 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione C H A P T E R 9 Decision making and employee involvement

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 2 Chapter learning objectives 1.Diagram the general model of decision making. 2.Explain why people have difficulty identifying problems and opportunities. 3.Identify three factors that challenge our ability to choose the best alternative. 4.Outline the causes of escalation of commitment to a poor decision. 5.Outline the forms and levels of employee involvement. 6.Describe sociotechnical systems theory recommendations for more successful self-directed work teams. 7.Identify the four contingencies in the Vroom–Jago model that determine the optimal level of employee involvement. 8.Discuss the challenges that prevent employee involvement.

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 3 3. Develop alternatives 1. Identify problem 2. Choose decisionstyle Decision making model 4. Choose best solution 5. Implement solution 6. Evaluate decision

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 4 Famous missed opportunities A Knight’s Tale was a box office success, yet most Hollywood studios rejected Brian Helgeland’s proposal. They failed to see the appeal of a film about a lowly squire in 14th century England who aspires to be a knight, set to 1970s rock music and reflecting contemporary themes of youth, freedom and equality. © Photofest

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 5 © Photofest Problem identification concerns  Perceptual biases  perceptual defence  political influence by others  mental models  Poor diagnostic skills  need to make sense  lack of time  defining solutions as problems

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 6 © Photofest Identifying problems effectively  Be aware of perceptual limitations  Discuss the situation with colleagues  Create early warning signs  Use information technology

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 7 Problems with choosing solutions  Goal problems  ambiguous, conflicting  biased by personal goals  Information processing problems  selective attention  limited information processing  sequential evaluation with implicit favourite  Maximising problems  tend to satisfice

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 8 Choosing solutions effectively  Systematically evaluate alternatives  Decision support systems  Scenario planning  Intuition (with caution)

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 9 Intuitive decision making  Ability to know when a problem or opportunity exists and to select the best course of action without conscious reasoning  Conduit for tacit knowledge  Logical reasoning that became habit

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 10 Escalation of commitment causes  Self-justification  Gambler’s fallacy  Perceptual blinders  Closing costs

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 11 Employee involvement at Tien Wah Every three months, Tien Wah Press reveals its financial performance over the previous quarter to employees, so they can see how their costs affect the company’s performance and their bonus. This motivates staff to discover ways to reduce costs. Courtesy of Tien Wah Press

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 12 Employee involvement defined The degree to which employees share information, knowledge, rewards and power throughout the organisation  active in decisions previously outside their control  power to influence decisions  knowledge sharing Courtesy of Tien Wah Press

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 13 Forms of employee involvement Informal Casual information exchanges Example: Boss asks for ideas Formal Codified practices Example: self- directed teams at ZIP Industries Statutory Required by law Example: European codetermination Voluntary No legal requirement Example: Building design task force at Great Plains Direct Employees personally involved Example: Staff submit safety ideas at GPR Truck Sales Representative Reps decide for other employees Example: Labour- mgt committees in NZ

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 14 HighMediumLow Levels of employee involvement  High involvement  employees have complete decision making power (eg SDWTs)  Full consultation  employees offer recommendations (eg gain sharing)  Selective consultation  employees give information, but don’t know the problem

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 15 Features of self-directed teams  Complete entire work process  Tasks assigned by the team, not supervisors  Highly autonomous  responsible for inputs, processes, outputs  Responsible for correcting problems  Receive team-level feedback and rewards

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 16 Sociotechnical systems at Celestica Celestica adopted sociotechnical systems (STS) as its template for corporate renewal. The computer manufacturer assigned self- directed work teams to each work process and identified key variances that the teams control in those processes. Courtesy of Celestica Inc

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 17 Sociotechnical systems conditions  Primary work unit  Semi-autonomous groups  Control key variances  Joint optimisation Courtesy of Celestica Inc

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 18 How involvement improves decisions Employee involvement Leads to better definition of problems More likely to select the best option Improves number and quality of solutions

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 19 Determining optimal involvement  Decision quality  Decision commitment  Risk of conflict  Decision structure

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 20 Overcoming involvement challenges  Cultural differences  better in collectivist and low power distance cultures  Management resistance  educate/train managers to become facilitators  Employee and union resistance  concerns about increased stress, giving up union rights and union power  solution is trust and involvement

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione 21 Overview of the next chapter  The creativity process  Characteristics of creative employees  Workplace conditions that support creativity  Problems facing teams when making decisions  Five structures for team decision making

 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Organisational Behaviour on the Pacific Rim by McShane and Travaglione C H A P T E R 9 Decision making and employee involvement