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Organisational
Group
Individual
RMIT University 2014
Organisation
Group
Individual
Theoretical
Approaches
Key issues
Constraints
Theories of
Effects of power and
organisation power, conflict
conflict and decision
making
Group conformity,
group dynamics,
group size, and
networks
1. Group norms
2. Group think
Effects of group
dynamics, individual
perceptions and
behaviours
1.Informationprocessing theory
1.Information
overload
2. Cognitive
psychology
2.Personal biases
1.Information processing
failures
2.Perceptual biases
3.Intuition and emotion
4.Escalation of
commitment
Decision : a definition
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Decisional Roles
Entrepreneur
Negotiator
Disturbance
Handler
Resource
Allocator
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Decisional Roles
Entrepreneur
Disturbance
Handler
Resource
Allocator
Negotiator
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Respond to pressures
Decision making
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Sporadic
Fluid
decision
Constricted
decision
Informal
Will suffer from
delays
Flow, formally
channelled,
Speedy &
predictable
Narrowly
channelled,
technical
information
Information from
various sources
of expertise
Time delays
Information from
fewer sources
Fewer delays
Decision made
by experts
Unitary
approach
Pluralist
approach
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Types of choice
Clear choice
Competing
choice
Choice
avoidance
Choice
suppression
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Rational
Administrative
/ Bureaucratic
Garbage-can
Political
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Assumptions
Problem clarity
Known options
Clear preferences
Gathering and
analysing data
Constant preferences
Maximum pay-off
No time or cost constraints
Identification and
application of choice
criteria
Evaluation of
alternatives in relation
to choice criteria
Implementation of decision
Source: Bratton et al. 2010: 411; Linstead & Fulop 2009:674;Nelson et al. 2012:150
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Based on the
actual behaviour
of decision
makers
There are cognitive
or mental limits to
human rationality
Decision making is
governed by
bounded rationality
Influence of nonrational elements in
humans
Satisfices
Assumptions
Managers:
Select the first satisfactory alternative
Are comfortable making decisions
without determining the alternatives
Make decisions by short cuts or
heuristics (managers make decisions
on what has worked in the past)
Satisfice because of cost of best
choice
Source: Bratton et al. 2010: 411; Linstead & Fulop 2009:676; Nelson et al. 2012:151
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Organised
anarchy
Not clear if an
issue is a problem,
or a solution to a
problem
Reaction to
circumstances
Total demands on
the decision
makers at the time
Implementation of decision
15
Recognises the
role of conflict and
conflict resolution
in the decisionmaking process
Difficulty
Pluralistic in nature
Recognises the
role of
stakeholders in the
organisation
Decision making is
about reconciling
stakeholders
interests
Implementation of decision
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Sensing
Intuition
Can it be
analysed
objectively?
Consider the
# consequences of each
alternative
# cause and effect of each
action
If you were not involved, what
would you suggest?
What alternatives
do the facts suggest?
Let your imagination
run wild.
Brainstorm.
Consider various solutions
Thinking
Feeling
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DIMENSION
RATIONAL
(Unitary)
BUREAUCRATIC
(unitary)
GARBAGE CAN
(pluralist)
POLITICAL POWER
(pluralist)
PREFERENCES
&
GOALS
Consistent
among
participants
Reasonably consistent
Unclear, ambiguous,
may be constructed
afterwards
to legitimise actions
Inconsistent, diverse
or conflicting goals
& preferences
POWER
&
CONTROL
Focuses on
hierarchical
authority
Less centralised ,
still legitimate authority
Very decentralised,
anarchic; power is also
recognised
Shifting coalitions
&interest groups who
have power but not
necessarily authority
DECISION
Orderly,
rational
Procedural rationality
embodied in programmes
&standard operating
procedures
EXPECTED
RESULTS
& OUTCOMES
Maximisation
&
optimisation
Follow from
satisficing mode
Unclear, ambiguous
INFORMATION
Extensive
&systematic
information gathering
Information used
&
withheld strategically
Stability, fairness
Playfulness
PROCESS
REQUIREMENTS
RATIONALE
Efficiency
&effectiveness in
achieving agreed-to
performance criteria
Ad hoc
Disorderly, characterised
by push & pull of interest
groups
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Traditional decision-making
techniques
Modern decision-making
techniques
1.Programmed
Routine, repetitive
decisions;
organisation develops
specific processes for
handling them.
