Decision Making

Module 3

LIS 580: Spring, 2006

Instructor- Michael Crandall

April 4, 2006 LIS580- Spring 2006 2

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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Understanding Decision Making

• Puzzles, Problems, and Wicked Problems– 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

decision-making process.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.

http://en.wikipedia.org/wiki/Wicked_problems

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Types of Decisions

• 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 manager’s attention. Handle routine matters yourself.”

G.Dessler, 2003

Programmed Decisions

Nonprogrammed Decisions

Top

Level in Organization

Bottom

Ill-structured

Type of Problem

Well-structured

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Procedure and Form to Use for Developing a Workplace Rule

Source: Copyright Gary Dessler, Ph.D.

FIGURE 3–1

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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.

G.Dessler, 2003

The problem is clear and

unambiguous

A single, well-defined 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

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Decision-Making Models (cont’d)

• The Administrative Approach– Bounded Rationality (Herbert Simon)

• The boundaries on rational decision making imposed by one’s 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.

G.Dessler, 2003

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Checklist 3.1The Decision-Making Process

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

G.Dessler, 2003

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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 I’ve

assessed it)?– Why am I even thinking about solving this

problem?– What is the connection between the

trigger and the problem?G.Dessler, 2003

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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 capture your interests.

G.Dessler, 2003

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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.

G.Dessler, 2003

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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 alternative.

G.Dessler, 2003

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Consequence Matrix

G.Dessler, 2003

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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 decision—even a relatively simple one like choosing a computer—usually can’t be done so accurately or rationally.

G.Dessler, 2003

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How To Make Better Decisions

1. Increase Your Knowledge– 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– A cognitive process whereby a person instinctively

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

G.Dessler, 2003

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Are You More Rational or More Intuitive?

FIGURE 3–2Source: Adapted and reproduced by permission of the Publisher, Psychological Assessment Resources. Inc., Odessa FL 33556, from the Personal Style Inventory by William Taggart, Ph.D., and Barbara Hausladen. Copyright 1991, 1993 by PAR, Inc. G.Dessler, 2003

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How To Make Better Decisions (cont’d)

3. Weigh the Pros and Cons– Quantify realities by sizing up your options, and

taking into consideration the relative importance of each of your objectives.

3. Don’t 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.

3. Make Sure the Timing Is Right

G.Dessler, 2003

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FIGURE 3–3

Decision Matrix

• Use weights to provide adjustments for importance of criteria

• Often subjective, but helps to prioritize

G.Dessler, 2003

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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.

• Nominal group technique– A decision-making technique

in which group members are physically present but operate independently

G.Dessler, 2003

Creativity

Task motivation

Creativity skillsExpertise

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Nominal Group Technique

• Each participant contributes individual ideas

• Ideas are then ranked individually

• Totals are summed for final rank

http://www.ryerson.ca/~mjoppe/ResearchProcess/841TheNominalGroupTechnique.htm

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Checklist 3.4How 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.

G.Dessler, 2003

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Decision-making Shortcuts and Traps

• Using a Heuristic– 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 person’s present needs and personality.

G.Dessler, 2003

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Source: Applied Human Relations, 4th ed., by Benton/Halloran cW 1991. Reprinted by permission of Prentice-Hall, Upper Saddle River, NJ.

FIGURE 3–6

Using Creativity to Find a Solution

G.Dessler, 2003

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Next Time

• We’ll 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?