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Session 12 13

Human behavior organizations notes

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KANIKA GORAYA
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49 views

Session 12 13

Human behavior organizations notes

Uploaded by

KANIKA GORAYA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Human Behavior in Organizations

Session 13
Types of Decisions

Programmed Nonprogrammed
Decision Decision
a simple, routine a new, complex decision
matter for which a that requires a creative
manager has an solution
established decision
rule
Recognize the problem and
Decision the need for a decision
Making
Process
Identify the objective of
the decision

Gather and evaluate data


and diagnose the situation

List and evaluate


alternatives
Select the best
Decision
course of action
Making
Process
Implement
the decision

Gather feedback

Follow up
Models of decision making
Rational Decision Making

• Assumptions of the Rational Model

– The decision maker…


• Has complete information.

• Is able to identify all the relevant options in an unbiased


manner.
• The decision maker can calculate the probability of success
for each alternative
• Chooses the option with the highest utility.
• Most decisions in the real world don’t follow the rational model.
Bounded Rationality

A theory that suggests that there are constraints

that force a decision maker to be less than

completely rational
• Bounded Rationality

– Most people respond to a complex problem by reducing it to a


level at which it can be readily understood.

• People satisfice – they seek solutions that are satisfactory


and sufficient.

– Individuals operate within the confines of bounded rationality.

• They construct simplified models that extract the essential


features.

• Use heuristics

6-8
• How does bounded rationality work?

– Once a problem is identified, the search for criteria and


options begins.
• A limited list of the more conspicuous choices is
identified.
• The decision maker then reviews the list, looking for a
solution that is “good enough.”
Garbage Can Model Solutions
a theory that contends
that Choice
Problems opportunities
decisions in
organizations are Participants
random and
unsystematic
Common Biases and Errors in Decision Making

– Overconfidence Bias:
• Overestimation of performance and ability.
• People think they know more than they do, and it costs them.

– Anchoring Bias:
• fixating on initial information as a starting point and failing to
adequately adjust for subsequent information.
Common Biases and Errors in Decision Making

• Confirmation Bias: type of selective perception.


– Seek out information that reaffirms past choices, and
discount information that contradicts past judgments.
• Availability Bias: tendency for people to base judgments on
information that is readily available.
• Framing Bias : The way decision maker views situation at
hand. More risk taken in lose-lose situations.
Common Biases and Errors in Decision Making

• Escalation of Commitment: staying with a decision even


when there is clear evidence that it’s wrong.
• Likely to occur when individuals view themselves as
responsible for the outcome.
• Randomness Error: our tendency to believe we can predict
the outcome of random events.
• Decision making becomes impaired when we try to
create meaning out of random events.
Common Biases and Errors in Decision Making

• Motivational Biases:
– Collision between multiple selves (emotion vs. reason)

– Positive illusions

• Hindsight Bias:
– The tendency of people to overestimate their ability to have predicted
an outcome that could not possibly have been predicted.
– In essence, the hindsight bias is sort of like saying “I knew it!” when an
outcome (either expected or unexpected) occurs – and the belief that
one actually predicted it correctly.
Individual factors that affect decision making

• Personality
• Conscientiousness
• High self-esteem
• Risk aversion

• Gender

• Mental Ability

• Cultural Differences
Influences on Decision Making

Intuition – fast, Creativity – a


positive force in process influenced
decision making by individual and
utilized at a level organizational
factors that results
below consciousness, in the production of
involves learned novel and useful
patterns of ideas, products, or
information both
Intuition and Business success

• A survey of 13,000 business executives


revealed:
• Executives credited 80 percent of their
business success to relying on their intuition.

• (Source:Parikh, Jagdish, Neubaeur, Fred & Lank, Alden G. (1996), Intuition: The New
Frontier of Management; 3rd edition, Blackwell Business)
Group Decision Making

• Synergy – occurs when group members stimulate


new solutions to problems through the process of
mutual influence and encouragement within the
group.
Group Decision Making
1. More knowledge through pooling of
group resources
Advantages 2. Increased acceptance and
commitment due to voice in
decisions
3. Greater understanding due to
involvement in decision stages

1. Pressure in groups to conform


2. Domination by one forceful member
or dominant clique
Disadvantages
3. Amount of time required, because
group is slower than individual to
make a decision
4. Ambiguous responsibility
Limits of Group Decision Making

Groupthink – a deterioration of mental efficiency, reality testing,


and moral judgment resulting from in-group pressures

Group Polarization – the tendency for group discussion to


produce shifts toward more extreme attitudes among
members
• Risky shift
Preventing Groupthink

• Ask each group member to act as critical


evaluator
• Have the leader avoid stating his opinion prior to
the group decision
• Create several groups to work simultaneously
• Appoint a devil’s advocate
• Evaluate the competition carefully
• After consensus, encourage rethinking the
position

From Janis, Irving L., Groupthink: Psychological Studies of Policy Decisions and Fiascoes, Second Edition. Copyright
© 1982 by Houghton Mifflin Company.
Group Decision Techniques

Nominal Dialectical
Group Inquiry
Technique Brainstorming

Brainstorming

Quality Circles
and Quality Teams
Devil’s Advocacy
Group Decision Making

• The nominal group technique: restricts discussion or


interpersonal communication during the decision making
process.
– Group members are all physically present, but members
operate independently.
– Permits the group to meet formally but does not restrict
independent thinking, as does the interacting group.
• Nominal groups outperform brainstorming groups.
• Steps for a nominal group:
– Each member independently writes down his/her ideas on the problem.

– After this silent period, each member presents one idea to the group.
– The ideas are discussed for clarity.
– Each group member rank-orders the ideas.
– The idea with the highest aggregate ranking determines the final
decision.
Special Decision-Making Groups

• Quality circles – small groups that meet voluntarily to


address work-related problems.

• Quality teams – a team that is part of an organization,


empowered to act on its decisions regarding quality

• Self-managed teams – more broadly focused than


above two types
Participative Decision Making

Occurs when individuals who are affected


by decisions influence decision-making

Organizational Individual
Foundation Foundation

Supportive organizational culture People must be psychologically


Team-oriented work design equipped
Motivation to act autonomously
Employees must be able to see benefit

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