Low uncertainty and
low ambiguity
Habit
Clerical routine: standard
operating procedures,
policies, manuals
Organisation structure
know your place
Systems of sub-goals
Well-defined information
channels
Operations research
mathematical models,
computer simulations
Electronic data
processing
Management
information systems
2. Non-programmed
Judgment, intuition ,
One-shot, illcreativity
structured novel policy Rule of thumb (by top
decisions.
management)
Handled by general
non-routine problemsolving processes.
High uncertainty and
ambiguity.
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Risk, risk
aversion
Enablers
and
barriers to
creativity
Personality,
attitudes,
values
Organisation
Environment
Influences
4 stages:
Preparation
Incubation
Illumination
Verification
Creativity
Intuition
Ability to make
judgment about a
situation based on a
hunch.
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Escalation of Commitment
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Advantages
Disadvantages
Pressure to conform
Greater understanding
of the decision
Domination by one
forceful member
Member involvement
22
Groupthink
Moral
judgment and
reality testing
are
suspended
Often occurs
with high risk
decisions in
high-status
groups with
dominant
leadership
High stress
conditions and
threats to selfesteem
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Symptoms of Groupthink
Conform and
reach consensus
Unpopular ideas
may be
suppressed
Members who
oppose the group
are stereotyped as
weak, evil or
stupid.
Leads members to be
convinced of the
logical correctness of
what
they are dong and
ignore
the ethical or moral
consequences of
decisions.
Illusion of
invulnerability
Pressure
on
individuals
Group
consensus
Belief in the
inherent morality
of the group
Excessive optimism
and risk taking
Group believes it
cannot make a bad
decision
Leads to discounting
warnings and negative
information.
An illusion of unanimity
emerges
Self-censorships of any
deviation from group
norms.
24
Avoiding Groupthink
Invite
Interaction consultants
Develop
with other and others alternative
to challenge
groups
plans
the group
Leaders need to be reflexive to assess their behaviour and stay impartial
25
Group Polarisation
Can be disastrous
If individuals are
leaning towards a
dangerous decision they
are likely to support it
more strongly following
discussion.
26
Brainstorming
Nominal group
technique
Stepladder
technique
Delphi
technique
27
Current issues
in organisational decision making
Power-distance
Individualism-collectivism
Culture
Technology
Ethics
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Artificial intelligence
Virtual teamwork
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References
Bratton, J., Sawchuck, P., Forshaw, C., Callinan, M., and Corbett, M. 2010, Work and
Organization Behaviour, 2nd edn, Palgrave MacMillan, UK. Chapter 15: Decision
Making and Ethics, pp.407-432
Haslam, S.A. 2004, Psychology in organisations: the social identity approach, 2nd edn,
Sage London. Chapter 6: Group decision making, pp.99-119
Linstead S., Fulop, L., and Lilley, S. 2009, Management and Organization: A critical
text, 2nd edn, Palgrave MacMillan, London. Chapter 14: Decision making in
organisations, pp. 667-708
Nelson, D.L., Quick, J.C., Wright, S., and Adams, C. 2012, OrgB Asia-Pacific Edition,
Cengage, Sydney. Chapter 10: Decision making by individuals and groups, pp. 148164
Pettinger, R. 2010, Organizational Behaviour: Performance management in practice.
Routledge, London. Chapter 20
Thompson, P. & McHugh, D. 2009 Work Organisations: A critical approach, Palgrave
Macmillan, London. Chapter 24: From groups to teams, pp. 369-387
Wilson, F.M. 2014, Organizational Behaviour and Work: A critical introduction, Oxford
University Press, London. Chapter 3, p.69
Wood, J. Zeffane, R. Fromholtz, M. Wiesner, Morrison, R. and Seet, P.
2013, Organisational Behaviour: Core Concepts and Applications, Wiley, Brisbane
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