Week 6 Decision Making and Creativity

Question 1

Rational choice paradigm of decision making

Decision making: the _____ process of making _____ among with the intention of moving towards some desired state of affairs.

Answer 1

conscious, choices, alternatives

Question 2

There are Two key elements of rational choice paradigm:

Answer 2

Subjective expected utility - determines choice with highest value (maximisation)
Decision-making process - systematic application of stages of decision making

Question 3

Rational choice paradigm of decision making

Definition: the view in decision making that people should – and typically do – use logic and all available information to choose the alternative with the highest value

Answer 3

Rational choice paradigm:

Question 4

Rational choice paradigm of decision making

Definition: Ultimate principle of rational choice paradigm is to choose the alternative with the highest _____ _____ _____ – the probability (expectation) of satisfaction (utility) resulting from choosing a specific alternative in a decision.

Answer 4

subjective expected utility

Question 5

There are 7 steps in the Rational Choice Decision-Making Process

Answer 5

1. Identify problem or opportunity - Symptom vs problem
2. Choose the best decision process
3. Discover or develop possible choices.
4. Discover or develop possible choices
5. Select the choice with the highest value
6. Implement the selected choice
7. Evaluate the selected choice

Question 6

What are 3 Problems with rational choice paradigm

Answer 6

1. Assumes that people are efficient and logical information processing machines
2. Focuses on logical thinking and completely ignores emotions.
   3 People have difficulty recognising problems and failures and cannot simultaneously process huge volumes of information.

Question 7

Identifying Problems and Opportunities - Problems with problem identification

What are the 5 most widely recognised concerns

Answer 7

Stakeholder framing
Mental models
Decisive leadership
Solution-focused problems
Perceptual defence

Question 8

Name that problem

_______ ______: The process where ______ filter information to amplify or suppress the seriousness of the situation, which highlights/hides specific problems and opportunities.

Answer 8

Stakeholder framing: stakeholders

Question 9

Name that problem

_____ _____: inhibit recognition of unique problems or opportunities because they product a negative evaluation of things that are dissimilar to the mental model

Answer 9

Mental models

Question 10

Name that problem

_____ _____: Even though employees rate this type of person as more affective, due to being able to quickly form an opinion about a problem or opportunity, studies have found that quicker decisions don’t always allow for logical assessment

Answer 10

Decisive leadership

Question 11

Name that problem

_____ _____ _____: Occurs when all problems seen as solutions that have worked well in the past, even though circumstances are different

Answer 11

Situation-focused problems

Question 12

Name that problem

_____ _____ _____: Occurs when a person blocks out bad news as a defence/coping mechanism

Answer 12

Perceptual defence

Question 13

1. Be aware of perceptual and diagnostic limitations
2. Fight against pressure to look decisive
3. Maintain ‘divine discontent’ (aversion to complacency)
4. Discuss the situation with colleagues—see different perspectives.

These are all ways of:

Answer 13

Identifying problems and opportunities more effectively

Question 14

Evaluating and choosing alternatives

Which Nobel Prize winner argued that

People engage in bounded rationality – the view that people are bounded in their decision-making capabilities, including access to limited information, limited information processing and a tendency to practice satisficing rather than maximising when making choices.

Answer 14

Herbert Simon

Question 15

Rational choice paradigm assumptions vs.

Goals are clear, compatible and agreed upon

Answer 15

Observations from organisational behaviour

Goals are ambiguous, in conflict and lack full support

Question 16

Rational choice paradigm assumptions vs.

Decision makers can calculate all alternatives and their outcomes

Answer 16

Observations from organisational behaviour

Decision makers have limited information-processing abilities

Question 17

Rational choice paradigm assumptions vs.

Decision makers evaluate all alternatives simultaneously

Answer 17

Observations from organisational behaviour

Decision makers evaluate alternatives sequentially

Question 18

Rational choice paradigm assumptions vs.

Decision makers use absolute standards to evaluate alternatives

Answer 18

Observations from organisational behaviour

Decision makers evaluate alternatives against implicit favourite

Question 19

Rational choice paradigm assumptions vs.

Decision makers use factual information to choose alternatives

Answer 19

Observations from organisational behaviour

Decision makers process perceptually distorted information

Question 20

Rational choice paradigm assumptions vs.

Decision makers choose the alternative with the highest pay-off

Answer 20

Observations from organisational behaviour

Decision makers choose the alternative that is good enough (satisficing)

Question 21

Problems with information processing

Decision makers typically evaluate alternatives sequentially rather than simultaneously. Each alternative is compared to an _____ _____

Answer 21

implicit favourite

Question 22

Problems with information processing

Definition: a preferred alternative that the decision maker uses repeatedly as a comparison with other choices.

