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© Copyright RMIT
2006
1
“Decisions, Decisions ….”
John Toohey PhD
Professor of Organisational Behaviour and
Head, Graduate School of Business
Graduate School of Business
© Copyright RMIT
2006
2
Why is Decision Making important?
“Decisions are the coin of the realm in
business”
Rogers, P., and Blenko, M. Who has the D?; How Clear
Decision Roles Enhance Organisational Performance
© Copyright RMIT
2006
3
1. The context of business decision making
2. The individual in decision making
3. Effective decision making
4. Ineffective decision making
5. How does this apply to me?
What will we cover?
© Copyright RMIT
2006
4
Styles of Management Decision Making
Identify the decision making style …….
© Copyright RMIT
2006
5
1. The context of business decision making
So what will we cover?
© Copyright RMIT
2006
6
“.. above all else, leaders are made or broken by the
quality of their decisions”
(Garvin and Roberto, Harvard Business Review, September, 2001, p
108).
© Copyright RMIT
2006
7
“… a discrete choice at a single point in time …”
INFORMATION OPTIONS EVALUATION OUTCOME
(Garvin and Roberto, pp 108– 116)
An “event” view of Decision Making
© Copyright RMIT
2006
8
“ a process … over months, weeks or years… power, politics,
personal nuances and institutional history”.
EXTENDED
TIME FRAME “POLITICAL” ITERATIONS
SUPPORT FOR
OUTCOME
(Garvin and Roberto, pp 108– 116)
A “process” view of Decision Making
© Copyright RMIT
2006
9
The combination “improves the odds..”
• Multiple alternatives
• Assumption testing
• Well-defined criteria
• Dissent and debate
• Perceived fairness
Superior Decision Making is “difficult”
© Copyright RMIT
2006
10
The RAPID response .. (Not “lock-step” - Role based)
• R – Recommend (proposal with data)
• A – Agree (on the actual proposal)
• P – Perform (clarity of execution - roles)
• I – Input (who is consulted?)
• D – Decide (person responsible - final decision)
(Rogers and Blenko, 2005)
A Decision Making Primer
© Copyright RMIT
2006
11
Naturalistic Decision Making (NDR)
“.. The study of how people use experience to make decisions in
field settings.”
(Flin, R, et.al, 2002, Decision making Under Stress, Ashgate)
Building a model based on what has happened before:
• Human factors engineering
• Air crew training / Military
Models of Decision Making
© Copyright RMIT
2006
12
Technology-based Decision Making
“According to this argument, technology will replace much of
the calculation and analysis on which decision making is
based.”
(Hilmer, F and Donaldson, L 1996, Management Redeemed,
Free Press)
• NHS (National Health Service)
• Student data base management
Models of Decision Making
© Copyright RMIT
2006
13
Analytics based Decision Making
“Some companies have built their business on their
ability to collect, analyse and act on data …”
• Analytics is central to strategy
• Multiple initiatives, complex data, statistical analysis
• Managed at enterprise level (not departmental)
(Davenport, T., Competing on Analytics, HBR, Jan 06)
Models of Decision Making
© Copyright RMIT
2006
14
Cognitive Dissonance
(1950’s Leon Festinger, Stanford University)
• Psychological discomfort caused by inconsistency among a
person’s beliefs, attitudes and / or actions
• Discrediting logical information to reach more comfortable
conclusions
• Change the weak cognition to conform to the stronger one
Models of Decision Making
© Copyright RMIT
2006
15
2. The individual in decision making
So what will we cover?
© Copyright RMIT
2006
16
Stimulus and Response
Flight and Fight
Self-protect - repress
Nature – “hard wiring” – 50% to 80%?
Nurture – learned behaviours
On being human..
© Copyright RMIT
2006
17
“Stressors”
Individual
Characteristics
Symptoms of Ill
Health Disease
A Medical Model of Stress Injury
PAIN
(Reported by
Patient)
LESION
(Observed by
Physician)
MEDICAL-PSYCHIATRIC JUDGEMENT
(Rendered by Physician)
1. + + Real, organic pain. Successful (somatic) diagnosis.
Professionally validated pain.
2. + _ Imaginary, psychogenic pain. Unsuccessful (somatic)
diagnosis. Malingering, hysterical, hypochondriasis,
somatic delusions etc.
Professionally invalidated pain (the patient should not
have pain).
3. _ + Injury or illness without pain.
Inattention to pain (accident, war).
