Chapter 7 - Decision Making & Creativity

Question 1

Rational Choice Paradigm (definition and 6 steps)

Answer 1

Use of logic in decision making process.

1. Identify problem/opportunity
2. Choose decision strategy
3. Develop alternatives
4. Choose “best” solution
5. Implement solution
6. Evaluate

Question 2

Subjective Expected Utility

Answer 2

Probability (expectancy) of event X importance of criteria (utility)

Question 3

Programmed vs Non-programmed decision

Answer 3

Decision follows a standard operating procedure

Vs

Decision which does not have a defined procedure (generally new, complex or poorly defined problems)

Question 4

Stakeholder framing

Answer 4

Stakeholders highlight or hide information to influence how the decision maker interprets the situation/problem (constructed realities)

Question 5

Solution-focused problems

Answer 5

Describing a problem with use of a solution
Eg: the problem is that we need more communication from management

Vs

The problem is a lack of understanding

Question 6

Decisive leadership

Answer 6

Jumping to conclusions without appropriate assessment of the problem and its solutions

Question 7

Perceptual defence

Answer 7

Coping mechanism which screens out bad news/info that threatens ones self-concept

Question 8

Mental models

Answer 8

Models of the external world based on past experience that promulgate “filling in the blanks” and shape how we visualise a problem

Question 9

Problem vs Opportunity

Answer 9

A gap between current and desired future state

Vs

A gap between current and a future state not previously considered

Question 10

Bounded rationality

Answer 10

Recognising the limitations in a persons ability to make rational decisions - limited info, limited processing ability, satisfying vs maximising

Question 11

Implicit favourite

Answer 11

A preferred alternative that all others are assessed against, an initial anchor

Question 12

3 types of decision heuristics

Answer 12

1. Anchoring and adjustment heuristic
2. Availability heuristic
3. Representative heuristic

Question 13

Availability heuristic

Answer 13

Over/under weighing probabilities based on availability of information. Influenced by emotional reactions and recent events

Question 14

Representative heuristic

Answer 14

Extrapolating irrelevant trends and information such as stereotypes and clustering.

Question 15

3 areas that emotion can impact during decision making process

Answer 15

1. Forming initial preferences through initial emotional makers
2. Decision making is influenced by mood. Negative mood = detail orientated vs positive mood = better use of programmed decision routes.
3. Evaluating alternatives are influenced by emotional reactions and emotional events (intuition)

Question 16

Intuition

Answer 16

A subconscious assessment of the situation. An emotional event that implies a problem/opportunity not yet recognised by the conscious mind.
Formed through observation, past experience and mental models.

Question 17

Action script

Answer 17

An intuitive programmed decision to an event

Question 18

Escalation of commitment and 4 input theories

Answer 18

Repeat or continued investment in a bad decision.

1. Self justification
2. Self enhancement
3. Prospect theory
4. Sunk cost effect

Question 19

Self justification

Answer 19

Desire for a positive public image. Over emphasis of good / positive / competent

Question 20

Self enhancement

Answer 20

Over confidence in ability and luck to being more successful than average. Core component of self-concept.

Question 21

Prospect theory

Answer 21

Negative emotions associated with a loss
>
Positive emotions associated with a gain

Question 22

Sunk cost effect

Answer 22

Over emphasis of resources already invested or resources yet to be invested as part of an exit from a bad decision

Question 23

4 strategies to strengthen decision making

Answer 23

1. Separate decision choosers and makers
2. Predetermined abandonment triggers
3. Predetermined evaluation points/criteria
4. Using multiple people in decision process

Question 24

Divergent thinking

Answer 24

Reframing a problem and using different approaches

Question 25

4 stages of the Creative Process

Answer 25

1. Preparation
2. Incubate
3. Insight
4. Verification

Question 26

4 characteristics of creative people

Answer 26

1. Knowledge and Experience
2. Persistent
3. Intellectual
4. Independent imagination

Question 27

Workplace environments which support creativity

Answer 27

1. Autonomy
2. Acceptance of risk/errors as part of “learning culture”
3. Task significance/Purpose
4. Open communication of ideas
5. Resource availability

Question 28

Stakeholders highlight or hide information to influence how the decision maker interprets the situation/problem (constructed realities)

Answer 28

Stakeholder Framing

Question 29

Three books and how they support bounded rationality

Answer 29

1. Satisficing described in Gladwell’s Blink
2. System 1 and System 2 thinking described in Kahneman’s Thinking Fast and Thinking Slow
3. Availability Heuristic in Taleb’s Black Swan

Question 30

Difference between Innovation and Creativity

Answer 30

Innovation uses conversant thinking to bring ideas together and improve upon them

Creativity uses divergent thinking to form new ideas