Chapter 4 Individual Decision Making and Creativity Fundamentals

Chapter 4 Individual Decision Making and Creativity Fundamentals of Organizational Behavior 2 e Andrew J. Du. Brin Power. Point Presentation by Charlie Cook

Learning Objectives Work through the classical/behavioral decisionmaking model when faced with a major decision. Identify and describe factors that influence the effectiveness of decision making. Understand the nature of creative decision making in organizations. Enhance your creative problem-solving ability. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 2

Types of Decisions Decision v What takes place when a person chooses among two or more alternative responses or courses of action. Programmed Decisions v Programmed (routine) decisions use standardized response alternatives to recurring problems. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 3

Types of Decisions (cont’d) Nonprogrammed Decisions v Nonroutine decisions involving creative thinking to develop unique responses to nonrecurring problems for which alternatives are not known in advance. v Higher level managers typically are involved in nonprogrammed decision making; lower level managers face more programmed decisions. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 4

Degree of Risk and Uncertainty Associated with Decisions Certainty Risk Uncertainty Facts are well known. Facts are unknown. Alternatives are known and outcomes can be predicted accurately. Alternatives are less clearly defined. Few alternatives are known. The probability of outcomes is predicted from experience. The probability of outcomes cannot be predicted accurately. Usually involves lowerlevel issues Low Degree of Risk and Uncertainty A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. High 5

Decision-Making Models Classical decision model v The environment is certain and stable. v Managers are rational decision-makers. Behavioral decision model v There is environmental uncertainty and instability. v Managers have cognitive limitations and make decisions based on their perceptions of a situation A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 6

A Classical/Behavioral Decision-Making Model v Managers make decisions within a generally rational framework though they may rely on personal intuition and judgment at various points in the decision process. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 7

The Decision-Making Process Identify and diagnose the problem Establish decision criteria Develop creative alternatives Evaluate the alternatives Choose one alternative “Back to the drawing board. ” EXHIBIT 4 -1 Repeat process if necessary “What really is our problem? ” “What are we trying to accomplish? ” “Let’s dream up some great ideas. ” “Some of these ideas are good, some are wacko. ” “This alternative is a winner!” Implement the decision “Now let’s take action. ” Evaluate and control “How really good was that idea? ” A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 8

Bounded Rationality and Influences on Decision Making Bounded rationality (Herbert Simon) v The rationality of decisions is limited by: u The extent of the decision maker’s metal abilities. u External influences over which the decision maker has little or no control. v Satisficing decisions: u Are reached when the first sufficient alternative that is adequate, acceptable, or passable is chosen. u Result from bounded rationality. v Heuristics u Simplified strategies to deal with masses of information. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 9

Influences on Decision Making Contributing to Bounded Rationality “I’m great at hunches. ” “Let’s wait before deciding. ” “I’ve got integrity. ” “Our backs are to the wall, and we disagree. ” Procrastination Values Crisis and Conflict Intuition Bounded Rationality of Decision Maker Political Considerations Personality and Cognitive Intelligence Emotional Intelligence “I like risks and I’m really bright. ” “I can read people great and control my emotions. ” Quality and Accessibility of “The IS group is feeding Information me great stuff. ” “What does my boss want me to decide? ” EXHIBIT 4 -2 A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 10

The Nature of Creativity: v Is the process of developing good ideas that can be put into action. v Is essential to dealing with nonprogrammed decisions. Approaches to understanding creativity: v Steps in the creative process v Characteristics of creative people v Conditions necessary for creativity A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 11

Steps in the Creative Process “I see something of potential value here. ” Step 1 Opportunity or Problem Recognition “Time to raise some money and get a few early customers. ” “Time for a warm bath and a long sleep. Step 2 Immersion Step 3 Incubation “I’m going to gather all l can find on this subject. ” Step 4 Insight Step 5 Verification “Wow, I’ll sell moon rocks over the Net. ” EXHIBIT 4 -3 A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12

Characteristics of Creative People Knowledge v Have acquired a broad background of facts and information needed to support creative problem solving when combining ideas and things in new and different ways. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 13

Characteristics of Creative People (cont’d) Intellectual Abilities v Are bright but not brilliant; possessing creative intelligence. v Are good at generating and choosing alternatives (thinking divergently/convergently). v Are youthfully curious and empathetic to others. v Creatively use both fluid and crystallized A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 14

Characteristics of Creative People (cont’d) Personality v Have a positive self-image; not blindly self- confident. v Able to cope with criticism of their ideas. v Can tolerate the isolation necessary for developing ideas. v Are frequently nonconformists and do not need strong approval from the group. v Are persistent in carrying through on an idea. v Can deal with ambiguity and chaos. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 15

Conditions Necessary for Creativity Internal factors affecting creativity: v Expertise u The necessary knowledge to put facts together. v Creative-thinking skills u The flexibility and imagination with which individuals approach problems. v Motivation u. A fascination with or passion for the task is important for maximizing creativity. u The experience of flow – Total absorption and intense concentration (being “in the zone”) make the task worth doing regardless of the consequences. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 16

Conditions Necessary for Creativity (cont’d) External factors affecting creativity: v An environmental need that stimulates goal setting u “Necessity is the mother of invention. ” v Conflict and tension that put people on edge u Creating situations that require flexibility and imagination in the way in which individuals approach problems. v Encouragement u Establishing a permissive non-punitive environment that welcomes new ideas and original thinking. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 17

Enhancing and Improving Creativity Creative problem solving requires: v Overcoming traditional ways of thinking by breaking down the rigid thinking that blocks new ideas v Encouraging creative persons to “think outside the box. ” A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 18

Techniques for Enhancing Creativity Brainstorming: v Use groups of five to seven people. v Encourage spontaneous expression of ideas. v Gather the largest quantity and variety of of ideas to increase the likelihood of a breakthrough. v Encourage combination and improvement of ideas. v Keep a record of ideas by writing them down. v Do not overstructure the session by following the rules to rigidly. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 19

Techniques for Enhancing Creativity (cont’d) Idea quotas v Demand that employees come up with new ideas on a regular basis. Heterogeneous group v Form professionally and culturally diverse groups to bring various viewpoints to problems at hand to develop creative ideas. Financial incentives v Offer monetary rewards for suggestions and implemented ideas. Architecture and physical layout v Remove structural barriers to communication and interaction to foster creative thinking. A. J. Du. Brin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 20