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DECISION MAKING

ROADMAP
Types of decisions
Models of decision making
The decision making process
Creativity
Shortcuts and traps

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CONNECTING THE DOTS


Making warning systems more sensitive reduces the risk of
surprise, but increases the number of false alarms, which in
turn reduces sensitivity
The Chief of Staff has to make decisions, and his decisions
must be clear To be sure, the clearer and sharper the
estimate, the clearer and sharper the mistake..

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LIS580- SPRING 2006

UNDERSTANDING DECISION
Puzzles,
Problems, and Wicked Problems
MAKING
A discrepancy between a desirable and an actual

situation.
Well structured, ill-structured, and complex problems.

Decision

A choice made between available alternatives.

Decision Making

The process of developing and analyzing alternatives


and choosing from among them.

Judgment

The cognitive, or thinking, aspects of the decisionmaking process.

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G.Dessler, 2003

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WICKED PROBLEMS
Proposed by H.J. Rittel and M. Webber of UC Berkeley in 1973.
Wicked problems do not have an exhaustive set of potential solutions.
Every wicked problem can be considered to be a symptom of another
problem.
Discrepancies in representing a wicked problem can be explained in
numerous ways--the choice of explanation in turn determines the nature
of the problem's resolution.
Every wicked problem is essentially unique--lessons-learned are hard to
transfer across to other problems.
Wicked problems are often "solved" through group efforts.
Wicked problems require inventive/creative solutions.
Every implemented solution to a wicked problem has consequences, and may
cause additional problems.
Wicked problems have no stopping rule(s).
Solutions to wicked problems are not true-or-false, but instead better, worse,
or good enough.
There is no immediate and no ultimate test of a solution to a wicked problem.
The planner or designer (solving the problem) has no inherent right to solve
the problem, and no permission to make mistakes.

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http://en.wikipedia.org/wiki/Wicked_problems
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TYPES OF DECISIONS
Ill-structured
Type of
Problem
Well-structured

Nonprogrammed
Decisions
Programmed
Decisions

Top
Level in
Organization
Bottom

Programmed Decision

A decision that is repetitive and routine and can be made


by using a definite, systematic procedure.

Nonprogrammed Decision

A decision that is unique and novel.

The Principle of Exception

Only bring exceptions to the way things should be to the


managers
attention. Handle routine matters yourself.
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PROCEDURE AND FORM TO USE FOR


DEVELOPING A WORKPLACE RULE

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FIGURE
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DECISION-MAKING MODELS
The Classical Approach

Have complete or perfect information about the


situation.
Distinguish perfectly between the problem and its
symptoms.
Identify all criteria and accurately weigh all the criteria
according to preferences.
Know all alternatives and can assess each one against
each criterion.
Accurately calculate and choose the alternative with the
highest perceived value.
Make an optimal choice without being confused by
irrational thought processes.

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The problem
is clear and
unambiguous

A single, welldefined goal


is to be
achieved

All alternatives
and
consequences
are known

Preferences
are clear

Preferences
are constant
and stable

No time or
cost
constraints
exist

Final choice
will maximize
economic
payoff
G.Dessler, 2003

LIS580- SPRING 2006

DECISION-MAKING MODELS
(CONTD)
The Administrative Approach
Bounded Rationality (Herbert Simon)
The boundaries on rational decision making imposed by ones values,
abilities, and limited capacity for processing information.
Satisfice
To stop the decision-making process when satisfactory alternatives
are found, rather than to review solutions until an optimal alternative
is discovered.

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G.Dessler, 2003

LIS580- SPRING 2006

CHECKLIST 3.1
THE DECISION-MAKING
PROCESS

Define the problem.


Clarify your objectives.
Identify alternatives.
Analyze the
consequences.
Make a choice.

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STEP 1. DEFINE THE PROBLEM


1.

Start by writing down your initial assessment of the


problem.

2.

Dissect the problem.

What triggered this problem (as Ive assessed it)?

Why am I even thinking about solving this problem?

What is the connection between the trigger and the


problem?

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STEP 2. CLARIFY YOUR OBJECTIVES


1. Write down all the concerns you
hope to address through your
decision.
2. Convert your concerns into specific,
concrete objectives.
3. Separate ends from means to
establish your fundamental
objectives.
4. Clarify what you mean by each
objective.
5. Test your objectives to see if they
06 capture your interests.
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STEP 3. IDENTIFY ALTERNATIVES


1.

