978-1285063003 Chapter 3

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Chapter 3

Decision Making, Problem Solving, and Ethics

After reading and studying this chapter, the student

should be able to:

 Explain the role of decision making in the

supervisor’s job.

 Discuss why supervisors need to make so many

decisions.

 Define decision making and identify at least four

elements involved.

 Discuss how decisions are made.

 Name some factors to keep in mind when

making decisions.

 Decide whether to use the individual approach

or the group approach when making decisions.

 Discuss some ways of improving decision

making.

 Explain the role of ethics in the organization’s

and supervisor’s decision making.

Brief Outline

Role of Decision Making in

Supervisory Management

Decision Making: The Heart of

Supervisory Management

Why Supervisors Need to Make So

Many Decisions

What Is Decision Making?

Decision Making Defined

Elements Involved in Decision Making

Types of Decisions to Be Made

How Decision Making and Problem

Solving Relate

How to Make Decisions

Step 1: Define the Idea or Problem

Step 2: Develop Alternatives

Step 3: Collect, Interpret, and Evaluate

Information about Each Alternative

Step 4: Select the Preferred Alternative

Step 5: Implement the Decision

Step 6: Follow Up, Evaluate, and Make

Changes—If Needed

Approaches to Decision Making and

Problem Solving

The Myers-Briggs Type Indicator

A Well-Balanced Meyers-Briggs Profile

The Vroom-Yetton Model

Creative Problem Solving

The Concept of Synergy and Some

Processes of Creative Problem Solving

Developing Creativity

Brainstorming

The Crawford Slip Technique

Nominal Grouping Technique

Becoming Creative

Ethical Considerations Play a Part

The Ethical Organizations

Learning Objectives

SUPERVISORY MANAGEMENT Instructor’s Manual

Facebook

Mark Zuckerberg has faced a challenge or two since introducing us to Facebook and the “social-

networking era,” and effective decision making has been key to managing the company’s success. Face-

book has grown exponentially in terms of revenues and users, yet, along the way, Facebook has made

some poor decisions. One of the worst, according to Zuckerberg, was betting that as mobile technology

matured, the demand for standalone apps would dissipate. Mark Zuckerberg has faced a challenge or two

since introducing us to Facebook and the “social–networking era,” and effective decision making has been

key to managing the company’s success. He made a choice of to focus their energies on developing soft-

ware that would operate on Google’s open source system. However, this decision is not without risks. By

choosing Google’s open source operating system to showcase its mobile muscle, Facebook may be alien-

ating Apple, the creator of the iPhone. Also, because Facebook Home acts as a shield or layer between the

Android user and Google’s system, Facebook Home is the first thing users see and interact with, which

might make Google, one of Facebook’s key competitors, a might testy. This shows how decision making

is an important and on-going process occurring at all levels within an organization.

I. Role of Decision Making in Supervisory Management

• Managers must make decisions whenever they perform any of the five management functions—

planning, organizing, staffing, controlling, and leading.

• Without decision making, the entire management system would cease to exist.

o For example, in planning, the supervisor must decide which objectives to seek, which poli-

cies to establish, and what rules to institute.

o In organizing, choices must be made as to who gets what authority and how duties and re-

sponsibilities are grouped.

o In staffing, decisions must be made concerning employee selection, placement, training, and

development; performance appraisal; compensation; and health and safety.

o In controlling, if actual performance does not conform to planned performance, decisions

must be made about how best to bring them together.

o The function of leading entails deciding how best to communicate with and motivate em-

ployees.

• The decisions that managers make often must be made quickly—and frequently with little infor-

mation, or even conflicting information.

A. Decision Making: The Heart of Supervisory Management

• Decision making is central to the supervisor’s job.

o Supervisors must continuously decide what is to be done, who is to do it, and how, when,

Preview

Lecture Outline

CHAPTER NOTES Chapter 3

and where it is to be done.

o These decisions are interrelated.

▪ One decision is affected by, and builds on, previous ones.

B. Why Supervisors Need to Make So Many Decisions

• Supervisory managers are involved in directing employees’ behavior toward achieving the organ-

ization’s goals, as well as those of the employees themselves

• Supervisors must make more decisions more frequently, and often more quickly, because they

operate on a production-oriented, day-by-day, person-to-person basis.

