1. Decision Making, Learning, Creativity, and Entrepreneurship
Chapter 7
Decision Making, Learning, Creativity, and Entrepreneurship

2. Decision Making Programmed Decision Non-Programmed Decisions Intuition
Routine, virtually automatic decision making that follows established rules or guidelines.
Non-Programmed Decisions
Non-routine decision made in response to unusual or novel situations
Intuition
Feelings, beliefs, and hunches that come readily to mind and result in on-the-spot decisions
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3. The Classical Model
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4. The Administrative Model
Bounded rationality
Managers cannot consider all alternatives and available information
Decisions are by cognitive limitations
Incomplete information
Due risk and uncertainty, ambiguity, and time constraints
Satisficing
Choosing the first acceptable decision
MGMT 321 – Chapter 7

5. Why Information Is Incomplete
Figure 7.2
MGMT 321 – Chapter 7

6. Steps in Decision Making
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7. Cognitive Biases Heuristics Types
Rules of thumb that simplify decision making
Used to deal with bounded rationality
Types
Prior Hypothesis Bias
Representativeness
Illusion of Control
Escalating Commitment
MGMT 321 – Chapter 7

8. Group Decision Making Usually superior to individual making
Choices less likely to fall victim to bias
Able to draw on combined skills of group members
Improve ability to generate feasible alternatives
Allows managers to process more information
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9. Group Decision Making Potential Disadvantages
Usually takes much longer than individual decision making
Can be difficult to reach agreement
Can be undermined by biases
Groupthink
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10. Improving Decision Making
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11. Organizational Learning and Creativity
Improving employees’ desire and ability to understand and manage the organization and its task environment
The Learning Organization
Maximizing employees’ ability to behave creatively to maximize organizational learning
Creativity
The ability to discover novel ideas leading to a feasible course of action
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12. Senge’s Principles
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13. Creating a Learning Organization
Personal mastery
Mental models
Team learning
Build a shared vision
Systems thinking
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14. Building Group Creativity
Brainstorming
Production blocking
Nominal group technique
Delphi technique
MGMT 321 – Chapter 7

15. Entrepreneurship Entrepreneurs Intrapreneurs Characteristics
Open to experience
Internal locus of control
High self-esteem
High need for achievement
Entrepreneurs start new businesses and carry out all of the management functions.
Entrepreneurs assume all of the risks for losses and receive all of the returns (profits) from their ventures.
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16. Entrepreneurship and Management
People can become involved in entrepreneurial ventures by starting a business from scratch
Frequently need to hire other people to help them run the business
Frequently, founding entrepreneur lacks the skills, patience, and experience to manage the people and processes
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