Generate as many alternatives as you can yourself.

2.

Expand your search, by checking with other people,


including experts.

3.

Look at each of your objectives and ask, how?

4.

Know when to stop.

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STEP 4. ANALYZE THE


CONSEQUENCES
1. Mentally put yourself into the future.

Process Analysis

Solving problems by thinking through the process


involved from beginning to end, imagining, at each
step, what actually would happen.

2. Eliminate any clearly inferior


alternatives.
3. Organize your remaining alternatives
into a table (matrix) that provides a
concise, bird's-eye view of the
consequences of pursuing each
6 alternative.
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CONSEQUENCE MATRIX

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STEP 5. MAKE A CHOICE


Analyses are useless unless the right choice is made.
Under perfect conditions, simply review the consequences of each
alternative, and choose the alternative that maximizes benefits.
In practice, making a decisioneven a relatively simple one like
choosing a computerusually cant be done so accurately or
rationally.

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HOW TO MAKE BETTER


1.
Increase Your Knowledge
DECISIONS
Ask questions.

Get experience.
Use consultants.
Do your research.
Force yourself to recognize the facts when you see
them (maintain your objectivity).

2. Use Your Intuition

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A cognitive process whereby a person instinctively


makes a decision based on his or her accumulated
knowledge and experience.

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ARE YOU MORE RATIONAL OR


MORE INTUITIVE?

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0 Adapted and reproduced by permission of the Publisher, Psychological Assessment Resources. Inc., Odessa FL 33556,
Source:
20 the Personal Style Inventory by William Taggart, Ph.D., and Barbara Hausladen. Copyright 1991, 1993 by PAR, Inc.
,
from
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FIGURE 32
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HOW TO MAKE BETTER


3.
Weigh the Pros(CONTD)
and Cons
DECISIONS
Quantify realities by sizing up your options, and
taking into consideration the relative importance
of each of your objectives.

4. Dont Overstress the Finality of Your


Decision

Remember that few decisions are forever.


Knowing when to quit is sometimes the smartest
thing a manager can do.

5. Make Sure the Timing Is Right

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DECISION MATRIX
Use weights to provide adjustments for importance of criteria
Often subjective, but helps to prioritize

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FIGURE 33
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CREATIVITY AND DECISION


MAKING
Creativity

The process of developing


original, novel responses to a
problem.

Brainstorming

A creativity-stimulating
technique in which prior
judgments and criticisms are
specifically forbidden from
being expressed in order to
encourage the free flow of
ideas which are encouraged.

Creativity
skills

Expertise
Creativity

Task motivation

Nominal group technique

A decision-making technique
in which group members are
physically present but operate
independently
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NOMINAL GROUP TECHNIQUE


Each participant contributes individual ideas
Ideas are then ranked individually
Totals are summed for final rank

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http://www.ryerson.ca/~mjoppe/ResearchProcess/841TheNominalGroupTechnique.htm
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CHECKLIST 3.4
HOW TO BE MORE CREATIVE
Create a culture of creativity.
Encourage brainstorming.
Suspend judgment.
Get more points of view.
Provide physical support for
creativity.
Encourage anonymous input.

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DECISION-MAKING
Using
a Heuristic
SHORTCUTS
AND TRAPS
Applying a rule of thumb or an approximation as a shortcut
to decision making.

Anchoring

Unconsciously giving disproportionate weight to the first


information available.

Adopting a Psychological Set

The tendency to rely on a rigid strategy or approach when


solving a problem.

Perception (Personal Bias)

The unique way each person defines stimuli, depending on


the influence of past experiences and the persons present
needs and personality.

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USING CREATIVITY TO FIND A


SOLUTION

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Source:
Applied Human Relations, 4th ed., by Benton/Halloran cW 1991.
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NEXT TIME
Well talk about planning basics
Read Chapter 4 and assigned articles
For discussion article, think about these
questions:

Do you think EMP used a well-defined planning process


prior to opening?
Since the opening?
If any planning has been done, who do you think has
been involved in it?
Does planning matter in this situation?
What steps might EMP take to provide more success in
the future?

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