Management Chapter 5 Decision Making Learning Creativity And Entrepreneurship Nonprogrammed Decision Making Required When

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-18

Nonprogrammed decision making is required when a situation arises that is not easily resolved by a pre-

2. In what ways do the classical and administrative models of decision making help managers appreciate

the complexities involved in real-world decision making?

3. Why do capable managers sometimes make bad decisions? What can individual managers do to

improve their decision-making skills?

4. In what kinds of groups is groupthink most likely to be a problem? When is it least likely to be a

problem? What steps can group members take to ward off groupthink?

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-19

Groupthink is a pattern of faulty and biased decision making that occurs in groups whose members strive

for agreement within the group at the expense of accurately assessing information relevant to a decision.

When this occurs, alternatives are not critically examined, potentially leading to a poor decision. Emotion,

5. What is organizational learning, and how can managers promote it?

6. What is the difference between entrepreneurship and intrapreneurship?

ACTION

7. Ask a manager to recall the best and the worst decisions he or she ever made. Try to determine why

these decisions were so good or so bad.

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-20

(Note to Instructors: Students’ answers will vary. The answers given here are only indicative.)

Leslie Fox is the manager at a commercial bank. She described her worst managerial decision as the one

to establish a teller of the month program at her branch. This well-intentioned effort to motivate her

(Note to Instructors: Students’ answers will vary. The answers given here are only indicative.)

A local university is phasing out its hotel and hospitality management (HHM) program because of low

enrollment. University officials would like to continue the program but can no longer justify the

operational inefficiencies that result from doing so. Stakeholders include students, faculty, university

administrators, the Board of Regents that governs the university, and the local community. To save this

program, which is one of several offered by the university’s College of Commerce, faculty and university

administrators must identify the reasons behind low enrollment.

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-21

Education.

Residents of the local community could be asked: What can the HHM department do to make a

contribution to this community? By making a positive contribution to the community, the department’s

visibility is heightened, which will in turn, attract interest and increase the number of applications

received. Community contributions might include offering a seminar series for local restaurant owners,

offering cooking classes for kids, etc.

Faculty members could be asked: Which part of your HHM classes do students find most boring? This

question should stimulate faculty to think about new approaches that allow classroom material to be

presented in more creative and dynamic ways, thereby peaking the interest of students considering the

HHM as a major.

AACSB: Analytic

Notes for Building Management Skills

(Instructors Note: Below is an example of one possible problem (John’s) and how he considered the

problem and made his decision.)

1. Identify the criteria you used, either consciously or unconsciously, to guide your decision making.

John needed to decide if he should take a part-time job as a research assistant in the management

department in his second year in college. John decided that he would take the position because he thought

2. List the alternatives you considered. Were they all possible alternatives? Did you unconsciously (or

consciously) ignore some important alternatives?

2. take a different part-time job somewhere else, either within the university or the community.

BUILDING MANAGEMENT SKILLS

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-22

Education.

John did not consider any other alternatives. It seemed to him that these were all the alternatives that were

possible. One alternative that John did not consider was the option of taking out a student loan to cover

expenses. John did not think he would be eligible for such a loan, and it did not occur to him to go to the

financial aid office and see if it was possible for him to get a loan.

3. How much information did you have about each alternative? Were you making the decision on the

basis of complete or incomplete information?

4. Try to remember how you reached the decision. Did you sit down and consciously think through the

implications of each alternative, or did you make a decision on the basis of intuition? Did you use any

rules of thumb to help you make the decision?

5. In retrospect, do you think that your choice of alternative was shaped by any of the cognitive biases

discussed in this chapter?

6. Having answered the previous five questions,, do you think in retrospect that you made a reasonable

decision? What, if anything, might you do to improve your ability to make good decisions in the future?

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-23

John made a reasonable decision based on the outcomes but also on the process he used. He consciously

weighed the alternatives and obtained information before deciding.

Notes for Managing Ethically

1. Either alone or in a group, think about the ethical implications of extreme decision making by groups.

2. When group decision making takes place, should members of a group each feel fully accountable for

outcomes of the decision? Why or why not?

AACSB: Ethics

Brainstorming

Form groups of three or four people and appoint one member as the spokesperson who will communicate

your findings to the whole class when called upon by the instructor. Then discuss the following scenario:

MANAGING ETHICALLY

SMALL GROUP BREAKOUT EXERCISE

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-24

Education.

You and your partners are trying to decide which kind of restaurant to open in a centrally located

shopping center that has just been built in your city. The problem confronting you is that the city already

has many restaurants that provide different kinds of food in all price ranges. You have the resources to

open any type of restaurant. Your challenge is to decide which type is most likely to succeed.

Use the brainstorming technique to decide which type of restaurant to open. Follow by following these

steps:

1. As a group, spend 5 or 10 minutes generating ideas about the alternative restaurants that the members

think will be most likely to succeed. Each group member should be as innovative and creative as possible,

and no suggestions should be criticized.

The following is a list of some alternative kinds of restaurants that students may suggest:

1. A sports bar and grill

3. A celebrity restaurant with memorabilia and entertainment

5. A cartoon character theme restaurant

2. Appoint one group member to write down the alternatives as they are identified.

3. Spend the next 10 to 15 minutes debating the pros and cons of the alternatives. As a group, try to reach

a consensus on which alternative is most likely to succeed.

While engaging in this exercise, students should consider the location of the restaurant, the neighborhood

4. After making your decision, discuss the pros and cons of the brainstorming method, and decide

whether any production blocking occurred.

