July 10, 2014

Decision Making and Creativity in Decision Making - Review Notes

Organizational behavior revision article series

Decision making is almost universally defined as choosing between alternatives. It is closely related to all the management functions, planning, organizing and control. Chester Barnard started a meaningful analysis of the decision making process in organizations.  He pointed out that the process of making decision uses techniques for narrowing choices. Herbert A. Simon conceptualized three major phases in the decision-making process:
1. Intelligence activity
2. Design activity:  developing possible courses of action
3. Choice activity: Choosing an alternative from set of courses developed.

Mintzberg proposed three phases.
1. The identification phase
2. The development phase
3. The selection phase

Behavioral Aspects and Theory of Decision Making

Classical management theory operated under the assumption of rationality and certainty. But new behavioral decision theory is developed on the assumption that individuals have cognitive limitations and also because of the complexity of organizations and the world in general, they act in situations where uncertainty prevails and information is often ambiguous and incomplete.

The Social Model: At the opposite extreme is social model implied by Sigmund Freud's view of a man.  Sigmund Freud viewed humans as bundles of feelings, emotions, and instincts, and their behavior was guided largely by their unconscious desires. Even though, most contemporary psychologists would take issue with Freudian description of humans, almost all would agree that psychological influences have a significant impact on decision-making behavior. Further more, social pressures may cause managers to make irrational decisions.

Simon's Bounded Rationality Model

Judgmental Heuristics and Biases Model

1. The availability heuristic
2. The representativeness heuristic
3. The anchoring and adjustment heuristics

Decision Making Styles

Directive style

Low tolerance for ambiguity and orientation toward task and the technical concern. The decision makers like to exercise power, want to be in control, and in general display an autocratic leadership style.

Analytical style

Analytical decision makers have a high tolerance for ambiguity and a strong task and technical orientation

Conceptual style
The style combines high tolerance for ambiguity with strong people and social concerns.

Behavioral style
Low tolerance for ambiguity is combined with strong people and social concerns.

Participative Decision-Making Techniques

Problem of Pseudoparticipation: Some managers ask for participation, but whenever subordindates make a suggestion or try to provide some input into a decision, they are put down. If managers claim to want participation from their people but never let them become intellectually and emotionally involved and never use their suggestions, the results may be negative.


The process of creativity
According to noted creativity researcher Teresa Amabile, creativity is a function of three major components: expertise, creative-thinking skills, and motivation.

Expertise consists of knowledge: technical, procedural, and intellectual.
Creative thinking skills determine how flexibly and imaginatively people can deal with problems and make effective decisions.
Motivation is the inner passion to solve the problem at hand.

Creative people are better able to do things such as abstracting, imaging, synthesizing, recognizing patterns, and empathizing. They are also good intuitive thinkers. Intuitive thinking is coming out with ideas to solve problems where logical and known procedures are not giving any valid solution.

Psychological Definition and Analysis of Creativity

Psychological definition of creativity is that it involves combining responses or ideas of individuals or groups in novel ways.

Two widely recognize dimensions of creativity that help in explaining the creative process.

1. Divergent thinking: Ability to generate novel, but still appropriate, responses to questions and problems.

2. Cognitive complexity: This refers to a person's use of and preference for elaborate, intricate, and complex stimuli and thinking patterns.

Creativity techniques for Management Decision Making

A survey found that top managers are using creativity enhancing techniques like guided imagery, self-hypnosis, journal keeping, and lateral styles of thinking.

In some Japanese companies, employee creativity is managed or developed through deliberate structural means to develop the employee's motivation, job satisfaction and teamwork.

A recent technique called empathic design was used by certain companies. In this customers were photographed and studied to interpret their reactions in using existing products and services as well as proposed products, services and product and service features.

Group Decision Making

The Delphi Technique

The Nominal Group Technique

Silent generation of ideas in writing. Although more research is needed, there is some evidence that NGT-led groups come with many more ideas than traditional interacting groups.

July - Management Knowledge Revision

One Year MBA Knowledge Revision Plan

January  - February  - March  - April  - May   -   June

July  - August     - September  - October  - November  - December

Updated 10 July 2014, 4 Dec 2011

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