THE NATURE OF DECISION MAKING

1. THE NATURE OF DECISION MAKING DECISION MAKING The act of choosing one alternative from among a set of alternatives. DECISION-MAKING PROCESS Recognize and define the nature of a decision situation Identify appropriate alternatives Choose and justify the best alternative (Recommend) Evaluated on basis of feasibility, effectiveness, and consequences Implement the recommendation (Put it into practice) EFFECTIVE DECISIONS Effective decisions optimize some set of factors: e.g. maximize profits, sales, market share or satisfaction, or minimize costs, waste, turnover, or unhappiness.

2. PRECONDITIONS FOR DECISION MAKINGIS THERE A PROBLEM WE REALLY MUST ADDRESS? IS THERE A PERFORMANCE GAP? Assumes there are standards to judge Assumes there is monitoring and feedback IS THE DECISION MAKER AWARE OF THIS GAP? Consciousness of the gap Significance to the organization DOES THE DECISION MAKER HAVE THE RESOURCES TO ACT? Knowledge and ability to fix the problem Budgets, personnel, power IS THE DECISION MAKER MOTIVATED TO ACT ON THE GAP? Rewards and risks weighed Risk-averse or risk-seeker?

3. TYPES OF DECISIONS ROUTINE (Programmed) COMMON PROBLEMS WITH WELL-DEFINED SOLUTIONS : Rules, procedures, computer software packages There is an obvious “best” solution or alternative ADAPTIVE A COMBINATION OF MODERATELY UNUSUAL AND ONLY PARTIALLY-KNOWN PROBLEMS AND ALTERNATIVES Incremental changes or modifications of past decisions and practices Selecting from a set of known alternatives, but unsure of the outcomes INNOVATIVE (Non-Programmed) UNUSUAL OR AMBIGUOUS PROBLEMS WHICH REQUIRE UNIQUE OR CREATIVE ALTERNATIVE SOLUTIONS Emphasizes radical change, innovation, brainstorming Not sure what the alternatives are, not sure whether any will work

4. RATIONAL DECISION MAKING MODEL DEFINE AND DIAGNOSE THE PROBLEMS SEPARATE SYMPTOMS FROM CAUSES CLARIFY THE OBJECTIVES TO BE ACHIEVED IDENTIFY CRITERIA TO BE USED SEARCH FOR ALTERNATIVE SOLUTIONS WE MUST HAVE OPTIONS FOR EACH PROBLEM COMPARE AND EVALUATE ALTERNATIVES EXPECTED RESULTS, COSTS, POTENTIAL SIDE EFFECTS? RECOMMENDED SOLUTIONS JUSTIFY WHY THIS CHOICE…WHY NOT THE OTHERS? IMPLEMENTATION STEPS AND PROCEDURES TO FOLLOW TO ENSURE SUCCESS MONITORING AND CONTROL ARE THINGS GOING AS EXPECTED? IS FURTHER INTERVENTION NEEDED?

5. RATIONAL MODEL ASSUMPTIONS PROBLEM CLARITY The problem is clear and unambiguous. The decision maker is assumed to have complete information regarding the decision situation. KNOWN OPTIONS The decision maker can identify all the relevant criteria and can list all the viable alternatives. Furthermore, the decision maker is aware of all the possible consequences of each alternative. CLEAR PREFERENCES The criteria and alternatives can be ranked and weighted to reflect their importance. CONSTANT PREFERENCES The decision criteria are constant and the weights assigned are stable. NO TIME OR COST CONSTRAINTS The decision maker can obtain full information about criteria and alternatives because it is assumed there are no time or cost constraints. MAXIMUM PAYOFF The rational decision maker will choose the alternative that yields the highest perceived value.

6. BOUNDED RATIONALITYSIMON (57) BASED ON A LIMITED PERSPECTIVE SOME IMPORTANT CRITERIA ARE NOT IDENTIFIED NOT ALL ALTERNATIVES ARE CONSIDERED SEQUENTIAL EVALUATION OF ALTERNATIVES CONSIDER OPTIONS ONE AT A TIME MAY ONLY COMPARE AND CONTRAST TWO OPTIONS SATISFICING IS THE OPTION UNDER CONSIDERATION “OK” or “GOOD ENOUGH?” SELECTION OF THE FIRST TOLERABLE OPTION JUDGMENTAL HEURISTICS AND BIASES OVERCONFIDENCE – “I’m 70% sure”…more like 50/50 ANCHORS -- Get stuck on some initial info…$15-$50 mill…”Primacy Effect” CONFIRMATION – Bias that remembers only data that supports your predisposition AVAILABILITY– Information that is readily available and vivid, we don’t dig deeper ESCALATION OF COMMITMENT – More investment in a bad decision