Answer 22

implicit favourite

Question 23

What are non-conscious modes of reasoning or rules of thumb

Answer 23

Biased decision heuristics

Question 24

Name 3 widely studied heuristics biases

Answer 24

Anchoring and adjustment heuristic
Availability heuristic
Representativeness heuristic

Question 25

a natural tendency for people to be influenced by an initial anchor point such that they do not sufficiently move away from that point as new information is provided

Answer 25

Anchoring and adjustment heuristic

Question 26

Decision quality will often be enhanced by the use of systematic evaluation, where relevant factors are listed and alternatives scored against each one. Why is this so?

Answer 26

Humans are not able to process all the information in their heads

Question 27

Name that Biased decision heuristic A natural tendency to assign higher probabilities to objects or events that are easier to recall from memory, even though ease of recall is also affected by non-probability factors (e.g. emotional response, recent events)

Answer 27

Availability heuristic

Question 28

Name that Biased decision heuristic It has natural tendency to evaluate probabilities of events of objects by the degree to which they resemble (are representative of) other events or objects rather than on objective probability information

Answer 28

Representativeness heuristic

Question 29

Problems with maximisation _____: selecting an alternative that is satisfactory or ‘good enough’ rather than the alternative with the highest value (maximisation)

Answer 29

Satisficing

Question 30

Problems with maximisation _____ _____: Decision makers do not evaluate alternatives when they find an opportunity because they see the opportunity as the solution

Answer 30

Evaluating opportunities

Question 31

Emotions influence our evaluation of alternatives when they are used as information. T or F

Answer 31

True

Question 32

Mental models hinder which step in the decision-making process?

Answer 32

Identifying problems and opportunities A mental model colours the way in which a person looks at the world; this can inhibit the ability to see opportunities which are unusual or outside the range of normal activity. Mental models make it hard to abandon views of the world which no longer apply in changed circumstances, thus hiding problems and opportunities. Mental models also produce a negative evaluation of things that are dissimilar to the mental model.

Question 33

Emotions affect the evaluation of alternatives in three ways.

Answer 33

1. Emotional markers influence our preference for certain alternatives 2. More attention is given to alternatives when we are in a negative mood 3. Anger can encourage the choice of risky alternatives

Question 34

Which feature of intuition is most likely to be helpful in making good decisions

Answer 34

Access to tacit knowledge

Question 35

Intuition is just another word for emotion

Answer 35

False The key distinction is that intuition involves rapidly comparing our observations with deeply held patterns learned through experience. These templates represent tacit knowledge that has been implicitly acquired over time. They are mental models that help us to understand whether the current situation is good or bad, depending on how well that situation fits our mental model. When a template fits or doesn't fit the current situation, emotions are produced that motivate us to act.

Question 36

After the best solution has been chosen, what is the next step in the rational choice decision-making process?

Answer 36

Implement the selected alternative

Question 37

Emotions and making choices 1. Emotions form early _____ before we can _____ evaluate those choices 2. _____ and _____ influence how well the decision making process is followed 3. Emotions serve as information when _____ are evaluated – We listen in our emotions and use that info to assist in making choices

Answer 37

perceptions, consciously, Moods, emotions, alternatives

Question 38

When a problem is defined as 'we need more control over our suppliers' it reflects

Answer 38

Solution focused problems

Question 39

Subjective expected utility is characterised by its:

Answer 39

Expectation of satisfaction Maximisation of happiness Highest returns and satisfaction for stakeholders

Question 40

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

Answer 40

Intuition It is both an emotional response and a rapid, unconscious, analytic process, but not all emotional signals are intuition

Question 41

Making choices more effectively 1. _____ evaluate alternatives against relevant factors 2. Remember that decisions are influenced by both _____ and _____ processes 3. _____ _____: a systematic process of thinking about alternative futures and what the organisation should do to anticipate and react to those environments

Answer 41

Systematically, rational and emotional, Scenario planning

Question 42

Implementing decisions and evaluating decision outcomes Decision makers aren’t completely honest with themselves when evaluating effectiveness of decisions. One problem associated with this is _____ _____ (also known as post-decisional justification) which is selectivity in the acquisition and use of evidence.

Answer 42

confirmation bias

Question 43

Implementing Decisions This is one of the most important and challenging tasks of leaders

Answer 43

Execution—translating decisions into action—

Question 44

Evaluating Decision Outcomes Post-decisional justification - is the tendency to inflate the quality of the selected option, and forget or downplay rejected alternatives. Caused by???

