Topic 7:
Decision Making and
Creativity
1-1
Decision Making Defined
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.
7-2
Rational Choice Decision Process
Identify problem/opportunity
Choose decision process
• e.g. non-programmed vs
programmed
Develop/identify alternatives
Choose best alternative
Implement choice
Evaluate choice
7-3
Intuitive Decision Making
Ability to know when a problem or opportunity
exists and select the best course of action
without conscious reasoning
Intuition as emotional experience
• Gut feelings are emotional signals
• Not all emotional signals are intuition
Intuition as rapid nonconscious analysis
7-4
Postdecisional Justification
Tendency to inflate quality of the selected
option; forget or downplay rejected
alternatives
Results from need to maintain a positive self-
identity
Initially produces excessively optimistic
evaluation of decision
7-5
Escalation of Commitment
The tendency to repeat an apparently bad
decision or allocate more resources to a
failing course of action
Four main causes of escalation:
• Self-justification
• Prospect theory effect
• Perceptual blinders
• Closing costs
7-6
Evaluating Decisions More
Effectively
1. Separate decision choosers from evaluators
2. Establish a preset level to abandon the
project
3. Find sources of systematic and clear
feedback
4. Involve several people in the evaluation
process
7-7
Employee Involvement Defined
The degree to which
employees influence how their
work is organized and
carried out
Different levels and forms of
involvement
7-8
Employee Involvement Model
Potential Involvement
Outcomes
Better problem
Employee identification
Involvement Synergy produces
more/better solutions
Better at picking the
best choice
Contingencies
of Involvement Higher decision
commitment
7-9
Contingencies of Involvement
Higher employee involvement is better when:
Decision • Problem is new & complex
Structure (i.e nonprogrammed decision)
Knowledge • Employees have relevant knowledge
Source beyond leader
Decision • Employees would lack commitment
Commitment unless involved
Risk of 1. Norms support firm’s goals
Conflict 2. Employee agreement likely
7-10
Creativity Defined
Developing an original idea that makes a
socially recognized contribution
• Applies to all aspects of the decision process –
problems, alternatives, solutions
7-11
Creative Process Model
Verification
Insight
Incubation
Preparation
7-12
Characteristics of Creative People
Above average intelligence
Persistence
Relevant knowledge and experience
Independent imagination traits
• Higher openness to experience personality
• Lower need for affiliation motivation
• Higher self-direction values
7-13
Creative Work Environments
Learning orientation
• Encourage experimentation
• Tolerate mistakes
Intrinsically motivating work
• Task significance, autonomy, feedback
Open communication and sufficient resources
Team competition and time pressure have
complex effect on creativity
7-14