CHAPTER 9

 

DECISION MAKING AND EMPLOYEE INVOLVEMENT

 OUTLINE  I.                   A GENERAL MODEL OF DECISION MAKING  A.    Decision-making defined. 1.   A conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs.2.      Decisions occur in response to problems or opportunities.3.      A problem is a deviation between the current and desired situation.4.      An opportunity is a deviation between current expectations and the recognition of a potentially better situation is neither planned nor expected. B.     Steps in decision making. 1.      Problem identification.2.      Determine the most appropriate decision style.a.       Programmed decision follows standard operating procedures.b.      Nonprogrammed decision requires decision-makers to search for alternatives and possible develop a unique solution.3.      Develop a list of possible solutions.4.      Choosing the best alternative.5.      Decision-makers must rally employees and mobilize sufficient resources to translate their decisions into action.6.      Evaluating whether the gap has narrowed between "what is" and "what ought to be."  II.                IDENTIFYING PROBLEMS AND OPPORTUNITIES A.    Perceptual biases are perceptions, values, and assumptions. B.     Poor diagnostic skills  1.      Quickly defining problems based on stereotypes and unsubstantiated information.2.      Failure to see problems or opportunities due to insufficient time or information.3.      Organizations are complex systems where decision-makers may have trouble identifying where the main causes of problems occur.4.      Defining problems in terms of their solutions. 

 

C.     Identifying problems and opportunities more effectively by: 1.      Recognizing how mental models restrict a person's understanding of the world, decision-makers learn to openly consider other perspectives of reality.2.      Create early warning systems.3.      Identify opportunities and problems through computer programs in data mining.  III.             EVALUATING AND CHOOSING SOLUTIONS A.    Problems with goals. 1.      Goals are often ambiguous or in conflict with each other.2.      Organization members disagree over the relative importance of these goals. B.     Problems with information processing when decision makers: 1.   Not aware of every piece of information because the selective attention process screens out much of it.2.      Can't possibly think through all of the alternatives and outcomes, so they engage in a limited search for alternatives.3.      Look at alternatives sequentially. C.     Problems with maximization 1.      Satisficing defined is accepting the alternative that is acceptable or "good enough". D.    Choosing solutions more effectively through three strategies: 1.      Systematic evaluationa.       Identifying the relevant factors against which the applicants are judged.b.      Measuring applicants on each factor.c.       Weighting the importance of each factor.d.      Computing an overall score for each applicant based on the weights and ratings for each factor. 2.      Decision support systems.3.      Scenario planning. 

 

E.     Making choices with intuition 1.      Intuition defined is the ability to know when a problem or opportunity exists and select the best course of action without conscious reasoning.2.      Intuition is valuable when the decision-maker has extensive knowledge of the business but lacks detailed knowledge of a new situation.  IV.             EVALUATING DECISION OUTCOMES A.    Postdecisional justification results from the need to maintain a positive self-identity. B.     Escalation of commitment is the tendency to repeat an apparently bad decision or allocate more resources to a failing course of action. C.     Causes of escalating commitment: 1.      Self-justification.2.      Gambler's fallacy.3.      Perceptual blinders.4.      Closing costs. D.    Evaluating decision outcomes more effectively. 1.      Separate decision choosers from decision evaluators.2.      Publicly establish a preset level at which the decision is abandoned or re-evaluated.3.      Involve several people.  V.                EMPLOYEE INVOLVEMENT A.    Employee involvement refers to the degree that employees share information, knowledge, rewards, and power throughout the organization. B.     Forms of employee involvement: 1.      Formal participation activities such as nursing teams.2.      Informal participation includes casual events, such as approaching a supervisor about an idea or suggestion.3.      Voluntary such as a committee to help design the company's new office.4.      Statutory is widespread in Europe where countries have codetermination laws.a.       Codetermination requires employee involvement at both the work site and corporate levels.C.     Levels of employee involvement. 1.      The lowest level is selective consultation, in which employees are individually asked for specific information or opinions about one or two aspects of the decision.2.      A moderate level of employee involvement occurs when employees are more fully consulted either individually or in a group.a.       Gainsharing involves a moderate level of employee involvement because employees reduce costs through recommendations to senior executives.b.      Open book management encourages employees to think of financial performance as a game that they can play and win.3.      The highest level of involvement occurs when employees have complete power over the decision process.  VI.             SELF-DIRECTED WORK TEAMS (SDWTs) A.    Sociotechnical systems and SDWTs  1.      Several conditions for successful SDWTs:a.       Primary work unit suggests that SDWTs work best in any work team that makes a product, provides a service, or otherwise completes an entire work process.b.      Semi-autonomous work groups are a team based structure in whichemployees in the primary work unit have sufficient autonomy to manage the work process.c.       Controlling key variances allows work teams to control the quantity and quality of output in the work process.d.      Joint optimization is a balance struck between the social and technical systems to maximize the operation's effectiveness.  VII.          BENEFITS OF EMPLOYEE INVOLVEMENT A.    Decision quality may lead to a more accurate definition of the problem, employee involvement can potentially improve the number and quality of solutions generated to organizational problems and involving employees in decisions increases the likelihood that the best option will be selected. B.     Decision commitment creates psychological ownership of the decision. C.     Employee satisfaction, empowerment and development. 

 

VIII.       CHOOSING THE OPTIMAL LEVEL OF EMPLOYEE INVOLVEMENT A.    Four key decision issues are: 1.      Decision quality2.      Decision commitment3.      Risk of conflict4.      Decision structure  IX.             OVERCOMING CHALLENGES TO EMPLOYEE INVOLVEMENT A.    Cultural differences make employee involvement more compatible with some cultural values than with others. B.     Management resistance - losing power when employees gain power through participation. C.     Employee and labor union resistance.