PART 3

Social and Group Processes in

Organizations

CHAPTER 8
Decision Making and
Problem Solving
Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Chapter Learning Objectives
After studying this chapter you should be able to:
1. Describe the nature of decision making and distinguish it from
problem solving.
2. Discuss the rational approach to decision making.
3. Identify and discuss the primary behavioral aspects of decision
making.
4. Discuss group decision making in organizations.
5. Discuss the nature of creativity and relate it to decision making and
problem solving.

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Nature of Decision Making (1 of 3)

• Decision making
– The process of choosing from among several alternatives
• Problem solving
– A special form of decision making that requires finding the answer to a
question

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Elements of Decision Making
Figure 8.1

A decision maker has a goal, evaluates the outcomes of alternative

courses of action in terms of the goal, and selects one alternative to be
implemented.
Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Nature of Decision Making (2 of 3)

• Types of decisions
– Programmed decision
 Recurs often enough to develop decision rules: statements that tell
decision makers which alternative to choose once they have predetermined
information about the decision situation
– Nonprogrammed decision
 Recurs infrequently, unique situations, no previously established decision
rules

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Table 8.1 Characteristics of Programmed and
Nonprogrammed Decisions

PROGRAMMED NONPROGRAMMED
CHARACTERISTICS
DECISIONS DECISIONS
Type of decision Well structured Poorly structured
Frequency Repetitive and routine New and unusual
Goals Clear and specific Vague
Information Readily available Not available, unclear
channels
Consequences Minor Major
Organizational level Lower levels Upper levels
Time for solution Short Relatively long
Basis for solution Decision rules, set procedures Judgment and creativity

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Nature of Decision Making (3 of 3)

• Decision making conditions—where information levels about desired

outcomes vary
– Condition of certainty
 Outcomes of alternatives are known with enough information to determine
the probabilities of various outcomes.
– Condition of risk
 Certainty of outcomes is unknown but there is enough information to
estimate probabilities of various outcomes.
– Condition of uncertainty
 There is insufficient information to estimate the probability of possible
outcomes.

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Alternative Outcomes under Different
Decision-Making Conditions
Figure 8.2

The three decision-making conditions of certainty, risk, and

uncertainty for the decision about whether to promote a new video
game to the market.
Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Rational Approach to Decision Making

• The rational approach assumptions

– Managers follow a systematic, step-by-step process for making
decisions
– Organizations are dedicated to making logical choices
– Organizations want to do what makes the most sense economically
– Decision makers are completely objective and have complete
information
– Planning may require a contingency plan: alternative actions to take if
the primary plan fails or is disrupted
– Implementation may result in post-decision dissonance: doubt about a
choice that’s already been made
Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Rational Decision-Making Approach
Figure 8.3

The rational model follows a systematic, step-by-step approach from

goals to implementation, measurement, and control.
Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Rational Approach (1 of 2)

• Strengths
– Forces decision in a logical, sequential manner
– In-depth analysis enables the decision maker to choose on the basis of
information rather than emotion or social pressure
• Weaknesses
– Rigid underlying assumptions often unrealistic
– Information limited by time or cost constraints, manager’s ability to
process information
– Not all alternatives easily quantified
– Outcomes unknown due to unpredictability of future

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Rational Approach (2 of 2)

• Evidence-based management (EBM)

– The commitment to identify and utilize the best theory and data available to make
decisions through five principles:
1. Facing the hard facts and building a culture in which people are encouraged to tell the truth,
even if it’s unpleasant
2. Being committed to “fact-based” decision making—getting the best evidence and using it to
guide actions
3. Treating your organization as an unfinished prototype—encouraging experimentation and
learning by doing
4. Looking for the risks and drawbacks in what people recommend (even the best medicine
has side effects)
5. Avoiding basing decisions on untested beliefs, what was done in the past, or uncritical
“benchmarking” of what winners do

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Behavioral Approach to Decision Making
• The administrative model
– Describes how decisions are often actually made
– Characteristics of the administrative model
 Bounded rationality—decision makers can’t deal with all the information, so
they tackle some subset of it
 Sub-optimizing—knowingly accepting less than best outcome in order to
avoid unintended negative consequences on the rest of the organization
 Satisficing—examining alternatives only until a solution that meets minimal
requirements is found

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Behavioral Approach (1 of 2)
• Other behavioral forces in decision making
– Coalitions: an informal alliance of individuals or groups formed to achieve a common
goal (can be positive or negative)
– Intuition: an innate belief about something without conscious consideration (hunch,
often results in better decision making)
– Escalation of commitment: occurs when a decision maker stays with the decision, even
if it appears to be wrong
– Risk propensity: the degree to which a decision maker is willing to gamble when
making a decision
– Ethics: a person’s beliefs about what constitutes right and wrong behavior
• Prospect theory: argues that when people make decisions under a condition of risk
they are more motivated to avoid losses than they are to seek gains

