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65 Cards in this Set
- Front
- Back
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Decision Making
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the process of developing a commitment to a course of action. A conscious process of making a choice among 2 or more alternatives.
Often occurs as a reaction to a problem or an opportunity |
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Programmed Decisions
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Somewhat automated decisions due to decision maker’s knowledge and past experience with the problem
Problem has been resolved in the past and an optimal solution has already been identified and documented |
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Non-Programmed Decisions
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Occurs with new, complex problems for which an optimal solution has yet to be identified
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Rational Decision-Making Paradigm
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The rational decision maker makes consistent, value maximizing choices given specific context
Perfect rationality is a decision strategy that is completely informed, perfectly logical, and oriented toward economic gain. Prototype is the Economic Person who is the perfect, cool, calculating decision maker. |
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Rational Decision Making Process
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1. Identify the problem or opportunity (Which cause should we sponsor?)
2. Identify relevant criteria for making the decision 3. Is the cause aligned with the company’s vision and goals? 4. What are some of the benefits of the cause (e.g., improve org image) How does this impact our operations/bottom line? 5. Generate a list of possible alternatives (red cross, cancer society, “Green”) 6. Evaluate each alternative against the criteria (2) Choose alternative with most value (Support Green Initiative) |
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Bounded Rationality
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People are limited in ability to interpret, process, and act on information – Bounded Rationality
A decision strategy that relies on limited information and that reflects time constraints and political considerations Heavy reliance on Heuristics – cognitive shortcuts or “rule of thumb” that simplify decision making E.g. fairness -> trust Generally useful but can lead to errors or |
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Biases and Errors in Decision Making
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1. Overconfidence
2. Confirmation Bias 3. Escalation of Commitment 4. Inaction Inertia |
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Overconfidence Error
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errors from being too optimistic about ones own performance.
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Confirmation Bias
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Tendency to seek out information that supports our past choices and to discount information that contradicts them
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Escalation of Commitment
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Tendency to continue to commit to a failing course of action
Often due to an unwillingness to admit mistake Typically results in Sunk Cost Effects |
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Sunk Cost Effects
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Tendency to persist in an activity because of previously invested effort, time or money
Sunk costs are permanent losses of resources incurred as the result of a decision. Resist selling a stock whose value continues to depreciate |
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Inaction Inertia
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Tendency to fail to act on an opportunity after foregoing a more attractive earlier opportunity
Resisting to buy a stock that was cheaper two weeks ago although it still makes economic sense to buy at current price |
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Framing Effects
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How information is presented tends to affect judgment and decisions
Framing refers to the manner in which objectively equivalent alternatives are presented Framing a dilemma as a chance to recoup losses versus chance to achieve gains influences people’s risky choices |
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Group-Level Effects
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1. Risk Taking
2. Information Pooling 3. Group Think |
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Risk Taking
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groups tend to make more extreme decisions that individuals (called group polarization) - spreading responsibility among more people.
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Sunk Cost Effects
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Tendency to persist in an activity because of previously invested effort, time or money
Sunk costs are permanent losses of resources incurred as the result of a decision. Resist selling a stock whose value continues to depreciate |
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Inaction Inertia
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Tendency to fail to act on an opportunity after foregoing a more attractive earlier opportunity
Resisting to buy a stock that was cheaper two weeks ago although it still makes economic sense to buy at current price |
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Framing Effects
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How information is presented tends to affect judgment and decisions
Framing refers to the manner in which objectively equivalent alternatives are presented Framing a dilemma as a chance to recoup losses versus chance to achieve gains influences people’s risky choices |
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Group-Level Effects
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1. Risk Taking
2. Information Pooling 3. Group Think |
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Risk Taking
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groups tend to make more extreme decisions that individuals (called group polarization) - spreading responsibility among more people.
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Information Pooling
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groups tend to focus on information shared by all members and ignore information held by a few.
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Group Think
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Group pressures to conform tend to prevent the group from critically considering unpopular views
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Conflict
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a process that occurs when one person, group, or organizational subunit frustrates the goal attainment of another.
