Garbage can model of decision making pros and cons

The Organizational Behavior In Action Case.

the Organizational Behavior in Action case.

2. To what extent did decision-making biases impact the decisions made in this case? Identify the specific biases that were present. Is BP's and Transocean's approach more characteristic of the rational, normative, or garbage can models of decision making? Discuss your rational

Learning Objectives

LO.1 Compare and contrast the rational model of decision making, Simon’s normative model, and the garbage can model.

LO.2 Discuss eight decision-making biases.

LO.3 Discuss the thrust of evidence-based decision making and its implementation principles.

LO.4 Explain the model of decision-making styles.

LO.5 Explain the model of intuition and the ethical decision tree.

LO.1 Compare and contrast the rational model of decision making, Simon’s normative model, and the garbage can model.

LO.2 Discuss eight decision-making biases.

LO.3 Discuss the thrust of evidence-based decision making and its implementation principles.

LO.4 Explain the model of decision-making styles.

LO.5 Explain the model of intuition and the ethical decision tree.

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Learning Objectives (cont.)

LO.6 Summarize the pros and cons of involving groups in the decision-making process.

LO.7 Contrast brainstorming, the nominal group technique, the Delphi technique, and

computer-aided decision making.

LO.8 Describe the stages of the creative process.

LO.9 Discuss the practical recommendations for increasing creativity.

LO.6 Summarize the pros and cons of involving groups in the decision-making process.

LO.7 Contrast brainstorming, the nominal group technique, the Delphi technique, and computer-aided decision making.

LO.8 Describe the stages of the creative process.

LO.9 Discuss the practical recommendations for increasing creativity.

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Models of Decision Making

Decision making

identifying and choosing alternative solutions that lead to a desired state of affairs

Decision making

identifying and choosing alternative solutions that lead to a desired state of affairs

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Models of Decision Making

The Rational Model

proposes that managers use a rational four-step approach to decision making.
The rational model proposes that managers use a rational, four-stage sequence

when making decisions (see Figure 12–1 ). According to this model, managers

are completely objective and possess complete information to make a decision.

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The Rational Model

Identify the Problem or Opportunity

Problem – exists when the actual situation and the desired situation differ

Opportunity - represents a situation in which there are possibilities to do things that lead to results that exceed goals and expectations

Generate Alternative Solutions

For routine decisions alternatives are readily available through decision rules

Identifying the Problem or Opportunity

Problem – exists when the actual situation and the desired situation differ

Opportunity - represents a situation in which there are possibilities to do things that lead to results that exceed goals and expectations

Generating Solutions

For routine decisions alternatives are readily available through decision rules

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Rational Model

Evaluate Alternatives and Select a Solution

Is the potential solution ethical?

Is it feasible?

Will it remove the causes and solve the problem?

Evaluate Alternatives and Select a Solution

Is the potential solution ethical?

Is it feasible?

Will it remove the causes and solve the problem?

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Rational Model

Implement and Evaluate the Solution

After solution is implemented, the evaluation phase is used to evaluate its effectiveness

Optimizing – producing the best possible solution

Implement and Evaluate the Solution

After solution is implemented, the evaluation phase is used to evaluate its effectiveness

Optimizing – producing the best possible solution

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Summarizing the Rational Model

The quality of decisions may be enhanced

It makes the reasoning behind a decision transparent

If made public, it discourages the decider from acting on suspect considerations

1. The quality of decisions may be enhanced, in the sense that they follow more

logically from all available knowledge and expertise.

2. It makes the reasoning behind a decision transparent and available to scrutiny.

3. If made public, it discourages the decider from acting on suspect considerations

(such as personal advancement or avoiding bureaucratic embarrassment).

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Nonrational Models of Decision Making

Nonrational models

Attempt to explain how decisions are actually made

Decision making is uncertain

Decision makers do not possess complete information

Difficult for managers to make optimal decisions

Nonrational models

Attempt to explain how decisions are actually made

Decision making is uncertain
Decision makers do not possess complete information
Difficult for managers to make optimal decisions
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Simon’s Normative Model

Bounded rationality

represents the notion that decision makers are “bounded” or restricted by a variety of constraints when making decisions

Satisficing

choosing a solution that meets some minimum qualifications, one that is “good enough”.

