Chapter 7 - Decision Making and Creativity
Chapter 7 - Decision Making and Creativity Thursday, March 7, 2013 1:56 AM • Decision making is the conscious process of making choices among
alternatives with the intention of moving toward some desired state of affairs. RATIONAL CHOICE PARADIGM OF DECISION MAKING • rational choice paradigm, which has dominated decision making philosophy in Western societies for most of written history • Subjective expected utility is the probability (expectation) of satisfaction (utility) for each specific alternative in a decision. • Rational choice assumes that decision makers naturally select the alternative that offers the greatest level of happiness (i.e., maximization), such as highest returns for stockholders and highest satisfaction for customers, employees, government, and other stakeholders. • The first step is to identify the problem or recognize an opportunity. A problem is a deviation between the current and the desired situation—the gap between “what is” and “what ought to be.” This deviation is a symptom of more fundamental causes that need to be corrected.6 An opportunity is a deviation between current expectations and a potentially better situation that was not previously expected. • The second step involves deciding how to decide; that is, what processes to apply to make the decision. • One issue is whether the decision maker has enough information or needs to involve others in the process. • Another issue is whether the decision is programmed or nonprogrammed. Programmed decisions follow standard operating procedures; they have been resolved in the past, so the optimal solution has already been identified and documented. • In contrast, nonprogrammed decisions require all steps in the decision model because the problems are new, complex, or ill-defined. • The third step is to discover and develop a list of possible solutions. • The rational choice paradigm seems so logical, yet it is impossible to apply in reality. One reason is that the model assumes people are efficient and logical information processing machines. • The second reason why the rational model doesn't fit reality is that it focuses on logical thinking and completely ignores the fact that emotions also influence —perhaps even dominate—the decision making process. IDENTIFYING PROBLEMS AND OPPORTUNITIES • Stakeholder Framing Employees, suppliers, customers, and other stakeholders have vested interests when bringing good or bad news to corporate decision makers. Often unwittingly, they filter information to amplify or suppress the seriousness of the situation. By framing the situation, stakeholders throw a spotlight on specific causes of the symptoms and away from other possible causes. Stakeholders also frame problems in ways that
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raise the value of resources they can provide to help the organization solve those problems. Mental Models Even if stakeholders don't frame information, our mind creates its own framing through preconceived mental models. Mental models are visual or relational images in our mind of the external world; they fill in information that we don't immediately see, which helps us understand and navigate in our surrounding environment. Decisive Leadership According to various studies, employees believe that decisiveness is a characteristic of effective leaders. Being decisive includes quickly forming an opinion of whether an event signals a problem or opportunity. Solution-Focused Problems Decision makers have a tendency to define problems as veiled solutions. For instance, someone might say: “The problem is that we need more control over our suppliers.” This statement doesn't describe the problem; it is really a slightly rephrased presentation of a solution to an ill-defined problem. Decision makers engage in solution-focused problem identification because it provides comforting closure to the otherwise ambiguous and uncertain nature of problems. Perceptual Defence People sometimes block out bad news as a coping mechanism. Their brain refuses to see information that threatens their selfconcept. This phenomenon is not true for everyone. Some people inherently overlook negative information, whereas others are more aware of it. but one way to improve the process is by becoming aware of the five problem identification biases just described. For example, by recognizing that mental models restrict a person's perspective of the world, decision makers are more motivated to consider other perspectives of reality. Along with increasing their awareness of problem identification flaws, leaders require considerable willpower to resist the temptation of looking decisive when a more thoughtful examination of the situation should occur. A third way to improve problem identification is for leaders to create a norm of “divine discontent.” employees can minimize problem identification errors by discussing the situation with colleagues.
