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Chapter 6: Decision Making and Creativity
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Instructor’s Manual to Accompany

M:Organizational Behavior 3/e
by Steven L. McShane and Mary Ann Von Glinow
Chapter 6:
Decision Making
and Creativity
Prepared by:
Steven L. McShane, The University of Western Australia
Page 6-1
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Decision Making
6 and Creativity
LEARNING OBJECTIVES
After reading this chapter, students should be able to:
LO1 Describe the rational choice paradigm of decision making.
LO2 Explain why people differ from the rational choice paradigm when identifying
problems/opportunities, evaluating/choosing alternatives, and evaluating decision
outcomes.
LO3 Discuss the roles of emotions and intuition in decision making.
LO4 Describe employee characteristics, workplace conditions, and specific activities that
support creativity.
LO5 Describe the benefits of employee involvement and identify four contingencies that
affect the optimal level of employee involvement.
CHAPTER GLOSSARY
anchoring and adjustment heuristic — a natural decision making — the conscious process of making
tendency for people to be influenced by an initial anchor choices among alternatives with the intention of moving
point such that they do not sufficiently move away from toward some desired state of affairs.
that point as new information is provided.
divergent thinking — reframing a problem in a unique
availability heuristic — a natural tendency to assign way and generating different approaches to the issue.
higher probabilities to objects or events that are easier to
employee involvement — the degree to which
recall from memory, even though ease of recall is also
employees influence how their work is organized and
affected by nonprobability factors (e.g., emotional
carried out.
response, recent events).
escalation of commitment — the tendency to repeat an
bounded rationality — the view that people are
apparently bad decision or allocate more resources to a
bounded in their decision-making capabilities, including
failing course of action.
access to limited information, limited information
processing, and tendency toward satisficing rather than implicit favorite — a preferred alternative that the
maximizing when making choices. decision maker uses repeatedly as a comparison with
other choices.
creativity — the development of original ideas that
make a socially recognized contribution.
Page 6-3
intuition — the ability to know when a problem or satisficing — selecting an alternative that is satisfactory
opportunity exists and to select the best course of action or “good enough,” rather than the alternative with the
without conscious reasoning. highest value (maximization).
prospect theory effect a natural tendency to feel more scenario planning — a systematic process of thinking
dissatisfaction from losing a particular amount than about alternative futures and what the organization
satisfaction from gaining an equal amount. should do to anticipate and react to those environments.
rational choice paradigm — the view in decision making subjective expected utility (SEU) — the probability
that people should—and typically do—use logic and all (expectancy) of satisfaction (utility) resulting from
available information to choose the alternative with the choosing a specific alternative in a decision.
highest value.
representativeness heuristic — a natural tendency to
evaluate probabilities of events or objects by the degree
to which they resemble (are representative of) other
events or objects rather than on objective probability
information.
CHAPTER SUMMARY BY LEARNING OBJECTIVE

LO1 Describe the rational choice paradigm of decision making.
Decision making is a conscious process of making choices among one or more alternatives with the intention of
moving toward some desired state of affairs. The rational choice paradigm relies on subjective expected utility to
identify the best choice. It also follows the logical process of identifying problems and opportunities, choosing the best
decision style, developing alternative solutions, choosing the best solution, implementing the selected alternative, and
evaluating decision outcomes.
LO2 Explain why people differ from the rational choice paradigm when identifying problems/opportunities,
evaluating/choosing alternatives, and evaluating decision outcomes.
Stakeholder framing, perceptual defense, mental models, decisive leadership, and solution-oriented focus affect our
ability to objectively identify problems and opportunities. We can minimize these challenges by being aware of the
human limitations and discussing the situation with colleagues.
Evaluating and choosing alternatives is often challenging because organizational goals are ambiguous or in conflict,
human information processing is incomplete and subjective, and people tend to satisfice rather than maximize.
Decision makers also short-circuit the evaluation process when faced with an opportunity rather than a problem.
People generally make better choices by systematically evaluating alternatives. Scenario planning can help make future
decisions without the pressure and emotions that occur during
real emergencies.
Confirmation bias and escalation of commitment make it difficult to accurately evaluate decision outcomes. Escalation
is mainly caused by self-justification, self-enhancement effect, the prospect theory effect, and sunk costs. These
problems are minimized by separating decision choosers from decision evaluators, establishing a preset level at which
the decision is abandoned or reevaluated, relying on more systematic and clear feedback about the project’s success,
and involving several people in decision making.
LO3 Discuss the roles of emotions and intuition in decision making.

