Decision Making

							                                             ™




ProThink
  “Helping you make the right decisions!”®
Decision Making
 Aaron Brown    Brian Chang
 Steve Byrne    Sarah Coble
 Tiffany Chen   Chris Conway
                 STATISTICS
Research, conducted by YouGov polled 3471 adults online,
  highlights the negative impact of poor decision-making or
     poor communication about decision-making, has on
                         employees.

 Of those that thought their employer was a poor
  decision-maker, 61 percent reported feeling frustrated
  and losing respect for the manager.
 Some 83 percent felt it damaged morale
 51 percent said it reduced productivity in the workplace
 Nearly one in five, or 19 per cent, thought it led to
  competitors gaining an advantage
                   Overview
 What is decision making and how it works
 Causes and effects of poor decision-making
     Concept of Groupthink
     Show how decision-making can affect a company
      in positive or negative direction
 Solutions   to those causes
                  Decision Making
 In organizations, or in general, decision making
  is considered as an outcome of cognitive
  processes that lead to the selection of a course
  of action among several alternatives.
 Decisions can be made off of outside influences,
  advice, and opinions

       Decision-making should be looked at as a process and not
        something that can be done quickly and effectively on a regular
        basis.
Steps to Formulating a Decision

   Step One:
       Formulation
   Step Two
       Concept Development
   Step Three
       Detailing
   Step Four
       Evaluation
   Step Five
       Implementation
      Poor Decision Making
 Problemscan arise with poor decision-
 making and the misuses and
 misunderstandings of the decision-making
 processes
Forms of Bad Decision Making
   1. Groupthink
     A mode of thinking that people engage in when they
      are deeply involved in a cohesive in-group, when the
      members’ striving for unanimity override their
      motivation to realistically appraise alternative courses
      of action
    Also meaning…
        In a group there is more concern with appearing

          cohesive and maintaining group relations, or a
         tendency to seek concurrence, than there is with
                  making a high quality decision.
     Symptoms of Groupthink
 Collective               Self-censorship
  rationalizations         An illusion of
 Direct pressure on        invulnerability
  dissidents to conform    An illusion of
 The emergence of          unanimity
  self-appointed mind      An illusion of morality
  guards
 Biased perceptions or
  stereotyping of out-
  group members
      Bad Decision Making Cont.
 2.According to Whyte, Hirokawa and
  Scheerhorn …
      Bad decision-making could be attributed to
       the “tendency of groups make more extreme
       decisions than individuals and the tendency of
       groups to frame some decisions in negative
       ways”
   Bad Decision Making Cont.
 3.Emotions and a groups’ manner of
  handling conflict can also play a role in the
  quality of decisions.
Effects of poor Decision-Making
 Negatively   impacts:
     Productivity
     Efficiency
     Turnover
     Profit
     Employee Moral
     Communication
     Brand Image
         Effects of the Bay of Pigs
                  Invasion
   A number of poor decisions were made in the Bay of Pigs
    Invasion, which included changing locations, cancelling a
    follow- up air strike against Cuban forces, and other internal
    problems within the CIA and administration

   The effects of the failed invasion
        Brought embarrassment to the Kennedy Administration
        Did not overthrow Castro and just made him more popular for
         standing up against the U.S.
        Casualties: 4 U.S. pilots and 68 Cuban exiles
         The rest of the 1,209 Cuban exiles were imprisoned and some
         were executed.
        U.S. negotiated for the return of the prisoners for $53 million in
         food and medicine.
        Increased tensions with Cuba culminating into the Cuban missile
         crisis.
                          Apple iPhone
   Apple lowered the price of the iPhone by $200 after only 66 days.

        This upset many early iPhone buyers, believing that Apple cut the price
         too quickly by too much.

        This created bad feelings among a loyal iPhone customer base.

        Other critics say that the iPhone price cut also had the effect of
         cannibalizing its own business. Lowering the demand for its other
         products, in place of the iPhone or iTouch.