• The lower the level of management, the greater the manager’s span of management, which is the

number of immediate subordinates a manager can supervise effectively.

o Therefore, supervisors make decisions that affect not only their own behavior, but also that

of many other people.

II. What is Decision Making?

1. A Decision May Not Be Needed

• A wise decision maker begins by asking, “Is a decision needed?”

o It may seem strange to include this question in a discussion of decision making, but it

is important.

o In many supervisory situations, no decision is needed, and decision making would be

in vain.

2. Decisions Involve the Future

• A supervisor’s decision making is oriented toward the future; it always contains an element

of uncertainty.

o The goal is to make the best decision at a specific time given the information availa-

ble.

3. Decision Making a Conscious Process

• Decision making involves a conscious process of selection.

• In making a decision, the individual consciously:

o Becomes aware of a want that needs to be satisfied

o Seeks relevant behavioral alternatives

o Evaluates them as a basis of choice

4. Decision Making Involves More Than One Alternative

• For a true decision to be made, there must be two or more available alternatives to choose

from, including the possibility of doing nothing.

o Frequently, there are only two choices, as in a “yes or no” or “to do or not to do” situa-

tion.

• Most decision situations involve several alternatives with varying expected outcomes.

C. Types of Decisions to be Made

• Programmed decisions are those that are routine and repetitive.

o Because such decisions tend to be similar and must be made frequently, supervisors usually

establish a systematic way of handling them.

• Non-programmed decisions are those that occur infrequently.

o Because different variables are involved, requiring a separate and different response each

time, establishing a systematic way of dealing with such decisions is difficult.

D. How Decision Making and Problem Solving Relate

• An opportunity is a set of circumstances that provides a chance to improve a situation or help

reach a goal.

• A problem is an existing unsatisfactory situation causing anxiety or distress that must be ad-

dressed.

• Effective supervisors must be able to identify problems and their cause(s), to analyze complex

and involved situations, and to solve problems by removing their cause(s).

o However, placing too much emphasis on problems can prevent one from identifying oppor-

tunities.

o After all, solving a problem only eliminates or neutralizes a negative situation.

• Progress or advancement comes from seeking and identifying opportunities; recognizing the emo-

tions, needs, and motivations of the people involved; and analyzing ways of satisfying them.

III. How to Make Decisions

A. Step 1: Define the Idea or Problem

CHAPTER NOTES Chapter 3

• A decision is only as good as the correct definition of the problem. The right cure for the wrong

problem is just as bad as the wrong cure for the right problem.

o However, it is not always easy to know what the problem is or which opportunity is the

best one to seek.

• If the decision to be made involves solving a problem, its cause, or the factors that are creating it,

must be determined.

o One should be careful to identify the true problem, not just the symptoms.

• Following are 10 action steps many successful managers take to identify the exact source and

origin of elusive problems in the workplace.

o Ask. Some managers think they have to know or come up with all the answers.

o Let someone else do the asking.

o Check out rumors.

o Pay attention to veteran employees.

o Test the communication systems.

o Revisit policies and procedures.

o Re-examine expectations.

o Review the reward system.

o Re-evaluate vendors.

o Look to the competition

• All good supervisors have to be problem solvers.

o In business, as in the medical model, the basis for any solution (cure) is an accurate diagno-

sis.

o To succeed as a problem solver, supervisors need to learn to be a good diagnostician.

▪ The first rule is don’t guess or rush to judgment.

▪ Be methodical and thorough.

▪ Take time in identifying what’s wrong.

▪ Misdiagnosis in management—as in the medical profession—is the first step to mal-

practice. And there is no malpractice insurance for supervisors.

B. Step 2: Develop Alternatives

• Alternatives are possible courses of action that can satisfy a need or solve a problem.

o Because it is easier to choose from a few alternatives than from many, it is good to reduce

the number at some point by creating a “short list.”

o Also, one should be aware that, if choices are limited, they may include only undesirable

ones.

