Organizational Behavior by Mcshane, S. (8th edition) a summary
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Organizational Behavior
Chapter 7
Decision making and creativity
Decision making: the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs.
Rational choice decision making selects the best alternative by calculating the probability that various outcomes will occur from the choices and the expected satisfaction from each of those outcomes.
Rely primarily on two pieces of information:
Rational choice decision-making process
Steps:
Programmed decisions: follow standard operating procedures.
They have been resolved in the past, so the optimal solution has already been identified and documented.
Non-programmed decisions: require all steps in he decision model because the problems are new, complex, or ill-defined.
Problems with problem identification
Five of the most widely recognized problems:
Solution-focused problems
Some decision makers describe the problems as a veiled solution.
They fail to fully diagnose the underlying causes that need to be addressed.
Decisive leadership
Many leaders announce problems or opportunities before having a change to logically asses the situation. The result is often a misguided effort to solve an ill-defined problem or resources wasted on a poorly identified opportunity.
Stakeholder framing
Stakeholders provide (or hide) information in ways that makes the decision maker see the situation as a problem, opportunity, or steady sailing.
Perceptual defense
People sometimes fail to become aware of problems because they block out bad news as a coping mechanism.
Mental models
Decision makers are victims of their own problem framing due to existing mental models.
Mental models are visual or relational images in our mind of the external world.
Identifying problems and opportunities more effectively
One way to improve the process is by becoming aware of the five problem identification biases.
Another way is to create a norm of ‘divine discontent’. Decision makers with this mindset are never satisfied with current conditions, so they more actively search for problems and opportunities.
Or discussing the situation with colleagues and clients.
Rational choice paradigm assumptions | Observations from organizational behavior |
Goals are clear, compatible and agreed upon | Goals are ambiguous, are in conflict and lack full support |
Decision makers can calculate all alternatives and their outcomes | Decision makers have limited information-processing abilities |
Decision makers evaluate all alternatives simultaneously | Decision makers evaluate alternatives sequentially |
Decision makes use absolute standards to evaluate alternatives | Decision makers evaluate alternatives against an implicit favorite |
Decision makers use factual information to choose alternatives | Decision makers process perceptually distorted information |
Decision makers choose the alternative with the highest payoff | Decision makers choose the alternative that is good enough (satisfying) |
Bounded rationality: the view that people are bounded in their decision-making capabilities. Including:
Additional flaws are overlooked by bounded rationality.
Problems with information processing
People evaluate only a few alternatives and only some of the main outcomes of those alternatives.
Implicit favorite: a preferred alternative that the decision makes uses repeatedly as a comparison with other choices.
Sometimes, decision makers aren’t even aware of this favoritism.
Confirmation bias
Humans need to minimize cognitive dissonance.
Biased decision heuristics
Three of the most widely studies heuristic biases:
Clustering illusion: the tendency to see patterns from a small sample of events when those events are, in fact, random.
Problems with maximization
Satisficing: selecting an alternative that is satisfactory or ‘good enough’ rather than the alternative with the highest value.
Maximizing decision makes run into trouble where there are many alternatives, those alternatives have many features, and the quality of those features for each alternative is ambiguous.
When presented wit ha large number of choices, people often choose a strategy that is less cognitively challenging, they don’t choose at all.
Evaluating opportunities
Decision makers do not evaluate several alternatives when they find an opportunity.
An opportunity is usually experienced as an exciting and rare revelation, so decision makers often tend to have an emotional attachment to the opportunity.
Emotions and making choices
It is impossible for humans to make perfectly rational decisions.
The rational choice view completely ignores the effect of emotions in human decision making.
Emotions form early preferences
Our brain very quickly attaches specific emotions to information about each alternative, and our preferred alternative is strongly influences by those initial emotional markers.
Logical analysis also influences with alternative to choose, but it requires strong logical evident to change our initial preferences.
Even logical analysis depends on emotions to sway our decision.
Information produced from logical analysis is tagged with emotional markers that then motivate us to choose or avoid a particular alternative.
Emotions change the decision evaluation process
Mood and specific emotions influence the process of evaluating alternatives.
