国外组织行为学课件-皮尔森-ch11

1、Chapter 11Decision MakingCopyright 2011 Pearson Canada Inc.Learning ObjectivesDefine decision making and differentiate well-structured and ill-structured problems.Compare and contrast perfectly rational decision making with decision making under bounded rationality.Discuss the impact of framing and

2、cognitive biases on the decision process.Copyright 2011 Pearson Canada Inc.Learning Objectives4.Explain the process of escalation of commitment to an apparently failing course of action.5.Consider how emotions and mood affect decision making.Summarize the pros and cons of using groups to make decisi

3、ons, with attention to the groupthink phenomenon and risk assessment.Discuss techniques for improving organizational decision making.Copyright 2011 Pearson Canada Inc.What Is Decision Making?Decision making is the process of developing a commitment to some course of action.Three things are noteworth

4、y about decision making:It involves making a choice among several action alternatives.It is a process.It involves a commitment of resources.Copyright 2011 Pearson Canada Inc.What Is Decision Making? (continued)Decision making can also be described as a process of problem solving.A problem exists whe

5、n a gap is perceived between some existing state and some desired state.Copyright 2011 Pearson Canada Inc.Well-Structured ProblemsA problem for which the existing state is clear, the desired state is clear, and how to get from one state to another is fairly obvious.These problems are simple, and the

6、ir solutions arouse little controversy.They are repetitive and familiar and they can be programmed.A program is a standardized way of solving a problem.Copyright 2011 Pearson Canada Inc.Well-Structured Problems (continued)Programs short-circuit the decision-making process by enabling the decision ma

7、ker to go directly from problem identification to solution.They are also known as rules, routines, standard operating procedures, or rules of thumb.They provide a useful means of solving well structured problems.Programs are only as good as the decision-making process that led to the adoption of the

8、 program in the first place.Copyright 2011 Pearson Canada Inc.Ill-Structured ProblemA problem for which the existing and desired states are unclear and the method of getting to the desired state is unknown.Unique and unusual problems that have not been encountered before.They tend to be complex and

9、involve a high degree of uncertainty.They frequently arouse controversy and conflict.Copyright 2011 Pearson Canada Inc.Ill-Structured Problem (continued)They cannot be solved with programmed decisions.Decision makers must resort to non-programmed decision making.They can entail high risk and stimula

10、te strong political considerations.Copyright 2011 Pearson Canada Inc.The Compleat Decision Maker A Rational Decision-Making ModelA rational decision maker might use a model that involves a sequence of steps that are followed when making a decision.Copyright 2011 Pearson Canada Inc.The Rational Decis

11、ion Making ProcessCopyright 2011 Pearson Canada Inc.Perfect RationalityPerfect rationality is a decision strategy that is completely informed, perfectly logical, and oriented toward economic gain.The prototype for perfect rationality is the Economic Person who is the perfect, cool, calculating decis

12、ion maker.Copyright 2011 Pearson Canada Inc.Perfect Rationality (continued)Economic Person characteristics:can gather information without cost and is completely informed;is perfectly logical; andonly criterion for decision making is economic gain.These perfectly rational characteristics do not exist

13、 in real decision makers.Copyright 2011 Pearson Canada Inc.Bounded RationalityHerbert Simon recognized that the rational characteristics of Economic Person do not exist in real decision makers. He suggested that managers use bounded rationality.Bounded rationality is a decision strategy that relies

14、on limited information and that reflects time constraints and political considerations.Copyright 2011 Pearson Canada Inc.Bounded Rationality (continued)Framing and cognitive biases illustrate the operation of bounded rationality, as does the impact of emotions and mood on decisions.Framing refers to

15、 the aspects of the presentation of information about a problem that are assumed by decision makers.How problems and decision alternatives are framed can have a powerful impact on resulting decisions.Copyright 2011 Pearson Canada Inc.Cognitive BiasesCognitive biases are tendencies to acquire and pro

