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Organizational Behavior 8th edition

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www.downloadslide.com Chapter Seven Decision Making and Creativity 183 EXHIBIT 7.1 Rational Choice Decision- Making Example Probability (“expectancy”) the outcome will occur with that supplier Important outcomes (selection criteria) Outcome valences (“utility”) 0.7 Product quality +9 Supplier A 0.9 On-time delivery +4 0.8 Low prices +6 0.9 Product quality +9 Supplier B 0.6 On-time delivery +4 0.4 Low prices +6 ought to be.” This deviation is a symptom of more fundamental causes that need to be corrected. 8 The “ought to be” refers to goals, and these goals later help evaluate the selected choice. For instance, if a customer contact center’s goal is to answer incoming client calls within 30 seconds, the problem is the gap between that goal and the actual time the contact center takes to answer most client calls. An opportunity is a deviation between current expectations and a potentially better situation that was not previously expected. In other words, an opportunity exists when decision makers discover that some choices may produce better results than current goals or expectations. EXHIBIT 7.2 Rational Choice Decision- Making Process 6. Evaluate the selecteded choice 5. Implementent the selecteded choice 1. Identify problem or opportunity Rational Choice Decision- Making Process 4. Select the choice with the highest value 2. Choose the best decision process 3. Discover or develop possible choices

www.downloadslide.com 184 Part Two Individual Behavior and Processes The second step involves choosing the best decision process. This step is really a meta-decision—deciding how to decide—because it refers to choosing among the different approaches and processes to make the decision. 9 One meta-decision is whether to solve the problem alone or involve others in the process. Later in this chapter, we’ll examine the contingencies of employee involvement in decision making. Another metadecision is whether to assume the decision is programmed or nonprogrammed. Programmed decisions follow standard operating procedures; they have been resolved in the past, so the optimal solution has already been identified and documented. In contrast, nonprogrammed decisions require all steps in the decision model because the problems are new, complex, or ill-defined. The third step in the rational choice decision process is to identify and/or develop a list of possible choices. This usually begins by searching for ready-made solutions, such as practices that have worked well on similar problems. If an acceptable solution cannot be found, then decision makers need to design a custom-made solution or modify an existing one. The fourth step is to select the best choice by applying the rational choice calculation we described in Exhibit 7.1. Choosing the alternative that offers the greatest satisfaction or value requires the decision maker to have information about all possible alternatives and their outcomes. That condition is usually impossible, but the rational choice view of decision making assumes this can be accomplished with ease. The fifth step is to implement the selected alternative. Rational choice decision making assumes that implementation occurs without any problems. The final step is to evaluate whether the gap has narrowed between “what is” and “what ought to be.” Ideally, this information should come from systematic benchmarks so that relevant feedback is objective and easily observed. PROBLEMS WITH RATIONAL CHOICE DECISION MAKING The rational choice view of decision making seems so logical, yet there are several reasons why it is impossible to apply in reality. 10 Therefore, we need to understand why people have imperfect rationality. Over the next several pages we reexamine each step in the rational choice decision-making process, but with more detail about what really happens through the lens of “imperfect rationality.” Identifying Problems and Opportunities 7-2 When Albert Einstein was asked how he would save the world in one hour, he replied that the first 55 minutes should be spent defining the problem and the last 5 minutes solving it. 11 Einstein’s point is that problem identification is not just the first step in decision making; it is arguably the most important step. But problems and opportunities are not clearly labeled objects that appear on our desks. Instead, they are conclusions that we form from ambiguous and conflicting information. 12 PROBLEMS WITH PROBLEM IDENTIFICATION The problem identification stage is, itself, filled with problems. Here are five of the most widely recognized concerns. 13 Solution-Focused Problems Some decision makers describe the problem as a veiled solution. 14 For instance, someone might say: “The problem is that we need more control over our suppliers.” This isn’t a description of the problem; it is a rephrased statement of a solution to a problem that has not been adequately diagnosed. One

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