Emotions shape our preferences for alternatives and the process we follow to evaluate alternatives. We also listen to
our emotions for guidance when making decisions. This latter activity relates to intuition—the ability to know when a
problem or opportunity exists and to select the best course of action without conscious reasoning. Intuition is both an
Page 6-3
emotional experience and a rapid, nonconscious analytic process that involves both pattern matching and action
scripts.
Page 6-4
LO4 Describe employee characteristics, workplace conditions, and specific activities that support creativity.
Creativity is the development of original ideas that make a socially recognized contribution. The four creativity stages
are preparation, incubation, insight, and verification. Incubation assists divergent thinking, which involves reframing
the problem in a unique way and generating different approaches to the issue.
Four of the main features of creative people are intelligence, persistence, expertise, and independent imagination.
Creativity is also strengthened for everyone when the work environment supports a learning orientation, the job has
high intrinsic motivation, the organization provides a reasonable level of job security, and project leaders provide
appropriate goals, time pressure, and resources. Three types of activities that encourage creativity are those that
redefine the problem, associative play, and cross-pollination.
LO5 Describe the benefits of employee involvement and identify four contingencies that affect the optimal level of
employee involvement.
Employee involvement refers to the degree that employees influence how their work is organized and carried out. The
level of participation may range from an employee providing specific information to management without knowing
the problem or issue to complete involvement in all phases of the decision process. Employee involvement may lead to
higher decision quality and commitment, but several contingencies need to be considered, including the decision
structure, source of decision knowledge, decision commitment, and risk of conflict.
Page 6-5
LECTURE OUTLINE (WITH POWERPOINT® SLIDES)
Decision Making and Creativity
Decision Making and

Creativity
Slide 1
Rational Choice Paradigm

Rational choice paradigm – the view that people should, and typically do,
use logic and all available information to choose the alternative with the
highest value
Rational Choice
Paradigm Key elements:
Slide 2 • Subjective expected utility – the probability (expectation) of
satisfaction (utility) resulting from choosing a specific alternative in a
decision – used to determine choice that maximizes
• Decision making process – follows the systematic process and
application of stages of decision making
Subjective Expected Utility
Foundation of rational choice paradigm and of several OB theories (e.g.
expectancy theory of motivation)
“Expected” — probability that selected alternative will result in a specific
Subjective Expected
Utility outcome
Slide 3
“Utility” — selection criterion’s (outcome’s) positive/negative valence
Preferred alternative has highest positive SEU — composite calculation of
probability and valence of each outcome
NOTE: (see supplemental slide for detailed SEU calculation)
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Rational Choice Decision Making Process

The rational choice paradigm assumes that decision makers follow the
systematic process illustrated
1. Identify problem/opportunity (symptom vs. problem)
Rational Choice • Problem – gap between “what is” and “what ought to be”
Decision Process
• Opportunity-- deviation between current expectations and potentially
Slide 4
better situation(s) not previously expected
• Symptom – indicators and outcomes of fundamental root causes
2. Choose the best decision process
• Programmed decisions – follow standard operating procedures i.e. they
have been resolved in the past
• Nonprogrammed decisions – require all steps in the decision model
because the problems are new, complex, or ill-defined
3. Develop alternative solutions – search for ready-made solutions first,
then develop/modify custom-made solution
4. Choose the best alternative – alternative with the highest subjective
expected utility
5. Implement the selected alternative – assumed to occur easily
6. Evaluate decision outcomes – determines whether the gap between
“what is” and “what ought to be” has narrowed
Problem Identification Challenges
Problems and opportunities are not “given” -- they are conclusions
formed from ambiguous and conflicting information
Problem Identification
Five Problem Identification Challenges:
Challenges • Stakeholder framing – stakeholders frame information so decision
Slide 5 makers perceive a problem opportunity, or no issue
• Decisive leadership – leaders rewarded for decisiveness, so they
conclude problems or opportunities without careful assessment
• Solution-focused problems – solutions are defined as problems (e.g.
“the problem poor training”) -- feels comfortable having a solution
• Perceptual defense – blocking out bad news as a coping mechanism
(fail to see information that threatens self-concept)
• Mental models – existing mental models blind us from seeing unique
problems or opportunities
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Identifying Problems Effectively