7. DECISION MAKING UNDER CONDITIONS OF: CERTAINTY RISK UNCERTAINTY AMBIGUITY LEADS TO SOLUTIONS THAT ARE: OPTIMIZED SATISFICED

8. FOUR DECISION MAKING CONDITIONS CERTAINTY DECISION MAKERS KNOW WHICH OBJECTIVES THEY WANT TO ACHIEVE ALTERNATIVES ARE CLEARLY DEFINED KNOWLEDGE OF OUTCOMES IS COMPLETE ALL INFORMATION NEEDED IS FULLY AVAILABLE RISK DECISION MAKERS KNOW WHICH OBJECTIVES THEY WANT TO ACHIEVE ALTERNATIVES ARE CLEAR LIKELIHOOD OF OUTCOMES IS SUBJECT TO CHANCE GOOD INFORMATION IS AVAILABLE UNCERTAINTY DECISION MAKERS KNOW WHICH OBJECTIVES THEY WANT TO ACHIEVE ALTERNATIVES ARE INCOMPLETE LIKELIHOOD OF OUTCOMES IS NOT UNDERSTOOD INFORMATION IS INCOMPLETE AMBIGUITY OBJECTIVES TO BE ACHIEVED ARE NOT CLEAR ALTERNATIVES ARE DIFFICULT TO DEFINE INFORMATION ABOUT OUTCOMES IS UNAVAILABLE

9. DECISION STYLESTHOMPSON & TUDEN (59) CLEAR PREFERENCES REGARDING OUTCOMES YES, We Agree NO Agreement Known with Certainty Not Known - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - YES, We Know What To Do CLEAR UNDERSTANDINGCOMPUTATIONAL COMPROMISE OF CAUSE / EFFECT- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - RELATIONSHIPSJUDGMENTAL BLUE-SKY (Inspirational) NO, We Don’t Know What to Do - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DO YOU KNOW WHAT OUTCOMES YOU WANT AND WHAT TO DO TO GET THEM?

10. THREE “RATIONAL”DECISION PROCESSESCOMPENSATORY, CONJUNCTIVE, DISJUNCTIVE COMPENSATORY PROCESS (CLASSICAL) ALL IMPORTANT CRITERIA ARE CLEARLY IDENTIFIED CRITERIA ARE WEIGHTED ACCORDING TO IMPORTANCE ALL ALTERNATIVES CAN BE MATHEMATICALLY MODELED EXPECTED VALUE IS CALCULATED FOR EACH OPTION THE “BEST” EXPECTED VALUE IS THE OPTIMAL CHOICE USE OF EXPECTED VALUES ALWAYS LEADS TO THE OPTIMAL SOLUTION VERY HIGH PERFORMANCE ON ONE CRITERION CAN OFFSET WEAKNESSES IN ANOTHER ARE YOU CONFIDENT THE WEIGHTS AND VALUES ARE CORRECT?

11. COMPENSATORY DECISION PROCESSCLASSICAL / ECONOMIC APPROACH Price MPG Room Power Style EXPECTED ORIGINAL GRID .40 .20 .10 .10 .20 VALUE - - - - - - - - - - - - - - - - - - - - - - - - - - - - - CAR A 9,000 50 .4 .4 .6 CAR B 12,000 35 .6 .7 .9 CAR C 14,000 28 .7 .9 .7 CAR D 10,500 32 .7 .7 .4 CONVERTED GRID (so all #’s are standardized) CAR A .889 1.00 .4 .4 .6 .7556** CAR B .667 .70 .6 .7 .9 .7168 CAR C .571 .56 .7 .9 .7 .6404 CAR D .762 .64 .7 .7 .4 .6528 Ideal = $8,000 50mpg 1.0 1.0 1.0

