Management
Innovation
and
Organization
Development
Chapter 5
Decision Making Skills
and Strategic Innovative Leadership
Preface
“Without good decision making, leader leads nothing”
Objectives
After studying the chapter, students should be able to..
• Explain terms of decision making and strategic innovative leadership
• Explain the importance of decision making and who is concerned as
key decision maker in the organization
• Describe different natures between two major decision making
approaches and explain the examples of each one.
• Explain how to develop effective decision making
• Explain challenges of strategic innovative leadership
• Explain leadership responsibilities to innovation process
• Explain when change leadership plays role to the organization
Contents
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Decision making…………………………………………………………6
Decision making approaches………………………………………….9
Decision making styles……………………………………………….19
Strategic innovative leadership………………………………………22
Change leadership…………………………………………………….31
Summary………………………………………………………………..38
Problem…………………………………………………………………40
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Decision making
Decision making approaches
Decision making styles
Strategic innovative leadership
Change leadership
Summary
Problem
Decision Making
Definition of Decision Making
• The process of choosing from among various alternatives (Ghillyer: 56,
2012)
• The process of identifying and choosing alternative course of action, may
be rational, but often it is nonrational. (Kinincki & Williams: 196, 2011)
• The cognitive process of reaching a decision (Yan Zhang & Amanda
Ruhl)
Decision Making
Importance of Decision Making
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Decision making
Decision making approaches
Decision making styles
Strategic innovative leadership
Change leadership
Summary
Problem
Decision Making Approaches
Decision Making Approaches
• Rational Approaches: Approach to decision making that attempt
to evaluate factual information through the use of some type of
deductive reasoning.
– Optimizing approach
– Satisficing approach
• Intuitive Approaches: Decision making process that relies on
hunches and intuition.
Decision Making Approaches
Rational VS Intuitive
Rational Approaches
Intuitive Approaches
Decision Making Approaches
Rational Approaches
• Optimizing Approach: selecting the best possible alternative
Stage 1
Recognize
the need
for a
decision
Stage 2
Set up,
rank, and
weigh the
decision
criteria
Stage 3
Gather
available
information
and data
6 steps in optimizing approach
Stage 4
Identify
possible
alternatives
Stage 5
Stage 6
Evaluate
each
alternative
with
respect to
all criteria
Select the
best
alternative
Decision Making Approaches
Rational Approaches
• Satisficing Approach: seeking alternatives until finding one that
satisfactory, not optimal due to many constraints as follows;
– Complexity
– Time and money
– Different cognitive capacity, value, skills, habits, unconscious reflexes
– Imperfect information
– Information overload
– Different priorities
– Conflicting goals
Decision Making Approaches
Rational Approaches
<<Modern rational
decision making
tools A.K.A.
programmed
decision making
Decision making Approaches
Intuitive Approaches
• Intuitive approach: Making a choice without the use of
conscious thought or logical inference
• Intuition stemming from expertise—A.K.A. a holistic hunch
• Intuition based on feeling– A.K.A. automated experience
benefits
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drawback
Speed up decision making
•
Useful when deadlines are tight
Helpful when resources are limited •
Difficult to convince others that
such hunch makes sense
Unable to modernize the thought
if the decision makers are kind of “
living in the past”.
Intuitive Approaches
•
Develop intuitive skill with dreyfus model
Decision making Approaches
Intuitive Approaches
<<Modern intuitive
decision making
tools A.K.A. nonprogrammed
decision making
Decision making Approaches
Z Problem-Solving Model
Look at
the facts
and details
Can it be
analyzed
objectively?
Sensing
Thinking
Intuition
Feeling
What alternatives
do the facts
suggest?
What impact
will it have on
those involved?
Figure from Type Talk at Work by Otto Kroeger and Janet M. Thuesen. Copyright © 1992 by Otto Kroeger
and Janet M. Thuesen. Used by permission of Dell Publishing, a division of Random House. Inc.
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Decision making
Decision making approaches
Decision Making Styles
Strategic innovative leadership
Change leadership
Summary
Problem
Decision making Styles
Decision Maker’s Environment
Organizational group
Advisory committees
Labor union
Informal group
Individual within organization
Subordinates
superior
Decision
making
style
Organization itself
position
Structure
Purpose
tradition
Environmental factors influencing decision making in an organization
Personal traits
Personality
Background
experience
Decision making Styles
Four General Decision Making Styles
high
Tolerance for
ambiguity
Analytical
conceptual
Directive
Behavioral
low
Task & technical
concerns
Decision making styles
People & social
concerns
Value orientation
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Decision making
Decision making approaches
Decision making styles
Strategic innovative leadership
Change leadership
Summary
Problem
Strategic Innovative Leadership
“Managers do the things right,
leaders do the right things”
Management - Chapter 18
23
Strategic Innovative Leadership
What is Leadership?
Masters reach consensus on two viewpoints which respond to
two major misuses of leadership. (Lan Liu: 5-20, 2010)
• It’s about activity, not about position
• It’s about change, not about management
Management - Chapter 18
24
Strategic Innovative Leadership
Eight Disciplines of Leadership
The foundation of leadership lies in these eight disciplines (Lan Liu: 5-20,
2010)
1. Connecting with people
2.