1. Be aware of perceptual and diagnostic limitations
2. Resist temptation of looking decisive when more thoughtful
examination of the situation should occur
Identifying Problems 3. Create a norm of “divine discontent” – avoid being complacent with
Effectively
the status quo and adopt an aversion to complacency
Slide 6
4. Discuss the situation with colleagues to discover blind spots and see
different perspectives
Making Choices: Rational vs OB Views
Bounded rationality (Herb Simon) – people process limited and imperfect
information, rarely select the best choice
Making Choices: Problems with goals

Rational vs OB Views • Rational – goals are clear, compatible, and agreed-upon
Slide 7 • OB – goals are ambiguous, conflicting, lack full support
Problems with information processing
• Rational – people can process all information about all alternatives and
their outcomes
• OB – people have limited information processing abilities
Problems with evaluation timing
• Rational – choices evaluated simultaneously
• OB – choices evaluated sequentially
Making Choices: Rational vs OB (con’t)
Problems with evaluation standards
• Rational – people use absolute standards to evaluate alternatives
• OB – people evaluate against an implicit favorite
Making Choices:
Rational vs OB Views Problems with information quality
Slide 8 • Rational – choices are made using factual information
• OB – choices are made using distorted information
Problems with decision objective
• Rational – people maximize i.e. choose alternative with the highest
payoff (subjective expected utility)
• OB – people satisfice i.e. select “good enough” alternative
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Biased Decision Heuristics

People have built-in decision heuristics that bias evaluation of
alternatives
Anchoring and adjustment heuristic
Biased Decision
Heuristics • We are influenced by an initial anchor point, and don’t move away
Slide 9 from that point much as new information is provided
➡ e.g. high price of an initial contract tender causes negotiations to focus
around that price even though excessive
Availability heuristic
• Tendency to estimate the probability of something occurring by how
easily we can recall those events
➡ e.g. we easily remember emotional events (e.g. shark attack) so we
overestimate how often these emotional events occur
Representative heuristic
• Tendency to estimate probability of something based on its similarity
to something known than by more precise statistics
➡ e.g. class is 20% engineering and 80% business majors, yet stereotype of
engineering students biases our probability that one student is engineering
Problems with Maximization

People don’t choose the best alternative (maximization) because:
1. Alternatives appear over time and may not be available later
➡ we need to decide now, not when future choices are available
Problems with 2. People lack motivation and ability to process huge amounts of
Maximization
Slide 10
information required for maximization
➡ people are cognitive misers
Page 6-8
How decision makers respond to problems with maximization

1. Satisficing
➡ choose the first alternative that exceeds a “good enough” standard
➡ much less cognitive taxing than maximization
➡ we determine if alternatives are better than our implicit favorite
2. Oversimplify decision calculations

➡ use easily identifiable factors (color, size) to remove several alternatives from
further consideration
➡ use few evaluation criteria rather than full list of factors
3. Avoid making the decision

➡ When presented with many choices, people often choose the least cognitively
challenging alternative – no decision at all
➡ Occurs even when there are clear benefits of selecting any alternative (such
as joining a company retirement plan)
Emotions and Making Choices

How emotions affect the evaluation of alternatives:
1. Emotions form preferences before cognition inferences
• Emotional marker process determines our preferences for each alternative
Emotions and Making before we consciously evaluate those alternatives
Choices
Slide 11 2. Emotions affect the decision evaluation process
• moods and emotions affect how carefully we evaluate alternatives
• e.g. we may pay more attention to details when in a negative mood, tend
to skim over evaluating when in a good mood
3. Emotions serve as information
• We ‘listen in’ on our emotions for guidance when making choices
• e.g. visualize using product, pay attention to resulting emotion
Intuitive Decision Making