12. CONJUNCTIVE PROCESSOR ”MULTIPLE HURDLES” APPROACH ALL IMPORTANT CRITERIA ARE CLEARLY IDENTIFIED CRITERIA CAN BE RANKED OR ORDERED IN IMPORTANCE CUTOFF LIMITS ARE SET FOR EACH CRITERION ALTERNATIVES ARE COMPARED TO THE CUTOFF LIMITS ONLY ALTERNATIVES WITHIN ALL CUTOFF LIMITS SURVIVE NOT AN OPTIMIZING PROCESS---NO SOLUTION GUARANTEED THE PROCESS MAY NARROW DOWN THE OPTIONS, BUT DOESN’T GUARANTEE A “BEST” SOLUTION WILL BE FOUND. IN FACT, IT IS POSSIBLE THAT ALL ALTERNATIVES MAY BE ELIMINATED BY THE CUTOFF LIMITS, LEAVING US WITH NO RECOMMENDATION. EXCEPTIONAL STRENGTH ON ONE CRITERION CANNOT MAKE UP FOR A WEAKNESS OR LACK ON ANOTHER CRITERION. ALL THE MINIMUMS ON ALL THE CRITERIA MUST BE MET.

13. CONJUNCTIVE DECISION PROCESSMULTIPLE HURDLES APPROACH Price MPG Style Power Room PASSED ALL Rank = 1 2 3 4 5 CUTOFFS Original Grid - - - - - - - - - - - - - - - - - - - - - - - - - - - - - CAR A 9,000 50 .6 .4 .4 CAR B 12,000 35 .9 .7 .6 CAR C 14,000 28 .7 .9 .7 CAR D 10,500 32 .4 .7 .7 CUTOFFS Max Min Min Min Min 13,000 30 .6 .6 .6 RUNNING THE HURDLES CAR A OK OK OKFAIL --- CAR B OK OK OK OK OK YES** CAR C FAIL ---- CAR D OK OK FAIL ----

14. DISJUNCTIVE PROCESSOR “BEHAVIORAL” WE HAVE SOME CRITERIA, BUT THE LIST SEEMS INCOMPLETE UNABLE TO EITHER WEIGHT OR RANK CRITERIA BY IMPORTANCE WE CAN PERCEIVE OUTSTANDING ATTRIBUTES FOR EACH OPTION WE LIST THE “STRENGTHS” & “WEAKNESSES” OF EACH OPTION WE PICK OUR CHOICE BASED ON A REVIEW OF THESE S/W LISTS THE DECISION PROCESS IS UNSYSTEMATIC, INCONSISTENT AN ALTERNATIVE WITH A “BAD” ATTRIBUTE IS FREQUENTLY REJECTED FINAL CHOICES ARE USUALLY MADE USING A SINGLE CRITERION WHICH THE DECISION MAKER HAS DECIDED TO FOCUS UPON. THESE DECISIONS ARE MUCH MORE SUBJECTIVE THAN THEY APPEAR, AND ARE DIFFICULT TO DEFEND IF CHALLENGED.

15. DISJUNCTIVE DECISION PROCESSBEHAVIORAL, STRENGTHS/WEAKNESSES APPROACH Price Style Power MPG ???? Original Grid - - - - - - - - - - - - - - - - - - - - - - - - - - - - - CAR A Good Bad Good CAR B Good CAR C Bad Good CAR D Bad Eliminate the alternatives with “Bad” evaluations, and see what is left. Thus, we buy Car B because I liked the color and my wife liked the interior! NOT RATIONAL OR SYSTEMATIC, BUT WE THINK WE WERE “LOGICAL” IN WHAT WE DID BEFORE SELECTING THE CAR.

16. ENVIRONMENTAL SCENARIOS WHAT ARE YOUR ASSUMPTIONS ABOUT THE ENVIRONMENT? POSSIBLE STATES OF NATURE (Scenarios) MUTUALLY EXCLUSIVE THINGS WE DON’T CONTROL POSSIBLE ACTIONS WE CAN TAKE (Alternatives) ALTERNATIVES OR OPTIONS THESE ARE THE CHOICES WE CAN MAKE (WE CONTROL THESE) EXPECTED OUTCOMES FOR EACH POSSIBLE ACTION REVENUES, COSTS, PROFITS UNITS PRODUCED, HOURS WORKED, ETC. LIKELIHOOD OF EACH OUTCOME CERTAINTY RISK or PROBABILITY TOTAL UNCERTAINTY

17. PAYOFF TABLES SINGLE-PHASE PROBLEMS RECURRING, REPETITIVE DECISIONS CAN ILLUSTRATE THE CLASSICAL DECISION PROCESS DECISION TREES MULTI-PHASE PROBLEMS NEAR-UNIQUE, ONE-TIME-ONLY DECISIONS

