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Chapter 12 - Individual and Group Decision Making
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(3) Analytical
(a) This style has much higher tolerance for ambiguity and is
characterized by the tendency to overanalyze a situation.
(b) Analytic individuals are careful decision makers who take longer to
make decisions but who also respond well to new or uncertain
situations.
(4) Conceptual
(a) People with this style have a high tolerance for ambiguity and tend to
focus on the people or social aspects of a work situation.
(b) Conceptual types adopt a long-term perspective and rely on intuition
and discussions with others to acquire information.
(c) A conceptual style can foster an idealistic and indecisive approach to
decision making.
(5) Behavioral
(a) People with this style work well with others and enjoy social
interactions in which opinions are openly exchanged.
(b) Behavioral types are supportive, receptive to suggestions, show
warmth, and prefer verbal to written information but have a tendency to
avoid conflict.
(6) Research and Practical Implications
(a) Research implications:
Chapter 12 - Individual and Group Decision Making
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(i) Research shows very few people have only one dominant decision-
making style.
(ii) Research shows that decision-making styles vary across
occupations, personality, gender, and countries.
(b) Practical implications:
(i) Knowledge of styles helps you to identify your strengths and
weaknesses as a decision maker.
(ii) You can increase your ability to influence others by being aware of
the decision-making styles of others.
(iii)Allows you to understand how people can take the same
information and yet arrive at different decisions.
(iv)There is not a best decision-making style that applies in all
situations.
ii) The Role of Intuition in Decision Making
(1) Intuition Overview
(a) Intuition: judgments, insights, or decisions that come to mind on their
own, without explicit awareness of the evoking cues and without
explicit evaluation of the validity of these cues. See Slide 12-27
(b) Intuition is as important as rational analysis in many decisions.
(2) A Model of Intuition
(a) Figure 12-4: A Dual Model of Intuition presents the two types of
Chapter 12 - Individual and Group Decision Making
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intuition and the two sources. See Slide 12-28
(b) Types of intuition: See Slide 12-29
(i) Holistic hunch: a judgment that is based on a subconscious
integration of information stored in memory.
(ii) Automated experience: a choice that is based on a familiar
situation and a partially subconscious application of previously
learned information related to that situation.
(c) Sources of intuition:
(i) Expertise: an individual’s combined explicit and tacit knowledge
regarding an object, person, situation, or decision opportunity.
(ii) Feelings: the automatic, underlying effect one experiences in
response to an object, person, situation, or decision opportunity.
(d) Intuition is represented by two distinct processes: one is automatic,
involuntary, and mostly effortless, while the second is controlled,
voluntary, and effortful.
(3) Pros and Cons of Using Intuition when Making Decisions
(a) On the positive side, intuition can speed up the decision-making
process.
(b) Intuition may be a practical approach when resources are limited and
deadlines are tight.
(c) On the negative side, intuition is particularly susceptible to the
availability and representativeness heuristics, as well as the anchoring,
Chapter 12 - Individual and Group Decision Making
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overconfidence and hindsight biases.
(d) Also, the decision maker may have difficulty convincing others that the
intuitive decision makes sense, so a good idea may be ignored.
(e) Table 12-1: Guidelines for Developing Intuitive Awareness
provides suggestions for improving your intuitive awareness.
iii) Road Map to Ethical Decision Making: A Decision Tree
(1) Decision tree: graphical representation of the process underlying
decision making. See Slide 12-30
(2) Decision trees are used as an aid in decision making and can help
managers to make more ethical decisions.
(3) The decision tree in Figure 12-5: An Ethical Decision Tree can be
applied to any type of decision or action that an individual manager or
corporation is contemplating. See Slide 12-31
(a) First ask: is the proposed action legal?
(i) If it is illegal, do not do it.
(ii) If it is legal, consider impact on shareholder value.
(b) Second, consider the impact on shareholder value.
(i) If a proposed action increases shareholder value:
1. Managers must consider the effect on stakeholders—
customers, employees, the community, the environment, and
suppliers to verify the benefits to the shareholders exceed the
benefits to the other key constituents.
Chapter 12 - Individual and Group Decision Making
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2. Managers should make the decision to engage in an action if
the benefits to the shareholders exceed the benefits to the other
key constituents.
3. Managers should not engage in the action if the other key
constituents benefit more from the action than shareholders.
