© 2005 prentice hall inc. all rights reserved.5–1 decision making and stress mgmt anubha
TRANSCRIPT
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DECISION MAKING AND STRESS MGMTDECISION MAKING AND STRESS MGMT
AnubhaAnubha
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Phases of DMPhases of DM
Identification Phase – identify problem– Recognize and Diagnose
Development phase – Solution– Search and design
Selection phase – Choice of solution– Judgment, Analysis & authorisation
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Types of decisionTypes of decision
Basic & Routine (Basic decision that are taken, generally only once and have a long lasting impact on the working of an org whereas routine are day to day basis and don’t have a major impact )
Personal & Organizational (Personal decision cannot be delegated and org often, if not always be delegated)
Program and non programmed ( Decision are routine and repetitive decision that are normally handled by bureaucratic procedure whereas non programmed decision made by individual using the info available and their own ability to judge the situation)
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Mechanistic Decision – the decision maker is sure of alternative and outcome of each alternative
Analytical Decision – decision taken where a large alternatives can be generated since a lot of information is available and outcome of each alternative can be calculated.
Judgment decision – A limited no. of alternatives are available to solve the problem and outcome of decision are also unknown
Adaptive Decision - a large no of alternatives are available and their outcome is not known
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Techniques used in steps of DMTechniques used in steps of DM
Brainstorming Synectics Delphi Technique
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Identify Problem
The Decision-Making Process
Select Alternative
ImplementAlternative
EvaluateResults
1
Develop Alternatives
AnalyzeAlternatives
DevelopDecisionCriteria
Allocate Weights to
Criteria
2 3
4 5
6
7
8
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Step 2: Decision Criteria
Factors that are relevant in making the decision
Price Interior comfort Durability Repair record Performance Handling
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Determining the relative priority
of each of the criteria
Step 3: Allocating Weights
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Problem: To purchase a new car
Criterion Weight
Price 10
Interior comfort 8
Durability 5
Repair record 5
Performance 3
Handling 1
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Assessing the value of each
alternative by making a value
judgment of the feature
Step 5: Analyzing Alternatives
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Concluding Steps in Making a DecisionConcluding Steps in Making a Decision
Step 6: Select the “best”
Step 7: Implement decision
Step 8: Evaluate decision
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Assumptions Of RationalityAssumptions Of Rationality
RationalDecisionMaking
Problem isclear and
unambiguous
Single, well-defined goal
is to be achievedAll alternatives
and consequences
are known
Preferencesare clear
Preferencesare constantand stable
No time or costconstraints exist
Final choicewill maximize
payoff
© Prentice Hall, 2002Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.
FOM 4.12
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Creativity and Decision MakingCreativity and Decision Making
Creativity is the ability to produce novel and useful ideas
Important to decision making as it allows the decision-maker to “see” problems that others can’t
It helps identify more viable alternatives
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Unleashing Creative PotentialUnleashing Creative Potential
“Thinking out of the box” Using the right side of your brain Three-component model of creativity
– Expertise– Creative-thinking skills– Intrinsic task motivation
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Bounded Rationality
Uncertainty Risk Satisfying Focusing on highly visible choices
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Errors in Decision-Making ProcessErrors in Decision-Making Process
Heuristics– Availability– Representative
Escalation of commitment
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Well-Structured vs. Ill-Structured Problems
Straightforward Familiar Easily-defined
New or unusual Ambiguous information Incomplete information
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Categories of DecisionsCategories of Decisions
Programmed Non-programmed
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Procedure
Rule
Policy
Programmed DecisionProgrammed Decision
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ProgrammedDecisions
Non-programmedDecisions
Relationship of Problems, Decisions, and Level
Type ofProblem
Level
Ill-Structured
Well-Structured
Top
Lower
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Decision-making and TechnologyDecision-making and Technology
Information technology can help support decision-making
Types of software include– Expert systems– Neural networks– Groupware
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Analytical
BehaviouralDirective
Conceptual
Decision-Making Styles
Rational Intuitive
Way of Thinking
Low
HighT
ole
ran
ce f
or
Am
big
uit
y
Source: S. P. Robbins, Supervision Today (Upper Saddle River, NJ: Prentice Hall, 1995), page 111.
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Advantages of Group Decision-Making
More complete information
Diversity of experience
Generation of more alternatives
Solutions more likely to be accepted by those concerned
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Disadvantages of Group Decision-Making
Time-consuming
Domination by a few
Pressure to conform
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When are Groups More Effective
When accuracy is important When creativity is important When buy-in is important When size of group is 5-7 people
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Ways to Improve Group Decision-Making
Brainstorming
Nominal group technique
Electronic meetings
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Decision-Making and National Culture
Differs from one country to another Need to recognize what is acceptable Managers can expect high payoff if they can
accommodate the diversity
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How Are Decisions Actually Made in Organizations
How Are Decisions Actually Made in Organizations
Bounded Rationality
Individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.
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How Are Decisions Actually Made in Organizations (cont’d)
How Are Decisions Actually Made in Organizations (cont’d)
How/Why problems are identified– Visibility over importance of problem
• Attention-catching, high profile problems
• Desire to “solve problems”
– Self-interest (if problem concerns decision maker) Alternative Development
– Satisficing: seeking the first alternative that solves problem.
– Engaging in incremental rather than unique problem solving through successive limited comparison of alternatives to the current alternative in effect.
