Decision Making & Communication Flashcards
(28 cards)
What is the rational choice paradigm? What are the two key elements of rational choice?
- effective decision makers identify, select, and apply the best possible alternative
Two key elements of rational choice
- Subjective expected utility – determines choice with highest value (maximization)
- Decision making process – systematic application of stages of decision making
Six Steps of the Rational Choice Decision Process
- Identify the problem or opportunity
- Choose the best decision process.
- Develop alternative solutions
- Choose the best alternative
- Implement the selected alternative
- Evaluate decision outcomes
What are the problems with the rational choice paradigm?
- people have difficulty recognizing problems
- people have difficult processing all the information necessary to reach the best solution
- people are influenced by cognitive and emotional biases
What are the problem identification challenges?
- Stakeholder framing
- Mental models
- Decisive leadership
- Solution-focused problems
- Perceptual defence
What is stakeholder framing?
- stakeholders with vested interests try to “frame” the situation
What are mental models?
- visual or relational images in our mind of the external world that can blind us from seeing unique problems or opportunities
What is decisive leadership?
- people view leaders are more effective decision makers when they are decisive
- problems are announced before the situation is fully analyzed
What is solution-focused problems?
- people define the problem based on the solution
- need for closure
- “when the only tool you have is a hammer, all problems resemble nails”
What is perceptual defence?
- some people block bad news as a coping strategy, they refuse to see the information that threatens their self-concept
What is paralyzed by choice?
- decision makers are less likely to make any decision at all as the number of options increases, they instead engage in “satisficing”…
- … or they make no choice at all, even when there are clear benefits of selecting any alternative (such as joining a company retirement plan
How do emotions effect making choices?
- emotions form preferences before we consciously evaluate those choices
- moods and emotions influence how we evaluate information
- we ‘listen in’ on our emotions and use that information to make choices – we evaluate how we would feel if we made the choice x or y
What is intuitive decision making?
- ability to know when a problem or opportunity exists and select the best course of action without conscious reasoning
- rapid non-conscious analysis, a “gut feeling”
- BUT, intuition also involves rapidly comparing our observations with relevant tacit knowledge acquired over time, i.e., with our mental models
How do we make choices more effectively?
- systematically evaluate multiple alternatives minimizing implicit favourites and satisficing
- be aware of effects of emotions and moods on decision preferences and evaluation process
- scenario planning
What is satisficing?
- selecting a “good enough” alternative
What is escalation of commitment and what is it caused by?
- repeating or further investing in an apparently bad decision
Caused by:
- self-justification (not wanting to admit failure to others)
- self-enhancement effect (avoiding recognition of the problem to protect our sense of self)
- Prospect theory effect (avoiding the pain of failure)
- Sunk costs effect (value of resources – time and money – already invested)
What is employee involvement in decision making?
- the degree to which employees influence how their work is organized and carried out
- potentially improves decision quality and commitment
- –employees are closer to the “action”
- –resources and knowledge are pooled
- –employees become more committed to the final decision
What is communication?
- the process by which information is transmitted and understood between two or more people
How to improve communication?
Both parties are motivated and able to communicate through specific channel
- face-to-face, written, etc.
Both parties have similar codebooks
- dictionaries of symbols, language, gestures, idioms, etc
Both parties share similar mental models of communication context
Send is experienced at communicating the message topic
How has e-mail altered communication?
- it is now the preferred medium for coordinating work
- tends to increase communication volume while decreasing face-to-face communication
- alters the flow of information
- reduces stereotype biases
What are the problems with e-mail?
Communicates emotions poorly.
Reduces politeness and respect
- no reflection before sending
- impersonal nature of e-mail
Inefficient for ambiguous, complex, novel situations.
Increases information overload.
What is emotional contagion?
The automatic process of sharing another person’s emotions by mimicking their facial expressions and other nonverbal behaviour
Serves three purposes:
- Provides continuous feedback to speaker
- Increases emotional understanding of the other person’s experience
- Communicates a collective sentiment – sharing the experience as part of a drive to bond
What is media richness?
- a channel’s data-carrying capacity – volume and variety of information that can be transmitted
- -high richness when channel: conveys multiple cues; allows timely feedback; allows customized messages; permits complex symbols
Media Richness Hierarchy
[Rich] Face-to-face Video conference Telephone Instant messaging E-mail Weblogs Newsletters Financial statements [Lean]
What is “noise”?
- all barriers that inhibit the effective flow of information
