Upload
joshua-prosper-norman
View
223
Download
0
Embed Size (px)
Citation preview
COMMERCE 2BA3 ORGANIZATIONAL
BEHAVIOURClass 8
Decision-MakingPower, politics, and ethics
Dr. Christa Wilkin
1
Brain Teasers
_it pa per
BendBackwards
sleepingjob
2
Last Class
Communication is more than what you say
THIS CLASS Decision Making Power, Politics and Ethics
3
Agenda
Rational decision making vs. Bounded rationality
Individual vs. Group decision making Types of power Organizational politics Ethical behaviour
4
CH 11: DECISION MAKING
5
Food for Thought
People usually make rational decisions. Agree? Disagree?
6
A Rational Decision Making Model
7
Perfect Rationality
Perfect rationality is a decision strategy that is completely informed, perfectly logical, and oriented toward economic gain.
The prototype is the Economic Person who is perfect, cool, calculating decision maker.
These perfectly rational characteristics do not exist in real decision makers.
8
Bounded Rationality
Bounded rationality is a decision strategy that relies on limited information and that reflects time constraints and political considerations.
Framing: How problems and decision alternatives are framed can have a powerful impact on decisions E.g., 20% probability that will win vs. 80% that you will
lose Cognitive biases: Tendencies to acquire and
process info in a particular way that is prone to error E.g., anchoring
9
Satisficing
Decision maker establishes an adequate level of acceptability for a solution to a problem and then screens solutions until he or she finds one that exceeds this level
10
Risky Decision Making
When people view a problem as a choice between losses, they tend to make risky decisions E.g., Option A: 85% chance of losing $100 along
with a 15% chance of losing nothing. Option B:100% chance of losing $50
When people frame the alternatives as a choice between gains, they tend to make conservative decisions E.g., Option A: bet $100 on the flip of a coin (50-
50 chance) if you stood to win $200. Option B: bet $100 if there was a 90% chance that you win $150
11
Quiz Question
Jennifer has a choice: (A)100% chance of losing $5 or (B) 85% chance of losing $10 along with a 15% chance of losing nothing. What is she likely to do now?
A) Ignore economic considerationsB) Make a risky decisionC) Make a conservative decisionD) Ignore sunk costsE) Ignore sample sizes
12
Justification
Substantial dissonance can be aroused when a decision turns out to be faulty.
To prevent such dissonance, decision makers sometimes avoid careful evaluations or devote their energy to trying to justify a faulty decision. E.g., oh I didn’t give that much thought; I
wasn’t feeling well that day
13
The Dollar Auction
You can participate or watch. Only bidders can talk (no extraneous
conversation). Bidding will be in 5¢ or 10¢ increments.
There is only one deviation from a conventional auction. Both the winner and the second highest bidder must pay the amount that each has bid. If you win at 30¢ and beat out a bid of 25¢, I get that 25¢ and I owe you 70¢.
Will someone give me 10¢ for this dollar?
14
Debrief
What was going through your mind during the auction?
15
Sunk Costs
The justification of faulty decisions is best seen in the irrational treatment of sunk costs
Sunk costs are permanent losses of resources incurred as the result of a decision
Since these resources have been lost due to a past decision, they should not enter into future decisions E.g., Your used car breaks down again and
because you’ve already spent $1000 fixing it, you decide to fix it again
16
Escalation of Commitment
People often “throw good resources after bad,” acting as if they can recoup sunk costs
This process is known as escalation of commitment
Escalation of commitment refers to the tendency to invest additional resources in an apparently failing course of action E.g., You are playing poker and you have bet so
much of your chip stack on one hand that you will not fold even with new info that casts doubt on your decision
17
Escalation of Commitment
Reasons for escalation of commitment: Dissonance reduction. Social norm for consistent behaviour. Motivation to not appear wasteful. The way the problem is framed. Personality, moods, and emotions.
18
Preventing Escalation of Commitment
Encourage continuous experimentation with reframing the problem.
Set specific goals for the project in advance that must be met if more resources are to be invested.
Place more emphasis in evaluating managers on how they made decisions and less on decision outcomes.
Separate initial and subsequent decision making.
19
Hindsight is 20/20
Decision evaluation is also inhibited by faulty hindsight
Hindsight refers to the tendency to review the decision-making process that was used to find what was done right or wrong
It is the tendency to assume, after the fact, that we knew all along what the outcome of a decision would be E.g., See, I knew all along that I shouldn’t of
fixed the car again
20
QUESTIONS?