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Common Biases and ErrorsCommon Biases and Errors
Overconfidence Bias– Believing too much in our own decision
competencies. Anchoring Bias
– Fixating on early, first received information. Confirmation Bias
– Using only the facts that support our decision. Availability Bias
– Using information that is most readily at hand. Representative Bias
– Assessing the likelihood of an occurrence by trying to match it with a preexisting category.
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Common Biases and ErrorsCommon Biases and Errors
Escalation of Commitment– Increasing commitment to a previous decision in
spite of negative information. Randomness Error
– Trying to create meaning out of random events by falling prey to a false sense of control or superstitions.
Hindsight Bias– Falsely believing to have accurately predicted
the outcome of an event, after that outcome is actually known.
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IntuitionIntuition
Intuitive Decision Making– An unconscious process created out of distilled
experience. Conditions Favoring Intuitive Decision Making
– A high level of uncertainty exists– There is little precedent to draw on– Variables are less scientifically predictable– “Facts” are limited– Facts don’t clearly point the way– Analytical data are of little use– Several plausible alternative solutions exist– Time is limited and pressing for the right
decision
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Organizational Constraints on Decision MakersOrganizational Constraints on Decision Makers
Performance Evaluation– Evaluation criteria influence the choice of actions.
Reward Systems– Decision makers make action choices that are
favored by the organization. Formal Regulations
– Organizational rules and policies limit the alternative choices of decision makers.
System-imposed Time Constraints– Organizations require decisions by specific
deadlines. Historical Precedents
– Past decisions influence current decisions.
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Cultural Differences in Decision MakingCultural Differences in Decision Making
Problems selected Time orientation Importance of logic and rationality Belief in the ability of people to solve problems Preference for collect decision making
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Ethics in Decision MakingEthics in Decision Making
Ethical Decision Criteria– Utilitarianism
• Seeking the greatest good for the greatest number.
– Rights• Respecting and protecting basic rights of individuals
such as whistleblowers.
– Justice• Imposing and enforcing rules fairly and impartially.
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Ethics in Decision MakingEthics in Decision Making
Ethics and National Culture– There are no global ethical standards.
– The ethical principles of global organizations that reflect and respect local cultural norms are necessary for high standards and consistent practices.
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Ways to Improve Decision MakingWays to Improve Decision Making
1. Analyze the situation and adjust your decision making style to fit the situation.
2. Be aware of biases and try to limit their impact.
3. Combine rational analysis with intuition to increase decision-making effectiveness.
4. Don’t assume that your specific decision style is appropriate to every situation.
5. Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies.
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STRESS MANAGEMENTSTRESS MANAGEMENT
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Work Stress and Its ManagementWork Stress and Its Management
Stress
A dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he or she desires and for which the outcome is perceived to be both uncertain and important.
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Work Stress and Its ManagementWork Stress and Its Management
Constraints
Forces that prevent individuals from doing what they desire.
Demands
The loss of something desired.
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Potential Sources of Stress Potential Sources of Stress
Environmental Factors
– Economic uncertainties of the business cycle
– Political uncertainties of political systems
– Technological uncertainties of technical innovations
– Terrorism in threats to physical safety and security
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Potential Sources of Stress Potential Sources of Stress
Organizational Factors
– Task demands related to the job
– Role demands of functioning in an organization
– Interpersonal demands created by other employees
– Organizational structure (rules and regulations)
– Organizational leadership (managerial style)
– Organization’s life stage (growth, stability, or decline)
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Potential Sources of Stress (cont’d) Potential Sources of Stress (cont’d)
Individual Factors
– Family and personal relationships
– Economic problems from exceeding earning capacity
– Personality problems arising for basic disposition
Individual Differences
– Perceptual variations of how reality will affect the individual’s future.
– Greater job experience moderates stress effects.
– Social support buffers job stress.
– Internal locus of control lowers perceived job stress.
– Strong feelings of self-efficacy reduce reactions to job stress.
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Consequences of StressConsequences of Stress
High LevelsHigh Levelsof Stressof Stress
High LevelsHigh Levelsof Stressof Stress
PhysiologicalPhysiologicalSymptomsSymptoms
PhysiologicalPhysiologicalSymptomsSymptoms
BehavioralBehavioralSymptomsSymptoms
BehavioralBehavioralSymptomsSymptoms
PsychologicalPsychologicalSymptomsSymptoms
PsychologicalPsychologicalSymptomsSymptoms
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Managing StressManaging Stress
Individual Approaches– Implementing time management– Increasing physical exercise– Relaxation training– Expanding social support network
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Managing StressManaging Stress
Organizational Approaches– Improved personnel selection and job placement– Training– Use of realistic goal setting– Redesigning of jobs– Increased employee involvement– Improved organizational communication– Offering employee sabbaticals– Establishment of corporate wellness programs
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A Model of StressA Model of Stress
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Managing StressManaging Stress
Individual Approaches– Implementing time management– Increasing physical exercise– Relaxation training– Expanding social support network
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Managing StressManaging Stress
Organizational Approaches– Improved personnel selection and job placement– Training– Use of realistic goal setting– Redesigning of jobs– Increased employee involvement– Improved organizational communication– Offering employee sabbaticals– Establishment of corporate wellness programs
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Inverted-U Relationship between Stress and Job Performance
Inverted-U Relationship between Stress and Job Performance
OPTIMAL
ALERT ANXIETY
SLEEPDISORGANISED