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Individual Decision MakingEssentials of Organizational Behavior, 8/e Stephen P. Robbins Chapter 6 Individual Decision Making © 2005 Prentice-Hall
Decision making - making choices from among two or more alternatives© 2005 Prentice-Hall
The Six-Step Rational Decision-Making ModelDefine the problem Identify decision criteria Weight the criteria Generate alternatives Rate each alternative on each criterion Compute the optimal decision © 2005 Prentice-Hall
Assumptions of the ModelProblem clarity Known options Clear preferences Constant preferences No time or cost constraints Maximum payoff © 2005 Prentice-Hall
Creativity - ability to produce novel and useful ideasHelps decision maker identify all viable alternatives © 2005 Prentice-Hall
The Three Components of CreativityCreativity Skills Expertise Creativity Task Motivation © 2005 Prentice-Hall
Five Organizational Factors Impeding CreativityExpected evaluation Surveillance External motivators Competition Constrained choice © 2005 Prentice-Hall
Bounded Rationality Due to the limited capacity of the mind to be fully rational; decision makers construct simplified models to extract the essential features from complex problems © 2005 Prentice-Hall
Typical Use of Bounded RationalityLimited list of criteria based on most conspicuous choices Final solution represents a satisficing choice, not an optimum one Satisficing - first acceptable choice © 2005 Prentice-Hall
Common Biases and ErrorsOverconfidence bias Anchoring bias Confirmation bias Availability bias © 2005 Prentice-Hall
Common Biases and ErrorsRepresentative bias Escalation of commitment Randomness error Hindsight bias © 2005 Prentice-Hall
Intuition Unconscious process created out of distilled experience; resulting in a rapid decision with what appears to be very limited information © 2005 Prentice-Hall
When is Intuition Used? When a high level of uncertainty existsWhen there is little precedent to draw on When variables are less scientifically predictable When “facts” are limited When facts don’t clearly point the way © 2005 Prentice-Hall
When is Intuition Used? When analytical data are of little useWhen there are several plausible alternative solutions from which to choose When time is limited and there is pressure to come up with the right decision © 2005 Prentice-Hall
Tolerance for AmbiguityDecision-Style Model Conceptual Behavioral Analytical Directive Way of Thinking Tolerance for Ambiguity High Low Rational Intuitive © 2005 Prentice-Hall
Gender Differences Evidence indicates that women analyze decisions more than men Reason is not clear © 2005 Prentice-Hall
Stages of Moral DevelopmentLevel Stage Description Principled 6. Following self-chosen ethical principles, even if they violate the law 5. Valuing rights of others; upholding non-relative values and rights regardless of the majority’s opinion Conventional 4. Maintaining conventional order by fulfilling obligations to which you have agreed 3. Living up to what is expected by people close to you Pre-conventional 2. Following rules only when it’s in your immediate interest 1. Sticking to rules to avoid physical punishment © 2005 Prentice-Hall
Organizational ConstraintsPerformance Evaluation Reward Systems Formal Regulations System-Imposed Time Constraints Historical Precedents © 2005 Prentice-Hall
Cultural Differences Cultural background can significantly influenceSelection of problems Depth of analysis Importance placed on logic and rationality Whether decisions should be made Autocratically by individual manager Collectively in groups © 2005 Prentice-Hall
Criteria in Making Ethical ChoicesUtilitarianism Rights Justice © 2005 Prentice-Hall
Implications for ManagersFive suggestions to improve decision making: Analyze the situation and adjust to the national culture and criteria of organization Be aware of biases Combine rational analysis with intuition Do not assume your specific decision style is appropriate for every job Use creativity-stimulation techniques © 2005 Prentice-Hall
Organizational Behavior MBA-542 Instructor: Erlan Bakiev, Ph.D.
Individual & Group Decision Making
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-1 Essentials of Organizational Behavior, 10/e Stephen P. Robbins & Timothy A. Judge.
Copyright © 2012 Pearson Education Chapter 5 Individual Perception and Decision- Making 5-1 Essentials of Organizational Behavior, 11/e Global Edition.
© 2005 Prentice Hall Inc. All rights reserved. o r g a n i z a t i o n a l b e h a v i o r e l e v e n t h e d i t i o n.
Perception and Individual Decision Making
What Is Perception, and Why Is It Important?
Chapter 3 Perception and Individual Decision Making
Chapter 2 contd. Perception and Individual Decision Making
Link between Perception & Individual Decision Making Decisions: The choice made from among two or more alternatives. Problem: a discrepancy between some.
Chapter 3 Perception & Individual Decision Making
The Rational Decision-Making Process
Individual Decision Making
Chapter 9 Making Decisions K&K And more. Key concepts Models of decision making Rational, normative, optimizing, satisficing, heuristics Contingency model.
Individual Decision Making Session 6
Chapter 4 Foundations of Decision Making
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