C. Step 3: Collect, Interpret, and Evaluate Information about Each Alternative

• Sometimes standing orders, policies, procedures, rules, and regulations provide the relevant in-

formation.

o Other sources include one’s own experience, company records and reports, discussion with

the people directly and indirectly involved, and personal observations.

• The effective evaluation of alternatives involves looking objectively at the pros and cons of each

SUPERVISORY MANAGEMENT Instructor’s Manual

one.

• Choices can be evaluated in many ways.

o The information can be written down on a type of balance sheet with the reasons for each

alternative on one side and the reasons against it on the other.

o A process of elimination can be used in which the undesirable (or less desirable) choices

are dropped.

D. Step 4. Select the Preferred Alternative

• When reaching the point where a choice must be made, one should look at the conclusions made

from step 3 and then logically and rationally pick the alternative that is most desirable for all con-

cerned from objective, ethical, and practical points of view.

• Selecting the preferred alternative involves cost/benefit analysis and risk analysis.

o Using the technique of cost/benefit analysis, one can estimate what each alternative will

cost in terms of human, physical, and financial resources.

▪ Then estimate the expected benefits.

▪ Finally, compare the two estimates.

▪ The one with the greatest payoff is chosen, where the ratio of benefits to cost is most

favorable.

o Analysis of risk is inherent in decision making.

▪ Risk is the possibility of defeat, disadvantage, injury, or loss.

▪ Prudent decision makers try to minimize risk by effectively forecasting outcomes

and considering all variables.

E. Step 5: Implement the Decision

• Effective decision making doesn’t stop when you choose from among alternatives. The decision

must be put into operation.

o This is a difficult part of decision making because one must face and deal with people who

may not like the choice.

o Many good supervisory decisions are ineffective because of the way they’re implemented.

F. Step 6: Follow Up, Evaluate, and Make Changes—If Needed

• The last step in the decision making process involves exercising management’s control function.

• If implementing the decision does not achieve the desired results, the decision can be changed or

modified.

IV. Approaches to Decision Making and Problem Solving

• Two approaches that are particularly useful in both decision making and problem solving are the

Myers–Briggs Type Indicator and the Vroom–Yetton model.

o The Myers–Briggs Type Indicator is the better known and is used throughout the world.

CHAPTER NOTES Chapter 3

A. The Myers-Briggs Type Indicator

• The 126-item Myers-Briggs Type Indicator (MBTI) helps identify an individual’s personal

style.

o Although it measures eight dichotomies of personality types, although the four internal di-

mensions are: sensing versus, intuition, thinking versus, and feeling.

▪ These four are directly related to decision making and problem solving. These four

are directly related to decision making and problem solving.

• According to Myers and Briggs, people who rely primarily on sensing, or becoming aware of

things through the five senses, tend to be patient, practical, and realistic.

o Those who rely primarily on intuition tend to be impatient, idea and theory oriented, and

creative.

▪ Although everyone uses both ways of perceiving (sensing and intuition), Myers and

Briggs indicates that at an early age, people develop a preference for one method

over the other.

o People who trust and prefer thinking, or using a rational, logical process to come to imper-

sonal conclusions, are quite skillful in dealing with matters that require logic, objectivity,

and careful examination of facts.

o Those who trust and prefer feeling, or using innate processes that take into account one’s

own and others’ values and beliefs, tend to be adept at working with other people and suc-

cessful in applying skills in interpersonal and human relations.

• The ideal is to maintain a balance by developing capability in all four internal dimensions. This is

especially important for decision making, because all four dichotomies can be valuable in the de-

cision-making method.

o Sensing, which helps in developing and facing facts as well as being realistic about the na-

ture of the problem or opportunity, is helpful in step 1, recognizing a problem or opportuni-

ty.

o Intuition, on the other hand, is used in areas where creativity is needed to see possibilities

and develop opportunities.

▪ It is therefore helpful in step 2, developing alternative courses of action.

o Because thinking is impersonal and logically considers the consequences of cause and ef-

fect, it is helpful in step 3, evaluating the alternatives.

o Feeling comes into play when it is necessary to consider the values and ethics of others and

the impact of the final decision on them.

▪ This provides sensitivity in selecting the preferred alternative and implementing it.