SEARCHING FOR, EVALUATING, AND CHOOSING ALTERNATIVES • The rational choice paradigm assumes that organizational goals are clear and agreed-on • Unfortunately, organizational goals are often ambiguous or in conflict with each other. • Consequently, as a new alternative comes along, it is immediately compared to an implicit favourite—an alternative that the decision maker prefers and that is used as a comparison with other choices. When choosing a new computer system, for example, people typically have an implicit favourite brand or model in their heads that they use to compare with the others. This sequential process of comparing alternatives with an implicit favourite occurs even when decision makers aren't consciously aware that they are doing this • Biased Decision Heuristics o Three of the most widely studied heuristic biases are anchoring and adjustment, availability, and representativeness:
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Anchoring and adjustment heuristic. Availability heuristic. Representativeness heuristic Another form of the representativeness heuristic, known as the clustering illusion, is the tendency to see patterns from a small sample of events when those events are, in fact, random One of the main assumptions of the rational choice paradigm is that people want to—and are able to—choose the alternative with the highest payoff (i.e., the highest “utility” in subjective expected utility). People satisfice when they select the first alternative that exceeds a standard of acceptance for their needs and preferences. This necessarily calls for a satisficing decision rule—choose the first alternative that is “good enough.” A second reason why people engage in satisficing rather than maximization is that they lack the capacity and motivation to process the huge volume of information required to identify the best choice. Emotions Form Early Preferences The emotional marker process described in previous chapters determines our preferences for each alternative before we consciously think about those alternatives. Ultimately, emotions, not rational logic, energize us to make the preferred choice. In fact, people with damaged emotional brain centres have difficulty making choices. Emotions Change the Decision Evaluation Process A considerable body of literature indicates that moods and specific emotions influence the process of evaluating alternatives. Overall, emotions shape how we evaluate information, not just which choice we select. Emotions Serve as Information When We Evaluate Alternatives The third way that emotions influence the evaluation of alternatives is through a process called “emotions as information.” Most emotional experiences remain below the level of conscious awareness, but people actively try to be more sensitive to these subtle emotions when making a decision. Intuition is both an emotional experience and a rapid nonconscious analytic process. These signals warn us of impending danger, such as a dangerous mine wall, or motivate us to take advantage of an opportunity All gut feelings are emotional signals, but not all emotional signals are intuition. whether the emotions we experience in a situation represent intuition or not depends largely on our level of experience in that situation. action scripting is a form of programmed decision making. Action scripts are generic, so we need to consciously adapt them to the specific situation. By systematically assessing alternatives against relevant factors, decision makers minimize the implicit favourite and satisficing problems that occur when they rely on general subjective judgments. This recommendation does not suggest that we ignore intuition; rather, it suggests that we use it in combination with careful analysis of relevant information. A second piece of advice is to remember that decisions are influenced by both rational and emotional processes.
IMPLEMENTING DECISIONS
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translating decisions into action—is one of the most important and challenging tasks of leaders.
EVALUATING DECISION OUTCOMES • One problem is confirmation bias (also known as post-decisional justification in the context of decision evaluation), which is the “unwitting selectivity in the acquisition and use of evidence.”When evaluating decisions, people with confirmation bias ignore or downplay the negative outcomes of the selected alternative and overemphasize its positive outcomes. • Unfortunately, it also inflates the decision maker's initial evaluation of the decision, so reality often comes as a painful shock when objective feedback is finally received. • escalation of commitment—the tendency to repeat an apparently bad decision or allocate more resources to a failing course of action. • the four main influences are self-justification, prospect theory effect, perceptual blinders, and closing costs. o Self-justification—Decision makers typically want to appear rational and effective. o Prospect theory effect—Escalation of commitment is partly fuelled by the prospect theory effect. This is a natural tendency to experience stronger negative emotions when losing something of value than the positive emotions when gaining something of equal value o Perceptual blinders—Escalation of commitment sometimes occurs because decision makers do not see the problems soon enough o Closing costs—The financial, reputational, and other costs of terminating the failing project can also be a powerful incentive to continue investing in that project.. Closing costs are particularly important in political situations because closing the project is acknowledgement that the decision makers made a grave mistake in their previous decisions. • One of the most effective ways to minimize escalation of commitment and confirmation bias is to ensure that the people who made the original decision are not the same people who later evaluate that decision. • A second strategy is to publicly establish a preset level at which the decision is abandoned or re-evaluated. • A third strategy is to find a source of systematic and clear feedback CREATIVITY • The entire decision-making process described over the preceding pages depends on creativity—the development of original ideas that make a socially recognized contribution. • Creativity is at work when imagining opportunities, such as how a company's expertise might be redirected to untapped markets. • creativity is an essential component of decision making as well as a powerful resource for corporate competitive advantage and individual career development. • THE CREATIVE PROCESS MODEL o The first stage is preparation—the process of investigating the problem or opportunity in many ways. o The second stage, called incubation, is the period of reflective thought.
