Presentation Slides

to Accompany
Organizational Behavior
10th Edition
Don Hellriegel and John W. Slocum, Jr.
Chapter 13—Making Decisions in Organizations

Prepared by
Michael K. McCuddy
Valparaiso University
 Slide 13.1
Learning Objectives for
Making Decisions in Organizations
 Explain the basic concepts for
making ethical decisions
 Describe the attributes of three
models of managerial decision
making
 Explain two methods for stimulating
organizational creativity

Chapter 13: Making Decisions in 2

 Slide 13.2
Components of the Foundation for
Making Ethical Decisions

 Ethical intensity

 Decision-making principles and

decision rules
 Affected individuals

 Benefits and costs

 Determination of rights

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 Slide 13.3
Components of Ethical Intensity

 Magnitude of consequences

 Probability of effect

 Social consensus

 Temporal immediacy

 Proximity

 Concentration of effect

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 Slide 13.4
Ethical Principles That Justify
Self-Serving Behaviors and Decisions
 Hedonist principle
 Do whatever you find to be in your own self-
interest but do nothing that is clearly illegal
 Might-equals-right principle
 Do whatever you are powerful enough to
impose without respect to socially acceptable
behaviors but do nothing that is clearly illegal

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 Slide 13.4 (continued)
Ethical Principles That Justify
Self-Serving Behaviors and Decisions

 Organization interests principle

 Act on the basis of what is good for the
organization but do nothing that is clearly
illegal

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 Slide 13.5
Ethical Principles That Focus on
Balancing Multiple Interests
 Means–end principle
 Act on the basis of whether some overall good
justifies any moral transgression but do
nothing that is clearly illegal
 Utilitarian principle
 Act on the basis of whether the harm from a
decision is outweighed by the good in it but do
nothing that is clearly illegal

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 Slide 13.5 (continued)
Ethical Principles That Focus on
Balancing Multiple Interests

 Professional standards principle

 Act on the basis of whether the decision can
be explained before a group of your peers but
do nothing that is clearly illegal

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 Slide 13.6
Ethical Principles That Consider
Affected Parties and the Public
 Disclosure principle
 Act on the basis of how the general public
would likely respond to disclosure of the
rationale and facts related to the decision but
do nothing that is clearly illegal
 Distributive justice principle
 Act on the basis of treating an individual or
group equitably rather than on arbitrarily
defined characteristics but do nothing that is
clearly illegal

Chapter 13: Making Decisions in 9

 Slide 13.6(continued)
Ethical Principles That Consider
Affected Parties and the Public

 Golden rule principle

 Act on the basis of placing yourself in the
position of someone affected by the decision
and try to determine how that person would
feel but do nothing that is clearly illegal

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 Slide 13.7
Guidelines for Integrating Ethical Decision
Making into the Organization’s Daily Life

 Top management should commit to and model ethical

behavior
 Develop a code of ethics and follow it

 Have procedures for organization members to report

unethical behavior
 Involve managers and employees in identifying and solving
ethical problems
 Include ethics in performance appraisal

 Publicize the organization’s ethical orientation

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 Slide 13.8
Explicit Assumptions of
the Rational Model

 All available information on alternatives has

been obtained
 Alternatives can be ranked according to

explicit criteria
 The alternative selected will provide the

maximum gain

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 Slide 13.9
Implicit Assumptions of
the Rational Model

 Ethical dilemmas do not exist in the decision-

making process
 The means–end principle and the utilitarian

principles will dominate the consideration of

ethical issues

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 Slide 13.10
Portion of Xerox’s Rational Decision Process
QUESTION TO WHAT’S NEEDED TO
STEP BE ANSWERED GO TO NEXT STEP

1. Identify and select problem What do we want to change? Identification of the gap;
describe “desired state”

2. Analyze problem What’s preventing us from Key cause(s) documented

reaching the “desired state”? and ranked

3. Generate potential solutions How could change be made? Solution list

4. Select and plan the solution What’s the best way to do it? Make change plan; establish
measurement criteria

5. Implement the solution Are we following the plan? Solution in place

6. Evaluate the solution How well did it work? Solution verification; deal
with continuing problems
Source: Adapted from Garvin, D. A. Building a learning organization. Harvard Business Review, July-August 1993,
78-91; Brown, J. S., and Walton, E. Reenacting the corporation: Organizational change and restructuring of Xerox
Planning Review, September/October 1993, 5-8.

