ORGANIZATIONAL

BEHAVIOUR

Decision
Making
Maria V Simanjuntak : 1513221007
Nia Febriana : 15132210019
Ferdial : 1513221006
Rinto Suherman : 15132210016

KELOMPOK 4
Decison Making Process

TOPICS
Models of Decision Making
Decisions Making & Risk
Individual Influence in Decision
Making
Techniques for Group Decision
making
Decision-making in a Cultural
context
DECISION
MAKING
PROCESS & MODEL

THE DECISION-MAKING PROCESS

MODEL OF DECISION MAKING
DECISION MAKING & RISK
Decision
Making
Process
1.Programmed Decision
A simple, routine matter for which a
manager has an established decision rule.
Sample : The manager performs the
decision activity on a daily basis, using an
established procedure with the same clear
goal in mind.

2.Nonprogrammed Decision
A new, complex decision that requires a
creative solution.
Sample decisions : like buying out another
company are nonprogrammed.
The decision to acquire a company is
another situation that is unique and
unstructured and requires considerable
judgment.
Decision Making
Process
Decision
Making
Process
Model of
Decision Making

The Rational Model

The bounded
rationality model

The garbage can

model
MODEL 1
Rational Model
Rationality refers to a logical, step-by-step approach to decision
making, with a thorough analysis of alternatives and their
consequences

The decision maker strives to optimize, that is, to select the best
possible alternative.

Given its assumptions, the rational model is unrealistic.

There are time constraints on and limits to human knowledge and

information-processing capabilities. In addition, a manager’s
preferences and needs often change. The rational model is thus an
ideal that managers strive for in making decisions
MODEL 2
Bounded Rationality Model
Simon’s model also referred to as the “administrative man” theory,
rests on the idea that there are constraints that force a decision-
maker to be less than entirely rational.

The bounded rationality model has four assumptions:

Managers select the first satisfactory alternative.
Managers recognize that their conception of the world is simple.
Managers are comfortable making decisions without determining all the
alternatives.
Managers make decisions by rules of thumb or heuristics.
Heuristics are rules of thumb that allow managers to make decisions
based on what has worked in past experiences.

One of the reasons managers face limits to their rationality is that they must
make decisions under risk and time pressure.
MODEL 3
Garbage Can Model
MODEL 3
Garbage Can Model
In the garbage can model, decisions are random and unsystematic.

In this model, the organization is a garbage can in which problems,

solutions, participants, and choice opportunities are floating
around randomly.

The garbage can model illustrates the idea that not all
organizational decisions are made in a step-by-step, systematic
fashion. Especially under conditions of high uncertainty, the
decision process may be chaotic. Some decisions appear to
happen out of sheer luck.
Decision Making
and Risk
Many decisions involve some element of risk. For managers, hiring decisions, promotions, delegation,
acquisitions and mergers, overseas expansions, new product development, and other decisions make risk a
part of the job.

Some people experience risk aversion. They choose options that entail fewer risks, preferring familiarity and
certainty. Other individuals are risk takers; that is, they accept greater potential for loss in decisions, tolerate
greater uncertainty, and in general are more likely to make risky decisions. Risk takers are also more likely
to take the lead in group discussions.

Research indicates that women are more averse to risk taking than men and that older, more
experienced managers are more risk averse than younger managers.

There is also some evidence that successful managers take more risks than unsuccessful ones.

Risk taking is influenced not only by an individual’s tendency but also by organizational factors. In commercial
banks, loan decisions that require the assessment of risk are made every day.

Upper level managers face a tough task in managing risk-taking behavior. By discouraging lower level managers
from taking risks, they may stifle creativity and innovation. If upper level managers are going to encourage risk
taking, however, they must allow employees to fail without fear of punishment. One way to accom- plish this is
to consider failure “enlightened trial and error.”
INDIVIDUAL
INFLUENCE
IN DECISION MAKING
Individual Influences -
Jung’s Cognitive Styles

Carl Jung’s original theory identified two styles of information

gathering (sensing and intuiting) and two styles of making
judgments (thinking and feeling).