Answer 44

Caused by need to maintain a positive self-concept | Initially produces excessively optimistic evaluation of decision

Question 45

Escalation of Commitment The tendency to repeat an apparently bad decision or allocate more resources to a failing course of action There are Four main causes of escalation:

Answer 45

Self-justification Prospect theory effect Perceptual blinders Closing costs

Question 46

Name that cause of escalation. _____ _____: This cause of justification in in the demonstration the importance of a decision by continuing to invest in it

Answer 46

Self-justification

Question 47

Name that cause of escalation. _____ _____ _____A natural tendency to feel more dissatisfaction from losing a particular amount than satisfaction from gaining an equal amount

Answer 47

Prospect theory effect:

Question 48

Name that cause of escalation. _____ _____: non-conscious screening out/explaining away negative information

Answer 48

Perceptual blinders:

Question 49

Name that cause of escalation. Closing costs: terminating a project may incur financial penalties

Answer 49

Closing costs:

Question 50

4 Ways of Evaluating Decisions More Effectively

Answer 50

Separate decision choosers from evaluators Establish a preset level to abandon the project Find sources of systematic and clear feedback Involve several people in the evaluation process

Question 51

Creativity Creativity is defined as:

Answer 51

The development of original ideas that make a socially recognised contribution

Question 52

The creative process model There are 4 steps in the creative process

Answer 52

1. Preparation 2. Incubation 3. Illumination 4. Verification 1. Preparation: process of investigating the problem or opportunity in many ways 2. Incubation: assists divergent thinking – reframing a problem in a unique way and generating different approaches to the issue; contrasts with convergent thinking – calculating the conventionally accepted ‘right answer’ to a logical problem 3. Illumination: also known as insight 4. Verification: ideas are subjected to logical evaluation

Question 53

Characteristics of creative people Four of the main characteristics represent a person’s creative potential that give individuals more creative potential are

Answer 53

1. Independent Imagination 2. Cognitive and Practical Intelligence 3. Persistance 4. Knowledge and experience

Question 54

Organisational conditions supporting creativity Intelligence, persistence, knowledge and experience, and independent imagination represent a person’s creative potential, but the extent to which this translates into more creative output depends on work environment:

Answer 54

- Learning orientation: leaders recognise reasonable mistakes as part of the creative process - Motivation: more creative when employees believe job benefits organisation - Authority to experiment - Open communication and sufficient resources - Reasonable level of job security - Support from leaders and co-workers - Creating intrinsically motivating jobs

Question 55

Activities that encourage creativity 1. Hiring people with strong _____ potential 2. Providing work environment that supports creative _____ 3. Various activities that help employees to think more creatively: a. _____ the problem: revisit abandoned projects, explore issue with other people b. _____ play: storytelling, artistic activities, c. Morphological analysis: listing different dimensions and elements of each dimension and then looking at different combinations d. Cross-_____: diverse teams, information sessions, internal tradeshows

Answer 55

creative, thinking, Redefining, Associative, pollination Learning orientation in the organisation Forgiveness for mistakes Creating intrinsically motivating jobs Open communication and sufficient resources A reasonable level of job security Support from leaders and co-workers

Question 56

Employee involvement in decision making Definition: the degree to which employees influence how their work is organised and carried out

Answer 56

Employee involvement

Question 57

Main levels (from lowest to highest) of Employee involvement in decision making include:

Answer 57

- Decide alone - Receive information from others - Consult with individuals - Consult with the team - Facilitate the team’s decision

Question 58

Benefits of employee involvement

Answer 58

Improves decision-making quality and commitment Faster alerting of problems re customer expectations Improve number and quality of generated solutions Improves evaluation of alternatives

Question 59

Contingencies of employee involvement

Answer 59

Contingencies of employee involvement --> Employee Involvement --> Outcomes of employee involvement

Question 60

The 4 Contingencies of employee involvement

Answer 60

Decision structure Knowledge source Decision commitment Risk of conflict

Question 61

Name that Contingencies of employee involvement : benefits of employee involvement increase with novelty/complexity of problem or opportunity

Answer 61

Decision structure

Question 62

Contingencies of employee involvement _____ _____: employees may have more relevant knowledge than leader

Answer 62

Knowledge source

Question 63

Contingencies of employee involvement _____ _____: employees lack commitment when not involved

Answer 63

Decision commitment

Question 64

Contingencies of employee involvement _____ of _____: goals and norms (individual) should support organisational goals; employee agreement should be likely in high involvement situations.

Answer 64

Risk of conflict

Question 65

Bounded rationality challenges the assumptions of rational decision making - Information is often limited and imperfect and people process information imperfectly - Goals are often unclear - Some decisions are more difficult than others - People are content to satisfice rather than maximise

Answer 65

Information is often limited and imperfect and people process information imperfectly

Question 66

What is the name for a procedure which involves thinking about the implications of a significant environmental change and what could be done to anticipate this

Answer 66

Scenario Planning

Question 67

The tendency to recommit resources to a project which seems to be failing is known as:

Answer 67

Escalation of Commitment

Question 68

More diverse perspectives, better solutions and quicker recognition of problems are all evidence of:

Answer 68

Employee involvement

Question 69

In models of creativity, in problem solving and decision making, there is one common critical step

Answer 69

Obtaining Information

Question 70

Everyone is creative. Which of these is an element of the work environment that supports the creative process

Answer 70

Learning orientation