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 Slide 13.11
Bounded Rationality Model

Bounded Rationality

Inadequate
Limited
Satisficing Information Decisions
Search
and Control

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 Slide 13.12
Political Model of Decision Making
 Describes decision making by individuals to
satisfy their own interests
 All aspects of the decision-making process are
merely methods to tilt decision outcomes in the
decision maker’s favor
 Decision outcomes are affected by the
distribution of power and the effectiveness of the
tactics used by participants
 Doesn’t explicitly consider ethical dilemmas but
often draws on the hedonistic principle and the
might-equals-right principle

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 Slide 13.13
Influence Strategies
 Rational persuasion
 Inspirational appeal
 Consultation
 Ingratiation
 Exchange
 Personal appeal
 Coalition
 Legitimating
 Pressure
Source: Adapted from Yukl, G., Guinan, P. J., and Sottolano, D. Influence tactics used for different
objectives with subordinates, peers, and superiors. Group & Organization Management, 1995, 20, 275;
Buchanan, D., and Badham, R. Power, Politics and Organizational Change. London: Sage, 1999, 64.

Chapter 13: Making Decisions in 17

 Slide 13.14
Barriers to Creativity and Innovation
 Perceptual blocks
 Failure to use all the senses in observing
 Failure to investigate the obvious
 Difficulty in seeing remote relationships
 Failure to distinguish between cause and effect

 Cultural blocks
 Desire to conform to established norms
 Overemphasis on competition or conflict avoidance
 Drive to be practical and to economize
 Disbelief in the value of open-ended exploration

Chapter 13: Making Decisions in 18

 Slide 13.14 (continued)
Barriers to Creativity and Innovation
 Emotional blocks
 Fear of making a mistake
 Fear and distrust of others
 Latching on to the first idea

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 Slide 13.15
Characteristics of Lateral Versus
Vertical Thinking
LATERAL THINKING VERTICAL THINKING
 Finds new ways to view things;  Tries to find absolutes; concerned
concerned with change and with stability.
movement.  Seeks justification for each step;
tries to find what is “right.”
 Looks for what is different rather
than “right” or “wrong.”  Analyzes ideas for faults.
 Analyzes ideas to generate new
 Seeks continuity.
ideas.  Selectively chooses information
to consider; rejects irrelevant
 Uses free association thinking. information.
 Welcomes chance intrusions of  Progresses using established
information; considers the patterns; considers the obvious.
irrelevant.
 Progresses by avoiding the
obvious.
Source: Based on de Bono, E. Lateral Thinking: Creativity Step by Step. New York:
Harper & Row, 1970; de Bono, E. Six Thinking Hats. Boston: Little, Brown, 1985.

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 Slide 13.16
Useful Lateral Thinking Techniques
 Reversal technique
 Examining a problem and turning it completely around,
inside out, or upside down
 Analogy technique
 Developing a statement about similarities between
objects, persons, and situations
 Cross-fertilization technique
 Asking experts from other fields to examine the problem
and suggest solutions from their own areas of expertise

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 Slide 13.17
Decision Making with a Devil’s Advocate

A devil’s advocate A critique is

A proposed course
is assigned to presented to key
of action
criticize the decision makers.
is generated.
proposal.

Repeat process, if needed.

The decision to Any additional

The decision adopt, modify, or information
is monitored. discontinue the relevant to
proposed course of the issues is
action is taken. generated.

Source: Adapted from Cosier, R. A., and Schrivenk, C. R. Agreement and thinking alike:
Ingredients for poor decisions. Academy of Management, February 1991, 71.

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