18. A PAYOFF TABLE ILLUSTRATIONUNDER TOTAL UNCERTAINTY EXPECTED PROFITS $ / ACRE STATES OF NATURE / ENVIRONMENTAL SCENARIOS ALTERNATIVE CROPSNORMALWETDRYVIOLENT - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - CORN $ 900 450 -800 250 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - POTATOES 800 -300 400 500 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - HAY/GRASS 300 500 0 100 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1. MAXI-MAX (Optimist) *Corn 900, Potato 800, Hay 500 2. MAXI-MIN (Pessimist) Corn -800, Potato -300, *Hay 0 3. MINI-MAX (Regret) Regrets..Corn 1200, Potato 800, *Hay 600 4. AVERAGE (Rational) Ex Value…Corn 200, *Potato 350, Hay 225

19. BUILDING A REGRET MATRIX EXPECTED PROFITS $ / ACRE STATES OF NATURE / ENVIRONMENTAL SCENARIOS ORIGINAL MATRIX ALTERNATIVE CROPSNORMALWETDRYVIOLENT - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - CORN $ 900 450 -800 250 POTATOES 800 -300 400 500 HAY/GRASS 300 500 0 100 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - REGRET MATRIX CORN 0 50 1200 250 POTATOES 100 800 0 0 HAY/GRASS 600 0 400 400 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - MINIMIZE THE MAXIMUM REGRETS Corn = 1200, Potatoes = 800, Hay = 600**

20. A PAYOFF TABLE ILLUSTRATIONUNDER RISK (ASSIGNED PROBABILITY) EXPECTED PROFITS $ / ACRE PROBABILITIES COME FROM “GOOD” GUESSES. CALCULATE THE EXPECTED VALUES INDIAN JOE’S ESTIMATES = Normal 30%, Wet 25%, Dry 20%, Violent 25% STATES OF NATURE / ENVIRONMENTAL SCENARIOS ALTERNATIVE CROPSNORMALWETDRYVIOLENT EXPECTED WEIGHTS .30 .25 .20 .25 VALUES = = = = = = = = = = = = = = = = = = = = = = = CORN $ 900 450 -800 250 $ 285 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - POTATOES 800 -300 400 500 370** - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - HAY/GRASS 300 500 0 100 240 = = = = = = = = = = = = = = = = = = = = = = = == = You should PLANT POTATOES EVERY YEAR. In any one year you’ll either make 800, lose 300, make 400, or make 500 …but over the years, you’ll average $370 of profits.

21. A PAYOFF TABLE ILLUSTRATIONUNDER RISK (FACTUAL PROBABILITY) EXPECTED PROFITS $ / ACRE PROBABILITY INFORMATION COMES FROM RELIABLE (FACTUAL) SOURCES WEATHER BUREAU HISTORY = Normal 35%, Wet 30%, Dry 15%, Violent 20% STATES OF NATURE / ENVIRONMENTAL SCENARIOS ALTERNATIVE CROPSNORMALWETDRYVIOLENT EXPECTED WEIGHTS .35 .30 .15 .20 VALUES = = = = = = = = = = = = = = = = = = = = = = = CORN $ 900 450 -800 250 $ 380** - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - POTATOES 800 -300 400 500 350 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - HAY/GRASS 300 500 0 100 275 = = = = = = = = = = = = = = = = = = = = = = = You should PLANT CORN EVERY YEAR. In any one year you’ll either make 900, make 450, lose 800 or make 250 …but over the years, you’ll average $380 of profits.

22. A PAYOFF TABLE ILLUSTRATIONUNDER RISK (WHAT IS THE VALUE OF PERFECT INFORMATION?) WE KNOW ONLY GOD CONTROLS THE WEATHER, BUT IF WE HAD PERFECT PREDICTION EACH YEAR, WE’D KNOW EXACTLY WHAT THE WEATHER WOULD BE AND WHAT WE SHOULD PLANT. WE’D HAVE NORMAL CONDITIONS 35% OF THE TIME, AND DURING THOSE TIMES, WE’D PLANT CORN. 30% OF THE TIME IT WOULD BE WET AND WE’D PLANT HAY, ETC. STATES OF NATURE / ENVIRONMENTAL SCENARIOS ALTERNATIVE CROPSNORMALWETDRYVIOLENT EXPECTED WEIGHTS .35 .30 .15 .20 VALUES = = = = = = = = = = = = = = = = = = = = = = = CORN $ 900 450 -800 250 $ 380** POTATOES 800 -300 400500350 HAY/GRASS 300 500 0 100 275 = = = = = = = = = = = = = = = = = = = = = = = Expected Profits given Perfect Information (EPPI) = $625. Expected Value of Perfect Information (EVPI) = EPPI – EV = $625 –380 = $ 245 Therefore, you can increase your profits by up to $245 if you have a perfect weather forecast each spring.

