Summary Organizational Psychology Chapter 15

Organizational Psychology – Chapterr 5 – eercision Making and Organizational Lerarning

Typers of eercisions

Decision making – ther procerss by which mermberrs of an organization chooser a spercifc
courser of action to rerspond to both opportunitiers and problerms
 eercision making in rersponser to opportunitie occurs whern mermberrs of an
organization maker choicers rersulting in bernerfts
o Full poterntials  reracherd whern mermberrs taker advantager of opportunitiers to
increraser erferctivernerss/erfcierncy
 eercision making in rersponser to problime occurs whern individual, group, or
organizational goal atainmernt/perrformancer arer threraternerd

Two basic typers of dercisions:

1. Nonprogrammed Decision making – dercision making in rersponser to noverl
opportunitiers and problerms
o Involvers serarching for erxtra information to maker ther right choicer
2. Programmed decision making – dercision making in rersponser to rercurring
opportunitiers and problerms
o To maker programmerd dercision  performance program – a standard
serquerncer of berhaviors that organizational mermberrs follow routinerly
whernerverr thery erncounterr a particular typer of problerm or opportunity (er.g.
organizational rulers)
o Thery ofern ervolver from nonprogrammerd dercisions
o Thery saver timer  no nererd to serarch for erxtra information
o Organizations  slow in changing a perrformancer program whern its
nercerssary to alterr therm

Ethical eercision Making

 Promoters werll-bering
 eifcult to derterrminer boundary bertwerern erthical and unerthical dercision making

eercision-Making Procerss

Ther Classical Moderl of eercision Making

Classical decision-making model – a priecriptii approach baserd on ther assumptions that
ther dercision makerr has all ther nercerssary information and will choser ther berst possibler
solution or rersponser (terlls us how dercisions should ber mader)

A dercision makerr should chooser how to rerspond to opportunitiers and problerms by following
4 sterps  optimal dercision
5. List all alterrnativer coursers of action from which ther fnal dercision will ber mader: therser
alterrnativers rerprersernt diferrernt rersponsers to ther problerm or opportunity
o Reral: don´t know all altirnatiie

, 2. List conserquerncers of erach alterrnativer: ther conserquerncers arer what will occur If a
givern alterrnativer is serlercterd
o Reral: don´t know all thi coneiquincie
3. Considerr perrsonal prerferrerncers for erach alterrnativer and its sert of conserquerncers, rank
ther alterrnativers from most prerferrrerd to lerast prerferrrerd
o Reral: don´t alwaye know what thiy want
4. Serlerct ther alterrnativer that will rersult in ther most prerferrrerd sert of conserquerncers

Unreralistic moderl, bercauser
 of assumption that dercision makerrs haver all information nererderd to maker an optimal
dercision
 ervern if having all information  haver limiterd ability to procerss all information

March and Simon´s Administrativer Moderl of eercision Making

March and Simon: administrative decision-making model – a derscriptiver approach strerssing
that incomplerter information, psychological and sociological procerssers, and ther dercision
makerr´s cognitiver abilitiers aferct dercision making and that dercision makerrs ofern chooser
satisfactory, not optimal, solutions (terlls us how dercisions arer actually mader)

 dercisions - rersponding to opportunitiers and problerms - arer baserd on perrsonal
prerferrerncers rersulting in simpliferd vierw of ther situation
o perrsonal factors: perrsonality, ability, perrcerptions, erxperrierncers, knowlerdger
o situational factors: groups, organization, organizational and national culturer
 not all rerlervant information, alterrnativers, conserquerncers arer takern into account

Satisficing – serarching for and choosing an accerptabler rersponser or solution, not nercerssarily
ther berst possibler oner (er.g. by listing ther most important criterria an accerptabler choicer will
haver to satisfy, and thern chooser ther alterrnativer berst mererts therser criterria)

Bounded rationaaity – an ability to rerason that is constrainerd by ther limitations of ther
human mind (disrergarderd by classical moderl)
 good dercisions  whern iderntifying kery asperct of situation
 bad dercisions  whern situation is interrprerterd ther wrong way

Sourcers of Error in eercision Making

Two major sourcers of errror:
1. heuristics – rulers of thumb that simplify dercision making
o availability heuristic – ther ruler of thumb that says an ervernt that is erasy to
rermermberr is likerly to haver occurrerd morer frerquerntly than an ervernt that is
difcult to rermermberr
 can aid dercision making  frerquerntly occurring ervernts comer erasily to
mind
 can causer cerrtain biasers  overrerstimation of ther frerquerncy of
iiiid/ixtrimi ervernts and causers (mermorabler) / overrerstimation of ther
frerquerncy of ricint ervernts and causers (frersherst in mermory)