This contrasts with convergent thinking—calculating the conventionally accepted “right answer” to a logical problem. o Illumination, the third stage of creativity, refers to the experience of suddenly becoming aware of a unique idea. o Illuminations is often visually depicted as a light bulb, but a better image would be a brief flash of light or perhaps a briefly flickering candle because these bits of inspiration are fleeting and can be quickly lost if not documented. o verification is labelled the final stage of creativity, it is really the beginning of a long process of creative decision making toward development of an innovative product or service. Four of the main characteristics that give individuals more creative potential are intelligence, persistence, knowledge and experience, and a cluster of personality traits and values representing independent imagination o Cognitive and practical intelligence. Creative people have aboveaverage intelligence to synthesize information, analyze ideas, and apply their ideas. practical intelligence—the capacity to evaluate the potential usefulness of their ideas. o Persistence. Creative people have persistence, which is based on a higher need for achievement, a strong motivation from the task itself, and a moderate or high degree of self-esteem. o Knowledge and experience. Creative people require a foundation of knowledge and experience to discover or acquire new knowledge (the idea of absorptive capacity that was discussed in Chapter 1). o Independent imagination. Creative people possess a cluster of personality traits and values that support an independent imagination: high openness to experience, moderately low need for affiliation, and strong values around self-direction and stimulation. One of the most important conditions that supports creative practice is that the organization has a learning orientation; that is, leaders recognize that employees make reasonable mistakes as part of the creative process Creativity is about changing things, and change is possible only when employees have the authority to experiment. creativity also improves with support from leaders and co-workers. Hiring people with strong creative potential and providing a work environment that supports creativity are two cornerstones of a creative workplace. The third cornerstone consists of various activities that help employees think more creatively. One set of activities involves redefining the problem Another strategy involves asking people unfamiliar with the issue (preferably with different expertise) to explore the problem with you. A second set of creativity activities, known as associative play, ranges from art classes to impromptu storytelling and acting. A third set of activities that promote creative thinking falls under the category of cross-pollination. Cross-pollination occurs when people from different areas of the organization exchange ideas or when new people are brought into an existing team. o
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EMPLOYEE INVOLVEMENT IN DECISION MAKING
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Employee involvement (also called participative management) refers to the degree to which employees influence how their work is organized and carried out. The main levels of involvement (from lowest to highest) include: o Decide alone. The decision maker relies on personal knowledge and insight to complete the entire decision process without conferring with anyone else. o Receive information from individuals. The decision maker asks individuals for information. These individuals do not make recommendations and might not even know what the problem is about. o Consult with individuals. The decision maker describes the problem to selected individuals and seeks both their information and recommendations. The final decision is made by the decision maker, who may or may not take the advice from others into account. o Consult with the team. The decision maker brings together a team of people (such as all staff in the department), who are told about the problem and provide their ideas and recommendations. The decision maker makes the final decision, which may or may not reflect the team's information. o Facilitate the team's decision. The entire decision making process is handed over to the team, where the original decision maker serves only as a facilitator to guide the team's decision process and keep everyone on track. The team identifies the problem, discovers alternative solutions, chooses the best alternative, and implements their choice. Involved employees can help improve decision quality by recognizing problems more quickly and defining them more accurately. Employees are, in many respects, the sensors of the organization's environment. Employee involvement ensures that everyone in the organization is quickly alerted to such problems. Employee involvement can also potentially improve the number and quality of solutions generated. A third benefit of employee involvement is that, under specific conditions, it improves the evaluation of alternatives. Along with improving decision quality, employee involvement tends to strengthen employee commitment to the decision. Involvement also has positive effects on employee motivation, satisfaction, and turnover. The employee involvement model lists four contingencies: decision structure, source of decision knowledge, decision commitment, and risk of conflict in the decision process. o Decision structure. At the beginning of this chapter, we stated that some decisions are programmed, whereas others are nonprogrammed. Programmed decisions are less likely to need employee involvement because the solutions are already worked out from past incidents. In other words, the benefits of employee involvement increase with the novelty and complexity of the problem or opportunity. o Source of decision knowledge. Employees should be involved in some level of decision making when the leader lacks sufficient knowledge and employees have additional information to improve decision quality. In many cases, employees are closer to customers and production activities, so they often know where the company can save money, improve product
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or service quality, and realize opportunities. This is particularly true for complex decisions where employees are more likely to possess relevant information. o Decision commitment. Participation tends to improve employee commitment to the decision. If employees are unlikely to accept a decision made without their involvement, some level of participation is usually necessary. o Risk of conflict. Two types of conflict undermine the benefits of employee involvement. First, if employee goals and norms conflict with the organization's goals, only a low level of employee involvement is advisable. Second, the degree of involvement depends on whether employees will agree on the preferred solution. If conflict is likely to occur, high involvement (i.e., employees make the decision alone) would be difficult to achieve. Employee involvement is an important component of the decision making process.