Denial of pain, unreported pain.
Psychosis, schizophrenia (self mutilation).
Professionally invalidated no-pain (the patient should
have pain).
4. _ _ No pain, no lesion.
Not of medical or psychiatric interest.
Pain, Lesion, Diagnosis
Szasz, T 1956, Pain and Pleasure, Harper

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Путешествие в мир профессий

  • 1. © Copyright RMIT 2006 1 “Decisions, Decisions ….” John Toohey PhD Professor of Organisational Behaviour and Head, Graduate School of Business Graduate School of Business
  • 2. © Copyright RMIT 2006 2 Why is Decision Making important? “Decisions are the coin of the realm in business” Rogers, P., and Blenko, M. Who has the D?; How Clear Decision Roles Enhance Organisational Performance
  • 3. © Copyright RMIT 2006 3 1. The context of business decision making 2. The individual in decision making 3. Effective decision making 4. Ineffective decision making 5. How does this apply to me? What will we cover?
  • 4. © Copyright RMIT 2006 4 Styles of Management Decision Making Identify the decision making style …….
  • 5. © Copyright RMIT 2006 5 1. The context of business decision making So what will we cover?
  • 6. © Copyright RMIT 2006 6 “.. above all else, leaders are made or broken by the quality of their decisions” (Garvin and Roberto, Harvard Business Review, September, 2001, p 108).
  • 7. © Copyright RMIT 2006 7 “… a discrete choice at a single point in time …” INFORMATION OPTIONS EVALUATION OUTCOME (Garvin and Roberto, pp 108– 116) An “event” view of Decision Making
  • 8. © Copyright RMIT 2006 8 “ a process … over months, weeks or years… power, politics, personal nuances and institutional history”. EXTENDED TIME FRAME “POLITICAL” ITERATIONS SUPPORT FOR OUTCOME (Garvin and Roberto, pp 108– 116) A “process” view of Decision Making
  • 9. © Copyright RMIT 2006 9 The combination “improves the odds..” • Multiple alternatives • Assumption testing • Well-defined criteria • Dissent and debate • Perceived fairness Superior Decision Making is “difficult”
  • 10. © Copyright RMIT 2006 10 The RAPID response .. (Not “lock-step” - Role based) • R – Recommend (proposal with data) • A – Agree (on the actual proposal) • P – Perform (clarity of execution - roles) • I – Input (who is consulted?) • D – Decide (person responsible - final decision) (Rogers and Blenko, 2005) A Decision Making Primer
  • 11. © Copyright RMIT 2006 11 Naturalistic Decision Making (NDR) “.. The study of how people use experience to make decisions in field settings.” (Flin, R, et.al, 2002, Decision making Under Stress, Ashgate) Building a model based on what has happened before: • Human factors engineering • Air crew training / Military Models of Decision Making
  • 12. © Copyright RMIT 2006 12 Technology-based Decision Making “According to this argument, technology will replace much of the calculation and analysis on which decision making is based.” (Hilmer, F and Donaldson, L 1996, Management Redeemed, Free Press) • NHS (National Health Service) • Student data base management Models of Decision Making
  • 13. © Copyright RMIT 2006 13 Analytics based Decision Making “Some companies have built their business on their ability to collect, analyse and act on data …” • Analytics is central to strategy • Multiple initiatives, complex data, statistical analysis • Managed at enterprise level (not departmental) (Davenport, T., Competing on Analytics, HBR, Jan 06) Models of Decision Making
  • 14. © Copyright RMIT 2006 14 Cognitive Dissonance (1950’s Leon Festinger, Stanford University) • Psychological discomfort caused by inconsistency among a person’s beliefs, attitudes and / or actions • Discrediting logical information to reach more comfortable conclusions • Change the weak cognition to conform to the stronger one Models of Decision Making
  • 15. © Copyright RMIT 2006 15 2. The individual in decision making So what will we cover?
  • 16. © Copyright RMIT 2006 16 Stimulus and Response Flight and Fight Self-protect - repress Nature – “hard wiring” – 50% to 80%? Nurture – learned behaviours On being human..