Bounded rationality

represents the notion that decision makers are “bounded” or restricted by a variety of constraints when making decisions

Satisficing

choosing a solution that meets some minimum qualifications, one that is “good enough.”

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Simon’s Normative Model

Most frequent causes of poor decision making

Poorly defined processes and practices

Unclear company vision, mission, and goals

Unwillingness of leaders to take responsibility

Lack of reliable, timely information

Most frequent causes of poor decision making

Poorly defined processes and practices

Unclear company vision, mission, and goals

Unwillingness of leaders to take responsibility

Lack of reliable, timely information

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Garbage Can Model

Garbage Can Model

decision making is sloppy and haphazard

decisions result from complex interaction of four independent streams of events: problems, solutions, participants
and choice opportunities

Garbage Can Model

decision making is sloppy and haphazard

decisions result from complex interaction of four independent streams of events: problems, solutions, participants
and choice opportunities

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Implications of the Garbage Can Model

More pronounced in industries that rely on science-based innovations

Many decisions are made by oversight

Political motives frequently influence decision makers

Important decisions are more likely to be solved

More pronounced in industries that rely on science-based innovations
Many decisions are made by oversight
Political motives frequently influence decision makers
Important decisions are more likely to be solved
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Integrating Rational and Nonrational Models

A simple context is stable, and clear cause-and-effect relationships can be discerned, so the best answer can be agreed on

In a complicated context, there is a clear relationship between cause and effect, but some people may not see it, and more than one solution may be effective

1. A simple context is stable, and clear cause-and-effect relationships can be discerned, so the best answer can be agreed on.
This context calls for the rational model, where the decision maker gathers information, categorizes it, and responds in an established way.

2. In a complicated context, there is a clear relationship between cause and effect, but some people may not see it, and more than one
solution may be effective. Here, too, the rational model applies, but it requires the investigation of options, along with an analysis of them.

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Integrating Rational and Nonrational Models

In a complex context, there is one right answer, but there are so many unknowns that decision makers don’t understand cause-and-effect relationships.

In a chaotic context, cause-and-effect relationships are changing so fast that no pattern emerges.

3. In a complex context, there is one right answer, but there are so many unknowns that decision makers
don’t understand cause-and-effect relationships. Decision makers therefore need to start out by experimenting,
testing options, and probing to see what might happen as they look for a creative solution.

4. In a chaotic context, cause-and-effect relationships are changing so fast that no pattern emerges.
In this context, decision makers have to act first to establish order and then find areas where it is possible to
identify patterns so that aspects of the problem can be managed. The use of intuition and evidence-based decision

making, both of which are discussed later in this chapter, may be helpful in this situation.

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Decision-Making Biases

Judgmental heuristics

rules of thumb or shortcuts that people use to reduce information processing demands.

Judgmental heuristics

rules of thumb or shortcuts that people use to reduce information processing demands.

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Decision-Making Biases

There are both pros and cons to the use of heuristics. There are eight biases that affect decision making: (1) availability, (2) representativeness,

(3) confirmation, (4) anchoring, (5) overconfidence, (6) hindsight, (7) framing, and (8) escalation of commitment. Knowledge about these biases can

help you to avoid using them in the wrong situation.

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Question?

From January to October, Jamie's work performance was at best mediocre. In November and December, he significantly picked up his performance and did an excellent job. His supervisor evaluated him as an outstanding performer. This can be explained partially due to the:

Escalation of commitment effect.

Representativeness heuristic.

Nominal group effect.

Availability heuristic.

The correct answer is “D” – availability heuristic.