16、cess information in a particular way that is prone to error.They constitute assumptions and shortcuts that can improve decision-making efficiency, but they frequently lead to serious errors in judgment.Copyright 2011 Pearson Canada Inc.Problem Identification and FramingBounded rationality can lead t

17、o the following difficulties in problem identification:Perceptual defence.Problem defined in terms of functional specialty.Problem defined in terms of solution.Problem diagnosed in terms of symptoms.Copyright 2011 Pearson Canada Inc.Problem Identification and Framing (continued)When a problem is ide

18、ntified, it is framed in some way.A $10,000 expenditure can be framed as a cost or an investment.Different decision frames can lead to very different decisions.Copyright 2011 Pearson Canada Inc.Problem Identification and Framing (continued)Rational decision makers should be very self-conscious about

19、 how they have framed problems. They should try out alternative frames.They should avoid overarching, universal frames.Copyright 2011 Pearson Canada Inc.Information SearchThe perfectly rational decision maker has free and instantaneous access to all information necessary to clarify the problem and d

20、evelop alternative solutions.Bounded rationality suggests that information search can be slow and costly.Decision makers can have too little or too much information.Copyright 2011 Pearson Canada Inc.Too Little InformationSometimes, decision makers do not acquire enough information to make a good dec

21、ision.Several cognitive biases contribute to this such as using whatever information is most readily available and the tendency to be overconfident.Confirmation bias refers to the tendency to seek out information that conforms to ones own definition of or solution to a problem.Copyright 2011 Pearson

22、 Canada Inc.Too Much InformationToo much information can also damage the quality of decisions.Information overload is the reception of more information than is necessary to make effective decisions.Information overload can lead to errors, omissions, delays, and cutting corners.Decision makers seem t

23、o think that more is better.Copyright 2011 Pearson Canada Inc.Alternative Development, Evaluation, and ChoiceThe perfectly rational decision maker exhibits maximization the choice of the decision alternative with the greatest expected value. For the decision maker working under bounded rationality,

24、alternative solutions and probabilities of success are not all known.Cognitive biases also come into play.People are especially weak intuitive statisticians.Copyright 2011 Pearson Canada Inc.Alternative Development, Evaluation, and Choice (continued)People avoid incorporating existing data about the

25、 likelihood of events (“base rates”) into their decisions.Large samples warrant more confidence than small samples.Decision makers often overestimate the odds of complex chains of events occurring.Copyright 2011 Pearson Canada Inc.Alternative Development, Evaluation, and Choice (continued)People are

26、 poor at revising estimates of probabilities and values as they acquire additional information.The anchoring effect illustrates that decision makers do not adjust their estimates enough from some initial estimate that serves as an anchor.It is possible to reduce some of these cognitive biases by mak

27、ing people more accountable for their decisions.Copyright 2011 Pearson Canada Inc.Alternative Development, Evaluation, and Choice (continued)The perfectly rational decision maker can evaluate alternative solutions against a single criterion economic gain.The decision maker who is bounded by reality

28、might have to factor in other criteria such as political acceptability.The decision maker working under bounded rationality frequently “satisfices” rather than maximizes.Copyright 2011 Pearson Canada Inc.SatisficingSatisficing means that the decision maker establishes an adequate level of acceptabil

29、ity for a solution to a problem and then screens solutions until he or she finds one that exceeds this level.When this occurs, evaluation of alternatives ceases, and the solution is chosen for implementation.Copyright 2011 Pearson Canada Inc.Risky Decision MakingChoosing between decision alternative

30、s often involves an element of risk.When people view a problem as a choice between losses, they tend to make risky decisions.When people frame the alternatives as a choice between gains they tend to make conservative decisions.Copyright 2011 Pearson Canada Inc.Risky Decision Making (continued)It is

31、important to be aware of what reference point you are using when you frame decision alternatives.Framing a problem as a choice between losses can contribute to a foolish level of risk taking.Learning history can modify preferences for or against risk.Copyright 2011 Pearson Canada Inc.Solution Implem

