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Chapter 6
Effective Decision Making: Your Competitive Advantage
JUMP START
This scenario helps highlight how important and complicated effective decision making can be in
today’s complex business environment. The better students are at making decisions effectively,
the more valuable they are to their organization.
Emphasize to students that the organization is an integrated system and changing one area such as
productivity has a great effect on another area, in this case, creativity. Remind them that both
productivity and creativity are necessary in today’s organizations.
Answers to Jump Start Questions
Answers will vary. Point out to students that if 3M did not improve its productivity it
CHAPTER PREVIEW
OBJECTIVES
After studying this chapter, you should be able to:
6.1 Understand why effective decision making is important and how to make good decisions.
6.2 Connect critical thinking skills to effective decision making and be able to devise a plan to
strengthen your critical thinking.
6.3 Understand why creativity is important when making decisions.
6.4 Recognize problems and understand why resolving them can be complicated.
PRESENTATION OUTLINE
(Supplementary Exercise 6.1)
Jump Start
6.1. Importance of Effective Decision Making
A. Making Better Decisions
1. Determine what decisions Should Be Made First
(Case Study 6.1—The 80-20 Rule)
2. Determine Whether an Individual or Group Should Decide
(Supplementary Exercise 6.2)
3. Choose Decision Making Tools
B. Technology Connection
C. Ask Yourself
Chapter 6 Effective Decisionmaking: Your Competitive Advantage 1
6.2 Improving Critical Thinking
A. Distinguishing Fact from Opinion
B. Understanding Primary and Secondary Sources
C. Evaluating Information Sources
D. In the News
E. Recognizing deceptive arguments
F. Identifying Ethnocentrism and Stereotypes
G. Ethics Connection
(Supplementary Exercise 6.3)
H. Ask Yourself
6.3 Nurturing Creativity and Innovation
A. The Five Stages of the Creative Process
B. Unleashing Your Creativity
1. Information Overload
2. Unproductive Thought Processes
3. Emotional Blocks
4. Cultural Blocks
5. Environmental Blocks
(Supplementary Exercise 6.4 using T.M. 6.1A–B)
C. Turning Creativity into Innovation
D. Global Connection
E. Ask Yourself
6.4 Problems and Solutions
A. Types of Problems and Their Resolution
1. Identify the Problem
2. Generate Ideas
3. Evaluate Ideas for Practicality
4. Determine a Plan of Action
5. Implement the Plan
6. Evaluate the Effectiveness of Your Plan
B. Technology Connection
(Case Study 6.2—Help! Help!)
C. Ask Yourself
TEACHING-LEARNING SUGGESTIONS
Supplementary Exercise 6.1 (Personal Decision Making)
Introduce Chapter 6 by asking how many decisions each student has made in the last week. The
count should include mundane decisions such as what to eat and what to wear. Then ask how
many chose to get input from others on their decisions. Ask students what they find difficult in
making decisions.
6.1 Importance of Effective Decision Making
Decision making in today’s fast paced environment is complex. It is important to understand, not
only how the process of effective decision making works, but to appreciate which decisions need
to be made first and who should be included in making those decisions. Because of the vast
quantity of information available with which to make decisions, decision making tools can be of
great help. However, they should be used as aids and never replace common sense.
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Supplementary Exercise 6.2 (Group Decision-Making Exercise)
Divide the class into groups of approximately six students each. Ask each group to prioritize the
following list of items to have if they were stuck in their car during a snowstorm. They should use
the numbers 1 through 8 to rank the items in order from most important to least important.
Compass
Cigarette lighter
Pocket mirror
First aid kit
Sun screen
FM radio
Blanket
Box of crackers
Give the groups approximately 30 minutes to reach consensus on the order of the list items. Tell
students that they must reach consensus; they may not vote or decide rankings based on “majority
rules.” The decisions must be unanimous.
After 30 minutes, ask each group to record its rankings on the board. Then, ask groups to relate
how they reached their decisions and what feelings or problems they encountered in reaching
consensus. Apply decision-making skills and techniques from the chapter to points that come up
in discussion.
Answer to Technology Connection
Answers to Ask Yourself
6.2 Improving Critical Thinking
Because of the volume of information available today which can be used to make decisions, the
skill of critical thinking is more important than ever. Decisions made with distorted or inaccurate
information are less effective and can sometimes have disastrous consequences. With an open
mind, critical thinkers gather information, analyze it, and come to conclusions and solutions
based on their analysis. Critical thinking can be greatly enhanced by developing the following:
Distinguishing fact from opinion,
Understanding the differences between primary and secondary sources,
Evaluating information sources,
Recognizing deceptive arguments, and
Identifying ethnocentrism and stereotypes.
