1. Decision Making and Creativity
Chapter Six

2. Decision Making at Radical
Ron Sangha/ BC Business
Radical Entertainment founder Ian Wilkinson (third from right) meets with employees every week to reinforce the electronic games developer’s emphasis on creative decision making and employee involvement.

3. Decision Making Defined
Ron Sangha/ BC Business
Decision making is a conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs.

4. Rational Choice Decision Process

5. Rational Choice Decision Process
Identify problem/opportunity
Problem is a gap between what is and what ought to be
Choose decision process
Meta-decision -- e.g. programmed?, involve others?
Develop (and identify) alternatives
Search, then build
Choose best alternative
Alternative that maximizes payoff
Implement choice
Evaluate choice

6. Problem Identification Process
Problems and opportunities are not announced or pre-defined
need to interpret ambiguous information
Problem identification uses both logical analysis and unconscious emotional reaction during perceptual process
need to pay attention to both logic and emotional reaction in problem identification

7. No Problem, Houston?
NASA’s space shuttle Columbia disintegrated during re-entry, killing all seven crewmembers. A special accident investigation board concluded that NASA’s middle management continually resisted attempts to recognize that the Columbia was in trouble, and therefore made no attempt to prevent loss of life.

8. Problem Identification Challenges
Stakeholder framing
Perceptual defense
Mental models
Decisive leadership
Solution-focused problems

9. Identifying Problems Effectively
Be aware of perceptual and diagnostic limitations
Understand mental models
Discussing the situation with colleagues -- see different perspectives

10. Making Choices: Rational vs OB Views
Goals
Rational: Clear, compatible, agreed upon
OB: Ambiguous, conflicting, lack agreement
Processing
Information
Rational: People can process all information
OB: People process only limited information
Evaluation Timing
Rational: Choices evaluated simultaneously
OB: Choices evaluated sequentially
more

11. Making Choices: Rational vs OB (con’t)
Standards
Rational: Evaluate against absolute standards
OB: Evaluate against implicit favorite
Info Quality
Rational: People rely on factual information
OB: Rely on perceptually distorted information
Decision Objective
Rational: Maximization -- the optimal choice
OB: Satisficing -- a “good enough” choice

12. Emotions and Making Choices
Emotional marker process forms preferences before we consciously think about choices
Moods and emotions influence the decision process
affects vigilance, risk aversion, etc.
We ‘listen in’ on our emotions and use that information to make our choices

13. Intuitive Decision Making
Ability to know when a problem or opportunity exists and select the best course of action without conscious reasoning
Intuition as emotional experience
Gut feelings are emotional signals
Not all emotional signals are intuition
Intuition as rapid unconscious analysis
Uses action scripts

14. Making Choices more Effectively
Systematically evaluate alternatives
Balance emotions and rational influences
Scenario planning

15. Escalation of Commitment
The tendency to repeat an apparently bad decision or allocate more resources to a failing course of action
Four main causes of escalation:
Self-justification
Prospect theory effect
Perceptual blinders
Closing costs

16. Evaluating Decisions Better
Separate decision choosers from evaluators
Establish a preset level to abandon the project
Involve several people in the evaluation process

17. Decision Making and Creativity
Employee Involvement
Decision Making and Creativity

18. Employee Involvement at Thai Carbon Black
Thai Cabon Black, the Thai-Indian joint venture, relies on employee involvement to boost productivity and quality.
Employees submit hundreds of suggestions in little red boxes located around the site
Participatory management meetings are held every month

19. Employee Involvement Defined
The degree to which employees influence how their work is organized and carried out
Different levels and forms of involvement

20. Employee Involvement Model
Potential Involvement Outcomes
Employee Involvement
Better problem identification
Synergy produces more/better solutions
Better at picking the best choice
Higher decision commitment
Contingencies
of Involvement

21. Contingencies of Involvement
Higher employee involvement is better when:
Decision Structure
Problem is new & complex (i.e nonprogrammed decision)
Knowledge Source
Employees have relevant knowledge beyond leader
Decision Commitment
Employees would lack commitment unless involved
Risk of Conflict
Norms support firm’s goals
Employee agreement likely

22. Creativity in Decision Making
Decision Making and Creativity

23. Creative Process Model
Verification
Insight
Incubation
Preparation

24. Characteristics of Creative People
Above average intelligence
Persistence
Relevant knowledge and experience
Inventive thinking style

25. Creative Work Environments
Learning orientation
Encourage experimentation
Tolerate mistakes
Intrinsically motivating work
Task significance, autonomy, feedback
Open communication and sufficient resources
Team competition and time pressure have complex effect on creativity

26. Creative Activities Review abandoned projects
• Explore issue with other people
Redefine the Problem
• Storytelling
• Artistic activities
• Morphological analysis
Associative
Play
• Diverse teams
• Information sessions
Internal tradeshows
Cross- Pollination

27. Decision Making and Creativity
Chapter Six

28. Solutions to Creativity Brainbusters
Decision Making and Creativity

29. Double Circle Problem

30. Nine Dot Problem

31. Nine Dot Problem Revisited

32. Word Search
FCIRVEEALTETITVEERS

33. Burning Ropes One Hour to Burn Completely After first rope burned
i.e. 30 min.
One Hour to Burn Completely