23. GROUP DECISION MAKING ADVANTAGES • BROAD REPRESENTATION • TAPS EXPERTISE • MORE IDEAS GENERATED • EVALUATION OF OPTIONS • COORDINATION • HIGH ACCEPTANCE DISADVANTAGES • TIME CONSUMING • POSSIBLE INDECISIVENESS • COMPROMISE DECISIONS • DOMINATION BY A MEMBER • RISKY SHIFTS • GROUPTHINK

24. GROUP DECISION MAKING ISSUESVROOM & YETTON (73) • TIME AVAILABILITY • TYPE OF PROBLEM OR TASK • AVAILABILITY OF INFORMATION • NEED FOR ACCEPTANCE OF DECISION • LEVEL OF TRUST • CAPABILITIES OF SUBORDINATES • LIKELIHIID OF CONFLICT

25. PARTICIPATION IN DECISION MAKINGVROOM & YETTON (73) LEADERS HAVE THREE DECISION MAKING STYLES AUTOCRATIC CONSULTIVE PARTICIPATIVE FACTORS AFFECTING CHOICE OF STYLE: 1. CHARACTERISTICS OF THE PROBLEM HOW IMPORTANT IS THE QUALITY OF THE DECISION? IS THE PROBLEM WELL-STRUCTUERED? IS TIME CRITICAL? HOW IMPORTANT IS SUBORDINATE COMMITMENT TO THE CHOICE? 2. CHARACTERISTICS OF THE MANAGER DOES THE LEADER HAVE GOOD INFORMATION TO MAKE THE CHOICE? 3. CHARACTERISTICS OF SUBORDINATES WILL SUBORDINATES ACCEPT THE LEADER’S DECISION? DO SUBORDINATES SHARE THE ORGANIZATION’S GOALS? IS CONFLICT LIKELY AMONG SUBORDINATES (OVER THE CHOICES)? CAN THEY CONTRIBUTE GOOD INFORMATION TO MAKE THE CHOICE?

26. VROOM’S DECISION STYLES • A1 YOU SOLVE THE PROBLEM YOURSELF, WITH YOUR OWN INFORMATION • A2 YOU OBTAIN INFORMATION FROM YOUR SUBORDINATES, THEN SOLVE THE PROBLEM YOURSELF • C1 YOU SHARE THE PROBLEM WITH YOUR SUBORDINATES INDIVIDUALLY, WITHOUT BRINGING THEM TOGETHER AS A GROUP. YOU CONSIDER THEIR IDEAS, THEN MAKE THE DECISION BY YOURSELF • C2 YOU SHARE THE PROBLEM WITH YOUR SUBORDINATES AS A GROUP, COLLECTIVELY GETTING THEIR IDEAS, THEN YOU MAKE THE DECISION BY YOURSELF • G2 YOU SHARE THE PROBLEM WITH YOUR SUBORDINATES AS A GROUP. TOGETHER YOU ATTEMPT TO REACH A CONSENSUS ON A SOLUTION. YOUR ROLE IS CHAIR, AND THE GROUP’S SOLUTION SHOULD BE THE ONE IMPLEMENTED

27. DEFECTS IN GROUP DECISION MAKING • DISCUSSION LIMITED TO A FEW ALTERNATIVES (ONE OR TWO) • FAILURE TO REEXAMINE THE PREFERRED ALTERNATIVE FOR WEAKNESSES AND POTENTIAL RISKS • NO SEARCH TO FIND ADVANTAGES FOR OTHER ALTERNATIVES, AND NO SEARCH FOR WAYS TO MAKE OTHER OPTIONS FEASIBLE • LITTLE OR NO ATTEMPT TO OBTAIN EXPERT OR OUTSIDE ADVICE • A TENDENCY TO IGNORE FACTS AND OPINIONS THAT DO NOT AGREE WITH THE PREFERRED PLAN OF ACTION • NO CONTINGENCY PLANS ESTABLISHED IN CASE SOMETHING GOES WRONG • NO ATTEMPT TO LOOK AT THE SITUATION FROM A CONTRARY OR ANTAGONISTIC VIEWPOINT • LAUGHING AT DANGER SIGNALS; MAKING LIGHT OF INDICATIONS THAT ALL IS NOT PROCEEDING SMOOTHLY • LEADERS WHO DOMINATE DISCUSSIONS AND MAKE THEIR SUGGESTIONS EARLY, BEFORE OTHERS HAVE HAD THEIR SAY