   Apple recognized that they might of made a mistake and did give out
    $100 refunds and credit to early buyers, which helped a little.
  Effects of Poor Decision-Making
               Cont.
 BrandLoyalty, don’t loose your returning
 customers.
     Coca-Cola Brand
      • Tried introducing “New Coke” after conducting
        research and a blind taste test study.
      • They failed to see the brand loyalty in their
        customers which cost them millions.
            Research costs
            Cost of producing the product
            Lost customers
                Effects of
        Poor Decision-Making Cont.
   Time Warner Cable/AOL merger
       Time Warner
         • Lawsuits amounting to over $3 billion
                 Ex-employees
                 Stock holders
         • Stock Value plummeted 26% from 2000 to 2008.
       AOL
         • In 2002 AOL lost more than 1 million customers
         • The Title “AOL” was removed from AOL Time Warner, which now
           reads Time Warner Cable.
       Upper management
         • Both AOL and Time Warner went through changes in their upper
           management due to the poor decision-making that occurred with the
           merger. Prior Chief executives from both companies removed
           themselves for the “better of the company”.
          Decision-Making Across
                 Cultures
   The need to identify
    the type of culture.

   Who is being
    affected?

   What is the goal?
       Persuasion
       Decision
     Anxiety/Uncertainty Management
                 Theory
   Causes:                         Consequences:
       Fear of the unfamiliar          Can increase
       Fear of the unknown              ethnocentrism
       Vulnerability                   Intensify negative
       Perceived threats                stereotypes
        between ingroup and             Lead to vicious conflict
        outgroup circles.                styles
                                        Ultimately leading to
                                         poor decision making
            AUM Theory cont.
We experience anxiety and
uncertainty when we encounter
someone from another culture
   Anxiety: emotion
   Uncertainty: cognitive

If trying to persuade to make
decision it is important to
reduce anxiety and
   uncertainty.
            AUM Theory cont.
 There are misunderstandings in
 intercultural communication for a couple
 reasons.
     Our frame of reference
     Clashes in verbal and nonverbal behaviors
 47axioms that cover relationships on
 seven factors
     # 33: An increase in our respect for strangers
      will produce a decrease in our anxiety.
          Nonverbal Behaviors
 Extremely beneficial when trying to
  persuade to make a decision.
 Know the cultural taboos when doing
  business abroad.
     The A-OK sign
     Bottom of your foot in China.
 Remove Ethnocentric Lenses
 Take into account other cultures affected
 by a decision.

 Dominant   culture is not the “best”.

 Demonstrate   a mutual respect for all
 cultures.
Avoiding Hidden Mental
        Models
   Group dynamics awareness exercises
        Six de Bono Hats
   Pre-established decision making strategies
      Keeping the big picture in view as projects progress
      Avoid “good - at the time” decisions which hurt end results

      Organize group structure to minimize groupthink
             Avoiding Groupthink
       Appoint a devil’s advocate
       Encourage independent critical evaluation of
        group decisions
       Group leader should stay neutral initially
       Divide into independent subgroups
         Particularly when members split on a decision
       Seek outside advice / bring in new members
       Collect anonymous critique / suggestions
         Intuitive Decision Making
   Defined as
       Creative thinking, right-brain thinking, insight,
        intuition, or gut reaction
   Option Generation
       Ideally, producing as many alternatives as possible;
        discarding none at first
         • Brainstorming / Mind storming
   Subconscious tapping
       Mediation/Relaxation before or after addressing
        problem
    Rational Decision Making Process
    Identify the roles of group members
    Scope the range of variables for the problem
    Determine the objectives
    Propose measurable criteria to evaluate how well the objectives
     are met
    Develop as wide/varied a range of alternatives as possible
    Analyze how well each alternative meets each objective
    Explain the expected result of each alternative for every objective
     to the team leaders
    The team leaders choose an option
    The chosen alternative is turned over for implementation,
     evaluation, and feedback