B. A Well-Balanced Myers-Briggs Profile

• Myers-Briggs is based on the work of Carl Jung who saw type development as a lifelong process.

• People grow and develop problem-solving and decision-making processes if they have the ability

to learn from experience.

o One should have the ability to use the appropriate dimension at the appropriate time, thus

gaining good balance and wholeness in problem solving and decision making.

SUPERVISORY MANAGEMENT Instructor’s Manual

C. The Vroom-Yetton Model

• The Vroom-Yetton model provides guidelines on the extent to which subordinates are involved

in decision making or problem solving.

o This involvement may run the gamut from consensus decision making by a natural or self-

managing work team, a committee, or an ad hoc task force to the manager making the deci-

sion with minimal or no involvement of others.

• The extent of employee involvement is based on the situation, the quality of information availa-

ble, the importance of subordinates’ acceptance of the decision, and the time to make the deci-

sion.

1. Participation

• There are five participation styles (A-E) representing the varying degrees of participation

by others a manager uses in decision making.

o There are two autocratic approaches (A and B), two consultative approaches (C and

D), and one group consensus approach (E).

2. Appropriate Style

• A manager can use a decision tree in determining which approach to use.

o To use the model for a particular situation, one must start at the left-hand side of the

tree and work toward the right.

o When a box is encounter, answer the corresponding question and proceed to the next

appropriate box.

o The decision style designation finally reached will suggest which of the participation

styles to be used.

D. Creative Problem Solving

• More organizations and individual managers are involving subordinates in decision making and

problem solving, particularly using styles similar to D and E in the Vroom–Yetton model.

o One of the primary reasons for this trend is the concept of synergy.

V. The Concept of Synergy and Some Processes of Creative Problem Solving

• Synergy means that the whole is greater than the sum of the parts.

o This concept is especially applicable in the use of teams and ad hoc task forces in problem

solving.

o Increasingly, this type of synergy is being achieved by teams throughout the world.

o This emphasis on synergistic teamwork is recognized in the United States by Rochester In-

stitute of Technology’s College of Business and USA Todays Quality Cup Awards.

A. Developing Creativity

CHAPTER NOTES Chapter 3

• Creativity is the process of developing something unique or original.

• Scientists generalize that the right hemisphere of the brain captures our intuitive impulses. Right-

hemispheric functions are frequent catalysts for solution alternatives.

o Alternatively, the brain’s left hemisphere functions in logical, analytical, and linear ways,

allowing the decision maker to evaluate his or her intuitive, imaginative alternatives.

o Although the brain has a multifunctional capacity, the decision maker may allow his or her

preferred brain functioning to dominate and can allow left-side evaluation and analysis to

encroach on right-brain intuitive ideas prematurely.

o Using right-hemisphere functions as thought generators and following them with left-

brained functions results in powerfully effective “whole–brained” creativity.

• Three techniques that are very useful in the idea generation process are brainstorming, the Craw-

ford Slip technique, and the nominal grouping technique.

B. Brainstorming

• Brainstorming refers to a group of individuals responding to a question such as “How can we

improve communication?” without evaluating the ideas as they are generated.

o The ideas are offered and recorded, no matter how silly they may appear and with-

out regard to the rank of individuals or the value of any idea. Sorting out the value

of respective ideas comes later.

• Larry Hirschorn, management consultant and writer, has suggested four guidelines to follow

when using this powerful technique of brainstorming:

o The group favors quantity over quality.

o Team members refrain from judging anyone’s contributions; they can ask questions

later, in the evaluation part.

o Team members avoid censoring.

o Pride of authority is minimized; team members should feel free to offer variants

and build on one another’s ideas.

• Brainstorming is especially useful in developing alternatives during step 2 of the decision-

making or problem-solving process.

• Brainstorming is also useful in the following dimensions of creative problem solving:

o Defining all possible problems

o Redefining problems

o Determining all possible causes for a problem

o Listing all possible actions for implementing the chosen solution.

• Formally appointed committees rarely use brainstorming; problem-solving teams use it in a more

creative and effective manner.