28. SYMPTOMS OF GROUPTHINKJANIS (72) A VERY COHESIVE GROUP THAT IS LIKELY TO MAKE POOR DECISIONS • OVERESTIMATION OF THE GROUP ILLUSION OF INVULNERABILITY (Superiority) ILLUSION OF MORALITY • CLOSEMINDEDNESS RATIONALIZATION (Discounting Warning Signs) STEREOTYPED VIEWS OF OUTSIDERS (Not Trusted & Not Very Smart) • PRESSURE TOWARD CONFORMITY SELF-CENSORSHIP OF MEMBERS DIRECT PRESSURE APPLIED TO DEVIANTS MINDGUARDS (Don’t Let Others/outsiders Influence Us) ILLUSION OF UNANIMITY (Silence Means Agreement?)

29. REMEDIES FOR GROUPTHINK • ASSIGN EVERYONE THE ROLE OF CRITICAL EVALUATOR SENSITIZATION • LEADER MUST BE IMPARTIAL DO NOT INITIALLY STATE YOUR PREFERENCES • APPOINT AN INTERNAL “DEVIL’S ADVOCATE” • USE OUTSIDE EXPERTS TO CHALLENGE THE GROUP THEY MAY STRONGLY DISAGREE WITH WHAT YOU WANT TO DO • DIVIDE INTO TWO OR MORE SUBGROUPS TO WORK INDEPENDENTLY ON THE SAME PROBLEM HAVE EACH GROUP REPORT BACK • HOLD “SECOND CHANCE” MEETINGS TO REAFFIRM EARLIER THINKING AND DECISIONS HAVE A “CONFIRMATION” VOTE LATER

30. BRAINSTORMING USED TO GENERATE NEW IDEAS OR ALTERNATIVES RULES: • FREEWHEELING IS WELCOME --- OFFER ANY IDEAS THAT COME TO YOU • QUANTITY IS DESIRED --- DON’T WORRY ABOUT QUALITY OR RISK RIGHT NOW • NO CRITICISM OR PRAISE OF IDEAS IS ALLOWED • NO QUESTIONS OR DISCUSSION OF IDEAS --- THAT WILL COME AT A LATER MEETING • COMBINATION AND IMPROVEMENT OF IDEAS IS ENCOURAGED --- BUILD ON OTHER PEOPLE’S IDEAS AND SUGGESTIONS

31. NOMINAL GROUP TECHNIQUE • EACH MEMBER GENERATES A LIST OF THEIR IDEAS AHEAD OF TIME • IDEAS ARE SHARED WITH MEMBERS EITHER AS AN EXHAUSTIVE LIST, OR ARE PRESENTED ONE AT A TIME WITHOUT COMMENT • MEMBERS VOTE BY SECRET BALLOT TO SELECT THE “BEST” IDEAS WHICH THEY WANT TO PURSUE FURTHER • EACH ITEM IS DISCUSSED AND EVALUATED PUBLICLY (Pros and Cons) • FINAL VOTES ARE TAKEN BY SECRET BALLOT REDUCES THE EFFECTS OF POWER AND STATUS DIFFERENCES ALL MEMBERS CAN PARTICIPATE AND GET THEIR IDEAS BEFORE THE GROUP MEMBERS ARE NOT INTIMIDATED BY A DOMINANT MEMBER

32. DELPHI TECHNIQUE • CAN PROBE THE VIEWS OF INDUSTRY EXPERTS • MATRERIALS SENT TO PARTICIPANTS FOR REACTIONS • OPTIONS ARE INDIVIDUALLY WRITTEN AND SENT BACK • SUMMARIES ARE SENT OUT FOR FURTHER COMMENT • ROLE OF THE IN-HOUSE COORDINATOR IS CRUCIAL • THE “GROUP” NEVER MEETS TOGETHER • NO FINAL DECISIONS ARE “MADE” BY THIS GROUP THIS IS A “VIRTUAL GROUP” WHICH CAN BE INTERNET CONNECTED PROCESS GATHERS THE BEST THINKING & JUDGMENT OF EXPERTS SUCCESSIVE FEEDBACK REDEFINES AND FOCUSES IDEAS FINAL DECISIONS ARE MADE BY COMPANY OFFICIALS, NOT THE GROUP