Intuition – ability to know when a problem or opportunity exists and to
select the best course of action without conscious reasoning
Intuition is an emotional experience
Intuitive Decision • Gut feelings are emotional signals
Making
• Not all emotional signals are intuition
Slide 12
Intuition as rapid unconscious analysis
• Uses action scripts – programmed decision routines that shorten the
decision making process
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Making Better Choices

1. Systematically evaluate alternatives against relevant factors
2. Revisit decisions later, when in a different mood state
3. Scenario planning – disciplined method for imagining possible futures
Making Better Choices
Slide 13
Decision Evaluation Problems

Confirmation bias — nonconsciously bias evidence about the choice
• Emphasize, easier recall of the choice’s positive features
• Ignore/downplay negative features
Decision Evaluation
Problems Escalation of commitment -- tendency to repeat or further invest in an
Slide 14 apparently bad decision
Four causes of escalation of commitment:
1. Self-justification effect
➡ continue to invest in a failing project to maintain impression that the project
is still worthy -- ending project implies incompetence
2. Self-enhancement effect
➡ natural tendency to think we are above average (lucky, competent)
➡ results in (a) ignoring bad news about the decision and (b) overestimating
chance that investing more will correct the problem
3. Prospect theory effect
➡ we experience stronger negative emotions when losing something of value
than positive emotions when gaining something of equal value
➡ stopping a project hurts more than spending more on it
4. Sunk costs effect

➡ motivation to invest more in projects with large resources already invested
➡ but future investments should NOT consider size of previous investment in
the project, only the expected future gains
➡ past investment includes time -- people motivated to spend more time when
much time has been devoted to the project already
Page 6-10
Evaluating Decisions Better

1. Separate decision choosers from decision evaluators – minimizes self-
justification effect
2. Stop loss – publicly establish a preset level at which the decision is
Evaluating Decisions abandoned or re-evaluated
Better
3. Find sources of systematic and clear feedback
Slide 15
4. Involve several people in the decision – may notice problems sooner
than when someone is working alone
Creative Process Model
1. Preparation
• Investigating problem/opportunity -- actively studying the issue
2. Incubation
Creative Process Model • Reflective thought -- put problem aside, maintain low level of awareness
Slide 16 • Assists divergent thinking – reframing a problem in a unique way and
generating different approaches to the issue
• Contrasts with convergent thinking – calculating the conventionally
accepted “right answer” to a logical problem
3. Illumination
• The experience of suddenly becoming aware of a unique idea
• begins with “fringe” awareness (barely perceptible)
• short-term memory -- easily forgotten, so need to document
4. Verification
• Logical evaluation, experimentation, and further creative insight
Page 6-11
Characteristics of Creative People

Cognitive and practical intelligence
• Cognitive intelligence to synthesize/analyze information
• Practical intelligence – assess potential usefulness of ideas
Characteristics of
Creative People Persistence
Slide 17
• Based on: (a) higher need for achievement, (b) strong motivation from
the task itself, and (c) moderate or high degree of self-esteem
Knowledge and experience
• Expertise/subject matter knowledge – but deep knowledge may create
strong mental models that reduce divergent thinking
Independent imagination (cluster of personality traits and values)
• Cluster of personality traits and values
• Consists of: (a) high openness to experience (personality), moderately
low need for affiliation (drive/motive), higher self-direction and
stimulation (values)
Creative Work Environments
Learning orientation
• Encourage experimentation
• Tolerate mistakes as part of the creative process
Creative Work
Environments Intrinsically motivating work
Slide 18 • Motivation from the job itself -- task significance, autonomy,
challenging but within employee’s competencies
Open communication and sufficient resources
• Includes degree of job security
• Providing nontraditional workspaces e.g. unique building design
Note: It isn’t clear how much pressure should be exerted on employees
to produce creative ideas or the effect of co-worker support/co-worker
competition
Page 6-12
Creativity Activities
Redefine the problem
• Revisit abandoned projects—might be seen in new ways
• People unfamiliar with issue explore the problem (fresh eyes)
Creative Activities
Slide 19 Associative play
• Impromptu storytelling and acting
• Artistic activities
• Morphological analysis – listing different dimensions of a system and
the elements of each dimension and then looking at each combination
Cross-Pollination
• People from different parts of the organization exchange ideas or are
brought into the team
• Informal social interaction
Levels of Employee Involvement
Involvement — degree to which employees influence how their work is
organized and carried out
Levels of Employee
Different levels of involvement (lowest to highest)
Involvement 1. Employees individually asked for specific information but the problem
Slide 20 is not described to them.
2. Problem is described and employees are asked individually or
collectively for information relating to that problem.
3. Problem is described to employees, who are collectively given
responsibility for developing recommendations
4. Employees responsible for entire decision-making process -- identify
the problem, discover alternative solutions, choose the best
alternative, implement choice
Page 6-13
Employee Involvement Model

