

• stakeholders with vested interests try to “frame” the situation

Question 6

What are mental models?

Answer 6

• visual or relational images in our mind of the external world that can blind us from seeing unique problems or opportunities

Question 7

What is decisive leadership?

Answer 7

• people view leaders are more effective decision makers when they are decisive
• problems are announced before the situation is fully analyzed

Question 8

What is solution-focused problems?

Answer 8

• people define the problem based on the solution
• need for closure
• “when the only tool you have is a hammer, all problems resemble nails”

Question 9

What is perceptual defence?

Answer 9

• some people block bad news as a coping strategy, they refuse to see the information that threatens their self-concept

Question 10

What is paralyzed by choice?

Answer 10

• decision makers are less likely to make any decision at all as the number of options increases, they instead engage in “satisficing”…
• … or they make no choice at all, even when there are clear benefits of selecting any alternative (such as joining a company retirement plan

Question 11

How do emotions effect making choices?

Answer 11

• emotions form preferences before we consciously evaluate those choices
• moods and emotions influence how we evaluate information
• we ‘listen in’ on our emotions and use that information to make choices – we evaluate how we would feel if we made the choice x or y

Question 12

What is intuitive decision making?

Answer 12

• ability to know when a problem or opportunity exists and select the best course of action without conscious reasoning
• rapid non-conscious analysis, a “gut feeling”
• BUT, intuition also involves rapidly comparing our observations with relevant tacit knowledge acquired over time, i.e., with our mental models

Question 13

How do we make choices more effectively?

Answer 13

• systematically evaluate multiple alternatives minimizing implicit favourites and satisficing
• be aware of effects of emotions and moods on decision preferences and evaluation process
• scenario planning

Question 14

What is satisficing?

Answer 14

• selecting a “good enough” alternative

Question 15

What is escalation of commitment and what is it caused by?

Answer 15

• repeating or further investing in an apparently bad decision

Caused by:

1. self-justification (not wanting to admit failure to others)
2. self-enhancement effect (avoiding recognition of the problem to protect our sense of self)
3. Prospect theory effect (avoiding the pain of failure)
4. Sunk costs effect (value of resources – time and money – already invested)

Question 16

What is employee involvement in decision making?

Answer 16

• the degree to which employees influence how their work is organized and carried out
• potentially improves decision quality and commitment
• –employees are closer to the “action”
• –resources and knowledge are pooled
• –employees become more committed to the final decision

Question 17

What is communication?

Answer 17

• the process by which information is transmitted and understood between two or more people

Question 18

How to improve communication?

Answer 18

Both parties are motivated and able to communicate through specific channel
- face-to-face, written, etc.

Both parties have similar codebooks
- dictionaries of symbols, language, gestures, idioms, etc

Both parties share similar mental models of communication context

Send is experienced at communicating the message topic

Question 19

How has e-mail altered communication?

Answer 19

• it is now the preferred medium for coordinating work
• tends to increase communication volume while decreasing face-to-face communication
• alters the flow of information
• reduces stereotype biases

Question 20

What are the problems with e-mail?

Answer 20

Communicates emotions poorly.

Reduces politeness and respect

• no reflection before sending
• impersonal nature of e-mail

Inefficient for ambiguous, complex, novel situations.

Increases information overload.

Question 21

What is emotional contagion?

Answer 21

The automatic process of sharing another person’s emotions by mimicking their facial expressions and other nonverbal behaviour

Serves three purposes:

1. Provides continuous feedback to speaker
2. Increases emotional understanding of the other person’s experience
3. Communicates a collective sentiment – sharing the experience as part of a drive to bond

Question 22

What is media richness?

Answer 22

• a channel’s data-carrying capacity – volume and variety of information that can be transmitted
• -high richness when channel: conveys multiple cues; allows timely feedback; allows customized messages; permits complex symbols

Question 23

Media Richness Hierarchy

Answer 23

[Rich]
Face-to-face
Video conference
Telephone
Instant messaging
E-mail
Weblogs
Newsletters
Financial statements
[Lean]

Question 24

What is “noise”?

Answer 24

• all barriers that inhibit the effective flow of information

Question 25

Communication Process Model

Answer 25

1. Sender forms and encodes message
2. Messaged transmitted
3. Receiver receives encoded message and decodes it
4. Receiver forms feedback and encodes feedback
5. Feedback transmitted
6. Sender receives feedback and decodes feedback

Question 26

What are reasons for communication barriers?

Answer 26

Perceptions
- senders overestimate how well others understand the message

Filtering
- so that the message seems more favourable

Language

• jargon – not all are familiar
• ambiguity in all languages

Information Overload

Question 27

Differences in cross-cultural communication?

Answer 27

Verbal differences:

• language
• voice intonation
• silence/conversational overlaps

Nonverbal differences:
- some nonverbal gestures are universal, but others vary across cultures

Question 28

Active Listening Process

Answer 28

Sensing

• postpone evaluation
• avoid interruptions
• maintain interest

Evaluating

• empathize
• organize information

Responding

• show interest
• clarify the message