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Antecedents/Causes of Conflict
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Incompatible Goals – goals of group A interfere with group B's
Differentiation – differences in training, beliefs, experiences, values Interdependence – own tasks/rewards depend on others' performance Ambiguity – unclear or complete lack of rules on how work is done Resources – when groups compete for the same limited resources Group Identification – In-groups based on common interest, background, etc |
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Types of Conflict
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Task/Cognitive conflict
Relationship/Affective conflict Process conflict |
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Task/Cognitive conflict
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functional conflict which involves conflict of ideas, norms of civility, shared goals
results in improved decision making, greater shared understanding |
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Relationship/Affective conflict
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dysfunctional conflict which involves personalized conflict, emotional exchanges, conflicting individual goals
results in stress, revenge, poor communication, poor decision making |
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Process conflict
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responsibility, authority, resource allocation etc.
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Conflict Management Strategies
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Competition/Forcing – Imposing one’s will/goals on the other party "Win-Lose Orientation”
Collaboration/Problem Solving – Attempting to find a solution that satisfies both parties’ goals as much as possible. "Win-Win Orientation" Avoiding – Ignoring the issues creating the conflict Accommodation/Yielding – Accepting and implementing the other party’s will/goals Compromising – Giving up some things to reach an outcome. Search for middle ground. |
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Negotiation
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the process of making joint decisions when the parties involved have different preferences
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Interests vs. positions
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Issues: Items that parties specifically put up for discussion
Positions: Each parties stand or perspective on the issue Interests: Underlying concerns that influence negotiation Issue: window status Position: “I want the window closed!” Interest: “I’m cold” Focus on interests! Negotiation is not debate. |
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Approaches to negotiation
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Distributive vs. Integrative
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Information Pooling
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groups tend to focus on information shared by all members and ignore information held by a few.
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Group Think
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Group pressures to conform tend to prevent the group from critically considering unpopular views
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Distributive Negotiations
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Involve Only One Issue
Involve Fixed-Sum Games: One person’s gain is another person’s loss. Almost Directly Conflicting Interests: Each party is attempting to maximize his/her share of the fixed sum payoff. Simply Dividing the “Pie”: Goal is to claim value. Win/Lose Situation |
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Distributive Negotiation Tactics
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Threats and promises
Firmness versus concessions Sticking to your target position, offering few concessions, and waiting for the other party to give in. Is likely to be reciprocated by the other party. Persuasion an attempt to change the attitudes of the other party toward your target position. Persuaders are most effective when they are perceived as expert, likable, and unbiased. |
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Integrative Negotiations
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Involve Multiple Issues
Opportunity for Enlarging the Pie The goal is to create value. Can Increase the Benefits Available to Each Side by “Capitalizing on the Differences in the Parties’ Preferences” Opportunity for a Win/Win Situation |
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Integrative Negotiations Tactics
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Information Exchange
Framing Differences as Opportunities Cutting Costs |
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Distributive vs. Integrative Actions
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For distributive negotiation
Make the first offer (position of power) Make it reasonable but aggressive Reveal/set a deadline For integrative negotiation Bargain in teams (more ideas generated) Introduce more issues (opportunity for trading) Avoid compromising (don’t give up easily) |
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Team
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Small number of people who work closely together toward a common objective and are accountable to one another
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Group
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Three or more people with a common relationship
(i.e. business students, engineering students) |
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Key Components of a "team"?
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- Shared leadership
- Specific task-related purpose or mission - Accountability for some sort of work -Continuous problem solving - Effectiveness is measured as a team - Dependence on one another |
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Why are "teams" used?
