management innovation and organization development

Management Innovation and Organization Development

Chapter 5 Decision Making Skillsand Strategic Innovative

Leadership

Preface

“Without good decision making, leader leads nothing”

Objectives

After studying the chapter, students should be able to..•Explain terms of decision making and strategic innovative leadership•Explain the importance of decision making and who is concerned as key decision maker in the organization•Describe different natures between two major decision making approaches and explain the examples of each one.•Explain how to develop effective decision making•Explain challenges of strategic innovative leadership •Explain leadership responsibilities to innovation process •Explain when change leadership plays role to the organization

Contents

• Decision making…………………………………………………………6

• Decision making approaches………………………………………….9

• Decision making styles……………………………………………….19

• Strategic innovative leadership………………………………………22

• Change leadership…………………………………………………….31

• Summary………………………………………………………………..38

• Problem…………………………………………………………………40

• Decision making• Decision making approaches• Decision making styles• Strategic innovative leadership• Change leadership• Summary• Problem

Decision Making

Definition of Decision Making•The process of choosing from among various alternatives (Ghillyer: 56, 2012)•The process of identifying and choosing alternative course of action, may be rational, but often it is nonrational. (Kinincki & Williams: 196, 2011)•The cognitive process of reaching a decision (Yan Zhang & Amanda Ruhl)

Decision MakingImportance of Decision Making

• Decision making• Decision making approaches• Decision making styles• Strategic innovative leadership• Change leadership• Summary• Problem

Decision Making ApproachesDecision Making Approaches•Rational Approaches: Approach to decision making that attempt to evaluate factual information through the use of some type of deductive reasoning.

– Optimizing approach– Satisficing approach

•Intuitive Approaches: Decision making process that relies on hunches and intuition.

Rational Approaches Intuitive Approaches

Rational VS Intuitive

Decision Making Approaches

Decision Making ApproachesRational Approaches•Optimizing Approach: selecting the best possible alternative

6 steps in optimizing approach

Decision Making ApproachesRational Approaches•Satisficing Approach: seeking alternatives until finding one that satisfactory, not optimal due to many constraints as follows;

– Complexity– Time and money– Different cognitive capacity, value, skills, habits,

unconscious reflexes– Imperfect information– Information overload– Different priorities– Conflicting goals

Rational Approaches <<Modern rational decision making tools A.K.A. programmed decision making

Decision Making Approaches

Decision making ApproachesIntuitive Approaches•Intuitive approach: Making a choice without the use of conscious thought or logical inference•Intuition stemming from expertise—A.K.A. a holistic hunch•Intuition based on feeling– A.K.A. automated experience

benefits drawback

• Speed up decision making• Useful when deadlines are tight• Helpful when resources are

limited

• Difficult to convince others that such hunch makes sense

• Unable to modernize the thought if the decision makers are kind of “ living in the past”.

Intuitive Approaches

• Develop intuitive skill with dreyfus model

Intuitive Approaches

<<Modern intuitive decision making tools A.K.A. non-programmed decision making

Decision making Approaches

Z Problem-Solving Model

Look at the facts

and details

Can it beanalyzed

objectively?

What alternativesdo the facts

suggest?

What impactwill it have on

those involved?

Sensing Intuition

Thinking Feeling

Figure from Type Talk at Work by Otto Kroeger and Janet M. Thuesen. Copyright © 1992 by Otto Kroegerand Janet M. Thuesen. Used by permission of Dell Publishing, a division of Random House. Inc.

Decision making Approaches

• Decision making• Decision making approaches• Decision Making Styles• Strategic innovative leadership• Change leadership• Summary• Problem

Decision Maker’s Environment

Environmental factors influencing decision making in an organization

Decision making Styles

Four General Decision Making Styles

Decision making styles

Analytical conceptual

Directive Behavioral

high

low

Tolerance for ambiguity

Task & technical concerns

People & social concerns

Value orientation

Decision making Styles

• Decision making• Decision making approaches• Decision making styles• Strategic innovative leadership• Change leadership• Summary• Problem

Management - Chapter 1823

Strategic Innovative Leadership“Managers do the things right,

leaders do the right things”

Management - Chapter 1824

Strategic Innovative Leadership

What is Leadership?Masters reach consensus on two viewpoints which respond to two major misuses of leadership. (Lan Liu: 5-20, 2010)

•It’s about activity, not about position•It’s about change, not about management

Management - Chapter 1825

Eight Disciplines of LeadershipThe foundation of leadership lies in these eight disciplines (Lan Liu: 5-20, 2010)

1.Connecting with people2.Learning from failure3.Reflecting on experience4.Thinking deeply5.Storytelling6.Being a teacher7.Knowing yourself8.Becoming yourself

Source: Lan Liu, Conversation on Leadership, 10e, John Wiley & Son

Strategic Innovative Leadership

Management - Chapter 1826

Strategic Innovative Leadership

Challenges of Strategic Innovative Leadership•“Strategic Innovative leadership creates the capacity for ongoing strategic change of innovation.”•Components of strategic innovative leadership:

• Determining the organization’s innovative-driven purpose or vision.