Individuals prefer one style of perceiving and one style of judging.

The combination of a perceiving style and a judging style is called a
cognitive style.
Individual Influences -
Jung’s Cognitive Styles
Cognitive Style Description & Strength Weakness

Rely on facts. impersonal analysis of the situation and then make an Alienate others because of their
Sensing/Thinking analytical, objective decision. They are valuable in organizations because tendency to ignore interpersonal
(ST) produce a clear, simple solution.  STs remember details and seldom make aspects of decisions. In addition,
factual errors they tend to avoid risks

Gather factual information, but they make judgments in terms of how they
Sensing/Feeling affect people. They place great importance on interpersonal relationships but Have trouble accepting new ideas
(SF) also take a practical approach.  SFs’ strength in decision is to handle that break the organization’s rules
interpersonal problems well and to take calculated risks.

Focus on the alternative possibilities in a situation and then evaluate them Tendencies to ignore arguments
Intuiting/Thinking
objectively and impersonally. They initiate ideas, focus on the long term. They based on facts and to ignore the
(NT)
are innovative and will take risks. E.g: new business development. feelings of others

Prone to making decisions based on

Search out alternative possibilities and evaluate the possibilities in terms of personal preferences rather than
Intuiting/Feeling
how they will affect the people involved. They enjoy participative decision objective data. They may also
(NF)
making and are committed to developing their employees become too responsive to the needs
of others
 Other individual

influences
on Decision Making

Our brains have two

lateral halves :
The right side is the
center for creative
functions
The left side is the
center for logic,
detail, and planning.
 Other individual

influences
on Decision Making

Brain hemispheric dominance is related to students’ choices of

college majors.
Right-brained students are attracted to education, nursing,
communication, and literature.
Left-brained students gravitate toward business, engineering, and
sciences.
There are advantages to both kinds of thinking; the ideal situation is
to use either logic or creativity, or both, depending on the situation.
To develop your right side or creative side, you can ask “what-if”
questions, engage in play, and follow your intuition.
To develop the left side, you can set goals for completing tasks and
work to attain these goals.


The Role of Intuition

A fast, positive force in decision making that is utilized at a level below
consciousness and involves learned patterns of information
Intuition is an elusive concept, and one with many definitions. There is an
interesting paradox regarding intuition. Some researchers view “rational”
methods
In Jungian theory, intuiting (N) is one preference used to gather data. This is only
one way that the concept of intuition has been applied to managerial decision
making.

Intuition has been variously described as follows:

The ability to know or recognize quickly and readily the possibilities of a
situation
Smooth automatic performance of learned behavior sequences.
Simple analyses frozen into habit and into the capacity for rapid response
through recognition.
 Creativity

at Work
Creativity is a process that is at least in part unconscious, influenced
by individual and organizational factors that results in the production
of novel and useful ideas, products, or both.

 Creativity

at Work
Individual Influences
Several individual variables are related to creativity. One group of factors
involves the cognitive processes that creative individuals tend to use. One
cognitive process is divergent thinking, meaning the individual’s ability to
generate several potential solutions to a problem

Organizational Influences
The organizational environment people work in can either support or impede
creativity. Flexible organizational structures and participative decision making
have also been associated with creativity. An organization can also present
impediments to creativity

Individual/Organization
Fit Research has indicated that creative performance is highest when there is a
match, or fit, between the individual and organizational influences on creativity.
Research has shown that individuals can be trained to be more creative.8
GROUP DECISION
MAKING TECHNIQUE
 Group Decision
Making Technique
Group Decision-making is a form of participative decision-
making, where a group of individuals work together to solve a
problem complex in nature.

What is a Group?
Group is the number of individuals who come
together and work to attain a common objective.

What is Decision-making?
It is a process of selecting the best solution to
solve a critical problem.
 Group Decision
Making Technique
Group Decision Making aims to:

Gain commitment towards the decisions.

Invest more knowledge and expertise during the
process.
Bring synergy among the group members.
Participation in
Decision Making
In a participative decision-making process each team member has an
opportunity to share their perspectives, voice their ideas and tap their
skills to improve team effectiveness and efficiency.

