Behavioral

Aspects of
Decision
Making
 Objectives
*Overview about decisions-making
*Prescribing how is the decisions to be made
*The classical and administrative models paint quite different
pictures of decision making. Which is more correct?
*Knowing the major element of political forces.
*To know the two other important decision processes.
*To know the Risk Propensity and Ethics in a decision making
*3 Methods of group and team decision making
*Advantages and Disadvantages of Group Decision Making
 overview
*Decisions are often made with little consideration for logic and
rationality
*When a decision is made with a little regard for logic, it can still
turn out to be correct.
*The administrative model better reflects these subjective
considerations. Other behavioral aspects include political
forces, intuition and escalation of commitment, risk
propensity, and ethics.
The Administrative
Model

• A decision-making model that argues that decision makers

(1) use incomplete and imperfect information, (2) are
constrained by bounded rationality, and (3) tend to
“satisfice” when making decisions.
H E R B E RT A . S I M O N
Bounded Rationality

• Values and Unconscious Reflexes

• Skills
• Habits
• Less than complete information and knowledge
 Another important part of the
administrative model is satisficing,
which suggests that
rather than conducting an exhaustive search
for the best possible alternative, decision
makers tend to search only until they identify
an alternative that meets some minimum
standard of sufficiency.
The Classical Model

•It explains how managers can at

least attempt to be more rational
and logical in their approaches the
decisions.
Political Forces in
Decision Making

•another major element that

contributes to the behavioral
nature of decision making.
COALITION

• an informal alliance of individuals or groups

formed to achieve a common goal.
• often a preferred decision alternative
• The impact of coalitions can be either positive
or negative
• They can help astute managers get their
organization on a path toward effectiveness
and profitability, or they can strangle well-
conceived strategies and decisions.
Do you think there are
several essential
ingredients of a
successful Coalition in
your company?
There are several
essential ingredients of
a successful coalition:
• A clear, shared mission statement, goals and
objectives
• Strong, committed leadership
• Structures, policies, procedures, and bylaws
• A fair decision-making process
• Clear communication
• A collaborative approach
• Structured meetings on a regular basis
• Ongoing and consistent participation and commitment
• . Active planning, implementation, and evaluation of
projects
• Respect for differences in opinions
 Intuition and Escalation of
Commitment

Intuition - an innate belief about

something without conscious consideration.
Managers sometimes decide to do
something because it “feels right” or they
have a “hunch.”
 Intuition and Escalation of
Commitment

Escalation of Commitment - decision

makers sometimes make decisions and then
become so committed to the
courses of action suggested by those
decisions that they stay with them, even
when the decisions appear to have been
wrong.
 Risk Propensity
and Decision
Making

- theextent to which a decision maker is willing

to gamble when making a decision. Some managers
are cautious about every decision
they make.
 Ethics and
Decision Making
- individual ethics are personal beliefs about
right and wrong behavior. Ethics are clearly
related to decision making in a number of ways.
GROUP AND TEAM
DECISION MAKING
IN ORGANIZATIONS
• Interacting Groups or Teams Interacting
groups or teams
• Delphi groups
• Nominal groups
 Forms of Group and
Team Decision
Making
Interacting Groups or Teams Interacting groups or teams - are the most
common decision-making group. An advantage of this method is that the
interaction among people often sparks new ideas and promotes
understanding. A major disadvantage, though, is that political processes can
play too big a role.
 Forms of Group and
Team Decision
Making
Delphi Groups - is sometimes used to arrive at a consensus of expert
opinion. the Delphi procedure solicits input from a
panel of experts who contribute individually. Their opinions are combined
and, in effect, averaged.
 Forms of Group and
Team Decision
Making
Nominal Groups - Another useful group and team decision-making
technique that is occasionally used. nominal group members are brought
together in a face-to-face setting. The members represent a group in name
only, however; they do not talk to one another freely like the members of
interacting groups. Nominal groups are used most often to generate creative
and innovative alternatives or ideas.
Managing Group and Team
Decision-Making
Processes
• being aware of the pros and cons of having a group or
team make a decision to start with.
• Dominance can be at least partially avoided if a
special group is formed just to make the decision
• Time and cost can be managed by setting a deadline
by which the decision must be made final
• To avoid groupthink, each member of the group or
team should critically evaluate all alternatives.
• the leader should not make his or her position known
too early.
• At least one member of the group or team might be
assigned the role of devil’s advocate.
THANK YOU!
:)
Vergara, Reanelyn