Prepared by Michael K. McCuddy Valparaiso University

1. Presentation Slidesto AccompanyOrganizational Behavior10th EditionDon Hellriegel and John W. Slocum, Jr. Chapter 13—Making Decisions in Organizations Prepared by Michael K. McCuddy Valparaiso University

2. Slide 13.1Learning Objectives forMaking Decisions in Organizations • Explain the basic concepts for making ethical decisions • Describe the attributes of three models of managerial decision making • Explain two methods for stimulating organizational creativity Chapter 13: Making Decisions in Organzations

3. Slide 13.2Components of the Foundation for Making Ethical Decisions • Ethical intensity • Decision-making principles and decision rules • Affected individuals • Benefits and costs • Determination of rights Chapter 13: Making Decisions in Organzations

4. Slide 13.3Components of Ethical Intensity • Magnitude of consequences • Probability of effect • Social consensus • Temporal immediacy • Proximity • Concentration of effect Chapter 13: Making Decisions in Organzations

5. Slide 13.4Ethical Principles That JustifySelf-Serving Behaviors and Decisions • Hedonist principle • Do whatever you find to be in your own self-interest but do nothing that is clearly illegal • Might-equals-right principle • Do whatever you are powerful enough to impose without respect to socially acceptable behaviors but do nothing that is clearly illegal Chapter 13: Making Decisions in Organzations

6. Slide 13.4 (continued)Ethical Principles That JustifySelf-Serving Behaviors and Decisions • Organization interests principle • Act on the basis of what is good for the organization but do nothing that is clearly illegal Chapter 13: Making Decisions in Organzations

7. Slide 13.5Ethical Principles That Focus on Balancing Multiple Interests • Means–end principle • Act on the basis of whether some overall good justifies any moral transgression but do nothing that is clearly illegal • Utilitarian principle • Act on the basis of whether the harm from a decision is outweighed by the good in it but do nothing that is clearly illegal Chapter 13: Making Decisions in Organzations

8. Slide 13.5 (continued)Ethical Principles That Focus on Balancing Multiple Interests • Professional standards principle • Act on the basis of whether the decision can be explained before a group of your peers but do nothing that is clearly illegal Chapter 13: Making Decisions in Organzations

9. Slide 13.6Ethical Principles That ConsiderAffected Parties and the Public • Disclosure principle • Act on the basis of how the general public would likely respond to disclosure of the rationale and facts related to the decision but do nothing that is clearly illegal • Distributive justice principle • Act on the basis of treating an individual or group equitably rather than on arbitrarily defined characteristics but do nothing that is clearly illegal Chapter 13: Making Decisions in Organzations

10. Slide 13.6(continued)Ethical Principles That ConsiderAffected Parties and the Public • Golden rule principle • Act on the basis of placing yourself in the position of someone affected by the decision and try to determine how that person would feel but do nothing that is clearly illegal Chapter 13: Making Decisions in Organzations

11. Slide 13.7Guidelines for Integrating Ethical Decision Making into the Organization’s Daily Life • Top management should commit to and model ethical behavior • Develop a code of ethics and follow it • Have procedures for organization members to report unethical behavior • Involve managers and employees in identifying and solving ethical problems • Include ethics in performance appraisal • Publicize the organization’s ethical orientation Chapter 13: Making Decisions in Organzations

12. Slide 13.8Explicit Assumptions ofthe Rational Model • All available information on alternatives has been obtained • Alternatives can be ranked according to explicit criteria • The alternative selected will provide the maximum gain Chapter 13: Making Decisions in Organzations

13. Slide 13.9Implicit Assumptions ofthe Rational Model • Ethical dilemmas do not exist in the decision-making process • The means–end principle and the utilitarian principles will dominate the consideration of ethical issues Chapter 13: Making Decisions in Organzations

