OTD Chapter 12

Question 1

Programmed decision-making

Answer 1

Decisions that are repetitive and routine.

Question 2

Non-programmed decision-making

Answer 2

Decisions that are novel and unstructured.

Question 3

The rational model

Answer 3

Claims that decision-making is a straightforward three-stages process:

Identify the problem, generate alternative solutions to the problem, select a solution and implement it.

Question 4

Three critizications regarding the rational model

Answer 4

• That decision makers have all the information they need. (information and uncertainty)
• That decision makers have the ability to make the best decision.
  (managerial abilities)
• That decision makers agree about what needs to be done.
  (preferences and values)

Question 5

Carnegie model

Answer 5

More realistic approach/model to decision-making (compared to the rational model).

Question 6

The Carnegie model recognises the effects of:

Answer 6

BOS

• Bounded rationality: limited capacity to process information.
• Organizational coalitions: variations in manager’s preferences and values. Managers will evaluate different alternatives differently.
• Satisficing: limited information searches to identify problems and alternative solutions.

Question 7

Incrementalist model

Answer 7

Programmed decision-making.

Managers’ tendency to choose those courses of actions that only slightly differ from this used in the past. Lessening the chances of making a mistake.

Often used in stable environments where managers can accurately predict movements.

Question 8

Unstructured model

Answer 8

Non-programmed decisions making.

Decision-making by this method takes place when uncertainty is high. Managers make decisions in a haphazard, intuitive way, and uncertainty forces them to re-examine their decisions continuously to find new ways to behave in a constantly changing environment.

Question 9

Garbage-Can Model

Answer 9

Turns the decision-process around and argues that managers are as likely to start decision making from the solution side as from the problem side.

They create a problem they can solve with solutions that are already available.

Question 10

Organizational learning

Answer 10

The process managers use to improve organization members’ capacity to understand and manage the organization and its environment so they can make decisions that continuously increase organizational effectiveness.

Question 11

Two principal types of organizational learning

Answer 11

1. Exploration

2. Exploitation

Question 12

Explorational organizational learning

Answer 12

Organizational members search for - and experiment with - new types and forms of organizational activities and procedures.

Question 13

Exploitative organizational learning

Answer 13

Organizational members’ learning of ways to refine and improve existing organizational activities and procedures.

Question 14

Learning organization

Answer 14

An organization that purposefully designs and constructs its structure, culture, and strategy so to enhance and maximize the potential for organizational learning to take place.

Question 15

Personal mastery (Senge)

Answer 15

Individual-level organizational learning.

Organizations should empower all employees and allow them to experiment one explore what they want.

Question 16

Group-level organizational learning

Answer 16

Managers encouraging learning by promoting the use of various kinds of groups - such as self-managed and cross-functional teams - so that employees can share or pool their skills and abilities to solve problems.

Team learning is more important than individual learning in promoting organizational learning.

Question 17

Organizational-level learning

Answer 17

Managers can provide learning here by the way they create its structure and culture.

Mechanistic organizational level learning: facilitates exploitative learning.
Organic organizational level learning: takes advantage of both types of learning.

Question 18

Adaptive cultures

Answer 18

Cultures that value innovation and encourage and reward experimentation and risk-taking by middle and lower-level managers.

Question 19

Inert cultures

Answer 19

Cultures that are cautious and conservative and do not encourage risk taking by middle and lower-level managers.

Question 20

Two types of cultures in terms of their ability to facilitate organizational learning

Answer 20

Adaptive cultures

Inert cultures

Question 21

Inter-organizational level learning (Serge)

Answer 21

Organizations improving their effectiveness by imitating each other’s distinctive competences.

System thinking: to create a learning organization, managers must recognise the effect of one level of learning on the others.

E.g., Japanese car maker coming to the U.S. to learn about the car manufacturing methods.

Question 22

Knowledge management

Answer 22

A type of IT-enabled organizational relationship that has important implications for both organizational learning and decision making.

Two approaches: codification and personalisation.

Question 23

Codification approach (knowledge management)

Answer 23

Bureaucratic control, only suitable if and when products or services are standardised.

Question 24

Personalization approach (knowledge management)

Answer 24

Is pursued when an organization needs to provide customised products or solutions to clients, when technology is changing rapidly, and when employees rely much more on know-how insights, and judgements to make decisions.

Question 25

Cognitive structure

Answer 25

System of beliefs, preferences, and values that develop over time and predetermine managers’ response to and interpretations of a situations. The way managers view a situation is ahead by their prior experience and customary way of thinking.

Question 26

Cognitive dissonance

Answer 26

The state of discomfort or anxiety a person feels when there is an inconsistency between his or her beliefs and actions.

Question 27

Illusion of control

Answer 27

A cognitive bias that causes managers to overestimate the extent to which the outcomes of an action are under their personal control.

Question 28

Frequency (cognitive bias)

Answer 28

Cognitive bias that deceives people into assuming that extreme instances of a phenomenon are more prevalent (widespread) than they really are.

Question 29

Representativeness bias

Answer 29

Cognitive bias that leads managers to form judgements abased on small and unrepresentative samples.

E.g., exposure to a couple of unreliable suppliers leading to managers thinking all suppliers are untrustworthy.

Question 30

Escalation of commitment (cognitive bias)

Answer 30

Cognitive bias that leads managers to to remain committed to a losing course of action and refuse to admit they have made a mistake.

Question 31

Projection (bias)

Answer 31

A cognitive bias that allows managers to justify and reinforce their own preferences and values by attributing them to others.

Managers project their own feelings of helplessness on the others and blame them.

Question 32

Ego-defensiveness bias

Answer 32

A genitive bias that leads managers to interpret events in such a way that their actions appear in the most favourable light.

Question 33

Ways to improve decision-making and learning

Answer 33

1. Listening to dissenters
2. Converting events into learning opportunities
3. Experimenting

Question 34

Listening to dissenters

Answer 34

Surrounding yourself with people who hold different, opposing views. Still, often managers surround themselves with flatterers who enhance good news and hide bad news.

Question 35

Converting events into learning opportunities

Answer 35

Re-designing structure and culture to find new opportunities.

Question 36

Experimenting

Answer 36

Generating new alternatives and testing the validity of old ones.

Question 37

Game theory

Answer 37

Interactions between organizations are viewed as a competitive game.

Sequential move game: e.g., chess.
Simultaneous move game: players act at the same time, ignorant of their rival’s current actions.

Question 38

Types of top-management teams

Answer 38

Wheel: top managers send all their information to the CEO, separately.
Circle: top managers from different functions interact with one another and with the CEO.

Question 39

Groupthink

Answer 39

The conformity that emerges when like-minded people reinforce one another’s tendencies to interpret events and information in a similar way.

Question 40

Devil’s advocate

Answer 40

A person who is responsible for critiquing on-going organizational learning.

Rational approach: problem identified > solution suggested > solution chosen.
Devil’s advocacy: problem identified ? solutions suggested > solutions challenged > solution chosen.
Dialectical inquiry: problem identified > solution suggested & solution suggested > solution chosen.