HR-2

HR-2

• 1.
  Individual Decision Making
• 2.
  Individual Decision MakingDecision Making: Decision making is defined as a process of choosing among the possible alternatives. Problem: This is the discrepancy between the existing and the desired state of affairs.
• 3.
  Steps in DecisionMaking Process Define the problem. Identify the decision criteria. Allocate weights to the criteria. Develop the alternatives. Evaluate the alternatives. Select the best alternative. Implementing the decision Evaluating the decision’s effectiveness
• 4.
  Rational Decision MakingModel Describes how individuals should behave in order to maximize some outcome. Model Assumptions Problem clarity Known options Clear preferences Constant preferences No time or cost constraints Maximum payoffs
• 5.
  How are decisionsactually made in Organizations Bounded Rationality Individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.
• 6.
  Common Biases andErrors Overconfidence Bias Believing too much in our own decision competencies . Anchoring Bias Fixating on early, first received information . Confirmation Bias Using only the facts that support our decision. Availability Bias Using information that is most readily at hand. Representative Bias Assessing the likelihood of an occurrence by trying to match it with a preexisting category .
• 7.
  Common Biases andErrors Escalation of Commitment Increasing commitment to a previous decision in spite of negative information. Randomness Error Trying to create meaning out of random events by falling prey to a false sense of control or superstitions . Hindsight Bias Falsely believing to have accurately predicted the outcome of an event, after that outcome is actually known .
• 8.
  Intuition Intuitive DecisionMaking An unconscious process created out of distilled experience . Conditions Favoring Intuitive Decision Making A high level of uncertainty exists There is little precedent to draw on Variables are less scientifically predictable “ Facts” are limited Facts don’t clearly point the way Analytical data are of little use Several plausible alternative solutions exist Time is limited and pressing for the right decision
• 9.
  Ethics in DecisionMaking Ethical Decision Criteria Utilitarianism Seeking the greatest good for the greatest number. Rights Respecting and protecting basic rights of individuals such as whistleblowers. Justice Imposing and enforcing rules fairly and impartially.
• 10.
  Ethics in DecisionMaking Ethics and National Culture There are no global ethical standards. The ethical principles of global organizations that reflect and respect local cultural norms are necessary for high standards and consistent practices.
• 11.
  Ways to improveDecision Making Analyze the situation and adjust your decision making style to fit the situation. Be aware of biases and try to limit their impact. Combine rational analysis with intuition to increase decision-making effectiveness. Don’t assume that your specific decision style is appropriate to every situation. Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies.
• 12.
  Toward Reducing Biasesand Errors Focus on goals . Clear goals make decision making easier and help to eliminate options inconsistent with your interests. Look for information that disconfirms beliefs . Overtly considering ways we could be wrong challenges our tendencies to think we’re smarter than we actually are. Don’t try to create meaning out of random events . Don’t attempt to create meaning out of coincidence. Increase your options . The number and diversity of alternatives generated increases the chance of finding an outstanding one .