14. Slide 13.10Portion of Xerox’s Rational Decision Process QUESTION TO BE ANSWERED WHAT’S NEEDED TO GO TO NEXT STEP STEP 1. Identify and select problem What do we want to change? Identification of the gap; describe “desired state” 2. Analyze problem What’s preventing us from reaching the “desired state”? Key cause(s) documented and ranked 3. Generate potential solutions How could change be made? Solution list 4. Select and plan the solution What’s the best way to do it? Make change plan; establish measurement criteria 5. Implement the solution Are we following the plan? Solution in place 6. Evaluate the solution How well did it work? Solution verification; deal with continuing problems Source: Adapted from Garvin, D. A. Building a learning organization. Harvard Business Review, July-August 1993, 78-91; Brown, J. S., and Walton, E. Reenacting the corporation: Organizational change and restructuring of Xerox Planning Review, September/October 1993, 5-8. Chapter 13: Making Decisions in Organzations

15. Slide 13.11Bounded Rationality Model Bounded Rationality Inadequate Information and Control Limited Search Satisficing Decisions Chapter 13: Making Decisions in Organzations

16. Slide 13.12Political Model of Decision Making • Describes decision making by individuals to satisfy their own interests • All aspects of the decision-making process are merely methods to tilt decision outcomes in the decision maker’s favor • Decision outcomes are affected by the distribution of power and the effectiveness of the tactics used by participants • Doesn’t explicitly consider ethical dilemmas but often draws on the hedonistic principle and the might-equals-right principle Chapter 13: Making Decisions in Organzations

17. Slide 13.13Influence Strategies • Rational persuasion • Inspirational appeal • Consultation • Ingratiation • Exchange • Personal appeal • Coalition • Legitimating • Pressure Source: Adapted from Yukl, G., Guinan, P. J., and Sottolano, D. Influence tactics used for different objectives with subordinates, peers, and superiors. Group & Organization Management, 1995, 20, 275; Buchanan, D., and Badham, R. Power, Politics and Organizational Change. London: Sage, 1999, 64. Chapter 13: Making Decisions in Organzations

18. Slide 13.14Barriers to Creativity and Innovation • Perceptual blocks • Failure to use all the senses in observing • Failure to investigate the obvious • Difficulty in seeing remote relationships • Failure to distinguish between cause and effect • Cultural blocks • Desire to conform to established norms • Overemphasis on competition or conflict avoidance • Drive to be practical and to economize • Disbelief in the value of open-ended exploration Chapter 13: Making Decisions in Organzations

19. Slide 13.14 (continued)Barriers to Creativity and Innovation • Emotional blocks • Fear of making a mistake • Fear and distrust of others • Latching on to the first idea Chapter 13: Making Decisions in Organzations

20. Finds new ways to view things; concerned with change and movement. Looks for what is different rather than “right” or “wrong.” Analyzes ideas to generate new ideas. Uses free association thinking. Welcomes chance intrusions of information; considers the irrelevant. Progresses by avoiding the obvious. Tries to find absolutes; concerned with stability. Seeks justification for each step; tries to find what is “right.” Analyzes ideas for faults. Seeks continuity. Selectively chooses information to consider; rejects irrelevant information. Progresses using established patterns; considers the obvious. Slide 13.15Characteristics of Lateral Versus Vertical Thinking LATERAL THINKING VERTICAL THINKING Source: Based on de Bono, E. Lateral Thinking: Creativity Step by Step. New York: Harper & Row, 1970; de Bono, E. Six Thinking Hats. Boston: Little, Brown, 1985. Chapter 13: Making Decisions in Organzations

21. Slide 13.16Useful Lateral Thinking Techniques • Reversal technique • Examining a problem and turning it completely around, inside out, or upside down • Analogy technique • Developing a statement about similarities between objects, persons, and situations • Cross-fertilization technique • Asking experts from other fields to examine the problem and suggest solutions from their own areas of expertise Chapter 13: Making Decisions in Organzations

22. Slide 13.17Decision Making with a Devil’s Advocate A devil’s advocate is assigned to criticize the proposal. A critique is presented to key decision makers. A proposed course of action is generated. Repeat process, if needed. The decision to adopt, modify, or discontinue the proposed course of action is taken. Any additional information relevant to the issues is generated. The decision is monitored. Source: Adapted from Cosier, R. A., and Schrivenk, C. R. Agreement and thinking alike: Ingredients for poor decisions. Academy of Management, February 1991, 71. Chapter 13: Making Decisions in Organzations