C. The Crawford Slip Technique

• The Crawford Slip Technique makes use of two elements that are important in achieving crea-

SUPERVISORY MANAGEMENT Instructor’s Manual

tivity—fluency and flexibility.

o Fluency is the ability to let ideas flow out of your head like water over a waterfall.

o Flexibility is the ability to use free association to generate or classify ideas in categories.

D. Nominal Grouping Technique

• The nominal group technique (NGT) is a structured group technique for generating ideas

through round-robin individual responses, group sharing without criticism, and written balloting.

VI. Becoming Creative

• Part of being creative is changing perspectives.

o For some, this may mean getting in touch with one’s intuitive side.

▪ To do so, one must try not to think logically about a situation, but rather, think about

the possibilities.

o For others, becoming creative may be as simple as doing something different, for example:

Go a different way to work; read a political blog or watch a news program that contains in-

formation that is completely opposite of your political views; try a different restaurant or bar;

etc.

VII. Ethical Considerations Play a Part

• Supervisors should have a true concern for the well-being of others, both inside and outside the or-

ganization.

o Therefore, supervisors should not only obey all laws and conform to the ethical codes of

practice established by their employer and society, but also have a personal set of ethical

principles that guides their actions.

• Ethics are the standards used to judge the “rightness” or “wrongness” of one person’s behavior to-

ward others.

o The concept of ethical behavior is the individual’s personal ethic; it is the highest and most

rigid level of behavior.

o The next highest level is adhering to professional and organizational codes of ethics, which

are statements of what is and isn’t acceptable behavior.

o The lowest level is the legal level, where people are all expected to adhere to the “law of the

land.”

• Making a profit with no regard for the repercussions of operating methods can be disastrous.

o Ethical operations will take into account many factors including the impact on the overall

economic well-being of the local community and the community at large.

o The reputation of a fine organization and its financial standing can be soiled quickly by op-

erating in an unethical manner.

A. Ethical Organizations

• Ethical organizations are composed of three pillars: ethical individuals, ethical leadership, and

CHAPTER NOTES Chapter 3

sound structures and systems.

1. Ethical Individuals

• Ethical individuals are honest and act with integrity.

• Ethical people can be trusted by others and can be relied upon to make the “right” choice,

even in very challenging circumstances.

2. Ethical Leadership

• Ethical leadership is the center pillar of the ethical organization.

• Leaders guide the way; they are the visible face of the organization to internal as well as ex-

ternal stakeholders.

• If leaders act swiftly to deal with unethical behavior, this sends a direct message regarding

what will and will not be tolerated.

3. Sound Structures and Systems

• It is important that corporations create and sustain cultures that support ethical behavior.

• Developing a values statement or code of ethics is a good starting point, but to ensure this

document has teeth, it is necessary to appoint a chief ethics officer to chair an ethics commit-

tee responsible for conducting ethics training and developing whistle-blowing mechanisms,

such that the true spirit of the ethics document permeates throughout the entire organization.

VIII. Chapter Review

The PowerPoint slides correlated with the Lecture Outline above are available on the Instructors CD-

ROM and on the product support website.

PowerPoint Slide 3-1 Chapter 3 Title

PowerPoint Slide 3-2 Learning Objectives

PowerPoint Slide 3-3 Learning Objectives (cont’d)

PowerPoint Slide 3-4 Role of Decision Making in Management

PowerPoint Slide 3-5 Role of Decision Making in Management

PowerPoint Slide 3-6 Decision Making is the Heart of Supervisory Management (Text Exhibit 3-1)

PowerPoint Slide 3-7 Decisions and Supervisors

PowerPoint Slide 3-8 Decision Making

PowerPoint Slide 3-9 Decision-Making Process (Text Exhibit 3-2)

PowerPoint Slide 3-10 Types of Decisions

Visual Resources

SUPERVISORY MANAGEMENT Instructor’s Manual

PowerPoint Slide 3-12 How Decision Making and Problem Solving Relate

PowerPoint Slide 3-13 Steps in Decision Making

PowerPoint Slide 3-14 Steps in Decision Making

PowerPoint Slide 3-15 Myers-Briggs Type Indicator® (MBTI®)

PowerPoint Slide 3-16 Characteristics of Different Personality Types (Text Exhibit 3-6)

