Decision Making, Creativity, and Ethics

Chapter 11
Decision Making,
Creativity, and Ethics
Chapter 11, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, Third Canadian Edition.
Copyright © 2003 Pearson Education Canada Inc.
Decision Making, Creativity,
and Ethics
Questions for Consideration
• Who should make decisions: individuals
or groups?
• How does one increase creativity in
organizations?
• How difficult is it to make ethical
decisions?
Steps in the Rational Decision-
Making Model
Define the
problem
Select the Identify the

best alternative criteria
Making a Decision
Evaluate the
Allocate weights
alternatives
to the criteria
Develop
alternatives
Assumptions of the Rational
Decision-Making Model
• Problem Clarity
– The problem is clear and unambiguous
• Known Options
– The decision maker can identify all relevant criteria and viable
alternatives
• Clear Preferences
– Rationality assumes that the criteria and alternatives can be
ranked and weighted
Assumptions of the Rational
Decision-Making Model
• Constant Preferences
– Specific decision criteria are constant and the weights assigned
to them are stable over time
• No Time or Cost Constraints
– Full information is available because there are no time or cost
constraints
• Maximum Payoff
– The choice alternative will yield the highest perceived value
How Do Decision Makers
Identify and Select Problems?
• Problems that are visible tend to have a
higher probability of being selected than
ones that are important. Why?
– It is easier to recognize visible problems
– Decision makers want to appear competent and “on top
of problems”
– Decision makers’ self-interest affects problem selection
because it is usually in the decision maker’s best
interest to address problems of high visibility and high
payoff. This demonstrates an ability to perceive and
attack problems
Bounded Rationality
• Bounded Rationality
– Limitations on one’s ability to interpret,
process, and act on information
• Satisficing
– Identifying a solution that is “good enough”
Intuitive Decision Making
• A subconscious process created out of distilled
experience
• When used:
– When a high level of uncertainty exists
– When there is little precedent to draw on
– When variables are less scientifically predictable
– When “facts” are limited
– When facts don’t clearly point the way to go
– When analytical data are of little use
– When there are several plausible alternative solutions to choose from,
with good arguments for each
– When time is limited and there is pressure to come up with the right
decision.
Heuristics or Judgment
Shortcuts
• Framing
– The selective use of perspective
• Statistical Regression to the Mean
– Failure to recognize that performances tend towards
the average, rather than extremes
• Availability Heuristic
– The tendency of people to base their judgments on
information readily available to them
Heuristics or Judgment
Shortcuts
• Representative Heuristic
– The tendency to assess the likelihood of an
occurrence by trying to match it with a preexisting
category
• Ignoring the Base Rate
– Ignoring the statistical likelihood of an event when
making a decision
• Escalation of Commitment
– An increased commitment to a previous decision in
spite of negative information
Group Decision Making
Strengths of Group Weaknesses of Group
Decision Making Decision Making
• Generates more complete • More time consuming
information and knowledge
• Offers increased diversity of • Conformity pressures in
views groups
• Generates higher-quality • Discussion can be dominated
decisions by one or a few members
• Leads to increased acceptance • Decisions suffer from
of a solution ambiguous responsibility
Groupthink and Groupshift
• Groupthink
– Phenomenon in which the norm for
consensus overrides the realistic appraisal of
alternative courses of action
• Groupshift
– Phenomenon in which the initial positions of
individual members of a group are
exaggerated toward a more extreme position
Symptoms of Groupthink
• Illusion of Invulnerability
• Assumption of Morality
• Rationalized Resistance
• Peer Pressure
• Minimized Doubts
• Illusion of Unanimity
What Causes Groupshift?
• Discussion creates familiarization among
group members
• Group discussion motivates individuals to
take risks
• Group diffuses responsibility
Group Decision-Making
Techniques
• Interacting Groups
• Brainstorming
• Nominal Group Technique
• Electronic Meeting
Nominal Group Technique
Individual Activity Group Activity Individual Activity
Individuals silently Individuals take turns Individuals silently rank

Team members receive
description of problem. write down describing solutions (or vote on) each
possible solutions. to each other; solution presented.
Group then discusses
and evaluates ideas.
Leader Behaviours with
Groups
• AI
– You solve the problem or make a decision yourself using
whatever facts you have at hand.
• AII
– You obtain the necessary information from subordinates and
then decide on the solution to the problem yourself.
• CI
– You share the problem with relevant subordinates one-on-one,
getting their ideas and suggestions. However, the final decision
is yours alone.
Leader Behaviours with
Groups
• CII
– You share the problem with your subordinates as a group,
collectively obtaining their ideas and suggestions. Then you
make the decision that may or may not reflect your
subordinates’ influence.
• GII
– You share the problem with your subordinates as a group.
Your goal is to help the group concur on a decision. Your ideas
are not given any greater weight than those of others.
Creativity
• The process of creating products, ideas,
or procedures that are novel or original,
and are potentially relevant or useful to
an organization
De Bono’s Six Thinking Hats
• White hat
– Impartial thinking, focusing strictly on the
facts.
• Red hat
– Expression of feelings, passions, intuitions,
emotions.
• Black hat
– A critical, deliberate, evaluating outlook.
De Bono’s Six Thinking Hats
• Yellow hat
– An optimistic, upbeat, positive outlook.
• Green hat
– Creativity, inspiration, imagination, and the
free flow of new concepts.
• Blue hat
– Control, an overall “managerial” perspective
of the process.
Organizational Factors
Affecting Creativity
• Challenge
• Freedom
• Resources
• Work-Group Features
• Supervisory Encouragement
• Organizational Support
Creativity Blocks
• Expected evaluation
• Surveillance
• External motivators
• Competition
• Constrained choice
Ethics in Decision Making
• An individual can use three different criteria in
framing or making ethical choices.
– Utilitarian criterion
• Decisions are made solely on the basis of their outcomes or
consequences.
– Rights criterion
• Decisions consistent with fundamental liberties and privileges
as set forth in documents like the Canadian Charter of Rights
and Freedoms.
– Justice criterion
• Decisions that impose and enforce rules fairly and impartially
so there is an equitable distribution of benefits and costs.
Factors Affecting Ethical Decision-
Making Behaviour
Stage of moral
development
Organization Ethical
environment decision-making
behaviour
Locus of
control
Stages of Moral Development
Principled
6. Following self-chosen ethical

principles even if they violate
the law.
5. Valuing rights of others and
upholding absolute values
Conventional and rights regardless of the
majority’s opinion.
4. Maintaining conventional
order by fulfilling
obligations to which
you have agreed.
3. Living up to what is
Preconventional expected by people close
to you.
2. Following rules only
when doing so is in your
immediate interest.
1. Sticking to rules to avoid
physical punishment.
Summary and
Implications
• Individual decision making
– Individuals think and reason before they act.
– Under some decision situations, people follow the rational
decision making model.
• Group decision making
– Organizations that use teams face additional problems and
synergies with respect to decision making
– Leader-participation model can be used to determine when to
allow teams to make decisions
Summary and Implications
• Creativity
– Organizations need to reward and encourage creativity
• Ethics
– Managers set the tone for ethics in the organization

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Decision Making, Creativity, and Ethics

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Chapter 11

Select the Identify the

Individual Activity Group Activity Individual Activity

Individuals silently Individuals take turns Individuals silently rank

6. Following self-chosen ethical

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