Chapter 8: Decision Making, Organizational Culture, Structure, and Design

Comprehensive vocabulary flashcards covering organizational culture, structural designs, rational and nonrational decision making, analytical methods, and group decision dynamics.

Corporate Culture

The set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments.

Organizational Structure

A formal system of task and reporting relationships that coordinates and motivates an organization's members so that they can work together to achieve the organization's goals.

Human Resource Practices

All of the activities an organization uses to manage its human capital, including staffing, appraising, training and development, and compensation.

Observable Artifacts

The first level of organizational culture, consisting of physical manifestations such as dress, symbols, rites, ceremonies, and office layouts.

Espoused Values

The explicitly stated values and norms preferred by an organization.

Basic Assumptions

The core, nonobservable values and taken-for-granted beliefs that guide employee behavior in an organization.

Clan Culture

An employee-focused organizational culture valuing flexibility rather than stability and control, with a collaborative thrust driven by cohesion, participation, communication, and empowerment.

Adhocracy Culture

A risk-taking organizational culture valuing flexibility and discretion with an external focus, driven by adaptability, creativity, and agility to achieve innovation and cutting-edge output.

Market Culture

A competitive organizational culture valuing stability and control with an external focus, driven by customer focus and productivity to maximize profitability and market share.

Hierarchy Culture

A structured organizational culture valuing stability and control with an internal focus, driven by capable processes, consistency, and measurement to achieve efficiency and smooth functioning.

Person–Organization (P–O) Fit

The extent to which an individual's personality and values match the climate and culture in an organization.

Common Purpose

A major feature of organizations proposed by Edgar Schein that unifies employees or members and gives everyone an understanding of the organization's reason for being.

Coordinated Effort

A major feature of organizations proposed by Edgar Schein involving the coordination of individual efforts into a group or organization-wide effort.

Division of Labor

The arrangement of having discrete parts of a task done by different people in an organization.

Span of Control

The number of people reporting directly to a given manager; organizations may be flat (wide span) or tall (narrow span).

Centralized Authority

An organizational structure in which important decisions are primarily made by higher levels of management.

Decentralized Authority

An organizational structure in which important decisions are delegated to middle- and supervisory-level managers.

Simple Structure

A traditional organizational design characterized by authority centralized in a single person, a flat hierarchy, few rules, and low work specialization.

Functional Structure

A traditional organizational design in which people with similar occupational specialties are grouped together in formal departments.

Divisional Structure

A traditional organizational design in which people with diverse occupational specialties are grouped together by similar products or services, customers or clients, or geographic regions.

Matrix Structure

An organizational design that combines functional and divisional chains of command in a grid, resulting in two command structures: vertical and horizontal.

Horizontal Structure

A team-based design where temporary or permanent teams and workgroups are used to improve collaboration and work on shared tasks by breaking down internal boundaries.

Hollow Structure

Often called a network structure, an organizational design where the organization maintains a central core of key functions and outsources other functions to vendors who can perform them cheaper or faster.

Personal Adaptability

The ability and willingness to adapt to changing situations.

Decision

A choice made from among available alternatives.

Decision Making

The process of identifying and choosing alternative courses of action.

Rational Model of Decision Making

Also called the classical model; an approach explaining how managers should make decisions, assuming they possess complete information and will make logical, optimal choices in the best interest of the organization.

Bounded Rationality

The concept that the ability of decision makers to be rational is strictly limited by numerous constraints such as complexity, time and money, imperfect information, and cognitive capacity.

Hubris

An extreme and inflated sense of pride, certainty, and confidence that acts as a hindrance to rational decision making.

Satisficing Model

A nonrational decision-making model where managers seek alternatives only until finding one that is satisfactory rather than optimal ('satisfactory is good enough').

Intuition

Making a choice without the use of conscious thought or logical inference ('it just feels right').

Holistic Hunch

A form of intuition that stems from expertise and explicit/tacit knowledge.

Automated Experience

A form of intuition that is based on ingrained emotional feelings and reactions.

Decision Tree

A graph of decisions and their possible consequences used to guide managers, especially in resolving uncertainty and ensuring decisions are both legal and ethical.

Evidence-Based Decision Making

The process of gathering and analyzing high-quality data to develop and implement a plan of action.

Big Data

An extremely large quantity of data that is too vast for conventional computers to handle and requires specialized technologies and statistical approaches to process.

Descriptive Analytics

A branch of analytics that identifies trends, patterns, and relationships within historical and real-time big data via human-driven processing.

Predictive Analytics

A branch of analytics combining historical data with statistical models and machine learning to forecast the likelihood of future outcomes.

Artificial Intelligence (AI)

A set of technologies that develop human-like capabilities such as gathering and interpreting information, generating responses, and learning from decisions to attain specific objectives.

Directive Style

A decision-making style marked by a low tolerance for ambiguity and an orientation toward task and technical concerns, focusing on facts, logic, and rapid action.

Analytical Style

A decision-making style marked by a high tolerance for ambiguity and a focus on task and technical concerns, involving careful evaluation of many alternatives with a risk of overanalyzing.

Conceptual Style

A decision-making style marked by a high tolerance for ambiguity and a strong focus on people and social aspects, relying on intuition, creative problem solving, and a long-term perspective.

Behavioral Style

The most people-oriented decision-making style, marked by a low tolerance for ambiguity, high sociability, warmth, and a preference for verbal interactions, sometimes leading to conflict avoidance.

Availability Bias

A heuristic bias where decision makers rely exclusively on information readily available in memory rather than all relevant data.

Representativeness Bias

A decision-making bias involving faulty generalization from a small sample or a single isolated event.

Confirmation Bias

A cognitive bias where decision makers seek out only information that supports their preexisting point of view while discounting contradictory data.

Sunk-Cost Bias

A decision-making bias where money, time, or resources already spent are irrationally used to justify continuing a failing project.

Anchoring and Adjustment Bias

The tendency to make decisions influenced heavily by an initial figure or reference point, adjusting insufficiently from that benchmark.

Overconfidence Bias

A bias characterized by fixating on positive indicators and personal capability while dismissing negative risks or limitations.

Hindsight Bias

The tendency for people to view past events as having been completely predictable (known as the 'I-knew-it-all-along' effect).

Framing Bias

The tendency of decision makers to be influenced by how a problem, situation, or set of options is phrased or presented.

Escalation of Commitment Bias

The tendency to increase investment in a decision despite negative evidence, driven by feeling overly committed or personally attached to that course of action.

Groupthink

A cohesive group phenomenon where members prioritize agreement and harmony for the sake of unanimity over critical, realistic evaluation of decision alternatives.

Brainstorming

A group problem-solving technique designed to generate multiple spontaneous ideas and alternatives while deferring judgment and criticism.

Devil's Advocacy

A group decision-making technique in which an individual or subgroup is formally assigned the role of critic to question proposals and uncover flaws.

Dialectic Method

A group decision-making technique that fosters structured debate between two conflicting counterproposals based on different underlying assumptions prior to reaching a decision.

After Action Review

Also called a project post-mortem; a structured debrief of recent decisions and actions to identify lessons learned and improve future processes.