The Effects of Participation

Occurs when individual who are affected bu decisions
influence the making of those decision
Has positive consequences and impact even individuals do
not directly benefit from the policies are involved in the
decision making
Increase creativity, job satisfactioyn and productivity
Participation in
Decision Making
Group participation can ignite people’s passions and motivate
them to take action
Example : Walmart

Walmart designed “My Sustainability Plan” (MSP) with the

following goal: “There are more than two million associate
worldwide. Imagine if each of us made one small change to
improve our health, our life, our community and our world.
That’s million of little changes added up to make a world of
difference. That’s the goal of MSP to enable associates to live
healthier, live vetter and live greener.”
Participation in
Decision Making
The Two Foundation :
1.Supportive organizational culture and team oriented work
design
A supportive work environment is essential because of the uncertainty
within the org
Lower level must be able to make decisions and take action on them
Senior leadership 🡺 an organizational culture (supportive and
reassuring)

2.The design of work

Team oriented work design 🡺 key foundation for task broader &
greater sense of responsibility
Example is Volvo builds cars using team-oriented design
Participation in
Decision Making
The Three Individual Prerequisites
1.The capability to become psychologically involved in participative activities
Eventhough not all people are so predisposed; Germany vs General Motors case

2.The motivation to act autonomously

Except, for dependent personalities are
predisposed to be told what to do and to
rely on external motivation rather than
internal, intrinsic motivation

3.The capacity to see the relevance of

participation for one’s own well-being
•rerequisite, if participative decision making
is to work, people must be able to sess how
it provides a personal benefit to them
Participation in
Decision Making
Level of Participation
1.Identify problems
2.Generate alternatives
3.Select solutions
4.Plan for implementations
5.Evaluate results

Notes :
Research shows that greater involvement in all five of above stages has
cumulative effect
Employees who are involved in all five processes have higher satisfaction &
performance levels
Style of participation in decision making may need to change as the company
grwos or its culture changes
Participation in
Decision Making
Advantages
1.More knowledge and info through the pooling of group member resources
2.Increase acceptance of, and commitment to, the decision because members
had a voice in it
3.Greater understanding of the decision because members were involved in
the various stages of the decision process

Disadvantages
1.Pressure within the group to conform and fit in (groupthink)
2.Domination of the group by one forceful member or a dominant clique, who
may ramrod the decision (causing group polarization)
3.The amount of time required, because a group makes decisions more slowly
than an individual
Participation in
Decision Making
Groupthink
One liability of a cohesive group is its tendency to develop groupthink.
Groupthink is a deterioration of mental efficiency, reality testing and moral judgement
(Irving Janis).

Certain conditions caused

1.High cohesiveness
Cohesive groups tend to favor solidarity because members identify strongly with the
group
2.Having to make a highly consequential decisions and time constraints
A highly consequential decision is one that will have a great impact on the group
members and on outside parties
When they have limited time in which to make decisions, they may rush through the
process
Participation in
Decision Making
Participation in
Decision Making
Group Polarization
Indvividual who were initially against an issue became more radically opposed, and
individuals who were in favor of the issue became strongly supportive following
discussions.

Why occurs
Social comparison approach
Prior discussions, individual believe they hold better views that others.
During, they see that views are not so far form average. They shift to extreme
positions
The persuasive arguments view
Discussion reinforces the initial views of members, so they take a more extreme
positions
Participation in
Decision Making
How to avoid Group Polarization
Group polarization is the tendency for group discussion
to produce shifts toward more extreme attitudes among
members

So we need Brainstorming
Brainstorming is a technique for generating as many ideas as possible on a
given subject, while suspending evaluation until all the ideas have been
suggested.

Brainstorming is goof technique for generating alternatives

Participants are encouraged to build the suggestions

of others, and imagination is emphasized
DECISION-MAKING IN
A CULTURAL CONTEXT
Diversity dan Culture Dimensions
affect decision making:

Culture is a key factor in decision-making styles.

