CH11 Decision-Making and Creativity

what is decision-making

the process of generating alternatives and selecting the best course of action, which may also include inaction

what are the different types of decisions

1. programmed decisions

2. nonprogrammed decisions

what are programmed decisions

decisions that occur often enough for us to know instinctively what to do

what are some examples of programmed decisions

deciding what to wear, eat, and which route to take home from work

what is the decision rule

automated response to problems that occur routinely

what are nonprogrammed decisions

decisions that require more thorough inspection

what are some examples of nonprogrammed decisions

how to deal with lower earnings, who to appoint, and which supplier to choose

what are the 3 levels of decision-making

1. strategic decisions

2. tactical decisions

3. operational decisions

what are strategic decisions

decisions that set the course for an organization

what are some examples of strategic decisions

introduction of a new product, merging w/ another company, downsizing

who makes strategic decisions

top management teams, CEOs, boards of directors

what are tactical decisions

specific actions that serve a larger purpose

what is an example of tactical decisions

issuing a coupon to increase sales

who makes tactical decisions

managers

what are operational decisions

decisions that employees make each day to run the organization

what is an example of an operational decision

helping a customer through routine interaction

who makes operational decisions

employees

what are the 4 decision making models

1. rational decisions-making

2. bounded rationality decision-making

3. intuitive decision-making

4. creative decision-making

what is the rational decision-making model

a series of steps that decision makers should consider if their goal is to maximize their outcome and make the best choice

when is it best to use the rational decision-making model

when costs are high and consequences are significant

what are the 8 steps for rational decision-making

1. identify the problem

2. establish decision criteria

3. weigh decision criteria

4. generate alternatives

5. evaluate the alternatives

6. choose the best alternative

7. implement the decision

8. evaluate the decision

what is the bounded rationality decision-making model

a decision-making model where people eliminate obvious options and narrow it down to the most-likely

what is satisfice

when people accept the first option as the most valid

how does the bounded rationality model differ from the rational model

the in the BR model, the decision maker saves cognitive time and effort by choosing the first alternative that meets the minimum threshold

what is the intuitive decision-making model

decision-making that happens without conscious thinking (instinctive)

who uses the intuitive decision-making model the most

managers, and people in high-stakes jobs

What is the Creative Decision-Making Model?

a model that utilizes the creative process

what is the creative decision-making process

1. problem identification

2. immersion

3. incubation

4. illumination

5. verification and application

what is immersion in the creative decision-making process

when we gather information for the problem

what is incubation in the creative decision-making process

when we set the problem aside and avoid thinking about it for a while

what is illumination in the creative decision-making process

when the solution to the problem becomes apparent

what are the 3 factors used to evaluate creativity

1. fluency (# of ideas generated)

2. flexibility

3. originality

what does SCAMPER stand for

substitute, combine, adapt, modify, put to other uses, eliminate, rearrange

what is SCAMPER

a checklist tool that helps you think of changes you can make to an existing marketplace to create something new

what is anchoring bias

when people rely too heavily on just one piece of information

what is another term for anchoring bias

adjustment bias

what is availability bias

a situation in which more readily available information is seen as more likely to occur

what is confirmation bias

the tendency to process and analyze information in such a way that it supports one's preexisting ideas and beliefs

what is escalation and commitment bias

when people find out that the decision they made was a poor one, so they naturally fail moving forward

what is another term for escalation and commitment bias

sunk cost fallacy

what is framing bias

the tendency to be influenced by how a situation or problem is presented

what is fundamental attribution error

a situation in which good outcomes are attributed to personal characteristic, but undesirable outcomes are attributed to external circumstance

what is hindsight bias

a bias that occurs when a person, looking at the past, judges that a mistake that was made should have been recognized as a mistake at the time

what is correlation and causality bias

confusing correlation with causation

what is overconfidence bias

when individuals overestimate their ability to predict future events

what is sampling bias

when individuals make generalizations from a small number or a single source of information

what is groupthink

the tendency to avoid critical evaluation of ideas that the group favors

what is the delphi technique

a process that uses expert opinions from questionnaires rather than coming together and making a decision themselves

what are ethical champions

team members who step up to advocate for an ethical decision in their team

what is the nominal group technique

a technique that allows for full participation from the group

what are correspondent inferences

judgments about people's dispositions, traits, and characteristics that correspond to what we have observed of their actions

what is a representativeness heuristic

the tendency to base our estimates of probability on the extent to which the outcome fits with our schemas, categorizations, and prior experiences

what is an availability heuristic

When people say that something is more likely to occur because it is more vivid in their mind

what is the primacy effect

we often judge based on first impression

what is the recency effect

when the most recent action to have happened effect's the judgment of the event

what is the johari window

A model that describes the relationship between self-disclosure and self-awareness.