alternatives with the intention of moving toward some desired state of affairs. RATIONAL CHOICE PARADIGM OF DECISION MAKING • rational choice paradigm, which has dominated decision making philosophy in Western societies for most of written history • Subjective expected utility is the probability (expectation) of satisfaction (utility) for each specific alternative in a decision. • Rational choice assumes that decision makers naturally select the alternative that offers the greatest level of happiness (i.e., maximization), such as highest returns for stockholders and highest satisfaction for customers, employees, government, and other stakeholders. • The first step is to identify the problem or recognize an opportunity. A problem is a deviation between the current and the desired situation—the gap between “what is” and “what ought to be.” This deviation is a symptom of more fundamental causes that need to be corrected.6 An opportunity is a deviation between current expectations and a potentially better situation that was not previously expected. • The second step involves deciding how to decide; that is, what processes to apply to make the decision. • One issue is whether the decision maker has enough information or needs to involve others in the process. • Another issue is whether the decision is programmed or nonprogrammed. Programmed decisions follow standard operating procedures; they have been resolved in the past, so the optimal solution has already been identified and documented. • In contrast, nonprogrammed decisions require all steps in the decision model because the problems are new, complex, or ill-defined. • The third step is to discover and develop a list of possible solutions. • The rational choice paradigm seems so logical, yet it is impossible to apply in reality. One reason is that the model assumes people are efficient and logical information processing machines. • The second reason why the rational model doesn't fit reality is that it focuses on logical thinking and completely ignores the fact that emotions also influence —perhaps even dominate—the decision making process. IDENTIFYING PROBLEMS AND OPPORTUNITIES • Stakeholder Framing Employees, suppliers, customers, and other stakeholders have vested interests when bringing good or bad news to corporate decision makers. Often unwittingly, they filter information to amplify or suppress the seriousness of the situation. By framing the situation, stakeholders throw a spotlight on specific causes of the symptoms and away from other possible causes. Stakeholders also frame problems in ways that
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raise the value of resources they can provide to help the organization solve those problems. Mental Models Even if stakeholders don't frame information, our mind creates its own framing through preconceived mental models. Mental models are visual or relational images in our mind of the external world; they fill in information that we don't immediately see, which helps us understand and navigate in our surrounding environment. Decisive Leadership According to various studies, employees believe that decisiveness is a characteristic of effective leaders. Being decisive includes quickly forming an opinion of whether an event signals a problem or opportunity. Solution-Focused Problems Decision makers have a tendency to define problems as veiled solutions. For instance, someone might say: “The problem is that we need more control over our suppliers.” This statement doesn't describe the problem; it is really a slightly rephrased presentation of a solution to an ill-defined problem. Decision makers engage in solution-focused problem identification because it provides comforting closure to the otherwise ambiguous and uncertain nature of problems. Perceptual Defence People sometimes block out bad news as a coping mechanism. Their brain refuses to see information that threatens their selfconcept. This phenomenon is not true for everyone. Some people inherently overlook negative information, whereas others are more aware of it. but one way to improve the process is by becoming aware of the five problem identification biases just described. For example, by recognizing that mental models restrict a person's perspective of the world, decision makers are more motivated to consider other perspectives of reality. Along with increasing their awareness of problem identification flaws, leaders require considerable willpower to resist the temptation of looking decisive when a more thoughtful examination of the situation should occur. A third way to improve problem identification is for leaders to create a norm of “divine discontent.” employees can minimize problem identification errors by discussing the situation with colleagues.