Several potential benefits of involvement, but only under specific
circumstances.
1. Better problem identification
Employee Involvement • Recognizing problems more quickly and defining them more accurately
Model
Slide 21 2. Synergy produces more/better solutions
• Team members create synergy by pooling their knowledge to form new
alternatives
3. Better at picking the best choice
• Decision is reviewed by people with diverse perspectives and a broader
representation of values
4. Higher decision commitment
• Increases sense of personal responsibility for decision’s success and
representation of interests
Contingencies of Involvement
Higher employee involvement is better when:
1. Decision structure
• Problem is new and/or complex i.e. nonprogrammed decision
Contingencies of
Involvement 2. Source of decision knowledge
Slide 22 • The leader lacks knowledge and employees have information
3. Decision commitment
• Employees unlikely to accept decision without their involvement
4. Risk of conflict (two conflict risks)
(a) Employee norms support the organization’s goals
(b) Employees are likely to agree on the solution
Decision Making and Creativity
Decision Making and

Creativity
Slide 23
Page 6-14
Subjective Expected Utility Calculation

Subjective expected utility: estimating the best possible alternative
(maximization)
• Depends on probabilities of outcomes and value (valence) of those
Supplemental Slide: outcomes
Subjective Expected
Utility Calculation
Expected – probability of an outcome occurring
Slide 24 • As illustrated: Chance that outcome 3 will occur is 90% if choice ‘A’ is
chosen, 30% if choice ‘B’ is chosen
• e.g., 90% probability that applicant ‘A’ will quit within one year; only 30%
chance that applicant ‘B’ will quit within one year
Utility – value or happiness produced by each option from value of

expected outcomes
• As illustrated: you believe Choice ‘B’ has higher utility (i.e., will produce
greater happiness) than will Choice ‘A’
Choice ‘B’ expected utility is

(.8x7)+(.2 x -2)+(.3x1)= 6.4
Choice ‘A’ expected utility is
(.2x7)+(.5 x -2)+(.9x1)= 1.3
Note 1: Value (valence) of outcomes remain the same for both choices
e.g. you value good wireless reception (positive outcome) to the same degree
no matter which tablet (iPad, etc.) you are considering buying
Note 2: Unlike game theory models, the probabilities in this and most other
business decision scenarios do not sum to 1.0. The first endnote on this topic
in this chapter of the book provides a detailed explanation.
Page 6-15
STUDENT HANDOUT
CRITICAL THINKING QUESTIONS
1. You have been asked to personally recommend a new travel agency to handle all airfare,
accommodation, and related travel needs for your organization of 500 staff. One of your
colleagues, who is responsible for the company’s economic planning, suggests that the
best travel agent could be selected mathematically by inputting the relevant factors for
each agency and the weight (importance) of each factor. What decision making approach is
your colleague recommending? Is this recommendation a good idea in this situation? Why
or why not?
2. A developer received financial backing for a new business financial center along a derelict
section of the waterfront, a few miles from the current downtown area of a large European
city. The idea was to build several high-rise structures, attract large tenants to those sites,
and have the city extend transportation systems out to the new center. Over the next
decade, the developer believed that others would build in the area, thereby attracting the
regional or national offices of many financial institutions. Interest from potential tenants
was much lower than initially predicted and the city did not build transportation systems as
quickly as expected. Still, the builder proceeded with the original plans. Only after financial
support was curtailed did the developer reconsider the project. Using your knowledge of
escalation of commitment, discuss three possible reasons why the developer was motivated
to continue with the project.
3. Two characteristics of creative people are that they have relevant experience and are
persistent in their quest. Does this mean that people with the most experience and the
highest need for achievement are the most creative? Explain your answer.
4. Employee involvement applies just as well to the classroom as to the office or factory floor.
Explain how student involvement in classroom decisions typically made by the instructor
alone might improve decision quality. What potential problems may occur in this process?
Page 6-16
CONFIDENTIAL INSTRUCTOR NOTES
SUGGESTED ANSWERS TO CRITICAL

