DECISION

MAKING AND
CREATIVITY
Chapter 8

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.

RATIONAL DECISIONMAKING PROCESS

RATIONAL DECISIONMAKING PROCESS

1. Identify the problem or recognize an
opportunity.
Problem

is a deviation between the

current and the desired situation-the
gap between what is and what
ought to be.

Opportunity

is a deviation between
current expectations and a potentially

RATIONAL DECISIONMAKING PROCESS

2. Choose the best decision style.
Programmed

Decisions routine
decisions whereby decision makers
can follow standard operating
procedures to select the preferred
solution without the need to identify
or evaluate alternative choices.

RATIONAL DECISIONMAKING PROCESS

2. Choose the best decision style.
Nonprogrammed

Decisions unique,
complex, ill-defined situations
whereby decision makers follow the
full decision process, including a
careful search for and/or
development of unique solutions.

RATIONAL DECISIONMAKING PROCESS

3. Develop a list of alternative possible
solutions. Usually begins by searching readymade solutions, such as practices that have
worked well on similar problems.
4. Choosing the best alternative/solutions.
Involves identifying all factors, assigning
weights reflecting the importance of those
factors, rating each alternative, and
calculating each alternatives total value.

RATIONAL DECISIONMAKING PROCESS

5. Implement the selected actions.
The success of the chosen
alternative depends on whether it
can be translated into action.
6. Evaluate decision outcomes. Gather
information that tells them how well
the decision was implemented.
(feedback)

PROBLEMS WITH THE

RATIONAL DECISION-MAKING
PROCESS

One reason, the model assumes

people are efficient and logical
information processing
machines.

Second

reason, the model

focuses on logical thinking and
completely ignores emotions.

IDENTIFYING PROBLEMS AND

OPPORTUNITIES EFFECTIVELY
1. Be aware of perceptual and diagnostic
limitations
2. Fight against pressure to look decisive
3. Maintain divine discontent (aversion to
complacency)
4. Discuss the situation with colleagues-see
different perspectives

EVALUATING AND
CHOOSING ALTERNATIVES
Bounded

Rationality
processing limited and imperfect
information and satisficing rather
than maximizing when choosing
among alternatives.

MAKING CHOICES: RATIONAL VS. OB

VIEWS

Rational decision model assumptions

Observations from organizational behavior

Bounded Rationality Model

differences in terms of:

Problem with Goals. We need clear goals to

choose the best solution. Goals identify what
ought to be and, therefore, provide a standard
against which each alternative is evaluated. The
reality, however, is the organizational goals are
often ambiguous or in conflict with each other.

Problem with Information Processing. People

do not make perfectly rational decisions because
they dont process information very well. One
problem is that decision makers cant possibly
think through all of the alternatives and the
outcomes of those alternatives.

Continued:
Implicit Favorite the decision makers
preferred alternative against which all
other choices are judged.
Two Problems with Implicit Favorite
1. People often form an implicit favorite
based on limited information long before
the formal process of evaluating
alternatives begins.
2. People unconsciously try to make their
implicit favorite come out the winner in
most comparisons.

Continued:
Problem

with Maximization.
Decision makers tend to select the
alternative that is acceptable or
good enough, rather than the best
possible solution. In other words,
they engage in satisfacing rather
than mazimixing.

Satisfacing

selecting a solution
that is satisfactory, or good

EMOTIONS AND MAKING

CHOICES
1.

Emotions form preferences before

we consciously evaluate those
evaluate those choices

2.

Moods and emotions influence

how well we follow the decision
process

3.

We listen in on our emotions and

use that information to make choices

INTUITION AND MAKING

CHOICES
Intuition
the ability to know when a problem or
opportunity exists and select the best
course of action without conscious
reasoning.
As emotional experience
Gut feelings are emotional signs
Not all emotional signals are intuition
As rapid non-conscious analysis
Uses action scripts

CHOOSING SOLUTIONS
MORE EFFECTIVELY

Systematically evaluate alternatives

against relevant factors

Be aware of effects of emotions on

decision preferences and evaluation
process

Scenario planning
A systematic process of thinking about
alternative futures, and what the
organization should do to anticipate