We pay more attention to details when in a negative mood. In a positive mood, we rely more on a programmed decision routine.
Emotions shape how we evaluate information, not just which choice we select.
Emotions serve as information when we evaluate alternatives
We listen to our emotions to gain guidance when making decisions.
Most emotional experiences remain below the level of conscious awareness, but people actively try to be more sensitive to these subtle emotions when making a decision.
Intuition and making choices
Intuition: the ability to know when a problem or opportunity exists and to select the best course of action without conscious reasoning.
Some people rely more on intuition whereas others rely more on logical analysis when making decisions. But they never completely replace each other.
Intuition is both an emotional and a rapid nonconscious analytic process.
The gut feelings we experience are emotional signals that have enough intensity to make us consciously aware of them.
All gut feelings are emotional signals, but not all emotional signals are intuition.
Intuition involves rapidly comparing our observations with deeply held patterns learned trough experience. They are mental models. When a template fits or doesn’t fit the current situation, emotions are produced that motivate us to act.
Intuition signals that a problem or opportunity exist long before conscious rational analysis has occurred.
Intuition also relies on action scrips, programmed decision routines that speed up our response to pattern matches or mistakes.
Action scrips are generic, so we consciously adapt them to the specific situation.
Making choices more effectively.
Decision makers aren’t completely honest with themselves when evaluating the effectiveness of their decisions.
Postdecisional justification
Decision makers ignore or under-emphasize negative outcomes of the choice they make and overemphasize new information about its positive features.
Escalation of commitment
Escalation of commitment: The tendency to repeat an apparently bad decision or allocate more resources to a failing course of action.
Self-justification effect
People try to convey a positive public image of themselves.
Self-justification in decision making involves appearing to be rational and competent.
Self-enhancement effect
Self-enhancement: a person’s inherent motivation to have a positive self-concept.
Increases the risk of escalation of commitment.
When presented with evidence that a project is in trouble, the self-enhancement process biases our interpretation of the information as a temporary aberration from a otherwise positive trend line.
Mostly nonconsciously.
Prospect theory effect
A natural tendency to feel more dissatisfaction from losing a particular amount than satisfaction from gaining an equal amount.
Motivates us to avoid losses, which typically occurs by taking the risk of investing more in that losing project.
Escalation of commitment is the less painful option at the time.
Suck costs effect
The value of resources already invested in the decision.
People inherently feel motivate to invest more resources in projects that have sunk costs.
A variation is time investment.
Sunk costs can take the form of closing costs, the financial or nonfinancial penalties associated with shutting down a project.
Escalation of commitment is usually framed as poor decision making, but persistence may be the better choice under some circumstances.
Evaluating decision outcomes more effectively
Creativity: the development of original ideas that make a socially recognized contribution.
The creative process
Stages:
Characteristics of creative people
Organizational conditions supporting creativity
Activities that encourage creativity
Cornerstones of creativity in organizations:
Four types of creativity-building activities
Design thinking
A human-centered, solution-focused creative process that applies both intuition and analytical thinking to clarify problems and generate innovative solutions.
Four rules:
Employee involvement: the degree to which employees influence how their work is organized and carried out.
Also called participative management.
Has become a natural process in every organization, but the level of involvement varies with the situation.
Low level involvement occurs where employees are individually asked for specific information but the problem is not described to them.
Benefits of employee involvement
Employee involvement potentially improves decision-making quality and commitment.
It improves the identification of problems and opportunities.
Can potentially improve the number and quality of solutions generated.
Under specific conditions, it improves the evaluation of alternatives.
Involvement tends to strengthen employee commitment to the decision.
Contingencies of employee involvement
There is an optimal level of employee involvement, and that ideal level depends on the situation.
Four contingencies:
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This is a summary of the book Organizational Behavior by Mcshane, S (8th edition). This book is about psychology at the workplace. It contains for instance ways to increase employee satisfaction and workplace dynamics. The book is used in the course 'Labor and and
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Organisational behavior Talla Gull contributed on 19-04-2020 06:51
im am very interested to be part and parasol of this. it help me more than i have learned .
thankyou
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