AACSB: Group-individual dynamics Bloom's Taxonomy: Application

Difficulty: Hard Page: 335

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Evidence-Based Decision Making

Evidence-based decision making (EBDM)

represents a process of conscientiously using the best available data and evidence when making managerial decisions

Evidence-based decision making (EBDM)

represents a process of conscientiously using the best available data and evidence when making managerial decisions

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A Model of Evidence-Based
Decision Making (EBDM)

Figure 12–2 illustrates a five-step model of EBDM. You can see that the process begins by gathering internal and external data and evidence about a problem at hand. This information is then integrated with views from stakeholders (e.g., employees, shareholders, customers) and ethical considerations to make a final decision. All told, the process shown in Figure 12–2 helps managers to face hard facts and avoid their personal biases when making decisions. EBDM’s use of relevant and reliable data from different sources is clearly intended to make any decision-making context more explicit, critical, systematic, and fact-based.

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Seven Implementation Principles

Treat your organization as an unfinished prototype

No brag, just facts

See yourself and your organization as others do

Evidence-based management is not just for senior executives

Treat your organization as an unfinished prototype
No brag, just facts
See yourself and your organization as others do
Evidence-based management is not just for senior executives
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Seven Implementation Principles (cont.)

Like everything else, you still need to sell it

If all else fails, slow the spread of bad practice

The best diagnostic question: What happens when people fail?

Like everything else, you still need to sell it
If all else fails, slow the spread of bad practice
The best diagnostic question: What happens when people fail?
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Why Is It Hard to be
Evidenced-Based?

There’s too much evidence.

There’s not enough good evidence.

The evidence doesn’t quite apply.

People are trying to mislead you.

You are trying to mislead you.

The side effects outweigh the cure.

Stories are more persuasive anyway.

There’s too much evidence.
There’s not enough good evidence.
The evidence doesn’t quite apply.
People are trying to mislead you.
You are trying to mislead you.
The side effects outweigh the cure.
Stories are more persuasive anyway.
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General Decision-Making Styles

Value orientation

reflects the extent to which an individual focuses on either task and technical concerns or people and social concerns when making decisions

Tolerance for ambiguity

extent to which a person has a high need for structure or control in his life

Decision-making styles – combination of how individuals perceive and respond to information

Value orientation

reflects the extent to which an individual focuses on either task and technical concerns or people and social concerns when making decisions

Tolerance for ambiguity

extent to which a person has a high need for structure or control in his life

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Decision-Making Styles

When the dimensions of value orientation and tolerance for ambiguity are combined, they form four styles of decision making (see Figure 12–3): directive, analytical, conceptual, and behavioral.

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The Role of Intuition in
Decision Making

Intuition

represents judgments, insights, or decisions that “come to mind on their own, without explicit awareness of the evoking cues and of course without explicit evaluation of the validity of these cues”.

Intuition represents judgments, insights, or decisions that “come to mind on their own, without explicit awareness of the evoking cues and of course without explicit evaluation of the validity of these cues”.

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A Model of Intuition

In figure 12–4, intuition is represented by two distinct processes. One is automatic, involuntary, and mostly effortless. The second is quite the opposite in that it is controlled, voluntary, and effortful. Research reveals that these two processes can operate separately or jointly to influence intuition. These intuitive processes are influenced by two sources: expertise and feelings (see Figure 12–4).

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A Model of Intuition

Holistic hunch

judgment that is based on a subconscious integration of information stored in memory

Automated experiences

choice based on a familiar situation and a partially subconscious application of previously learned information related to that situation

Holistic hunch

judgment that is based on a subconscious integration of information stored in memory

Automated experiences

choice based on a familiar situation and a partially subconscious application of previously learned information related to that situation

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Road Map to Ethical Decision Making: A Decision Tree

Decision tree

graphical representation of the process underlying decisions and it shows the resulting consequences of making various choices

Decision tree

graphical representation of the process underlying decisions and it shows the resulting consequences of making various choices

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An Ethical Decision Tree

Decision trees are used as an aid in decision making. Ethical decision making frequently involves trade-offs, and a decision tree helps managers navigate through them. The decision tree shown in Figure 12–5 can be applied to any type of decision or action that an individual manager or corporation is contemplating.