3.
4.
5.
6.
7.
8.
Learning from failure
Reflecting on experience
Thinking deeply
Storytelling
Being a teacher
Knowing yourself
Becoming yourself
Management - Chapter 18
Source: Lan Liu, Conversation on Leadership, 10e, John Wiley & Son
25
Strategic Innovative Leadership
Challenges of Strategic Innovative Leadership
• “Strategic Innovative leadership creates the capacity for
ongoing strategic change of innovation.”
• Components of strategic innovative leadership:
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Determining the organization’s innovative-driven purpose or vision.
Exploiting and maintaining the organization’s core competencies.
Developing the organization’s human capital.
Sustaining an effective organizational culture.
Emphasizing and displaying ethical practices.
Establishing balanced organizational
controls.
Management - Chapter 18
26
Strategic Innovative Leadership
Challenges of Strategic Innovative Leadership
• Sustainable competitive advantage relies on creativity and
innovation.
• Creativity is the generation of a novel idea or unique approach
to solving problems or crafting opportunities.
• Innovation is the process of creating new ideas and putting
them into practice.
Management - Chapter 18
27
Strategic Innovative Leadership
Leadership Responsibilities for Innovation Process
• Imagining.
• Designing.
• Experimenting.
• Assessing.
• Scaling.
Management - Chapter 18
28
Strategic Innovative Leadership
Characteristics of Highly Innovative Organizations
• Corporate strategy and culture:
• Emphasize an entrepreneurial spirit.
• Expect innovation.
• Accept failure.
• Be willing to take risks.
• Organization structure:
• Be organic.
• Have lateral communications.
Management
Fundamentals:
Chapter
• Use cross-functional
teams
and
task
forces.
18
29
Strategic Innovative Leadership
Challenges of Strategic Innovative Leadership to be Highly
Innovative Organization
• Top management should:
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Understand the innovation process.
Be tolerant of criticism and differences of opinion.
Take all possible steps to keep goals clear.
Maintain the pressure to succeed.
Break down barriers to innovation.
• Staffing should fulfill five critical innovation roles:
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Idea generators.
Information gatekeepers.
Product champions.
Project managers.
Chapter
Innovation leaders.Management Fundamentals:
18
30
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Decision making
Decision making approaches
Decision making styles
Strategic innovative leadership
Change leadership
Summary
Problem
When the organization need to change….
Management Fundamentals: Chapter
18
32
Change Leadership
Change Leadership
• Change leader.
• A change agent who takes leadership responsibility for changing the
existing pattern of behavior of another person or social system.
• Change leadership.
• Forward-looking.
• Proactive.
• Embraces new ideas.
Management - Chapter 18
33
Change Leadership
Change Leaders Versus Status Quo Managers.
Management - Chapter 18
34
Change Leadership
Top Down VS Bottom Up
• Top-down change
• Strategic and comprehensive change that is initiated with the goals of
comprehensive impact on the organization and its performance
capabilities.
• Driven by the organization’s top leadership.
• Success depends on support of middle-level and lower-level workers.
• Successful leadership cases (called heroic or turnaround leadership):
Lee Iacocca at Chrysler, Lou Gerstner at IBM, Carlos Ghosn at
Nissan
Management - Chapter 18
35
Change Leadership
Top Down VS Bottom Up
• Bottom-up change.
• The initiatives for change come from any and all parts of the
organization, not just top management.
• Crucial for organizational innovation.
• Made possible by:
• Employee empowerment.
• Employee involvement.
• Employee participation.
• Successful leadership cases (teacher-role leadership): Jack Welch at
GE, 3M company, Bill George at Medtronic
Management - Chapter 18
36
Change Leadership
Organizational targets for change
• Tasks
• People
• Culture
• Technology
• Structure
Management - Chapter 18
37
Contents
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Decision making
Decision making approaches
Decision Making Styles
Strategic innovative leadership
Change leadership
Summary
Problem
Summary
Management - Chapter 18
39
Contents
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Decision making
Decision making approaches
Decision Making Styles
Strategic innovative leadership
Change leadership
Summary
Problem
Problem
Problem I
ADIDO company, a sanitary manufacturer has always been complained
from its U.S. clients about damaged shipment when shipped by a reliable
container vessel. Typically each product item is carefully packed into a set
of paper box and the number of package piled up on the palate are fitted
maximum load requirement.
1. What causes are probably to such damage shipment?
2. Who is most likely responsible to this problem?
3. If you are ADIDO’s warehouse manager, what innovative solution would
you offer to the company?
Problem
Problem II
Pracha, Logistic Manager at B&M Logistics found that there has gradually been
increasing of some complaints from its customers about late delivery since a
new fleet drivers were hired. Later he investigated them on what went wrong and
most of them gave him the answers such as heavy traffic jam on the delivery
route, long queuing up at traffic police barriers.
1. Should Pracha trust what the new drivers said?
2. What kind of decision making approach should he adopt to promptly respond
to the customer complaints?
3. In what innovative solution should he develop to keep on the delivery lead
time?