Chapter 6 Effective Decisionmaking: Your Competitive Advantage 3
Answers to In The News
Answers to Ethics Connection
Answers to Ask Yourself
Supplementary Exercise 6.3 (Taking a Closer Look)
Have students bring articles from a magazine or internet which support opposing viewpoints on
any topic they wish. Topics can include ones such as global warming, assisted suicide, stem cell
research, and nuclear power. As a group, analyze the articles critically. Have students identify
facts and opinions and determine whether the sources are primary or secondary. Next, as a group,
evaluate the expertise of the individual who authored the article. Is there any evidence of
ethnocentrism or stereotypes?
6.3 Nurturing Creativity and Innovation
Creativity has moved to the forefront today as a skill that will boost your career. Without
creativity companies cannot offer new and innovative products and services which are vital to
remain competitive.
Creativity is a thinking process that solves a problem or achieves a goal in an original and useful
way. It is the ability to come up with new and unique solutions to problems. A creative person has
the ability to see practical relationships among things that are not similar and to combine
elements into new patterns of association.
Sources of creativity reside in customers, clients, and employees. New ideas are not usually
immediately embraced in a company; they must be cultivated and supported from conception to
implementation and must have a champion. Supervisors can stimulate creativity by suspending
judgment, tolerating a reasonable amount of failure, supervising carefully, offering constructive
criticism, and tolerating some different behavior.
Supplementary Exercise 6.4 (Measure Your Creative Potential)
1. Have students complete Teaching Master 6.1A–B and calculate their potential.
2. Review the characteristics of creative people and suggestions for developing creativity given
in this chapter. Emphasize that the results are suggestive and that creativity can be developed.
Answers to Global Connection
1. Answers will vary. Point out that many times you may not be aware of small things such as a
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2. Answers will vary.
Answers to Ask Yourself
1. Answers will vary. Remind students that “Thinking out of the box” is easier for some people
2. Answers will vary. Frequently, doing things the way they have always been done is easier for
3. Answers will vary.
6.4 Problems and Solutions
Supplementary Exercise 6.2 (Brainstorming)
1. First, show and discuss Teaching Master 6.2, The Brainstorming Process.
2. Then lead a brainstorming session on one or more of the following topics, pointing out stages
3. Review the brainstorming process handout using the group’s process as an example.
Answers to Technology Connection
Answers to Ask Yourself
KEY TERMS DEFINITIONS
80-20 Rule Rule that says 20 percent of your problems will account for 80 percent of your
losses or gains.
Groupthink group members go along with an idea simply because the majority likes it.
Consensus a solution that all members can support, even if it’s not each member’s first
Chapter 6 Effective Decisionmaking: Your Competitive Advantage 5
DSS (decision support systems) computer applications that help sort through large amounts
Critical thinking process of evaluating what other people write or say in order to determine
Fact a thing that is known to be true, to exist, or to have occurred.
Opinion a view about a particular issue and is not necessarily true.
Context the interrelated situation in which an event occurs.
Stereotypes attitudes which assume all members of a group share the same set of
Ethnocentrism The belief that one’s own nationality, religion, or cultural traditions and
Creativity Thinking process that solves a problem or achieves a goal in an original and
Innovation The end product of a creative activity.
Preparation Acquiring skills, background information, and resources for sensing and
Concentration Focusing intensely on a problem to the exclusion of other demands.
Incubation Stage of the creative process that is mysterious and below the surface and
Illumination The “Aha!” stage of the creative process when solutions break through to
Verification or elaboration Last stage of the creative process; testing, evaluating, revising,
Problem Disturbance or unsettled matter that requires a solution if the organization or person
Brainstorming Group problem-solving technique that involves the spontaneous contribution
SUGGESTED RESPONSES TO REVIEW QUESTIONS
1. You can make better decisions by determining what decisions should be made first, deciding
2. Thinking critically enables you to have a more realistic picture of the issues. Critical
3. You can improve your creativity by thinking positively that you can be creative, listening
4. A problem is a puzzle looking for an answer or a disturbance or unsettled matter that requires a
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CRITICAL THINKING
1. Answers will vary. Challenge students by asking if they looked at the big picture and whether
CASE STUDIES
Answers to Case Study 6.1 (The 80-20 Rule)
1. In the ABC analysis things that are important or need to be done soon get an A, the next level
2. A activities: Run tests on patients, clean hazardous waste, call patients to remind them of their
appointment
Answers to Case Study 6. 2 (Help! Help!)
1. Answers will vary. Problems include an untrained employee, van not running well, sufficient
supplies are not stocked to finish the job, and a local supplier who does not keep adequate
2. Answers will vary.
3. Answers will vary. Generally the group should have come up with better decisions. However,
Chapter 6 Effective Decisionmaking: Your Competitive Advantage 7
HUMAN RELATIONS IN ACTION
A possible decision tree is as follows:
Problem
Possible Solutions
1. Hire more
2.Have current
Potential Events
a. Expense
b. More difficulty in
a. More business
a. Could get along with
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