THINKING QUESTIONS
1. You have been asked to personally recommend a new travel agency to handle all airfare, accommodation, and
related travel needs for your organization of 500 staff. One of your colleagues, who is responsible for the
company’s economic planning, suggests that the best travel agent could be selected mathematically by
inputting the relevant factors for each agency and the weight (importance) of each factor. What decision
making approach is your colleague recommending? Is this recommendation a good idea in this situation? Why
or why not?
The rational choice paradigm approach is being recommended for this decision.
The idea that relevant factors should be identified and weighted is good. At least this would help us think about
which factors are most important for the company. These could include such factors as, cost, speed of service,
quality of service, etc.
However, his suggestion that the best decision could be arrived at mathematically is somewhat misleading. While
the rational choice paradigm may rest on the assumption that people evaluate and choose the best alternatives
logically, that is not borne out by empirical evidence.
OB experts have demonstrated that decision-makers may not choose the best alternatives for a variety of reasons.
For example, decision makers have limited information processing abilities, evaluate alternatives sequentially and
against implicit favorites, and are influenced by perceptual errors, biases and emotions. Moreover, when it comes
to making a final choice their decisions are often made on the basis of satisficing rather than maximization.
2. A developer received financial backing for a new business financial center along a derelict section of the
waterfront, a few miles from the current downtown area of a large European city. The idea was to build several
high-rise structures, attract large tenants to those sites, and have the city extend transportation systems out to
the new center. Over the next decade, the developer believed that others would build in the area, thereby
attracting the regional or national offices of many financial institutions. Interest from potential tenants was
much lower than initially predicted and the city did not build transportation systems as quickly as expected.
Still, the builder proceeded with the original plans. Only after financial support was curtailed did the
developer reconsider the project. Using your knowledge of escalation of commitment, discuss three possible
reasons why the developer was motivated to continue with the project.
Escalation of commitment occurs when an individual repeats a bad decision or continues to allocate resources to a
failing cause of action. Students should be encouraged to consider the causes of escalation when discussing this
case.
The four causes are:
Self-justification. It is possible the developer felt that canceling construction would result in losing face. That is,
because of a personal identification and link with the project, failure would mean a loss of his/her reputation as
well.
Self-enhancement effect. People over-estimate their probability of success (e.g. are more skilled and luckier than
average), which distorts the risk of pouring more funds into a losing course of action. Self-enhancement also causes
people to nonconsciously screen out or ignore negative information about their decisions.
Prospect theory effect. The discomfort associated with losing money on this project may have outweighed the desire
for gains. In other words, knowing that stopping the project would mean certain loss, he/she was willing to go to
great lengths to avoid this, even it meant a smaller pay off in the end.
Page 6-17
Closing costs. This is closely tied to the prospect theory effect. While there is no evidence of an explicit monetary
penalty clause for non completion, the developer might have been concerned with these nonetheless. Aside from
monetary loss, costs include loss of reputation, trust, influence etc. One way to avoid these costs is to carry on with
the completion.
3. Two characteristics of creative people are that they have relevant experience and are persistent in their quest.
Does this mean that people with the most experience and the highest need for achievement are the most
creative? Explain your answer.
The answer is probably “No”. The textbook states that there is a dilemma regarding experience. On the one hand,
people need plenty of experience to be familiar with the issues. The literature on creativity suggests that it may
take several years of experience before a person has reached creative potential.
The dilemma is that the longer a person is in one field of study, the more he/she develops a mental model that
stifles creativity. Some companies prefer people with no experience in an industry so they are more creative.
These two points are not exactly contradictory – a person may be new to an industry but has many years of
experience in a particular skill or trade. However, the issue does suggest that there is an optimal level of
experience before mental models undermine creative potential.
It is less certain whether creativity continues to increase with need for achievement. The textbook explains that
need for achievement makes creative people more persistent, which is necessary in the face of short-term failures
and doubts from others. Would a very strong need for achievement undermine creative potential? This is a matter
for debate. Most likely too much need for achievement will create blind drive which can prevent people from
seeing alternative strategies and the obvious inappropriateness of existing routes.
4. Employee involvement applies just as well to the classroom as to the office or factory floor. Explain how
student involvement in classroom decisions typically made by the instructor alone might improve decision
quality. What potential problems may occur in this process?
Problem identification. Because students have a different perspective than the instructor, their involvement might
help identify issues or problems the instructor was unaware of. This could lead to improvements in the quality of
the learning experience.
Generating alternatives. Student involvement could potential improve the number and quality of solutions
generated. This typically happens when more people look for solutions, because individuals have different
perspectives.
Better solutions. The likelihood of choosing the best solution, from the list of alternatives generated, would be
increased due to diverse perspectives and values.
Increased commitment. When students are involved in identifying the issues, generating alternative solutions, and
choosing a solution they may also feel more committed to the decision taken.
Increased perception of fairness. Being involved in the process, may also promote a sense of fairness among students.
To avoid problems with this process, limits should be placed on the extent of participation, and the number of
issues requiring student involvement. For example, the determination of grades should be left up to the instructor.
The types of questions and weightings of exams should also be predetermined.
The instructor would have to make sure all students are equally involved to avoid a small influential and vocal
group of students from dominating the others.
Lastly, the instructor should be mindful that increasing student involvement requires more time, which may in
turn reduce teaching time.
Page 6-18
STUDENT HANDOUT
CLASS EXERCISE: EMPLOYEE INVOLVEMENT