21
CH 12: POWER, POLITICS, AND ETHICS
22
Types of Power
Coercive Power: Controlling people through fear E.g., You arrive to work 15 minutes early because
you know your boss will flip out if you’re late Reward Power: Controlling people because you
can distribute or withhold something that they want E.g., You accept overtime because you want your
boss to promote you Legitimate Power: Position or job in an
organization E.g., President of your company asks you to do
something
23
Types of Power
Referent Power: Stems from being well liked by others E.g., People will do a favour for you because
you’re such a nice person Expert Power: Derived from having special
information or expertise that is valued by an organization E.g., You got your undergrad from Mac and
because you’re super smart, everyone at work comes to you with questions
24
Quiz Question
Two army officers get into an argument, and one cites his rank in an attempt to settle the matter. To which power base is he resorting?
A) Expert B) Legitimate C) Referent D) Coercive E) Reward
25
Power26
Empowerment
Giving people the authority, opportunity, and motivation to take initiative and solve organizational problems
Giving people the freedom and ability to make decisions and commitments
Puts power where it is needed to make it effective
People who are empowered have a strong sense of self-efficacy
27
Who Wants Power?
Those high on McClelland’s Need for Power (N-Pow) McClelland argues that the most effective
managers (“Institutional Managers”): Have high N-Pow Use their power to achieve organizational goals Adopt a participative or “coaching” leadership style Are relatively unconcerned with how much others
like them
28
Organizational Politics
The pursuit of self-interest in an organization, whether or not this self-interest corresponds to organizational goals
29
Avoiding Actions Stalling
Move slowly when someone asks for your cooperation. Overconforming
Sticking to the strict letter of your job description Passing the buck
Having someone else take action. Buffing
Carefully documenting information showing that an appropriate course of action was followed.
Scapegoating Blaming others when things go wrong.
30
Machiavellianism
A set of cynical beliefs about human nature, morality, and the permissibility of using various tactics to achieve one’s ends.
A stable personality trait. High Machs use their tactics best in the
following kinds of situations: Face-to-face encounters. Fairly emotional circumstances. The situation is fairly unstructured, with few
guidelines for appropriate forms of interaction.
31
Question
How does the concept of machiavellianism relate to ethics?
32
Ethics in Organizations
Systematic thinking about the moral consequences of decisions
A substantial number of employees believe they have been pressured to compromise their own ethical standards when making organizational decisions.
33
Causes of Unethical Behaviour
Gain: anticipation of healthy reinforcement for following an unethical course of action
Role conflict: Employee vs. professional Competition for scarce resources: Stiff
competition for scarce resources Personality: Personality types more prone
to unethical behaviour (e.g., economic values)
Org Industry and Culture: Corporate cultures that reward unethical behaviour
34
Question
You are the entire information technology department for a small firm with 20 employees. The president of the company believes some of the employees are spending far too much time on the Internet doing tasks not related to work. The president asks you to start monitoring employees' Internet usage without their knowledge, something you could easily do from a technological standpoint.
35
Question
What Do You Do?A.Start monitoring employees' email and
Web usage, as the president has asked. B.Suggest that an acceptable Internet-use
policy be developed. C.Talk to employees and tell them what
the president has in mind so they'll change their habits.
36
Difference between Ethics and Morals
Ethics Something you choose to comply with An acceptable set of standards/behaviours Sometimes established by a body Standards of conduct
E.g., It is ethical to recycle Morals
Taught to you from an early age Deals with people Embedded and personal
E.g., It is wrong to make promises you can’t keep
37
Ford Example
Pinto video
38
Ford Example
Pinto cars (1973) bursting into flames after rear collisions; could have possibly been avoided by adding an $11 part; execs ignored the principal design engineer’s spoken and written statements
Proposed lawsuit cost to Ford: 180 burn injuries @ $67,000 180 burn deaths @ $200,000 Total Cost: $48,100,000
Pinto Repair Cost: 12,454,545 cars @ $11 = $137,000,000 (It was thus cheaper to pay the lawsuits)
39
Summary
People do not always make rational decisions
Different types of power can lead to higher commitment
Some people may behave for political gains and may behave unethically
40
For Next Class
Read Chapter 13 on conflict and stress
41