Chapter Seven: Decision Making and Creativity

Vocabulary practice flashcards covering rational choice decision making, heuristic biases, escalation of commitment, the creative process model, design thinking, and employee involvement from Chapter Seven.

Rational Choice Decision Making

The process of using logic and all available information to choose the alternative with the highest value, historically considered the ideal state of decision making.

Rational Choice Decision-Making Process

A six-step cyclical model consisting of: 1. Identify problem or opportunity, 2. Choose the best decision process, 3. Discover or develop possible choices, 4. Select the choice with the highest value, 5. Implement the selected choice, and 6. Evaluate the selected choice.

Stakeholder Framing

A problem identification challenge where internal or external stakeholders present information in ways that influence decision makers to see a situation as a problem, opportunity, or non-issue according to their own agenda.

Decisive Leadership

A problem identification challenge where leaders quickly announce problems and solutions to project confidence and authority before properly diagnosing the issue.

Solution-Focused Problems

A problem identification challenge where a problem is framed as a veiled solution, restricting decision makers from exploring alternative courses of action.

Perceptual Defence

A problem identification challenge where decision makers unconsciously screen out or ignore threatening or negative information that contradicts their beliefs or self-concept.

Mental Models (in Decision Making)

Prototypes or visual frames representing the external world, which can blind decision makers to novel opportunities or emerging problems when incoming information does not fit the model.

Implicit Favourite

An alternative preferred early in the decision process that serves as an anchor or standard against which all subsequent alternatives are sequentially compared and judged.

Cognitive Misers

The human tendency to minimize mental effort by appraising a limited number of alternatives and features sequentially rather than calculating all options simultaneously.

Anchoring and Adjustment Heuristic

A built-in heuristic bias where decision makers fixate on an initial anchor value and fail to make sufficient adjustments away from that anchor when estimating probabilities or valences.

Availability Heuristic

A built-in heuristic bias where the perceived likelihood or frequency of an event is judged based on how easily memories or examples of that event come to mind.

Representativeness Heuristic

A built-in heuristic bias where decision makers assess the probability of an event or person belonging to a category based on how closely they resemble typical prototypes.

Satisficing

The human decision-making practice of selecting an alternative that is 'good enough' to meet a minimum standard rather than calculating to find the option with the highest payoff (maximization).

Intuitive Decision Making

The ability to know when a problem or opportunity exists and to select the best course of action without conscious reasoning, functioning as an emotional experience supported by action scripts.

Action Scripts

Programmed routines and nonconscious mental templates that enable rapid intuitive decision making and responses without detailed conscious deliberation.

Scenario Planning

A decision-making tool that involves envisioning alternative plausible futures to make more effective choices and prepare responses to potential future states.

Post-Decisional Justification

The tendency to perceptually distort and rationalize information after a decision is made to maintain cognitive consistency and favour the chosen alternative.

Escalation of Commitment

The tendency to repeat or allocate further resources to an apparently failing course of action or bad decision.

Self-Justification Effect

A cause of escalation of commitment driven by a person's conscious need to defend their initial decision, protect their public reputation, and demonstrate they were right.

Self-Enhancement Effect

A cause of escalation of commitment driven by a nonconscious positive self-concept bias, causing decision makers to overestimate their competence and personal odds of success.

Prospect Theory Effect

A cause of escalation of commitment where the pain of experiencing a loss is felt more strongly than the pleasure of an equivalent gain, motivating risky behaviour to avoid realizing the loss.

Sunk Costs Effect

A cause of escalation of commitment where decision makers feel motivated to continue investing in a project because of past resources (such as time, money, or effort) that have already been expended and cannot be recovered.

Creative Process Model

A four-stage model of creativity formulated by G. Wallas (1926) comprising Preparation, Incubation, Illumination, and Verification.

Incubation

The second stage of the creative process model featuring a period of reflective thought, nonconscious or low-level awareness, and active divergent thinking without direct attention to the issue.

Illumination

The third stage of the creative process model characterized by the sudden awareness of a novel, though vague and incomplete, idea entering consciousness, often following an initial period of fringe awareness.

Characteristics of Creative People

A model outlining four personal dimensions that drive creative performance: Independent Imagination, Cognitive and Practical Intelligence, Knowledge and Experience (absorptive capacity), and Persistence.

Associative Play

Creative activities including playful exercises, creative challenges, and morphological analysis designed to break rigid mental models and discover new associations.

Cross-Pollination

A creative organizational practice where employees share and exchange ideas, knowledge, and perspectives across different areas and departments of the firm.

Design Thinking

A human-centred, solution-focused creative process relying on creative thinking, logical analysis, empathy, and intuition, guided by the human rule, ambiguity rule, re-design rule, and tangible rule.

Contingencies of Employee Involvement

The five situational factors that determine the optimal level of employee involvement: decision structure, source of decision knowledge, decision commitment, risk of conflict among employees, and risk of conflict between employees and the firm.