INCIDENT
Instructions
Read the incident below. Then, alone or in teams, decide how much you should involve your subordinates in
this decision. Select one of the following levels of involvement:
Decide alone. Use your personal knowledge and insight to complete the entire decision process without conferring
with anyone else.
Receive information from individuals. Ask specific individuals for information. They do not make recommendations
and might not even know what the problem is about.
Consult with individuals. Describe the problem to selected individuals and seek both their information and
recommendations. The final decision is made by you, and you may or may not take the advice from these others into
account.
Consult with the team. You bring together a team of people (all department staff or a representation of them if the
department is large), who are told about the problem and provide their ideas and recommendations. You make the final
decision, which may or may not reflect the team’s information.
Facilitate the team’s decision. The entire decision- making process is handed over to a team or commit- tee of
subordinates. You serve only as a facilitator to guide the decision process and keep everyone on track. The team
identifies the problem, discovers alternative solutions, chooses the best alternative, and implements their choice.
What factors led you to decide that this is the optimal level of employee involvement? What problems might occur if
less or more involvement occurred in this case (where possible)?
The Sugar Substitute Research Decision forms of research, it is difBicult to determine the amount of
research required to further identify and perfect the sugar
You are the head of research and development (R&D) for a
substitute. You do not know how much demand is expecte
major beer company. While working on a new beer produc
d for this product. Your department has a decision process
t, one of the scientists in your unit seems to have tentativel
for funding projects that are behind schedule. However, the
y identiBied a new chemical compound that has few calorie
re are no rules or precedents about funding projects that w
s but tastes closer to sugar than current sugar substitutes.
ould be licensed but not used by the organization.
The company has no foreseeable need for this product, but
it could be patented and licensed to manufacturers in the f The company’s R&D budget is limited and other scientists
ood industry. in your work group have recently complained that they re
quire more resources and Binancial support to get their pr
The sugar substitute discovery is in its preliminary stages
ojects completed. Some of these other R&D projects hold p
and would require considerable time and resources before
romise for future beer sales. You believe that most researc
it would be commercially viable. This means that it would
hers in the R&D unit are committed to ensuring company’s
necessarily take some resources away from other projects i
interests are achieved.
n the lab. The sugar substitute project is beyond your techn
ical expertise, but some of the R&D lab researchers are fam © 2002 Steven L. McShane
iliar with that Bield of chemistry. As with most
Page 6-19
CONFIDENTIAL INSTRUCTOR NOTES
CLASS EXERCISE: EMPLOYEE INVOLVEMENT