SEARCHING FOR, EVALUATING, AND CHOOSING ALTERNATIVES • The rational choice paradigm assumes that organizational goals are clear and agreed-on • Unfortunately, organizational goals are often ambiguous or in conflict with each other. • Consequently, as a new alternative comes along, it is immediately compared to an implicit favourite—an alternative that the decision maker prefers and that is used as a comparison with other choices. When choosing a new computer system, for example, people typically have an implicit favourite brand or model in their heads that they use to compare with the others. This sequential process of comparing alternatives with an implicit favourite occurs even when decision makers aren't consciously aware that they are doing this • Biased Decision Heuristics o Three of the most widely studied heuristic biases are anchoring and adjustment, availability, and representativeness:
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Anchoring and adjustment heuristic. Availability heuristic. Representativeness heuristic Another form of the representativeness heuristic, known as the clustering illusion, is the tendency to see patterns from a small sample of events when those events are, in fact, random One of the main assumptions of the rational choice paradigm is that people want to—and are able to—choose the alternative with the highest payoff (i.e., the highest “utility” in subjective expected utility). People satisfice when they select the first alternative that exceeds a standard of acceptance for their needs and preferences. This necessarily calls for a satisficing decision rule—choose the first alternative that is “good enough.” A second reason why people engage in satisficing rather than maximization is that they lack the capacity and motivation to process the huge volume of information required to identify the best choice. Emotions Form Early Preferences The emotional marker process described in previous chapters determines our preferences for each alternative before we consciously think about those alternatives. Ultimately, emotions, not rational logic, energize us to make the preferred choice. In fact, people with damaged emotional brain centres have difficulty making choices. Emotions Change the Decision Evaluation Process A considerable body of literature indicates that moods and specific emotions influence the process of evaluating alternatives. Overall, emotions shape how we evaluate information, not just which choice we select. Emotions Serve as Information When We Evaluate Alternatives The third way that emotions influence the evaluation of alternatives is through a process called “emotions as information.” Most emotional experiences remain below the level of conscious awareness, but people actively try to be more sensitive to these subtle emotions when making a decision. Intuition is both an emotional experience and a rapid nonconscious analytic process. These signals warn us of impending danger, such as a dangerous mine wall, or motivate us to take advantage of an opportunity All gut feelings are emotional signals, but not all emotional signals are intuition. whether the emotions we experience in a situation represent intuition or not depends largely on our level of experience in that situation. action scripting is a form of programmed decision making. Action scripts are generic, so we need to consciously adapt them to the specific situation. By systematically assessing alternatives against relevant factors, decision makers minimize the implicit favourite and satisficing problems that occur when they rely on general subjective judgments. This recommendation does not suggest that we ignore intuition; rather, it suggests that we use it in combination with careful analysis of relevant information. A second piece of advice is to remember that decisions are influenced by both rational and emotional processes.
IMPLEMENTING DECISIONS
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translating decisions into action—is one of the most important and challenging tasks of leaders.
EVALUATING DECISION OUTCOMES • One problem is confirmation bias (also known as post-decisional justification in the context of decision evaluation), which is the “unwitting selectivity in the acquisition and use of evidence.”When evaluating decisions, people with confirmation bias ignore or downplay the negative outcomes of the selected alternative and overemphasize its positive outcomes. • Unfortunately, it also inflates the decision maker's initial evaluation of the decision, so reality often comes as a painful shock when objective feedback is finally received. • escalation of commitment—the tendency to repeat an apparently bad decision or allocate more resources to a failing course of action. • the four main influences are self-justification, prospect theory effect, perceptual blinders, and closing costs. o Self-justification—Decision makers typically want to appear rational and effective. o Prospect theory effect—Escalation of commitment is partly fuelled by the prospect theory effect. This is a natural tendency to experience stronger negative emotions when losing something of value than the positive emotions when gaining something of equal value o Perceptual blinders—Escalation of commitment sometimes occurs because decision makers do not see the problems soon enough o Closing costs—The financial, reputational, and other costs of terminating the failing project can also be a powerful incentive to continue investing in that project.. Closing costs are particularly important in political situations because closing the project is acknowledgement that the decision makers made a grave mistake in their previous decisions. • One of the most effective ways to minimize escalation of commitment and confirmation bias is to ensure that the people who made the original decision are not the same people who later evaluate that decision. • A second strategy is to publicly establish a preset level at which the decision is abandoned or re-evaluated. • A third strategy is to find a source of systematic and clear feedback CREATIVITY • The entire decision-making process described over the preceding pages depends on creativity—the development of original ideas that make a socially recognized contribution. • Creativity is at work when imagining opportunities, such as how a company's expertise might be redirected to untapped markets. • creativity is an essential component of decision making as well as a powerful resource for corporate competitive advantage and individual career development. • THE CREATIVE PROCESS MODEL o The first stage is preparation—the process of investigating the problem or opportunity in many ways. o The second stage, called incubation, is the period of reflective thought.