32、entationDecision makers are often dependent on others to implement their decisions, and it might be difficult to anticipate their ability or motivation to do so.Implementation problems often occur when those who must implement a decision are not the ones who made the decision.Cross-functional teams

33、can help prevent these kinds of implementation problems.Copyright 2011 Pearson Canada Inc.Solution EvaluationThe perfectly rational decision maker should be able to evaluate the effectiveness of a decision with calm, objective detachment.The bounded decision might encounter problems at this stage of

34、 the process:JustificationHindsightCopyright 2011 Pearson Canada Inc.JustificationSubstantial dissonance can be aroused when a decision turns out to be faulty.To prevent such dissonance, decision makers sometimes avoid careful evaluations or devote their energy to trying to justify a faulty decision

35、.Copyright 2011 Pearson Canada Inc.Sunk CostsThe justification of faulty decisions is best seen in the irrational treatment of sunk costs.Sunk costs are permanent losses of resources incurred as the result of a decision.Since these resources have been lost due to a past decision, they should not ent

36、er into future decisions.Copyright 2011 Pearson Canada Inc.Escalation of CommitmentPeople often “throw good resources after bad,” acting as if they can recoup sunk costs.This process is known as escalation of commitment to an apparently failing course of action.Escalation of commitment refers to the

37、 tendency to invest additional resources in an apparently failing course of action.Copyright 2011 Pearson Canada Inc.Escalation of Commitment (continued)It can happen even when the current decision maker is not responsible for previous sunk costs and can occur in competitive and non-competitive situ

38、ations.Groups are more prone than individuals to escalate commitment.Copyright 2011 Pearson Canada Inc.Escalation of Commitment (continued)Reasons for escalation of commitment:Dissonance reduction.Social norm for consistent behaviour.Motivation to not appear wasteful.The way the problem is framed.Pe

39、rsonality, moods, and emotions.Copyright 2011 Pearson Canada Inc.Preventing Escalation of CommitmentEncourage continuous experimentation with reframing the problem.Set specific goals for the project in advance that must be met if more resources are to be invested.Copyright 2011 Pearson Canada Inc.Pr

40、eventing Escalation of Commitment (continued)Place more emphasis in evaluating managers on how they made decisions and less on decision outcomes.Separate initial and subsequent decision making.Copyright 2011 Pearson Canada Inc.HindsightThe evaluation of decisions is also inhibited by faulty hindsigh

41、t.Hindsight refers to the tendency to review the decision-making process that was used to find what was done right or wrong.It often reflects a cognitive bias.It is the tendency to assume, after the fact, that we knew all along what the outcome of a decision would be.Copyright 2011 Pearson Canada In

42、c.Hindsight (continued)Another form of faulty hindsight is the tendency to take personal responsibility for successful decision outcomes while denying responsibility for unsuccessful outcomes.Copyright 2011 Pearson Canada Inc.How Emotion and Mood Affect Decision MakingStrong emotions frequently figu

43、re in the decision making process. Emotions can help decision making but strong emotions can also be a hindrance.Mood affects what and how people think when making decisions.Mood has the greatest impact on uncertain, ambiguous decisions of the type that are especially crucial for organizations.Copyr

44、ight 2011 Pearson Canada Inc.How Emotion and Mood Affect Decision Making (continued)Research on mood and decision making reveals that:People in a positive (negative) mood tend to remember positive (negative) information.People in a positive (negative) mood tend to evaluate objects, people, and event

45、s more positively (negatively).Copyright 2011 Pearson Canada Inc.How Emotion and Mood Affect Decision Making (continued)People in a good mood tend to overestimate the likelihood that good events will occur and underestimate the occurrence of bad events. People in a bad mood do the opposite.People in

46、 a good mood adopt simplified, shortcut decision-making strategies, more likely violating the rational model.Copyright 2011 Pearson Canada Inc.How Emotion and Mood Affect Decision Making (continued)People in a negative mood are prone to approach decisions in a more deliberate, systematic, detailed w

