© 2005 prentice hall inc. all rights reserved.5–1 decision making and stress mgmt anubha

© 2005 Prentice Hall Inc. All rights reserved. 5–1

DECISION MAKING AND STRESS MGMTDECISION MAKING AND STRESS MGMT

AnubhaAnubha


Phases of DMPhases of DM

Identification Phase – identify problem– Recognize and Diagnose

Development phase – Solution– Search and design

Selection phase – Choice of solution– Judgment, Analysis & authorisation


Types of decisionTypes of decision

Basic & Routine (Basic decision that are taken, generally only once and have a long lasting impact on the working of an org whereas routine are day to day basis and don’t have a major impact )

Personal & Organizational (Personal decision cannot be delegated and org often, if not always be delegated)

Program and non programmed ( Decision are routine and repetitive decision that are normally handled by bureaucratic procedure whereas non programmed decision made by individual using the info available and their own ability to judge the situation)


Mechanistic Decision – the decision maker is sure of alternative and outcome of each alternative

Analytical Decision – decision taken where a large alternatives can be generated since a lot of information is available and outcome of each alternative can be calculated.

Judgment decision – A limited no. of alternatives are available to solve the problem and outcome of decision are also unknown

Adaptive Decision - a large no of alternatives are available and their outcome is not known


Techniques used in steps of DMTechniques used in steps of DM

Brainstorming Synectics Delphi Technique


Identify Problem

The Decision-Making Process

Select Alternative

ImplementAlternative

EvaluateResults

1

Develop Alternatives

AnalyzeAlternatives

DevelopDecisionCriteria

Allocate Weights to

Criteria

2 3

4 5

6

7

8


Step 2: Decision Criteria

Factors that are relevant in making the decision

Price Interior comfort Durability Repair record Performance Handling


Determining the relative priority

of each of the criteria

Step 3: Allocating Weights


Problem: To purchase a new car

Criterion Weight

Price 10

Interior comfort 8

Durability 5

Repair record 5

Performance 3

Handling 1


Assessing the value of each

alternative by making a value

judgment of the feature

Step 5: Analyzing Alternatives


Concluding Steps in Making a DecisionConcluding Steps in Making a Decision

Step 6: Select the “best”

Step 7: Implement decision

Step 8: Evaluate decision


Assumptions Of RationalityAssumptions Of Rationality

RationalDecisionMaking

Problem isclear and

unambiguous

Single, well-defined goal

is to be achievedAll alternatives

and consequences

are known

Preferencesare clear

Preferencesare constantand stable

No time or costconstraints exist

Final choicewill maximize

payoff

© Prentice Hall, 2002Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

FOM 4.12


Creativity and Decision MakingCreativity and Decision Making

Creativity is the ability to produce novel and useful ideas

Important to decision making as it allows the decision-maker to “see” problems that others can’t

It helps identify more viable alternatives


Unleashing Creative PotentialUnleashing Creative Potential

“Thinking out of the box” Using the right side of your brain Three-component model of creativity

– Expertise– Creative-thinking skills– Intrinsic task motivation


Bounded Rationality

Uncertainty Risk Satisfying Focusing on highly visible choices


Errors in Decision-Making ProcessErrors in Decision-Making Process

Heuristics– Availability– Representative

Escalation of commitment


Well-Structured vs. Ill-Structured Problems

Straightforward Familiar Easily-defined

New or unusual Ambiguous information Incomplete information


Categories of DecisionsCategories of Decisions

Programmed Non-programmed


Procedure

Rule

Policy

Programmed DecisionProgrammed Decision


ProgrammedDecisions

Non-programmedDecisions

Relationship of Problems, Decisions, and Level

Type ofProblem

Level

Ill-Structured

Well-Structured

Top

Lower


Decision-making and TechnologyDecision-making and Technology

Information technology can help support decision-making

Types of software include– Expert systems– Neural networks– Groupware


Analytical

BehaviouralDirective

Conceptual

Decision-Making Styles

Rational Intuitive

Way of Thinking

Low

HighT

ole

ran

ce f

or

Am

big

uit

y

Source: S. P. Robbins, Supervision Today (Upper Saddle River, NJ: Prentice Hall, 1995), page 111.


Advantages of Group Decision-Making

More complete information

Diversity of experience

Generation of more alternatives

Solutions more likely to be accepted by those concerned


Disadvantages of Group Decision-Making

Time-consuming

Domination by a few

Pressure to conform


When are Groups More Effective

When accuracy is important When creativity is important When buy-in is important When size of group is 5-7 people


Ways to Improve Group Decision-Making

Brainstorming

Nominal group technique

Electronic meetings


Decision-Making and National Culture

Differs from one country to another Need to recognize what is acceptable Managers can expect high payoff if they can

accommodate the diversity


How Are Decisions Actually Made in Organizations

How Are Decisions Actually Made in Organizations

Bounded Rationality

Individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.


How Are Decisions Actually Made in Organizations (cont’d)

How Are Decisions Actually Made in Organizations (cont’d)

How/Why problems are identified– Visibility over importance of problem

• Attention-catching, high profile problems

• Desire to “solve problems”

– Self-interest (if problem concerns decision maker) Alternative Development

– Satisficing: seeking the first alternative that solves problem.

– Engaging in incremental rather than unique problem solving through successive limited comparison of alternatives to the current alternative in effect.