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Group Involvement

Minority dissent

extent to which group members feel comfortable disagreeing with other group members, and a
group’s level
of participation in
decision making

Minority dissent

extent to which group members feel comfortable disagreeing with other group members, and a group’s level of participation in decision making

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Advantages and Disadvantages of
Group-Aided Decision Making

Including groups in the decision-making process has both pros and cons (see Table 12–2 ).
Advantages must be balanced with the disadvantages listed in Table 12–2 .

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Group Problem Solving Techniques

Consensus

reached when all members can say they either agree with the decision or have had their ‘day in court’ and were unable to convince the others of their viewpoint. Everyone agrees to support the outcome.

Brainstorming

process to generate a quantity of ideas

Consensus

reached when all members can say they either agree with the decision or have had their ‘day in court’ and were unable to convince the others of their viewpoint. Everyone agrees to support the outcome.

Brainstorming

process to generate a quantity of ideas

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Rules for Brainstorming

Defer judgment

Build on the ideas of others

Encourage wild ideas

Go for quantity over quality

Be visual

Stay focused on the topic

One conversation at a time

Defer judgment
Build on the ideas of others
Encourage wild ideas
Go for quantity over quality
Be visual
Stay focused on the topic
One conversation at a time
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Group Problem Solving
Techniques

Nominal Group Technique

process to generate ideas and evaluate solutions

Delphi technique

process to autonomously generate ideas from physically dispersed experts

Nominal Group Technique

process to generate ideas and evaluate solutions

Delphi technique

process to autonomously generate ideas from physically dispersed experts

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Group Problem Solving
Techniques

Computer-aided decision making

a variety of computer, software, and electronic devices to improve decision making

allows managers to quickly obtain larger amounts of information from employees, customers, or suppliers around the world

Chauffeur-driven systems, group-driven electronic meetings

Computer-aided decision making

a variety of computer, software, and electronic devices to improve decision making

allows managers to quickly obtain larger amounts of information from employees, customers, or suppliers around the world

Chauffeur-driven systems, group-driven electronic meetings

Chauffeur-driven systems ask participants to answer predetermined questions on electronic keypads

Group-driven meetings are conducted in special facilities equipped with individual workstations that are networked to each other

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Creativity

Creativity

process of using intelligence, imagination, and skill to develop a new or novel product, object, process, or thought

Creativity

process of using intelligence, imagination, and skill to develop a new or novel product, object, process, or thought

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The Creativity Stages

The preparation stage reflects the notion that creativity starts from a base of knowledge

During the concentration stage, an individual focuses on the problem at hand.

Incubation is done unconsciously. During this stage, people engage in daily activities while their minds
simultaneously mull over information and make remote associations.

Associations generated in this stage ultimately come to life in the illumination stage.

Finally, verification entails going through the entire process to verify, modify, or try out the new idea.

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Video: Leadership: Making Decisions During Hurricane Katrina

What roadblocks to using a rational decision making model were placed before the Sisters in this case? Could anything have been done to make their decisions easier?

Identify how intuition and creativity helped the Sisters in the decisions they had to make.

Without the ability to communicate or have the resources they normally had at their disposal, what did the Sisters rely on in making the decisions they needed to make?

Why was timely decision making so essential in this case?

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The list of roadblocks set before the Sisters of Holy Angels are virtually endless. The primary issue they had to face was a lack of time to investigate options. With an impending natural disasters, life and death decisions had to be made and made effectively. Other issues they faced included a lack of information (both through present-time communication as well as the loss of records of all types). In this instance, given the nature of the situation there is likely not much that could have been done to remove those roadblocks - no one knew the storm would hit the area the way it did.

Intuition and creativity were two of the major resources the Sisters did have at their disposal. A great example of intuition is shown in the story told by Sylvia Thibodeaux - she just “knew” the Superdome facility was not going to be safe and decided to force the situation and move on… Creativity can be seen in all of the stories told in this case in that the Sisters were forced to come up with decision options to very unfamiliar situations.

The Sisters relied on the “resources within” to make it through this experience. These resources would primarily be intuition, creativity and tenacity.

Timely decision making was essential in this case because there was an impending life-threatening natural disaster. Not making decisions quickly could result in life-threatening peril. The decisions made in this case not only needed to be timely, but needed to be well informed (as best as possible) and accurate.