INCIDENT
Suggested Answer to the Sugar Substitute Research Decision
1. To what extent should your subordinates be involved in this decision? Select one of the following levels of
involvement:
Most teams will likely identify some level of consultation, although some tend to suggest high involvement
(facilitate the team’s decision). The answer to the next question explains why either of these medium involvement
options is probably best here.
2. What factors led you to choose this alternative rather than the others?
This question can be answered by reviewing the four contingencies of employee involvement discussed in the textbook.
Decision structure: This decision has low structure. The incident says that there is a decision process for funding proj
ects behind schedule, but there are no rules or precedents about funding projects that would be licensed but not use
d by the organization. Consequently, some level of involvement may be valuable.
Source of decision knowledge: The incident clearly says that the sugar substitute project is beyond your technical
expertise and that it is difBicult to determine the amount of research required. Scientists have information unavailable
to the leader, but they would not have sufBicient information to make the decision alone. Overall, this suggests that some
involvement (probably at least a medium level) is desirable.
Decision commitment. This might be debatable, but most employees know that funding decisions are ultimately in the
hands of executives who must take responsibility for those decisions. Also, it sounds like past funding decisions are m
ade by the leader, not employees (mainly due to conBlict problems described below). Moreover, but employees don’t i
mplement anything as a result of this decision, so there is probably minimal adverse effect of low commitment.
Risk of con5lict. There are two dimensions of this contingency. First, with respect to goal compatibility between employe
es and the company, the incident says that you believe that most researchers in the R&D unit are committed to ensuring
company’s interests are achieved. Second, it is almost certainly true that conBlict will occur among employees. This is a
win-
lose situation where funding one project reduces or eliminates funding on other projects. Overall, the conBlict among em
ployee discourages high involvement, but will allow a medium level of involvement.
3. What problems might occur if less or more involvement occurred in this case (where possible)?
A higher degree of involvement would probably be difBicult because of the problem of conBlict among employees.
Employees could not agree because a decision to fund the project would reduce their own funding.
A low level of involvement would lose some of synergy of discussion about the issue. This synergy brings out valuable
information and potentially more creative solutions to the problem.
Page 6-20

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Chapter 6: Decision Making and Creativity

M Organizational Behavior 3rd Edition

Solution Manual: https://testbankpack.com/p/solution-manual-for-m-

Test Bank: https://testbankpack.com/p/test-bank-for-m-organizational-

Instructor’s Manual to Accompany

CHAPTER SUMMARY BY LEARNING OBJECTIVE

LO3 Discuss the roles of emotions and intuition in decision making.

LECTURE OUTLINE (WITH POWERPOINT® SLIDES)

Decision Making and Creativity

Decision Making and

Rational Choice Paradigm

Rational Choice Decision Making Process

Identifying Problems Effectively

Making Choices: Problems with goals

Biased Decision Heuristics

Problems with Maximization

How decision makers respond to problems with maximization

2. Oversimplify decision calculations

3. Avoid making the decision

Emotions and Making Choices

Intuitive Decision Making

Making Better Choices

Decision Evaluation Problems

4. Sunk costs effect

Evaluating Decisions Better

Characteristics of Creative People

Employee Involvement Model

Decision Making and Creativity

Decision Making and

Subjective Expected Utility Calculation

Utility – value or happiness produced by each option from value of

Choice ‘B’ expected utility is

CRITICAL THINKING QUESTIONS

CONFIDENTIAL INSTRUCTOR NOTES

SUGGESTED ANSWERS TO CRITICAL

CLASS EXERCISE: EMPLOYEE INVOLVEMENT

CONFIDENTIAL INSTRUCTOR NOTES

CLASS EXERCISE: EMPLOYEE INVOLVEMENT

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