Unformatted text preview: Outline of Today’s Class
Outline of Today Wrapup Control AND Commitment
OB as competitive advantage, why is OB important
Illustrative example of OB problems potentially derailing a product launch: Terra
Cog Case Human and Social Capital
Human and Social Capital Human Capital the productive potential of an individual’s knowledge and actions Social Capital productive potential resulting from strong relationships, goodwill, trust, and cooperative effort The Strategic Importance and The Strategic Importance and Dimensions of Human and Social Capital
People, individually and collectively, are the key to organizational success Individual Human
Capital Organizational Learning
(Shared Knowledge) Social
Capital TerraCog Case Study
TerraCog Case Study How have departmental and individual objectives led to the current situation?
What is the current decisionmaking process?
What are the strategic and organizational implications of each of the company’s options?
What should Emma Richardson do? A Control Theory Model: Control and A Control Theory Model: Control and Commitment? Feed Up Principles
Expectations Feed Down Organizational Goals
Project Discrepant? Actual
Change In teams
In teams Identify and discuss an organizational situation (from public or personal knowledge) where a faulty decision or error occurred wherein:
The decision was attributed to organizational/people processes
and/or Could have been avoided with better processes The Traditional, Analytical Model of The Traditional, Analytical Model of Decision Making
1. Identify the Problem
(e.g., insufficient funds to
meet payroll obligations)
2. Define Objectives 8. Follow up
(e.g., do I now have
sufficient funds?) (e.g., increase cash flow) 3. Make a predecision 7. Implement choice (e.g., decide to solve
this problem alone) (e.g., raise prices slightly and
sell excess inventory)
6. Make a choice
(e.g., decide to raise prices
slightly and sell excess
inventory) 4. Generate alternatives
(e.g., raise prices, lay off
equipment, etc.) 5. Evaluate alternatives
(e.g., higher prices may lower
sales, laying off workers will
slow production) The Administrative DecisionMaking Model
Negotiating goals Monitoring problems & prospects
to determine routineness
Routine problems Nonroutine problems Initiate
performance programs Expert evaluate
alternatives sequentially Check outcome against minimum acceptability
standard (satisfying) First alternative that meets minimum acceptable standard chosen
Check outcome against minimum
acceptable standard Factors That Prevent Rationality
Factors That Prevent Rationality
1. Lack of Consensus on goals
on ways to achieve goals 2. Uncertainty Causal ambiguity: What are means>ends relationships?
what are expected values? (uncertainty vs. risk or certainty) 3. “Noisy” Environments poor measures
Information overload 4. Emotion Types of Decisions
Types of Decisions Programmed Highly routine decisions made according to preestablished organizational routines and procedures. Nonprogrammed Decisions made about a highly novel problem for which there is no prescribed course of action. Types of Decisions: Uncertainty
Types of Decisions: Uncertainty Certainty CDs Risk
Stocks When Is the Super Lotto When Is the Super Lotto a “FAIR BET”????? Fair Bet: expected amount won is equal to cost/investment
Bad Bet: expected value is less
Good Bet: expected value is greater
Odds of winning are (about) 11,000,000 to 1 Here are your choices:
d. 32,000,000 Explain your choice ___________________ Types of Decisions
Types of Decisions TopDown The practice of vesting decision
making power in the hands of superiors as opposed to lower level employees. Empowered The practice of vesting power for making decisions in the hands of employees themselves (Job enrichment) Types of Decisions
Types of Decisions
1. Both quality & acceptance are important setting priorities for the School of Management 2. Quality is important, but acceptance is not
pricing policy purchasing technical problems 3. Acceptance is important, but quality is not issues of “fairness”, e.g., who does overtime, who does “crummy” job, who gets new computer equipment, etc. Escalation of Commitment: An Escalation of Commitment: An Overview
Past Time Decision
Decision Do X Do X Do X Do X Do X Do X
Do X Do X Do X Do X Do X Do X Outcome
Present Negative Negative Negative Negative Negative Negative
Negative Negative Negative Negative Negative Negative Do X Again?
Do X Again? Yes No
Yes No Escalate commitment;
throw good money after
throw good money after
bad in order to justify
bad in order to justify
previously made decisions
previously made decisions Conditions under
•• Limited resources
ecisions Give up; cut
Give up; cut
losses and run
losses and run Structured DecisionMaking Structured DecisionMaking Techniques Nominal Group Technique (NGT) Delphi technique Stepladder technique The Nominal Group Technique: An Overview
The Nominal Group Technique: An Overview
1. A small group gathers around a table and
receives instructions; problem is identified. 2. Participants privately write down
ideas about problem solving. 3. Each participant’s ideas are presented, one
at a time, and are written on a chart until all
ideas are expressed. 4. Each idea is discussed, clarified, and
evaluated by group members. 5. Participants privately rank the ideas
in order of their preference. 6. The highest-ranking idea is taken as
the group’s decision Delphi Technique
1. Leader identifies a problem and develops a questionnaire.
2. Participants (experts) are selected.
3. Questionnaires completed & returned to leader.
4. Results compiled and sent to all participants.
5. Participants comment on each other’s ideas and propose final recommendations.
6. Leader looks for consensus & accepts the group’s choice. The Stepladder Technique: A Summary
The Stepladder Technique: A Summary
Step 4 Step 3 Step 2 Step 1 Final group decision made by
Person A, Person B, Person C, and Person D Tentative group decision made by Individual decision by Person A, Person B, and Person C Person D Tentative group decision made by Individual decision by Person A and Person B Person C Individual decision by Individual decision by Person A Person B Follow these 12 steps to more Follow these 12 steps to more efficient and effective meetings: Prepare a meeting agenda.
Distribute the agenda in advance.
Consult with participants before the meeting.
Get participants to go over the agenda.
Establish specific time parameters.
Maintain focused discussion.
Encourage and support participation of all members.
Maintain a balanced style.
Encourage the clash of ideas.
Discourage the clash of personalities.
Be an effective listener.
Bring proper closure. Take Homes This Week
Take Homes This Week Think systematically, problemanalysis(cause)solution
It Depends (on what)
A commitment (freedom) strategy is popular and gaining strength, but control and commitment can Treat people with dignity and respect, an asset, not a means of production; related, people ARE a main source of sustained competitive advantage.
There are degrees of “going along”—be a pig.
Control may be necessary, but may also inhibit creativity/innovation, be aware of unintended consequences ...
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