As Hofstede already proposed that many dimension affect
the decision making.
As an example, is Uncertainty avoidance
that strongly affect the way people view
decision.
In the US that having low Uncertainty
avoidance, decisions are viewed as a
change opportunities.
As a contras Indonesia and Malaysia,
accept the situation as they are rather
than to change them.
Diversity dan Culture Dimensions
affect decision making:
Power Distance
In India, where have solid hierarchical cultures, such as India, top-level managers make decisions.
In countries with low power distance, like swedish culture lower-level employees make many
decisions.

The individualist/collectivist
Japan, with its collectivist emphasis, favors group decisions. The United States has a more difficult
time with group decisions because it is an individualistic culture. Time orientation affects the
frame of reference of the decision. In China, with its long-term view, decisions are made with the
future in mind. In the United States, many decisions are made considering only the short term

The masculine/feminine dimension.

This dimension can be compared to the Jungian thinking/ feeling preferences for decision
making. Masculine cultures, as in many Latin American countries, value quick, assertive decisions.
Feminine cultures, as in many Scandinavian countries, value decisions that reflect concern for
others
Recent research examining the effects of cultural diversity on decision making has found that
when individuals in a group are racially dissimilar, they engage in more open information sharing,
encourage dissenting perspectives, and arrive at better decisions than racially similar groups.
Decision Making in the Virtual
Workplace
How are decisions made in virtual teams?
These teams require advanced technologies for communication and
decision making.
Decision making in the virtual workplace is characterized by the use of
sophisticated technologies to assist in decision making.

Some of these technologies, like

videoconferencing, DSSs, and GDSSs, simply
assist humans in making the decision.
Others, like expert systems and some forms
of ABM, play a greater role in making the
decision. Regardless of the degree to which
they play a role, all of these technologies
make decision making in today’s virtual
workplace easier.
Ethical Issues in Decision Making
One criterion that should be applied to decision making is the ethical
implications of the decision.
Kenneth Blanchard and Norman Vincent Peale proposed an “ethics check”
for decision makers in their book The Power of Ethical Management.146 :

Is it legal? (Will I be violating the law or

company policy?)
Is it balanced? (Is it fair to all concerned
in the short term and long term?
Does it promote win–win relationships?)
How will it make me feel about myself?
(Will it make me proud of my actions?
How will I feel when others become
aware of the decision?)
Ethical issues in Decision Making

In summary, all decisions, whether made by individuals or

by groups, must be evaluated for their ethics.
Organizations should reinforce ethical decision making
among employees by encouraging and rewarding it.
Socialization processes should convey to newcomers the
ethical standards of behavior in the organization. Groups
should use devil’s advocates and dialectical methods to
reduce the potential for group thinking and the unethical
decisions that may result.
Ethical issues in Decision Making

In summary, all decisions, whether made by individuals or

by groups, must be evaluated for their ethics.
Organizations should reinforce ethical decision making
among employees by encouraging and rewarding it.
Socialization processes should convey to newcomers the
ethical standards of behavior in the organization. Groups
should use devil’s advocates and dialectical methods to
reduce the potential for group thinking and the unethical
decisions that may result.
Studi Kasus
Perusahaan ini adalah perusahaan FnB sedang tumbuh. Mulai dari omset milyaran sekarang sudah beromset triliun. Usia
perusahaan ini adalah 7 tahun. Dimana ini dimiliki oleh Family Business.
Dimana keluarga memegang peran antara lain : CEO, Head of Business Development (ponakan), dan manager Real Estate
dan wakilnya (adik kandung dan suaminya).

CEO ini seorang risk taker. dan sangat gigih dalam mencapai tujuan (nAch sangat tinggi).
Namun dalam mengelola bisnisnya, CEO ini sangat profesional.
Bahkan sewaktu di tanya, bagaimana terkait adik-adiknya. Beliau menyampaikan "Adik saya cukup di RE, tidak perlu
masuk struktur. Ga perlu di C Level juga. Karena adik saya tidak disiplin. Nanti tidak baik buat yg lain"

Di dalam pengembangkan business nya, CEO ini selalu mengajak teamnya untuk eksplorasi. Misalnya bagaimana
membuat outlet ini menjadi simple sehingga mudah di duplikasi.

