Organisational Behaviour Ch7
CHAPTER 7
DECISION MAKING AND CREATIVITY
Describe the six stages in the rational choice decision process
Decision making: the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs.
Rational choice paradigm of decision making: the view in decision making that people should and typically do, use logic and all available information to choose the alternative with the highest value.
Decision making involves identifying, selecting and applying the best possible alternative. The best decision use pure logic and all available information to choose the alternative with the highest value
Such as highest expected profit, customer satisfaction, employee wellbeing or some combination of these outcomes.
Subjective expected utility: the probability (expectation) of satisfaction (utility) resulting from choosing a specific alternative in a decision.
Decision making process: systematic application of stages of decision making. 1. Identify problem or opportunity 2. Choose the best decision process 3. Develop alternative solutions 4. Choose the best alternative 5. Implement the selected option 6. Evaluate decision outcomes
Problem with Rational choice paradigm: 1. Impossible to apply in reality 2. Difficulty recognising problems 3. Process the huge volume of information 4. Difficulty recognising when choices have failed 5. Focusing on logical thinking, ignores emotion influence making decision
IDENTIFYING PROBLEMS AND OPPORTUNITIES
Explain why people have difficulty with it
Problem identification is not just the first step in decision making: it is the most important
There are five most widely recognised concerns.
Stakeholder framing: attention-based theory of the firm: states that, organisational decisions and actions are influenced mainly by what attracts management’s attention, rather than by objective reality.
Mental mode: if an idea does not fit the existing mental mode of
DECISION MAKING AND CREATIVITY
Describe the six stages in the rational choice decision process
Decision making: the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs.
Rational choice paradigm of decision making: the view in decision making that people should and typically do, use logic and all available information to choose the alternative with the highest value.
Decision making involves identifying, selecting and applying the best possible alternative. The best decision use pure logic and all available information to choose the alternative with the highest value
Such as highest expected profit, customer satisfaction, employee wellbeing or some combination of these outcomes.
Subjective expected utility: the probability (expectation) of satisfaction (utility) resulting from choosing a specific alternative in a decision.
Decision making process: systematic application of stages of decision making. 1. Identify problem or opportunity 2. Choose the best decision process 3. Develop alternative solutions 4. Choose the best alternative 5. Implement the selected option 6. Evaluate decision outcomes
Problem with Rational choice paradigm: 1. Impossible to apply in reality 2. Difficulty recognising problems 3. Process the huge volume of information 4. Difficulty recognising when choices have failed 5. Focusing on logical thinking, ignores emotion influence making decision
IDENTIFYING PROBLEMS AND OPPORTUNITIES
Explain why people have difficulty with it
Problem identification is not just the first step in decision making: it is the most important
There are five most widely recognised concerns.
Stakeholder framing: attention-based theory of the firm: states that, organisational decisions and actions are influenced mainly by what attracts management’s attention, rather than by objective reality.
Mental mode: if an idea does not fit the existing mental mode of