Common Biases and ErrorsCommon Biases and Errors

Overconfidence Bias– Believing too much in our own decision

competencies. Anchoring Bias

– Fixating on early, first received information. Confirmation Bias

– Using only the facts that support our decision. Availability Bias

– Using information that is most readily at hand. Representative Bias

– Assessing the likelihood of an occurrence by trying to match it with a preexisting category.


Common Biases and ErrorsCommon Biases and Errors

Escalation of Commitment– Increasing commitment to a previous decision in

spite of negative information. Randomness Error

– Trying to create meaning out of random events by falling prey to a false sense of control or superstitions.

Hindsight Bias– Falsely believing to have accurately predicted

the outcome of an event, after that outcome is actually known.


IntuitionIntuition

Intuitive Decision Making– An unconscious process created out of distilled

experience. Conditions Favoring Intuitive Decision Making

– A high level of uncertainty exists– There is little precedent to draw on– Variables are less scientifically predictable– “Facts” are limited– Facts don’t clearly point the way– Analytical data are of little use– Several plausible alternative solutions exist– Time is limited and pressing for the right

decision


Organizational Constraints on Decision MakersOrganizational Constraints on Decision Makers

Performance Evaluation– Evaluation criteria influence the choice of actions.

Reward Systems– Decision makers make action choices that are

favored by the organization. Formal Regulations

– Organizational rules and policies limit the alternative choices of decision makers.

System-imposed Time Constraints– Organizations require decisions by specific

deadlines. Historical Precedents

– Past decisions influence current decisions.


Cultural Differences in Decision MakingCultural Differences in Decision Making

Problems selected Time orientation Importance of logic and rationality Belief in the ability of people to solve problems Preference for collect decision making


Ethics in Decision MakingEthics in Decision Making

Ethical Decision Criteria– Utilitarianism

• Seeking the greatest good for the greatest number.

– Rights• Respecting and protecting basic rights of individuals

such as whistleblowers.

– Justice• Imposing and enforcing rules fairly and impartially.


Ethics in Decision MakingEthics in Decision Making

Ethics and National Culture– There are no global ethical standards.

– The ethical principles of global organizations that reflect and respect local cultural norms are necessary for high standards and consistent practices.


Ways to Improve Decision MakingWays to Improve Decision Making

1. Analyze the situation and adjust your decision making style to fit the situation.

2. Be aware of biases and try to limit their impact.

3. Combine rational analysis with intuition to increase decision-making effectiveness.

4. Don’t assume that your specific decision style is appropriate to every situation.

5. Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies.


STRESS MANAGEMENTSTRESS MANAGEMENT


Work Stress and Its ManagementWork Stress and Its Management

Stress

A dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he or she desires and for which the outcome is perceived to be both uncertain and important.


Work Stress and Its ManagementWork Stress and Its Management

Constraints

Forces that prevent individuals from doing what they desire.

Demands

The loss of something desired.


Potential Sources of Stress Potential Sources of Stress

Environmental Factors

– Economic uncertainties of the business cycle

– Political uncertainties of political systems

– Technological uncertainties of technical innovations

– Terrorism in threats to physical safety and security


Potential Sources of Stress Potential Sources of Stress

Organizational Factors

– Task demands related to the job

– Role demands of functioning in an organization

– Interpersonal demands created by other employees

– Organizational structure (rules and regulations)

– Organizational leadership (managerial style)

– Organization’s life stage (growth, stability, or decline)


Potential Sources of Stress (cont’d) Potential Sources of Stress (cont’d)

Individual Factors

– Family and personal relationships

– Economic problems from exceeding earning capacity

– Personality problems arising for basic disposition

Individual Differences

– Perceptual variations of how reality will affect the individual’s future.

– Greater job experience moderates stress effects.

– Social support buffers job stress.

– Internal locus of control lowers perceived job stress.

– Strong feelings of self-efficacy reduce reactions to job stress.


Consequences of StressConsequences of Stress

High LevelsHigh Levelsof Stressof Stress

High LevelsHigh Levelsof Stressof Stress

PhysiologicalPhysiologicalSymptomsSymptoms

PhysiologicalPhysiologicalSymptomsSymptoms

BehavioralBehavioralSymptomsSymptoms

BehavioralBehavioralSymptomsSymptoms

PsychologicalPsychologicalSymptomsSymptoms

PsychologicalPsychologicalSymptomsSymptoms


Managing StressManaging Stress

Individual Approaches– Implementing time management– Increasing physical exercise– Relaxation training– Expanding social support network



Organizational Approaches– Improved personnel selection and job placement– Training– Use of realistic goal setting– Redesigning of jobs– Increased employee involvement– Improved organizational communication– Offering employee sabbaticals– Establishment of corporate wellness programs


A Model of StressA Model of Stress



Individual Approaches– Implementing time management– Increasing physical exercise– Relaxation training– Expanding social support network



Organizational Approaches– Improved personnel selection and job placement– Training– Use of realistic goal setting– Redesigning of jobs– Increased employee involvement– Improved organizational communication– Offering employee sabbaticals– Establishment of corporate wellness programs


Inverted-U Relationship between Stress and Job Performance

Inverted-U Relationship between Stress and Job Performance

OPTIMAL

ALERT ANXIETY

SLEEPDISORGANISED

© 2005 prentice hall inc. all rights reserved.5–1 decision making and stress mgmt anubha

Documents

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payoff prentice hall

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