PowerPoint Slide 3-17 Characteristics of Different Personality Types (cont’d) (Text Exhibit 3-6)

PowerPoint Slide 3-18 The Vroom-Yetton Model

PowerPoint Slide 3-19 Alternative Participation Styles

PowerPoint Slide 3-20 Decision Tree, Governing Group Problems (Text Exhibit 3-8)

PowerPoint Slide 3-21 Synergy and Creativity

PowerPoint Slide 3-22 Deferred Judgment

PowerPoint Slide 3-23 Brainstorming

PowerPoint Slide 3-24 Brainstorming

PowerPoint Slide 3-25 Crawford Slip Technique

PowerPoint Slide 3-26 Nominal Grouping Technique

PowerPoint Slide 3-27 Ethical Considerations

PowerPoint Slide 3-28 The Three Pillars of Ethical Organizations (Text Exhibit 3-11)

PowerPoint Slide 3-29 Important Terms

1. Peter Drucker states that a big decision-making error supervisors frequently make is failing to get a

handle on a problem. Often, managers plunge in prematurely. Why do you think many managers

make this common mistake?

2. Discuss the following statement: It’s better for a manager to try to carry out a poor decision for the

sake of worker confidence. You can’t build worker confidence by continually admitting the poor de-

cisions you make.

3. What are the pros and cons of decisions made by groups such as committees and task forces as com-

pared to decisions made by one person?

Solutions to the Questions for Review and Discussion

CHAPTER NOTES Chapter 3

more points of view and areas of expertise are utilized. It can also result in better communication,

4. Is it possible for someone to be a good decision maker but a poor supervisor? Explain.

5. One supervisor says that she finds procrastination to be a big help in her decision making. Do you

agree or disagree? Why?

6. Is it possible to operate as an ethical organization without one or more of the three pillars? Discuss.

Skill Builder 3.1

Coast Guard Cutter Decision Problem

Works with SCANS competencies: Information, Resources, Systems

This is the first of two decision-making exercises. The situation is that a Coast Guard Cutter is involved in

Solutions to the Skill Builders and Self–Assessments

SUPERVISORY MANAGEMENT Instructor’s Manual

Using the Vroom-Yetton model, choose one of the five styles of participation given in Text Exhibit 3-7.

Skill Builder 3.2

New Machines Decision Problem

Works with SCANS competencies: Information, Resources, Systems

This is the second of two decision-making exercises. The situation is that a manufacturing manager has

recently installed a new machine and a new, simplified work system designed to increase efficiency.

Skill Builder 3.3

Identifying Your Problem-Solving Style

Works with SCANS competencies: Information, Technology

This exercise presents a 20-item questionnaire analyzing how one usually feels and acts. Students should

Skill Builder 3.4

The $100,000 Investment Decision

Works with SCANS competencies: Interpersonal Skill, Information, Technology, Resources

This exercise is another group decision-making problem. A wealthy entrepreneur has donated $2 million

to the school’s management department to be used in improving students’ decision-making skills.

Divide the class into teams of five to seven students. Each team is given $100,000 to invest for a period of

five years. At the end of that period, a member of each team will have six months to liquidate the team’s

Each team’s assignment is as follows:

1. Following the steps of the decision-making process, reach a decision about what your investment(s)

2. Be prepared to make a five- to ten-minute presentation to the rest of the class as to why your decision

will reap the best return in five years.

Skill Builder 3.5

Prospect Theory

Works with SCANS competencies: Interpersonal Skill, Information, Technology, Resources

This exercise is another decision-making problem where students are asked to apply prospect theory with

frames a problem will influence what decision one arrives at.

Case 3-1

When Your Personality and Job Don’t Match—Time for a Change

1. What type of MBTI decision style do you think Cynde has? Explain.

2. Based on your answer to question 1, what are Cynde’s strengths and blind spots when making im-

portant decisions?

3 Help Cynde with steps 3 and 4 of the decision process (e.g., see Exhibit 3-3) by gathering information

from the library and the Internet, visiting and interviewing similar types of businesses locally, and so

on. Using this information and what you have learned from this chapter, how would you advise

Cynde to proceed? Discuss.

Solutions to the Case