Dalam mengambil keputusan →

Setiap bulannya CEO ini membuat challange kepada teamnya untuk membuat improvement di masing-masing
departement.
Yang awalnya murni risk taker. CEO kini mengambil keputusan dengan pertimbangan keuangan. Dan jika improvement-
improvement masih sesuai dengan angka rasio keuangan dan juga kualitas, CEO menyetujui semua improvement yang
ada.

Sewaktu menggali brainstorming dengan team inti. Hampir semua team terdekatnya menyampaikan bahwa “Saya merasa
di hargai pendapat saya. Dan sini saya bisa berkreasi. Perusahaan ini tumbuh,dan saya merasa memiliki perusahaan ini.
Karena saya merasa ikut membesarkan”.
Studi Kasus
PROSES PENGAMBILAN KEPUTUSAN
MODEL DECISION MAKING
CEO ini banyak menggunakan rasional dan rasional terbatas. Untuk
yang sifatnya jangka menengah dan panjang, CEO menggunakan
model rasional. Namun jika jangka pendek, CEO ini menggunakan
rasional terbatas.

Untuk RESIKO, CEO ini adalah seorang RISK TAKER yang terukur.
Sehingga wajar jika CEO ini bisa membawa perusahaannya tumbuh.
Studi Kasus
Individual Influences
Cognitive style seorang CEO ini adalah NF (Intuiting/Feeling (NF) yang
sangat terbuka untuk berbagai idea dalam problem solving dan
melibatkan berbagai pihak dalam berdiskusi. Seorang NF Membuat
keputusan apa yang terbaik untuk kepentingan bersama dari orang-
orang yg terlibat di organisasi

keputusan long term, beliau sadar bahwa dalam pengambilan keputusan

mengacu pada Z problem-solving model seharusnya seorang pemimpin
tidak hanya mengandalkan satu cognitive style intuisi/feeling tetap lebih
explorasi dan membuat analyisa Sensing (berdasarka Fakta/Details), dan
Thinking mempertimbangkan berbagai konsekuensi dari keputusan yang
diambil (terutama financial impact)
Studi Kasus
Dari sisi Group Decision Making, CEO ini berusaha untuk menerapkannya dengan menekankan adanya
partisipasi karyawan lain dalam menentukan atau mengambil sebuah keputusan ataupun kebijakan.
Bila melihat Level Partisipasi, maka sang CEO tersebut sudah menerapkan kelima level tersebut yaitu :Identiifkasi
masalah, Generalisir alternatif/pilihan, Seleksi solusi, Plan for implementation dan Evaluasi Hasi
Sepertinya si CEO sangat paham bahwa pengambilan keputusan bersama akan membuat adanya sinergi dalam
perusahaannya, mengikat komitmen karyawan dan juga meningkatkan produktivitas karena adanya engagement
karywan terhadap perusahaan karena merasa dilibatkan dan dianggap (orang jawa bila “diuwongke”

Yang menarik, mengingat perusahaan tersebut awalnya perusahaan keluarga yang ingin berubah menjadi
profesiona, maka si CEO berusaha membatasi terhadap kemungkinan adanya Groupthink (dominasi dari
salahsatu keluarganya dalam perusahaan daat pengambilan keputusan) dan juga Group Polarization (menjaga
adanya kelompok-kelompok dari keluarganya yang menjadi bagian perusahaan untuk mencari dukungan
karyawan lain sehingga terkesan nantinya ada 2 kelompok yang berseteru yang justru akan merugikan
perusahaan itu sendiri.

Untuk menghindari adanya hal-hal diatas, setidaknya 2 cara yang dilakukan oleh CEO, yaitu :
1. Membatasi wewenang keluarganya dalam bisnis serta menilai mereka berdasarkan kompetensi secara
objektif
2. Membawa budaya brainstorming, karena dia percaya bahwa inilah yang akan membawa terus maju
perusahaannya