Decision Making and Creativity
Chapter Six
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Decision Making at Radical
Ron Sangha/ BC Business
Radical Entertainment founder Ian Wilkinson (third from right)
meets with employees every week to reinforce the electronic
games developer’s emphasis on creative decision making and
employee involvement.
6-2
Decision Making Defined
Ron Sangha/ BC Business
Decision making is a conscious process of making choices
among one or more alternatives with the intention of
moving toward some desired state of affairs.
6-3
Rational Choice Decision Process
6-4
Rational Choice Decision Process
Identify problem/opportunity

Problem is a gap between what is
and what ought to be
Choose decision process

Meta-decision -- e.g.
programmed?, involve others?
Develop (and identify) alternatives

Search, then build
Choose best alternative

Alternative that maximizes payoff
Implement choice
Evaluate choice
6-5
Problem Identification Process
Problems and opportunities are not announced or
pre-defined

need to interpret ambiguous information
Problem identification uses both logical analysis
and unconscious emotional reaction during
perceptual process

need to pay attention to both logic and emotional
reaction in problem identification
6-6
No Problem, Houston?
NASA’s space shuttle Columbia
disintegrated during re-entry, killing all
seven crewmembers. A special accident
investigation board concluded that
NASA’s middle management continually
resisted attempts to recognize that the
Columbia was in trouble, and therefore
made no attempt to prevent loss of life.
6-7
Problem Identification Challenges
1. Stakeholder framing
2. Perceptual defense
3. Mental models
4. Decisive leadership
5. Solution-focused
problems
6-8
Identifying Problems Effectively
Be aware of perceptual
and diagnostic limitations
Understand mental models
Discussing the situation
with colleagues -- see
different perspectives
6-9
Making Choices: Rational vs OB Views
Goals
Rational: Clear, compatible, agreed upon
OB: Ambiguous, conflicting, lack agreement
Processing
Information
Rational: People can process all information
OB: People process only limited information
Evaluation
Timing
Rational: Choices evaluated simultaneously
OB: Choices evaluated sequentially
more
6-10
Making Choices: Rational vs OB (con’t)
Standards
Rational: Evaluate against absolute standards
OB: Evaluate against implicit favorite
Info Quality
Rational: People rely on factual information
OB: Rely on perceptually distorted information
Decision
Objective
Rational: Maximization -- the optimal choice
OB: Satisficing -- a “good enough” choice
6-11
Emotions and Making Choices
Emotional marker process forms preferences
before we consciously think about choices
Moods and emotions influence the decision
process

affects vigilance, risk aversion, etc.
We ‘listen in’ on our emotions and use that
information to make our choices
6-12
Intuitive Decision Making
Ability to know when a problem or opportunity
exists and select the best course of action without
conscious reasoning
Intuition as emotional experience


Gut feelings are emotional signals
Not all emotional signals are intuition
Intuition as rapid unconscious analysis

Uses action scripts
6-13
Making Choices more Effectively
Systematically evaluate alternatives
Balance emotions and rational influences
Scenario planning
6-14
Escalation of Commitment
The tendency to repeat an apparently bad
decision or allocate more resources to a failing
course of action
Four main causes of escalation:




Self-justification
Prospect theory effect
Perceptual blinders
Closing costs
6-15
Evaluating Decisions Better
Separate decision choosers from evaluators
Establish a preset level to abandon the project
Involve several people in the evaluation process
6-16
Employee
Involvement
Decision Making
and Creativity
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Employee Involvement at Thai Carbon Black
Thai Cabon Black, the Thai-Indian
joint venture, relies on employee
involvement to boost productivity
and quality.
Employees submit hundreds of
suggestions in little red boxes
located around the site
Participatory management
meetings are held every month
6-18
Employee Involvement Defined
The degree to which
employees influence how
their work is organized and
carried out
Different levels and forms
of involvement
6-19
Employee Involvement Model
Potential Involvement
Outcomes
Better problem
identification
Employee
Involvement
Synergy produces
more/better solutions
Contingencies
of Involvement
Better at picking the
best choice
Higher decision
commitment
6-20
Contingencies of Involvement
Higher employee involvement is better when:
Decision
Structure
Knowledge
Source
Decision
Commitment
Risk of
Conflict
• Problem is new & complex
(i.e nonprogrammed decision)
• Employees have relevant knowledge
beyond leader
• Employees would lack commitment
unless involved
1. Norms support firm’s goals
2. Employee agreement likely
6-21
Creativity in
Decision Making
Decision Making
and Creativity
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Creative Process Model
Verification
Insight
Incubation
Preparation
6-23
Characteristics of Creative People
Above average intelligence
Persistence
Relevant knowledge and experience
Inventive thinking style
6-24
Creative Work Environments
Learning orientation


Encourage experimentation
Tolerate mistakes
Intrinsically motivating work

Task significance, autonomy, feedback
Open communication and sufficient resources
Team competition and time pressure have
complex effect on creativity
6-25
Creative Activities
Redefine
the Problem
Associative
Play
CrossPollination
• Review
abandoned
projects
• Storytelling
• Diverse teams
• Artistic activities
• Explore issue
with other
people
• Morphological
analysis
• Information
sessions
• Internal
tradeshows
6-26
Decision Making and
Creativity
Chapter Six
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Solutions to
Creativity
Brainbusters
Decision Making
and Creativity
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Double Circle Problem
6-29
Nine Dot Problem
6-30
Nine Dot Problem Revisited
6-31
Word Search
FCIRVEEALTETITVEERS
6-32
Burning Ropes
After first rope burned
i.e. 30 min.
One Hour to Burn Completely
6-33