Chapter 15 Decision Making and Organizational Learning

Decision making in response to incurring opportunities and problems.

A standard sequence of behaviors that organizational members follow routinely when making a programmed decision whenever they encounter a specific type of problem or opportunity.

A prescriptive approach based on the assumptions that the decision maker has all the necessary information and will choose the best possible solution or response.

1. list all the alternative courses of action from which the final decision will be made: these alternative represent different responses to the problem or the opportunity.

2.list the consequences of each alternative: the consequences are what would occur if a given alternative is selected.3.considering personal preferences for each alternative and its set of consequences rank the alternatives from most preferred to least preferred.

4. select the alternative that will result in the most preferred set of consequences.

A descriptive approach stressing that incomplete information, psychological and sociological processes, and the decision maker's cognitive abilities affect decision making and that decision makers often choose satisfactory, not optimal, solutions.

incomplete information; decision maker's limited cognitive abilities.

searching for and choosing an acceptable response or solution, not necessarily the best possible one.

an ability to reason that is constrained by the limitations of the human mind.

rules of thumb that simplify decision making.

The rule of thumb that says an event that is easy to remember is likely to have occurred more frequently than an event that is difficult to remember.

The rule of thumb that says similar kinds of events that happened in the past are a good predictor of the likelihood of an upcoming event.

The actual frequency with which an event occurs.

The rule of thumb that says that decisions about how big or small an amount (such as salary, budget, or level of costs) should be made by making adjustments from some initial amount.

The tendency to invest additional time, money, or effort into what are essentially bad decisions or unproductive courses of action.

Costs that cannot be reversed and will not be affected by subsequent decision making.

poor

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Because of their different points of view due to varied backgrounds, they can sometimes find it difficult to get along with each other.

enhanced memory, capability of error detection, and greater decision acceptance.

the amount of time to make a decisions -- groups can seldom make decisions as quickly as individuals, the potential for group think -- a pattern of faulty decision making that occurs when cohesive groups whose members strive to reach common agreement or understanding and to achieve this they do not accurately process important information relevant to the decision and are willing to gloss over or suppress information that might lead them to disagree.

encourage members to be critical of proposed alternatives, raise any doubts they may have, and to accept criticism.leader should refrain from expressing any opinion until the group has had a chance to consider all alternatives.leader encourages members to gather information pertaining to a decision from people outside the group and seek outsiders' perspectives on the group's ideas.leader assigns one or two members to play the role of devil's advocateif an important decision is being made and time allows, after a group has made a decision, the group leader holds a second meeting. During the second meeting, member can raise any doubts of misgivings they might have about the course of actions the group has chosen.

- diffusion of responsibility: the group as a whole rather than one individual is accountable for the decision. If the decision was a good one, the group gets credit; if the decision was a poor one, a single individual is not blamed.- group polarization: the tendency to make more extreme decisions as a group than do individuals. This is due to diffusion of responsibility.- potential for conflict: different sets of skills and expertise as well ass backgrounds and experiences always creates the potential for conflict within groups.

crisis

A spontaneous, participative decision-making technique that groups use to generate a wide range of alternatives from which to make a decision.

Loss of productivity in brainstorming groups due to various distractions and limitations inherent brain storming.

A decision making technique that includes the following steps: group members generate ideas on their own and write them down, group member communicate their ideas to the rest of the group and each idea is then discussed and critically evaluated by the group.

a series of questionnaires are sent to experts on the issue at hand, though they never actually meet face to face.

benchmarking - selecting a high-performing group and using this group as a modelempowerment - the process of giving employees throughout an organization the authority to make decisions and be responsible for their outcomes.

the process through which managers seeks to increase organization members' desire and ability to make decisions that continuously raise organizational efficiency and effectiveness.

exploration: learning that involves organizational members searching for and experimenting with new kinds or forms of organizational behaviors and procedures to increase effectiveness.exploitation: learning that involves organizational members finding ways to refine and improve existing organizational behaviors and procedures to increase effectiveness.learning organization: an organization that purposefully takes steps to enhance and maximize the potential for explorative and exploitative organizational learning to take place.

personal mastery: at the individual level, managers need to do all they can to facilitate the learning of new skills, norms, ad values so that individuals can increase their own personal ability to help build the organization's core competencies.complex mental models: as part of attaining personal mastery, and to give employees a deeper unerstanidng of what is involved in a particular activity, organizations need to encourage employees to develop and use complex mental models that challenge them to find new or better ways to perform a task. team learning: at a group level, managers need to encourage learning by promoting the use of various kinds of groups -- such as self-managed groups or cross-functional teams so that individuals can share of pool their skills and abilities to solve a problem.building a shared vision: one of Senge's principles for designing a learning organization emphasizes the importance of building shared vision. Building a shared vision involves creating an ongoing frame of reference or mental model that all of the organization's member use to frame problems or opportunities that bind them to an organization.system thinking: Senge's last principle of organizational learning, systems thinking, emphasizes that in order to create a learning organization, managers must recognize how learning at the individual and group levels affect each other.