Pros of brainstorming include: creative and innovative suggestions from more than one person who is

contemplating the same problem, improved evaluation of suggestions from other group members,

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-25

Questions: What are you going to do?

BE THE MANAGER

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-26

Case Synopsis: Aetna Sets Wage Floor: $16 an Hour

Amid signs of a tightening labor market, Aetna Inc. plans to boost the incomes of its lowest paid workers

1. Is the decision managers at Aetna made to have a $16 an hour wage floor a programmed

or nonprogrammed decision?

2. How did managers recognize the need to make this decision?

3. To what extent do you think satisficing was involved in making this decision?

THE WALL STREET JOURNAL CASE IN THE NEWS

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-27

Education.

of the rapidly changing insurance and economic landscape. Due to these limitations, Aetna’s

managers could not attempt to discover every alternative in an attempt to reach the optimum

decision. Instead, they had to search for and choose a satisfactory response to the problem.

4. How would you evaluate this decision according to the four criteria that managers use to

evaluate the advantages and disadvantages of different courses of action?

AACSB: Analytic

SUPPLEMENTAL FEATURES

MANAGER’S HOT SEAT (MHS)

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

INSTRUCTOR’S POWERPOINT SLIDES

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-29

INSTRUCTOR’S POWERPOINT

SLIDE 10

Figure 5.1 – The Classical Model of

Decision Making

INSTRUCTOR’S POWERPOINT

SLIDE 11

The Administrative Model

INSTRUCTOR’S POWERPOINT

SLIDE 12

The Administrative Model:

Bounded Rationality

INSTRUCTOR’S POWERPOINT

SLIDE 13

Figure 5.2 – Why Information is

Incomplete

INSTRUCTOR’S POWERPOINT

SLIDE 14

Causes of Incomplete Information:

Risk and Uncertainty

INSTRUCTOR’S POWERPOINT

SLIDE 15

Causes of Incomplete Information:

Ambiguous Information

INSTRUCTOR’S POWERPOINT

SLIDE 16

Causes of Incomplete Information:

Time Constraints…

INSTRUCTOR’S POWERPOINT

SLIDE 17

Causes of Incomplete Information:

Satisficing

INSTRUCTOR’S POWERPOINT

SLIDE 18

Figure 5.4 – Six Steps in Decision

Making

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-30

INSTRUCTOR’S POWERPOINT

SLIDE 19

Discussion Question

INSTRUCTOR’S POWERPOINT

SLIDE 20

Step 1: Recognize Need for A

Decision

INSTRUCTOR’S POWERPOINT

SLIDE 21

Step 2: Generate Alternatives

INSTRUCTOR’S POWERPOINT

SLIDE 22

Step 3: Assess Alternatives

INSTRUCTOR’S POWERPOINT

SLIDE 23

Figure 5.5 – General Criteria for

Evaluating Possible courses of

Action

INSTRUCTOR’S POWERPOINT

SLIDE 24

Step 4: Choose Among Alternatives

INSTRUCTOR’S POWERPOINT

SLIDE 25

Step 5: Implement Chosen

Alternative

INSTRUCTOR’S POWERPOINT

SLIDE 26

Step 6: Learn from Feedback

INSTRUCTOR’S POWERPOINT

SLIDE 27

Group Decision Making

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-31

INSTRUCTOR’S POWERPOINT

SLIDE 28

Groupthink

INSTRUCTOR’S POWERPOINT

SLIDE 29

Devil’s Advocacy

INSTRUCTOR’S POWERPOINT

SLIDE 30

Diversity Among Decision Makers

INSTRUCTOR’S POWERPOINT

SLIDE 31

Organizational Learning and

Creativity

INSTRUCTOR’S POWERPOINT

SLIDE 32

Organizational Learning and

Creativity

INSTRUCTOR’S POWERPOINT

SLIDE 33

Figure 5.6 – Senge’s Principles for

Creating a Learning Organization

INSTRUCTOR’S POWERPOINT

SLIDE 34

Question?

INSTRUCTOR’S POWERPOINT

SLIDE 35

Organizational Learning and

Creativity

INSTRUCTOR’S POWERPOINT

SLIDE 36

Promoting Individual Creativity

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-32

INSTRUCTOR’S POWERPOINT

SLIDE 37

Promoting Group Creativity

INSTRUCTOR’S POWERPOINT

SLIDE 38

Building Group Creativity

INSTRUCTOR’S POWERPOINT

SLIDE 39

Delphi Technique

INSTRUCTOR’S POWERPOINT

SLIDE 40

Entrepreneurship and Creativity

INSTRUCTOR’S POWERPOINT

SLIDE 41

Intrapreneur

INSTRUCTOR’S POWERPOINT

SLIDE 42

Entrepreneurship

INSTRUCTOR’S POWERPOINT

SLIDE 43

Intrapreneurship and

Organizational Learning

INSTRUCTOR’S POWERPOINT

SLIDE 44

Be the Manager

INSTRUCTOR’S POWERPOINT

SLIDE 45

Topics for Discussion

Chapter 05 – Decision Making, Learning, Creativity, and Entrepreneurship

5-33

INSTRUCTOR’S POWERPOINT

SLIDE 46

Topics for Discussion

INSTRUCTOR’S POWERPOINT

SLIDE 47

Topics for Discussion

INSTRUCTOR’S POWERPOINT

SLIDE 48

Topics for Discussion

INSTRUCTOR’S POWERPOINT

SLIDE 49

Topics for Discussion

INSTRUCTOR’S POWERPOINT

SLIDE 50

Topics for Discussion