1. Chapter 11 Individual and Group Decision Making Models of Decision Making Models of Decision Making Dynamics of Decision Dynamics of Decision Making Making Group Decision Making Group Decision Making

2. Models of Decision Making Rational Model Rational Model logical four- step approach to decision making Identifying the problem Generating alternative solutions Selecting solution Implementing and evaluating the solution 11-2 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

3. Simon’s Normative Model of Decision Making Based on premise that decision making is not rational Decision making is characterized by Limited information processing Use of judgmental heuristic Satisficing 11-4 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

4. Decision Making Styles Analytical Conceptual Directive Behavioral Tasks and Technical Concerns People and Social Concerns Value Orientation Low High Tolerance for Ambiguity 11-6 Figure 11-2 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

5. Escalation of Commitment Psychological and Social Determinants * Ego defense * Individual motivators * Peer pressure * Saving face Organizational Determinants * Breakdown in communication * Politics * Organizational inertia Project Characteristics * A delayed return on the investment * Setbacks attributed to temporary causes Contextual Determinants * External political pressure Escalation of commitment Poor results or outcomes 11-7 Figure 11-3 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

6. Requirements for Effective Group Decision Making 1) Developing a clear understanding of the decision situation 2) Developing a clear understanding of the requirements for an affective choice 3) Thoroughly and accurately assessing the positive qualities of alternative solutions 4) Thoroughly and accurately assessing the negative qualities of alternative solutions 11-9 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

7. Advantages and Disadvantages of Group-Aided Decision Making Advantages Greater pool of knowledge Different perspectives Greater comprehension Increased acceptance Training groundDisadvantages Social pressure Domination by a vocal few Logrolling Goal displacement “Groupthink” 11-11 Table 11-2 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

8. Participative Management Participative Management Participative Management the process whereby employees play a direct role in: Setting goals Making decisions Solving problems Making changes in the organization 11-12 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

9. Group Problem Solving Techniques Consensus Consensus presenting opinions and gaining agreement to support a decision Brainstorming Brainstorming process to generate a quantity of ideas Nominal Group Technique Nominal Group Technique process to generate ideas and evaluate solutions Delphi Technique Delphi Technique process to generate ideas from physically dispersed experts Computer-Aided Decision Making Computer-Aided Decision Making 11-13 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

10. Creativity Creativity Creativity process of developing something new or unique 11-15 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

11. Stages of the Creativity Process PreparationConcentrationIncubationIlluminationVerification 11-16 Figure 11-4 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.