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Behavioral Approach (2 of 2)
• The integrated (or practical) approach
– Combines the unrealistic demands of the rational approach and the
limited, short-term orientation of the behavioral approach to create a
more practical approach for making decisions in organizations
• Hybrid approaches
– Managers use a combination of rational, behavioral, and practical
approaches to make decisions
– Research has shown that speed of decision making isn’t a factor in the
quality of the decision

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Practical Approach to Decision Making with
Behavioral Guidelines
Figure 8.4

The practical model applies some of the conditions recognized by the behavioral approach to the
rational approach to decision making. Although similar to the rational model, the practical
approach recognizes personal limitations at each point (or step) in the process.
Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Group Decision Making in Organizations
• Group polarization
– The tendency for a group’s average post-discussion attitudes to be more
extreme than its average pre-discussion attitudes (“risky shift”)
– Why polarization occurs
 Increasing confidence from shared opinions
 Persuasive arguments convincing weaker supporters
 Individuals substituting group responsibility for individual responsibility for
the decision

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Group Decision Making (1 of 4)
• Groupthink—A mode of thinking that occurs when members of a
group are deeply involved in a cohesive in-group and the desire for
unanimity offsets their motivation to appraise alternative courses of
action
– Symptoms of groupthink
 Illusion of vulnerability
 Rationalizing or discounting warnings
 Unquestioned belief in the group’s morality and ethics
 Stereotyped views of “the enemy”
 Pressure against alternative opinions
 Shared illusion of unanimity due to self-censorship
 Self-appointed “mindguards”
Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Groupthink Process
Figure 8.5
Groupthink can occur when a highly cohesive group with a directive leader is under
time pressure; it can result in a defective decision-making process and low of
successful outcomes.

Source: Moorhead, G., Ference, R., & Neck, C. P. (1991). Group Decision Fiascoes Continue:
Space Shuttle Challenger and a Revised Groupthink Framework. Human Relations, 44, 539–550.

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Group Decision Making (2 of 4)
– Effects of groupthink
 Consideration of and focus on fewer alternatives
 Failure to perceive nonobvious risks and drawbacks of an alternative
 Rejection of expert opinions
 Ignoring potential for setbacks or actions of competitors in not developing
contingency plans

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Table 8.2 Prescriptions for Preventing
Groupthink
A. Leader prescriptions

1. Assign everyone the role of critical evaluator.

2. Be impartial; do not state preferences.
3. Assign the devil’s advocate role to at least one group member.
4. Use outside experts to challenge the group.
5. Be open to dissenting points of view.
B. Organizational prescriptions
1. Set up several independent groups to study the same issue.
2. Train managers and group leaders in groupthink prevention techniques.
C. Individual prescriptions
1. Be a critical thinker.
2. Discuss group deliberations with a trusted outsider; report back to the group.
D. Process prescriptions
1. Periodically break the group into subgroups to discuss the issues.
2. Take time to study external factors.
3. Hold second-chance meetings to rethink issues before making a commitment.

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Group Decision Making (3 of 4)
• Participation in decision making
– To what degree should employees be involved in the decision-making
process?
• Benefits of participation
– Better solutions in “judgmental tasks”
– Produces more and better solutions in complex problem-solving tasks
– Creates a greater interest in the task
• Drawbacks
– Higher risk of polarization and groupthink

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Group Decision Making (4 of 4)
• Group problem solving—three techniques can help the process work
better
– Brainstorming: used in the idea-generation phase to assist in developing
many courses of action
– Nominal group technique: members generate many ideas, discuss
them, and then vote—repeating the cycle until they reach a decision
– Delphi technique—a method of systematically gathering judgments from
experts for use in developing forecasts

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Creativity, Problem Solving, and Decision
Making (1 of 2)
• Creativity
– The ability to generate new ideas or to conceive of new perspectives on
existing ideas
– Creative individuals share three traits
 Background experiences where creativity was nurtured
 Certain personality traits (openness, attraction to complexity, high levels of
energy, independence and autonomy, strong beliefs in self-confidence and
self-creativity
 Cognitive abilities—not all intelligent people are creative, but all creative
people are intelligent and can think convergently and divergently

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Creative Process

Figure 8.6
The creative process generally follows the
four steps illustrated here. Of course, there
are exceptions, and the process is
occasionally different. In most cases,
however, these steps capture the essence
of the creative process.

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Creativity, Problem Solving, and Decision
Making (2 of 2)
• Enhancing creativity in organizations
– Use explicit goals to make creativity a part of the organizational culture
– Reward creative successes
– Don’t punish creative failures

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Organizational Behavior in Action
• After reading the chapter:
– When your alarm goes off each morning, you have a decision to make:
get up and go to class, or to stay in bed. Is this a programmed or
nonprogrammed decision?
– Describe a situation in which you experienced escalation of commitment
to an ineffective course of action. Why did it happen?
– Can you think of a time when you satisficed when making a decision?
Suboptimized?

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.