  • 17. © Copyright RMIT 2006 17 “Stressors” Individual Characteristics Symptoms of Ill Health Disease A Medical Model of Stress Injury
  • 18. PAIN (Reported by Patient) LESION (Observed by Physician) MEDICAL-PSYCHIATRIC JUDGEMENT (Rendered by Physician) 1. + + Real, organic pain. Successful (somatic) diagnosis. Professionally validated pain. 2. + _ Imaginary, psychogenic pain. Unsuccessful (somatic) diagnosis. Malingering, hysterical, hypochondriasis, somatic delusions etc. Professionally invalidated pain (the patient should not have pain). 3. _ + Injury or illness without pain. Inattention to pain (accident, war). Denial of pain, unreported pain. Psychosis, schizophrenia (self mutilation). Professionally invalidated no-pain (the patient should have pain). 4. _ _ No pain, no lesion. Not of medical or psychiatric interest. Pain, Lesion, Diagnosis Szasz, T 1956, Pain and Pleasure, Harper
  • 19. © Copyright RMIT 2006 19 1. Emotions Ubel, P.A., Emotions, Decisions and the Limits of Rationality. Medical Decision Making, Vol. 25, No. 1. 95-96 (2005) 2. Ethical and Moral Constructs Aquinas, Thomas. Summa Theologica, circa 1270 3. Classical Conditioning e.g. stimulus/response training (military) 4. Knowledge, previous experience http://octopus.gma.org/space1/titanic.html Decision making is affected by…
  • 20. © Copyright RMIT 2006 20 1. The Anchoring Trap disproportional weight to first information 2. The Status Quo Trap bias toward maintaining current situation 3. The Sunk Cost Trap perpetuating the mistakes of the past 4. The Confirming Evidence Trap seek supporting information only Hidden traps in decision making …
  • 21. © Copyright RMIT 2006 21 5. The Framing Trap misstating a problem – undermining entire D-M process 6. The Over-confidence Trap overestimating the accuracy of forecasts 7. The Prudence Trap overcautious of estimates around uncertain events 8. The Recallability Trap giving undue weight to recent, dramatic events Hidden traps (continued …
  • 22. © Copyright RMIT 2006 22 3. Effective decision making So what will we cover?
  • 23. © Copyright RMIT 2006 23 Literature / Research Review … • Confusing decision with desire • Selective assessment of evidence • Confusing planning with decision making • Confusing process with outcome • Misunderstanding or misinterpreting data • Unsuitable or dysfunctional culture Effective (Functional) Decision Making
  • 24. © Copyright RMIT 2006 24 Advocacy vs. Inquiry Effective (Functional) Decision Making
  • 25. © Copyright RMIT 2006 25 Advocacy • Limit the parameters • Limit the options • Exclude non-supportive data • Limit the information / variables to consider • Limit time frames • Take a position and “defend” not “test” Effective (Functional) Decision Making
  • 26. © Copyright RMIT 2006 26 Inquiry • Participate as a “healthy sceptic” • Be disinterested and objective • Include and consider all positions (“left field”) • Evaluate “WCS” (worst case scenarios) • Critique process and logic • Abandon “protocol” Effective (Functional) Decision Making
  • 27. © Copyright RMIT 2006 27 4. Ineffective decision making So what will we cover?
  • 28. © Copyright RMIT 2006 28 .. As easy as A, B, C A = Activating Event B = Beliefs C = Consequences Ineffective (Dysfunctional) Decision Making
  • 29. © Copyright RMIT 2006 29 Cognitive Behaviour Therapy (Rational Emotive Behaviour Therapy) Dr Albert Ellis Albert Ellis Institute – New York http://www.rebt.org/ Ineffective (Dysfunctional) Decision Making
  • 30. © Copyright RMIT 2006 30 A = Activating Event Something happened – unpleasant, upsetting B = Beliefs Perception and interpretation of this event C = Consequences Emotional and behavioural outcomes Ineffective (Dysfunctional) Decision Making
  • 31. © Copyright RMIT 2006 31 A = Activating Event Something unpleasant happened – They criticized my work B = Beliefs How I perceive / interpret the event – It must be because I am an unworthy, incompetent etc. person C = Consequences My emotional and behavioural result - I feel angry, I feel worthless Ineffective (Dysfunctional) Decision Making
  • 32. © Copyright RMIT 2006 32 5. How does this apply to me? So what will we cover?
  • 33. © Copyright RMIT 2006 33 “Advocacy” or “Inquiry” • How much a “healthy sceptic”? • Disinterested, objective? • Able to consider variable positions? (“left field”?) • What are your “WCS” (worst case scenarios)? • Are process and logic sound? • Blinded by rank? • How is my “A, B, C”? How does this apply to me? How do I make decisions? – Self Awareness