47、ay.Positive mood promotes more creative, intuitive decision making.Copyright 2011 Pearson Canada Inc.Rational Decision Making A SummaryThe rational decision-making model provides a good guide for how many decisions should be made.It provides only a partially accurate view of how they are made.For co

48、mplex, unfamiliar decisions, the rational model provides a pretty good picture of how people actually make decisions.Copyright 2011 Pearson Canada Inc.Rational Decision Making A Summary (continued)Organizational decision makers often follow the rational model when they agree about the goals they are

49、 pursuing.Organizational decision makers often short-circuit the rational model.True experts in a field often short-circuit the rational model, using their intuitive knowledge base to skip steps logically.Copyright 2011 Pearson Canada Inc.Perfectly Rational Decision Making Contrasted with Bounded Ra

50、tionalityCopyright 2011 Pearson Canada Inc.Summary of Cognitive Biases in Decision MakingCopyright 2011 Pearson Canada Inc.Group Decision MakingMany organizational decisions are made by groups, especially when problems are ill structured.Why use groups for decision-making?Copyright 2011 Pearson Cana

51、da Inc.Why Use Groups?Decision QualityGroups or teams should make higher-quality decisions than individuals. Decision Acceptance and CommitmentA group decision will be more acceptable to those involved.This is especially important in getting a decision implemented.Copyright 2011 Pearson Canada Inc.W

52、hy Use Groups? (continued)Diffusion of ResponsibilityThe ability of group members to share the burden of the negative consequences of a poor decision.Copyright 2011 Pearson Canada Inc.Do Groups Actually Make Higher-Quality Decisions?Is the frequent use of groups to make decisions warranted by eviden

53、ce?Groups should perform better than individuals when:the group members differ in relevant skills and abilities, as long as they do not differ so much that conflict occurs;some division of labour can occur;memory for facts is an important issue; andCopyright 2011 Pearson Canada Inc.Do Groups Actuall

54、y Make Higher-Quality Decisions? (continued)individual judgments can be combined by weighting them to reflect the expertise of the various members.Copyright 2011 Pearson Canada Inc.Disadvantages of Group Decision MakingTimeThe time it takes to make a decision increases with group size.ConflictDecisi

55、on quality can take a back seat to political wrangling and infighting.Groups will make better decisions when members feel psychologically safe.Copyright 2011 Pearson Canada Inc.Disadvantages of Group Decision Making (continued)DominationWhen meetings are dominated by a single individual or a small c

56、oalition.Domination is not likely to lead to group acceptance and commitment.If the dominant person is misinformed, the group decision is likely to be ineffective.Copyright 2011 Pearson Canada Inc.GroupthinkThe capacity for group pressure to damage the mental efficiency, reality testing, and moral j

57、udgment of decision-making groups.Unanimous acceptance of decisions is stressed over quality of decisions.Victims of groupthink operate in an atmosphere of unreality that should lead to low-quality decisions.Copyright 2011 Pearson Canada Inc.Groupthink (continued)Factors that can cause groupthink in

58、clude:High group cohesiveness.Strong identification with the group.Concern for approval from the group.Isolation of the group from other sources of information.Promotion of a particular decision by the group leader (this appears to be the strongest cause).Copyright 2011 Pearson Canada Inc.Groupthink

59、 SymptomsIllusion of invulnerabilityRationalizationIllusion of moralityStereotypes of outsidersPressure for conformitySelf-censorshipIllusion of unanimityMindguardsCopyright 2011 Pearson Canada Inc.What Can Prevent Groupthink?Leaders must avoid exerting undue pressure for a particular decision outco

60、me and concentrate on good decision processes.Leaders should establish norms that encourage and reward responsible dissent.Outside experts should be brought in from time to time to challenge the groups views.Copyright 2011 Pearson Canada Inc.How Do Groups Handle Risk?Do groups make decisions that ar