This contrasts with convergent thinking—calculating the conventionally accepted “right answer” to a logical problem. o Illumination, the third stage of creativity, refers to the experience of suddenly becoming aware of a unique idea. o Illuminations is often visually depicted as a light bulb, but a better image would be a brief flash of light or perhaps a briefly flickering candle because these bits of inspiration are fleeting and can be quickly lost if not documented. o verification is labelled the final stage of creativity, it is really the beginning of a long process of creative decision making toward development of an innovative product or service. Four of the main characteristics that give individuals more creative potential are intelligence, persistence, knowledge and experience, and a cluster of personality traits and values representing independent imagination o Cognitive and practical intelligence. Creative people have aboveaverage intelligence to synthesize information, analyze ideas, and apply their ideas. practical intelligence—the capacity to evaluate the potential usefulness of their ideas. o Persistence. Creative people have persistence, which is based on a higher need for achievement, a strong motivation from the task itself, and a moderate or high degree of self-esteem. o Knowledge and experience. Creative people require a foundation of knowledge and experience to discover or acquire new knowledge (the idea of absorptive capacity that was discussed in Chapter 1). o Independent imagination. Creative people possess a cluster of personality traits and values that support an independent imagination: high openness to experience, moderately low need for affiliation, and strong values around self-direction and stimulation. One of the most important conditions that supports creative practice is that the organization has a learning orientation; that is, leaders recognize that employees make reasonable mistakes as part of the creative process Creativity is about changing things, and change is possible only when employees have the authority to experiment. creativity also improves with support from leaders and co-workers. Hiring people with strong creative potential and providing a work environment that supports creativity are two cornerstones of a creative workplace. The third cornerstone consists of various activities that help employees think more creatively. One set of activities involves redefining the problem Another strategy involves asking people unfamiliar with the issue (preferably with different expertise) to explore the problem with you. A second set of creativity activities, known as associative play, ranges from art classes to impromptu storytelling and acting. A third set of activities that promote creative thinking falls under the category of cross-pollination. Cross-pollination occurs when people from different areas of the organization exchange ideas or when new people are brought into an existing team. o
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EMPLOYEE INVOLVEMENT IN DECISION MAKING
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Employee involvement (also called participative management) refers to the degree to which employees influence how their work is organized and carried out. The main levels of involvement (from lowest to highest) include: o Decide alone. The decision maker relies on personal knowledge and insight to complete the entire decision process without conferring with anyone else. o Receive information from individuals. The decision maker asks individuals for information. These individuals do not make recommendations and might not even know what the problem is about. o Consult with individuals. The decision maker describes the problem to selected individuals and seeks both their information and recommendations. The final decision is made by the decision maker, who may or may not take the advice from others into account. o Consult with the team. The decision maker brings together a team of people (such as all staff in the department), who are told about the problem and provide their ideas and recommendations. The decision maker makes the final decision, which may or may not reflect the team's information. o Facilitate the team's decision. The entire decision making process is handed over to the team, where the original decision maker serves only as a facilitator to guide the team's decision process and keep everyone on track. The team identifies the problem, discovers alternative solutions, chooses the best alternative, and implements their choice. Involved employees can help improve decision quality by recognizing problems more quickly and defining them more accurately. Employees are, in many respects, the sensors of the organization's environment. Employee involvement ensures that everyone in the organization is quickly alerted to such problems. Employee involvement can also potentially improve the number and quality of solutions generated. A third benefit of employee involvement is that, under specific conditions, it improves the evaluation of alternatives. Along with improving decision quality, employee involvement tends to strengthen employee commitment to the decision. Involvement also has positive effects on employee motivation, satisfaction, and turnover. The employee involvement model lists four contingencies: decision structure, source of decision knowledge, decision commitment, and risk of conflict in the decision process. o Decision structure. At the beginning of this chapter, we stated that some decisions are programmed, whereas others are nonprogrammed. Programmed decisions are less likely to need employee involvement because the solutions are already worked out from past incidents. In other words, the benefits of employee involvement increase with the novelty and complexity of the problem or opportunity. o Source of decision knowledge. Employees should be involved in some level of decision making when the leader lacks sufficient knowledge and employees have additional information to improve decision quality. In many cases, employees are closer to customers and production activities, so they often know where the company can save money, improve product
•
or service quality, and realize opportunities. This is particularly true for complex decisions where employees are more likely to possess relevant information. o Decision commitment. Participation tends to improve employee commitment to the decision. If employees are unlikely to accept a decision made without their involvement, some level of participation is usually necessary. o Risk of conflict. Two types of conflict undermine the benefits of employee involvement. First, if employee goals and norms conflict with the organization's goals, only a low level of employee involvement is advisable. Second, the degree of involvement depends on whether employees will agree on the preferred solution. If conflict is likely to occur, high involvement (i.e., employees make the decision alone) would be difficult to achieve. Employee involvement is an important component of the decision making process.