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- Flexible
- Can quickly assemble to handle a project/problem - Can effectively utilize talent of many - Brings together specialized knowledge - Can help motivate people (i.e. more motivated by having other people with you - track runners perform better if they have a running partner or competitor rather than solo). |
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Types of Teams
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1. Problem Solving
2. Self Managed 3. Cross Functional 4. Virtual Teams |
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Problem Solving Team
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- 5 to 12 employees from the same department
- Meet a few hours each week to discuss ways of improving: - Quality - Efficiency - Work Environment - Often just share ideas and offer suggestions on how to improve some work process or method - Rarely given authority to act on their own or implement the solution |
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Self Managed Teams
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- Work under reduced supervision (no team leader/manager)
- Take on many of the responsibilities of the manager - Employees central in decisions and processes - Typically have highly interrelated/interdependent jobs - Managerial positions taken on less importance |
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Self Managed Teams - Critical Success Factors
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- The nature of the task -> complex, challenging, require team member interdependence
- The composition of the group stability, as small as feasible, high expertise, diversity(?! surface vs. deep level diversity), personality composition - Various support mechanisms adequate training, reward system, management role |
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Cross Functional Teams
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- Members usually from similar levels of the hierarchy
- Also tend to be from different work areas - Come together to complete or accomplish a task - Usually a “one time” task - Task that requires lots of input from members with different training and expertise Examples Task Force: Temporary cross-functional team Committee: Group of members from different departments - Effective way to allow people from diverse areas to: - Exchange information - Develop new ideas - Solve problems - Deal with complex problems Example: Team working on the electric toothbrush Engineers with different expertise, as well as artists and dentists might work together Could be intense, often self governing |
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Stages of Team/Group Development
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1. Forming
2. Storming 3. Norming 4. Performing 5. Adjourning |
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Virtual Teams
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- Use computer technology to tie together physically dispersed members in order to achieve a common goal
E.g., using video-conferencing, “Skype,” etc Advantages: - Can be less distracted, more task oriented - Can allow continuous progress - Maximize work schedule (24Hr Team) Challenges: - Less social rapport (Isolation) - Communication issues - Trust difficult to build - Start-up Cost |
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Forming
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- Often great deal of uncertainty
- Attempting to define group’s structure, leadership, purpose, dynamic |
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Storming
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- Characterized by intragroup conflict
- Power struggles - Team is imposing constraints on individuality - This is where clear hierarchy, roles emerge - Some teams never leave this stage, not effective |
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Norming
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- Resolve interpersonal conflict
- Team structure solidifies - Expectations and norms formed - Close(r) relationships develop |
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Performing
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- This is the stage when group is fully functional
- Significant task progress is made |
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Adjourning
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-Occurs in temporary groups
- Task performance no longer the priority - Prepare for disbandment - Individuals vary in their response to disbandment |
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Punctuated Equilibrium
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1. First Meeting
- Sets the team’s direction; Patterns begin to emerge 2. Phase 1 - Takes about half of the time available - Patterns of interaction and direction remain the same and are unlikely to change in this first half - Team doesn’t act on new insights/challenges - People often don’t accomplish their tasks, or do so in an uncoordinated manner - Low performance in general Oh no! Work needs to get done! 3. Transition Period - Make new plan to get it done - Almost always half-way into the life cycle of the team - Concentrated Burst of changes, dropping old patterns, realize time is running out 4. Move into Phase 2 - Motivation increases - Work hard (generally) and get things done |
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Group Functioning
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- When we bring people together in a group, they bring their perceptions, personality, values, experiences, expectations, expertise, communication styles
- Think of some of the challenges this can lead to |
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Group Functioning Roles
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A set of expected behaviors of a person in a given position in a social unit
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Group Functioning Role Conflict
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- We often have many roles in an organization
- Conflict rises when complying with one role makes it more difficult to comply with another - Most roles governed by “role expectations” - How others believe a person should act in a given situation |
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Group Function
Role Ambiguity |
- When one is unclear about the expectations of his/her role
- Leads to: - Confusion and lower performance - Stress - Low job satisfaction - It is very important that group members know their roles - Balance roles and expectations - Role overload: Too much is expected of someone - Role underload: Too little is expected, feel they are not contributing |
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Group Function
Norms |
- Acceptable standards of behavior within a group that are shared by the group’s members
- Sometimes formal, often informal - All groups have established norms |
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Group Function
Common Norms |
- Performance: How hard to work, how late can you be
- Appearance: Dress, how to show loyalty, when to look busy - Social Arrangement: How team members interact - Allocation of Resources: Pay, assignments, allocation of tools, materials |
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How are Norms Developed
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1.Explicit Statements
2. Critical Events – set precedent 3. Primacy – often the first set of behaviors that develops becomes the norm (where do you sit?) 4. Carry-over: E.g., from past experiences |
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Important Norms
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- Facilitate group’s survival
- Increase predictability of group members’ behaviors - Reduces embarrassing interpersonal problems - Allows members to express central values of the group |
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Characteristics of Effective Teams
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1. Work Design
- Autonomy, Meaningfulness, Coordination (JCM) 2. Resources and contextual influences 3. Team Composition |
