Ob slides - decision making hold(1)
- 1. M 05 Decision Making • “Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.” – Jim Collins • “The quality of decision is like the well-timed swoop of a falcon which enables it to strike and destroy its victim.” – Sun Tzu • “Whenever you see a successful business, someone once made a courageous decision.” – Peter Drucker
- 2. • The next slide provides a model of some of the issues involved in making a decision. • These are not items that are on the surface – they are hidden inside of us and yet they impact our questions, thoughts, ideas, and the way we decide.
- 4. Decision Making Styles • Decide – You decide alone and “announce” or “sell” it • Consult Individually – Present it individually to all and then decide • Consult Group – Present collectively and then decide • Facilitate – Present, facilitate, define the problem and boundaries – Seek concurrence • Delegate – Permit group decision within prescribed limits
- 5. ….. to consider (so many variables) • Responsibilities • Power • Vulnerability • Dilemmas • Pressures • Loneliness • Analyzing • Not independent, solitary events
- 6. ……. to consider… • Not just logical analysis & problem solving • Social process • Unending stream of decisions • Communication • Perceptions • Information • Experience
- 7. ……. to consider …. • Wisdom • Stakeholders
- 8. Critical pieces of decision making • Determining how the problem is to be solved, not necessarily the solution. • Determining how much data is needed. • Understanding the background that lead to this point
- 9. What doesn’t work • Persuasion – Selling expert opinions to convince • Edicts – Directives that announce decisions – Depletes “social credits”
- 10. Models of Decision Making • Rational Decision-Making • Bounded Rationality • Garbage Can
- 11. Rational Decision-Making • Assumption that all facts are knowable • Process similar to problem solving – Define the problem – Develop and weight criteria – List alternatives – Select the best alternative – Implement – Evaluate • Question: Is it possible to know all the facts?
- 12. Bounded Rationality • People are restricted: – in the information they have , – limit their searches, – settle for less than optimal solutions. • Assumptions – Satisficing – accepting the first, minimally acceptable solution – Comfortableness without all the alternatives – Judgmental shortcuts – called “heuristics” – Alternatives fall within the bounds of current moral & ethical standards
- 13. Garbage Can • Organization – metaphorically described as a “garbage can” • Floating in the GC are – Problems, Participants, Solutions, Choice opportunities – If they connect – a decision results • Assumptions – Haphazard – Chaotic – Unpredictable – Sheer luck
- 14. Common Decision Biases • Anchoring and adjusting • (the first information is overweighted) • Representativeness • (does this resemble another event?) • Availability • (what we remember easily) • Overconfidence • (Unrealistically optimistic views) • Bounded Awareness • (perception narrows –thus limiting information needed) • Emotional Involvement • (belief in a more positive outcome) • Self-serving Reasoning • (credit for success & avoiding blame for failure)
- 15. Tools • Decision Trees » Significance » Level of Commitment » Leader Expertise » Likelihood of Commitment » Group – Support, Expertise, Competence
- 16. Issues ( +/- ), to consider • Zone of Indifference • http://www.examiner.com/article/helping-employees-work- within-the-zone-of-indifference • Groupthink • http://www.mindtools.com/pages/article/newLDR_82.htm • Escalation of commitment • http://en.wikipedia.org/wiki/Escalation_of_commitment
- 17. Reality (what happens…) • Rationality • Otherwise we believe that people make irrational decisions. We may not understand their rationality – but to them it is rational • Intuitive consideration • We pull all our experiences together without even knowing it and use that data as well as the data around the proplem • Combine to provide decisions • Decision making is complex – not just for us but for everyone
- 18. The Literature Suggests….. • There are four (4) guidelines to making better decisions: – Personally manage your decision making. » This isn’t something that you can delegate – Search for understanding. » Make sure you know what is at stake – Establish a direction with objectives. » Objectives help you to know what you really want – Manage the social and political forces » Always know your clear rational