• Exploiting and maintaining the organization’s core competencies.

• Developing the organization’s human capital.• Sustaining an effective organizational culture.• Emphasizing and displaying ethical practices.• Establishing balanced organizational controls.

Management - Chapter 1827

Strategic Innovative LeadershipChallenges of Strategic Innovative Leadership

•Sustainable competitive advantage relies on creativity and innovation.

•Creativity is the generation of a novel idea or unique approach to solving problems or crafting opportunities.

•Innovation is the process of creating new ideas and putting them into practice.

Management - Chapter 1828

Leadership Responsibilities for Innovation Process

•Imagining.

•Designing.

•Experimenting.

•Assessing.

•Scaling.

Strategic Innovative Leadership

Management Fundamentals: Chapter 18 29

Characteristics of Highly Innovative Organizations

• Corporate strategy and culture:• Emphasize an entrepreneurial spirit.

• Expect innovation.

• Accept failure.

• Be willing to take risks.

• Organization structure:• Be organic.

• Have lateral communications.

• Use cross-functional teams and task forces.

Strategic Innovative Leadership

Management Fundamentals: Chapter 18 30

Strategic Innovative LeadershipChallenges of Strategic Innovative Leadership to be Highly Innovative Organization

• Top management should:• Understand the innovation process. • Be tolerant of criticism and differences of opinion.• Take all possible steps to keep goals clear.• Maintain the pressure to succeed.• Break down barriers to innovation.

• Staffing should fulfill five critical innovation roles:• Idea generators.• Information gatekeepers.• Product champions.• Project managers.• Innovation leaders.

• Decision making• Decision making approaches• Decision making styles• Strategic innovative leadership• Change leadership• Summary• Problem

Management Fundamentals: Chapter 18 32

When the organization need to change….

Management - Chapter 18 33

Change Leadership

Change Leadership •Change leader.

• A change agent who takes leadership responsibility for changing the existing pattern of behavior of another person or social system.

•Change leadership.• Forward-looking.• Proactive.• Embraces new ideas.

Management - Chapter 1834

Change Leaders Versus Status Quo Managers.

Change Leadership

Management - Chapter 18 35

Top Down VS Bottom Up•Top-down change

• Strategic and comprehensive change that is initiated with the goals of comprehensive impact on the organization and its performance capabilities.

• Driven by the organization’s top leadership.• Success depends on support of middle-level and

lower-level workers.• Successful leadership cases (called heroic or

turnaround leadership): Lee Iacocca at Chrysler, Lou Gerstner at IBM, Carlos Ghosn at Nissan

Change Leadership

Management - Chapter 18 36

Change Leadership

Top Down VS Bottom Up•Bottom-up change.

• The initiatives for change come from any and all parts of the organization, not just top management.

• Crucial for organizational innovation.• Made possible by:

• Employee empowerment.• Employee involvement.• Employee participation.

• Successful leadership cases (teacher-role leadership): Jack Welch at GE, 3M company, Bill George at Medtronic

Management - Chapter 1837

Change Leadership

Organizational targets for change

• Tasks

• People

• Culture

• Technology

• Structure

Contents

• Decision making• Decision making approaches• Decision Making Styles• Strategic innovative leadership• Change leadership• Summary• Problem

Management - Chapter 1839

Summary

Contents

• Decision making• Decision making approaches• Decision Making Styles• Strategic innovative leadership• Change leadership• Summary• Problem

Problem

Problem IADIDO company, a sanitary manufacturer has always been complained from its U.S. clients about damaged shipment when shipped by a reliable container vessel. Typically each product item is carefully packed into a set of paper box and the number of package piled up on the palate are fitted maximum load requirement.

1. What causes are probably to such damage shipment?2. Who is most likely responsible to this problem? 3. If you are ADIDO’s warehouse manager, what innovative solution would you offer to the company?

Problem

Problem IIPracha, Logistic Manager at B&M Logistics found that there has gradually been increasing of some complaints from its customers about late delivery since a new fleet drivers were hired. Later he investigated them on what went wrong and most of them gave him the answers such as heavy traffic jam on the delivery route, long queuing up at traffic police barriers.

1. Should Pracha trust what the new drivers said? 2. What kind of decision making approach should he adopt to promptly respond to the customer complaints?3. In what innovative solution should he develop to keep on the delivery lead time?