Organizational Behaviour Individual and Social Behaviour Decision making Decision Making • The process of developing commitment to some course of action Rational Decision Making Model • Maximizing decision making – Identify the problem – Search for relevant information – Develop alternative solutions – Evaluate solutions – Choose the best solution – Implement the chosen solution – Monitor and evaluate the chosen solution Bounded Rationality • using less than perfect decision making processes – Reasons • time and energy • limited capability to process information • organization politics – We satisfice rather than maximize • select an acceptable solution rather than an optimal solution Escalating Commitment • Continuing on a losing course of action or throwing good resources after bad Reasons 1) not recognizing sunk costs 2) self-justification (image management) 3) to be consistent (image management) 4) framing Escalating Commitment • To help overcome – set up specific goals – put more emphasis on the decision making process rather than the results – try to see the outcomes from a different perspective – separate initial decision makers from those evaluating the continuance of the program Prospect Theory • Framing options as losses or gains – >>>>> risk taking or risk avoidance • A gain of a given amount is much less attractive than the loss of the same amount is averse (feel losses more than gains) • Adapt more quickly to gains than losses – the reference point adjusts more quickly to gains • We perceive equal size gains (or losses) differently depending on the relative amounts that we are dealing with Heuristics and Biases • Processing information – Availability heuristic – Confirmation bias – Law of small numbers Group Decision Making • Can improve decision making – more people to spot the potential problem – bring in a wider variety of ideas and solutions – better at analyzing for strengths and weaknesses • Can increase commitment to decisions Group Decision Making • Disadvantages – Speed; takes more time – Conflict – Domination – Diffusion of responsibility Group Decision Making • Use when – members can bring in different backgrounds, knowledge and skill – tasks can be divided into individual assignments – memory is important – you can weight contributions Groupthink • Conformity among members that does not allow alternative perspectives to be heard; results in poor decision making • Includes – the leader or majority expressed opinion dominates – strong social pressures to maintain harmony – the group becomes closed to alternative ideas – pressures are put on dissenting members Groupthink • Illusion of invulnerability - members are overconfident; comfortable with risky decisions • Rationalization - problems or inconsistent information are explained away • Illusion of morality - an unquestioned belief in the morality of the group’s decision • Stereotyping of outsiders - unfavorable stereotypes are created about outsiders or the other side • Pressure for conformity - members pressure each other to conform to the dominant view • Self-censorship - member suppress doubts to maintain harmony • Illusion of unanimity - because dissent is suppressed members perceive that unanimous support exists for the chosen course of action • Mindguards - some members appoint themselves to prevent inconsistent information from reaching the team Groupthink • To overcome – leaders should not express or support early preferences – establish norms that allow for alternative perspectives to be heard e.g. devil’s advocate – draw out quiet members and make sure everyone contributes Group Polarization • Tendency for teams to make more extreme decisions than individuals – Risky shift and conservative shift • Polarization occurs because of – Persuasive arguments – Increased confidence – Social comparison Group Decision Making • Methods: – Ordinary – Brainstorming – Nominal Group Technique – Delphi Technique Organizational Decision Making The Garbage Can Model • Characteristics of the decision 1. The problem, alternatives, and solutions can be ill defined 2. The relationship among the key variables is hard to define 3. There is turnover of participants Garbage Can Model • Consequences – Problems may lead to a proposed solution or not. Problems may not be solved through the solution – Potential Solutions may be proposed. People may be attracted to solutions whether or not they solve the problem. Solutions can be independent of the problem – Participation can determine what and when problems and solutions are proposed – Choice opportunities or decision opportunities will determine which problems are proposed, what solutions are suggested, and which decision is made (a matter of timing) Garbage Can Model • Consequences – solutions may be proposed even when problems don’t exist – Choices are made without solving problems – Problems may persist without being solved – A few problems are solved