(ii) If a proposed action does not increase shareholder value:
1. Managers should consider if it is ethical not to take action by
considering the harm or cost of an action to shareholders
against the costs or benefits to other key constituents.
2. If the costs to shareholders from a managerial decision exceed
the costs or benefits to other constituents, the manager or
company should not engage in the action.
(4) The use of the decision tree still involves tradeoffs as managers may need
to decide which stakeholders are more important to the firm based on the
organization’s corporate values, but the decision tree does provide a
framework for considering the trade-offs between managerial and
corporate actions and managerial and corporate ethics.
V. Group Decision Making
i) Group Involvement in Decision Making
(1) Minority dissent: the extent to which group members feel comfortable
disagreeing with other group members, and a group’s level of participation
in decision making. See Slide 12-32
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(2) A research study showed that the most innovative groups possessed high
levels of both minority dissent and participation in decision making.
(3) Research findings suggest that managers should seek divergent views
from group members during decision making, should not punish group
members who disagree with a majority opinion.
ii) Advantages and Disadvantages of Group Decision Making
(1) Overview of Advantages and Disadvantages of Group Decision
Making
(a) Table 12-2: Advantages and Disadvantages of Group-Aided
Decision Making lists the strengths and weaknesses of using groups
to make decisions. See Slide 12-33
(b) The Real World/Real People: John Mackey, CEO of Whole Foods
Market, Believes in Consensual Decision Making profiles one
executive’s views on the positive characteristics of group decisions.
(c) Three guidelines should be used when deciding whether groups
should be included in the decision-making process:
(i) If additional information would increase the quality of the decision,
managers should involve these people who can provide the needed
information.
(ii) If acceptance is important, managers need to involve those
individuals whose acceptance and commitment are important.
Chapter 12 - Individual and Group Decision Making
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(iii)If people can be developed through their participation, managers
may want to involve those whose development is most important.
(2) Group versus Individual Performance
(a) A review of 61 years of relevant research concluded that generally
group performance was qualitatively and quantitatively superior to the
performance of the average individual.
(b) Additional research suggests that managers should use a contingency
approach when determining whether to include others in the decision-
making process.
(3) Practical Contingency Recommendations
(a) If the decision occurs frequently, such as deciding on promotions, use
groups because they tend to produce more consistent decisions than
do individuals.
(b) Given time constraints, let the most competent individual rather than
the group make the decision.
(c) In the face of environmental threats such as time pressure and the
potentially serious effects of a decision, groups use less information
and fewer communication channels. This increases the probability of a
bad decision.
(d) Because the quality of communication strongly affects a group’s
productivity, on complex tasks it is essential to devise mechanisms to
enhance communication effectiveness.
Chapter 12 - Individual and Group Decision Making
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iii) Group Problem-Solving Techniques See Slides 12-34, 12-36
(1) Group Problem-Solving Techniques Overview
(a) Using groups to make decisions generally requires that they reach a
consensus.
(b) Consensus: presenting opinions and gaining agreement to support a
decision.
(c) Consensus does not require unanimous agreement because group
members may still disagree with the final decision but are willing to
work toward its success.
(d) Groups can experience roadblocks when trying to arrive at consensus,
including dominate or shy individuals or satisficing.
(e) To successfully achieve consensus:
(i) Groups should use active listening skills, involve as many members
as possible, seek out the reasons behind arguments, and dig for
the facts.
(ii) Groups should not horse trade, or vote or agree just to avoid
“rocking the boat.”
(2) Brainstorming
(a) Brainstorming: a process to help groups generate multiple ideas and
alternatives for solving problems.
(b) Brainstorming begins by asking group members to silently generate
ideas/alternatives for solving the problem.
Chapter 12 - Individual and Group Decision Making
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(c) Next, these ideas/alternatives are solicited and shared in writing. It is
recommended that this stage be conducted anonymously.
(d) Managers are advised to follow the seven rules for brainstorming:
See Slide 12-35
(i) Defer judgment.
(ii) Build on the ideas of others.
(iii) Encourage wild ideas.
(iv) Go for quantity over quality.
(v) Be visual.
(vi) Stay focused on the topic.
(vii) One conversation at a time.
(e) Brainstorming is an effective technique for generating new ideas and
alternatives, but it is not appropriate for evaluating alternatives or
selecting solutions.
(3) The Nominal Group Technique
(a) Nominal group technique (NGT): process to generate ideas and
evaluate solutions.
