C H A P T E R
T E N
.
Decision Making
and Creativity
McShane 5th Canadian Edition
1
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Decision Making & Creativity at G.A.P
Creativity and astute
decision making have
helped Bruce Poon Tip
(shown) and his company,
G.A.P Adventures, to
become an innovator in the
travel industry
Courtesy of G.A.P Adventures
McShane 5th Canadian Edition
2
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Decision Making Defined
Conscious process of
making choices among
one or more alternatives
with the intention of
moving toward some
desired state of affairs
Courtesy of G.A.P Adventures
McShane 5th Canadian Edition
3
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Rational Decision Making Model
1. Identify
problem
6. Evaluate
decision
2. Choose
decision
style
5. Implement
solution
3. Develop
alternatives
4. Choose
best solution
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4
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Problem Identification Process
• Problems and opportunities are not
announced or pre-defined
– need to interpret ambiguous information
• Involves both rational and emotional brain
centres
– probably need to pay attention to both in
problem identification
McShane 5th Canadian Edition
5
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
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.
McShane 5th Canadian Edition
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© Photofest
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Problem Identification Challenges
• Perceptual bias:
– Imperfect perceptions
– Selective attention
mechanisms
– Influence from others
– Mental models
• Diagnostic skills:
– Defining problems in
terms of solutions
McShane 5th Canadian Edition
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7
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Identifying Problems Effectively
• Be aware of perceptual and
diagnostic limitations
• Understand mental models
• Consider other
perspectives
• Discuss the situation with
colleagues
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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: All choices evaluated simultaneously
OB: Choices evaluated sequentially
more
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Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Making Choices: Rational vs OB (con’t)
Standards
Rational: Evaluate against absolute standards
OB: Evaluate against implicit favourite
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
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10
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Intuitive Decision Making
• Ability to know when a problem or
opportunity exists and select the best
course of action without conscious
reasoning
• Conduit for tacit knowledge
• Use intuition to complete rational
process
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Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Choosing Solutions Effectively
• Systematically
evaluate alternatives
• Balance emotions and
rational influences
• Scenario planning
© Corel Corp. With permission
McShane 5th Canadian Edition
12
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Escalation of Commitment
Escalation of commitment
occurred when the British
government continued funding
the Concorde supersonic jet
long after it’s lack of
commercial viability was
apparent. Some scholars refer
to escalation of commitment as
the “Concorde fallacy.”
McShane 5th Canadian Edition
13
© Corel Corp. With permission
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Escalation of Commitment Causes
• Self-justification
• Gambler’s fallacy
• Perceptual blinders
• Closing costs
© Corel Corp. With permission
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14
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Employee Involvement Defined
The degree that employees share
information, knowledge, rewards and
power throughout the organization
– active in decisions
– employees influence how their work is
organized and carried out
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Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Levels of Employee Involvement
High
High involvement
– Employees have complete decision
making power (e.g.. SDWTs)
Full consultation
Medium
– Employees offer recommendations
(e.g.. gain sharing)
Selective consultation
Low
McShane 5th Canadian Edition
– Employees give information, but
don’t know the problem
16
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Employee Involvement Model
Potential Involvement
Outcomes
• Better problem
identification
Employee
Involvement
• More/better solutions
generated
Contingencies
of Involvement
McShane 5th Canadian Edition
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• Best choice more
likely
• Higher decision
commitment
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Contingencies of Involvement
Employee involvement is better when:
Decision
Structure
Knowledge
Source
Decision
Commitment
Risk of
Conflict
McShane 5th Canadian Edition
• Problem is new & complex
(i.e nonprogrammed decision)
• Employees have relevant knowledge
beyond leader
• Employees would lack commitment
unless involved
• Norms support firm’s goals
• Employee agreement likely
18
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Creative Process Model
Verification
Insight
Incubation
Preparation
McShane 5th Canadian Edition
19
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Creativity at Research in Motion
Through his persistence,
Mike Lazardis (shown)
helped Research in Motion to
become a leader in wireless
communications. “[He] keeps
grinding towards his goal until
he gets there,” says one
observer.
R. Koza, CP/K-W Record
McShane 5th Canadian Edition
20
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Characteristics of Creative People
• Above average
intelligence
• Persistence
• Relevant knowledge
and experience
R. Koza, CP/K-W Record
• Inventive thinking
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21
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Supporting Creativity
• Learning orientation
– Encourage experimentation
– Tolerate mistakes
• Intrinsically motivating work
– Task significance, autonomy, feedback
• Open communication and sufficient
resources
McShane 5th Canadian Edition
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Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Creative Activities
Redefine
the Problem
• Review
abandoned
projects
• Ask other
people
McShane 5th Canadian Edition
Associative
Play
CrossPollination
• Storytelling
• Diverse teams
• Artistic
activities
• Information
sessions
• Morphological
analysis
• Internal
tradeshows
23
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Team Decision Making Constraints
• Time constraints
– Time to organize/coordinate
– Production blocking
• Evaluation apprehension
– Belief that other team members are silently
evaluating you
• Conformity to peer pressure
– Suppressing opinions that oppose team
norms
McShane 5th Canadian Edition
24
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Team Constraints: Groupthink
• Tendency in highly cohesive teams to
value consensus at the price of decision
quality
• More common when the team:
–
–
–
–
–
–
Is highly cohesive
Is isolated from outsiders
Team leader is opinionated
Faces external threat
Has recent failures
Team lacks clear guidance
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Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Team Constraints: Group Polarization
• Tendency for teams to make more
extreme decisions than individuals alone
• Riskier options usually taken because of
gambler’s fallacy -- believe they can
beat the odds
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26
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
General Guidelines for Team Decisions
1. Ensure neither leader nor any
member dominates
2. Maintain optimal team size
3. Team norms encourage critical
thinking
4. Introduce effective team structures
McShane 5th Canadian Edition
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Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Generating Constructive Conflict
• Form heterogeneous decision
making team
• Ensure team meets often to
face contentious issues
• Members should take on
different discussion roles
McShane 5th Canadian Edition
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Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Rules of Brainstorming
1. Speak freely
2. No criticism
3. Provide many ideas
4. Build on others’ ideas
McShane 5th Canadian Edition
29
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Evaluating Electronic Brainstorming
• Benefits
–
–
–
–
Less production blocking
Less evaluation apprehension
More creative synergy
More satisfaction with process
• Problems
–
–
–
–
Too structured
Technology-bound
Candid feedback is threatening
Not applicable to all decisions
McShane 5th Canadian Edition
30
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Nominal Group Technique
Describe
problem
Individual
Activity
Team
Activity
Individual
Activity
Write down
possible
solutions
Possible
solutions
described
to others
Vote on
solutions
presented
McShane 5th Canadian Edition
31
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
C H A P T E R
T E N
.
Decision Making
and Creativity
McShane 5th Canadian Edition
32
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Solutions to Creativity
Brainbusters
McShane 5th Canadian Edition
33
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Double Circle Problem
McShane 5th Canadian Edition
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Nine Dot Problem
McShane 5th Canadian Edition
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Nine Dot Problem Revisited
McShane 5th Canadian Edition
36
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Word Search
FCIRVEEALTETITVEERS
McShane 5th Canadian Edition
37
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Burning Ropes
After first rope burned
i.e. 30 min.
One Hour to Burn Completely
McShane 5th Canadian Edition
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Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.