Michael A. Hitt
C. Chet Miller
Slides by Ralph R. Braithwaite
Dawn Ostroff’s Decision Making
at the CW Television Network
• What are your thoughts about Ostroff’s
decision-making process regarding
programming at the “new” network?
• Given the nature of the decisions needed, did
she used the knowledge and wisdom of her
Dawn Ostroff advisors wisely?
• What are your thoughts about the “creative
and somewhat risky tactics” that were
• Do you think the network will survive and be
successful in the future?
Exploring Behavior in Action 10-2
1. Describe the fundamentals of decision making,
including the basic steps and the need to balance
ideal and satisfactory decisions.
2. Discuss four important decision-making styles,
emphasizing the effectiveness of each one.
3. Explain the role of risk-taking propensity and
4. Define cognitive bias and explain the effects of
common types of cognitive bias on decision making.
5. Discuss common pitfalls of group decision making.
6. Describe key group decision-making techniques.
7. Explain the factors managers should consider in
determining the level of associate involvement in
Fundamentals of Decision
Decisions are choices of actions from among
multiple feasible alternatives.
Making decisions is one of the primary activities
of senior managers.
Decisions are also made by managers at all
levels and by associates in high-involvement
Define the Problem
Gather and Evaluate Data
List and Evaluate Alternatives
Select Best Alternative
Implement and Follow Up
Adapted from Exhibit 10-1: The Decision-Making Process 10-5
Optimal versus Satisfactory
Optimal decision Satisficing decision
Individuals’ predispositions can affect
decision process at two critical stages
(Perceiving) (Judging) of
of Information Alternatives
Sensing style Thinking style
Intuition style Feeling style
Identify Criteria Styles
Evaluate Using the five Using abstractions
Information senses to identify and describing the
factual details “big picture”
List and Evaluate
Objective Subjective values
analysis, rational with emotional and
procedures personal factors
Alternative Thinking Feeling
and Follow Up Adapted from Exhibit 10-2: Influence of Decision Styles 10-8
A decision style A decision style
focused on gathering focused on developing
concrete information abstractions and
directly through the figurative examples for
senses, with an use in decision making,
emphasis on practical with an emphasis on
and realistic ideas. imagination and
• A high level of ambiguity exists
• Few or no precedents exist
• Facts are limited
• Facts don’t clearly indicate which way to go
• Time is limited and there is pressure to make the
• Several plausible alternative solutions exist with
good arguments for each
A decision style A decision style
focused on objective focused on subjective
evaluation and evaluation and the
systematic analysis. emotional reactions of
Advice What are your thoughts about the comment that
many accountants believe that more data is
better and they hide behind “a mass of data”?
What are your thoughts that some marketers
have “blind spots” when it comes to having to
do data analysis?
What are you thoughts about the Six Thinking
Hats concept of Edward de Bono?
Edward de Bono
Degree of Acceptable Risk
• Risk exists when the outcome of a chosen
course of action is not certain
• Risk-taking propensity (Willingness to take
Confirmation bias Ease of recall bias
Seeking information Relying too much on
that confirms early information that is
beliefs and ideas easy to recall from
Cognitive Mental shortcuts involving
Sunk-cost bias Biases simplified ways of thinking
Not treating past
investments (time, Anchoring bias
effort, money) as sunk- Emphasizing too
costs when deciding to much the first piece
continue an investment of information
Mount Everest Expeditions
• What role do “sunk costs” play in many decisions?
• Why would someone like Rob Hall ignore his pre-
determined turnaround time?
• Have you experienced the “perils of sunk cost” in
your work or personal lives? Give examples.
George Mallory (R)
and Andrew Irvine
Sir Edmund Hillary (L)
Experiencing Rob Hall and Tenzing Norgay
Group Decision Making
• Some members may arrive with their own
expectations, problem definitions, and pre-
• Some members may have given more thought
to the decision situation and what is to be
• Focus of the team leader may be in developing a
collaborative team rather than developing
individual decision making skills
Adapted from Exhibit 10-3: Group Decision-Making Phenomena – Pitfalls and Techniques 10-17
Delphi Dialectical Devil’s
Technique Inquiry Advocacy
Victor Vroom Philip Yetton
Requires managers to diagnose the problem situation and
then determine the extent to which associates will be
involved in the decision-making process. The involvement
depends on the probable effect participation will have on:
• the expected quality of the decision
• the acceptance or commitment needed from associates to
implement the solution
• the amount of time available (and needed) to make the
Who Should Decide?
Level of Associate Involvement in Decision
AI AII CI CII GII
AI Manager solves problem or makes decision alone
AII Manager requests information but not alternatives
CI Manager explains problem individually but makes
CII Manager explains problem to group, gets suggestions,
makes decision alone
GII Manager explains problem to group, facilitates problem
solving, implements decision supported by the group
Adapted from Exhibit 10-4: Managerial Approaches to Associate Involvement in Decision Making 10-20
Questions asked to determine level of associate
involvement in decision making
A. Is there a quality requirement such that one solution is likely to
be more rational than another solution, or will any number of
solutions work reasonably well?
B. Do I have sufficient information to make a high-quality decision?
C. Is the problem structured (do I know the question to ask and
where to look for relevant information)?
D. Is acceptance of the decision by associates critical to effective
E. If I were to make the decision by myself, is it reasonably certain
that it would be accepted by my associates?
F. Do the associates share the organizational goals to be attained in
solving this problem?
G. Is conflict among associates likely in preferred solutions?
Adapted from Exhibit 10-5: Decision Tree Method 10-21
A B C D E F G
No 1-AI Yes 2-AI
Yes 5-AI Yes
Yes No No
Yes Yes 9-AII 8-CI
No Yes 11-CII
Adapted from Exhibit 10-5: Decision Tree Method 10-22
Vroom-Yetton Model and the
• What are your thoughts regarding the application of
the Vroom-Yetton Model to the Civil War battles
discussed in the text?
• How could you use this model to “fight” some of your
“battles” in your life?
Value of Individual vs. Group
Important considerations for judging the overall
value of group decision vs. individual decision
Nature of the Satisfaction and
Group Decision Making
Can accumulate more Take more time to reach
knowledge and facts and decisions than do individuals.
generate better alternatives.
Often display superior Social interactions may lead to
judgment when evaluating premature compromise.
Involvement in decisions leads Often dominated by one or two
to a higher level of acceptance “decision leaders.”
Can result in growth for Managers may rely too much on
members of the group. group decisions – lose their
Adapted from Exhibit 10-6: Advantages and Disadvantages of Group Decision Making 10-25
The Strategic Lens
1. You are a manager of a unit with 25 associates. You
have just been informed that you must lay off 20% of
the associates in your unit. What process will you
follow to make the decision and implement it?
2. If you made a decision that your manager told you was
important for the organization and later you learned
that you made an error in that decision, what actions
would you take? Assume that others will not notice the
error for some time.
3. You make decisions on a daily basis. Do you find it
difficult to make decisions, especially those of
importance? What can you do to improve your
decision-making abilities? 10-26