(b) Each person writes their ideas and then the ideas are presented
individually in a round-robin fashion. The ideas are then critiqued and
voted on.
(c) The nominal group technique reduces the roadblocks to group decision
Chapter 12 - Individual and Group Decision Making
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making by separating brainstorming from evaluation, promoting
balanced participation among group members, and incorporating
mathematical voting techniques to reach consensus.
(d) The Real World/Real People: CKE Restaurants Combines
Brainstorming, NGT, and Intuition to Make Decisions about New
Products profiles one firm’s use of brainstorming and NGT in its new
product development process.
(4) The Delphi Technique
(a) Delphi technique: process to anonymously generate ideas or
judgments from physically dispersed experts.
(b) Unlike the nominal group technique, experts’ ideas are obtained from
questionnaires or via the Internet, as opposed to face-to-face group
discussions.
(c) The Delphi technique is useful in several situations, such as when
face-to-face discussions are impractical, when disagreements and
conflict are likely to impair communication, when certain individuals
might severely dominate group discussion, and when groupthink is a
probable outcome of the group process.
(5) Computer-Aided Decision Making See Slide 12-37
(a) Computer-aided decision-making systems are being used in two
general ways:
Chapter 12 - Individual and Group Decision Making
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(i) Organizations are improving decision making by quickly obtaining
larger amounts of information from employees, customers, or
suppliers around the world.
(ii) Computer-aided decision-making can be used for running
meetings.
(b) Computer-aided decision-making systems used for running meetings
may be chauffeur driven or group driven.
(i) Chauffeur-driven systems ask participants to answer predetermined
questions on electronic keypads or dials.
(ii) Group-driven electronic meetings are conducted in one of two
ways:
1. Managers can use e-mail systems or the Internet to collect
information or brainstorm about a decision that must be made.
2. In a special facility equipped with individual workstations that
are networked to each other, participants type their input, ideas,
comments, reactions, or evaluations on their keyboards and
their inputs simultaneously appear on a large projector screen at
the front of the room, enabling all participants to see all input.
(c) Research demonstrates that computer-aided decision making
produced greater quality and quantity of ideas than either traditional
brainstorming or the nominal group technique for both small and large
groups of people.
Chapter 12 - Individual and Group Decision Making
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VI. Creativity
i) Definition and Individual Characteristics Associated with Creativity
(1) Creativity: the process of using intelligence, imagination, and skill to
develop a new or novel product, object, process, or thought. See
Slide 12-38
(2) Three broad types of creativity:
(a) Creating something new (creation).
(b) Combining or synthesizing things (synthesis).
(c) Improving or changing things (modification).
(3) Table 12-3: Individual Characteristics Associated with Creativity
profiles personality characteristics that are associated with creativity.
ii) Contextual Characteristics Associated with Creativity
(1) Organizations with an adhocracy culture tend to be more innovative.
(2) Time pressure stifles creativity.
(3) Creativity is highest when workers are under moderate stress.
(4) Leaders can boost creative behavior by showing concern for others and
by treating employees fairly.
iii) The Steps or Stages of Creativity See Slide 12-39
(1) Creativity involves “making remote associations” between unconnected
events, ideas, information stored in memory, or physical objects.
(2) There are five stages in the creative process: preparation, concentration,
Chapter 12 - Individual and Group Decision Making
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incubation, illumination, and verification.
(3) The preparation stage reflects the notion that creativity starts from a base
of tacit and explicit knowledge.
(4) During the concentration stage, an individual focuses on the problem at
hand but too much focus on trying to come up with creative solutions can
actually block creativity.
(5) Incubation is done unconsciously while the mind simultaneously mulls
over information and makes remote associations.
(6) The Real World/Real People: Martha Beck’s “Kitchen Sink”
Technique Increases Creativity describes a technique that can be used
during the incubation stage.
iv) Practical Recommendations for Increasing Creativity
(1) Creativity can be enhanced by effectively managing the creative process
and by fostering a positive and supportive work environment.
(2) Managers are encouraged to establish an organizational culture that
emphasizes innovation, to establish innovation goals, and to allocate
rewards and resources to innovative activities.
(3) Management should create a “safe” work environment that encourages
risk taking, autonomy, collaboration, and trusting relationships among
employees.
(4) It is important to develop a “peer environment” in which people are more
concerned about working for the greater good then their own personal
success.
