ADM 612 - Leadership

1. ADM 612 - Leadership Lecture 19 – Leadership and Decision Making

2. Introduction • Leaders of governments, major business corporations, and other large organizations typically make policy decisions with the expectation that the outcomes will be sufficiently successful to achieve fairly well the objectives they have in mind. • But, all too often they are bitterly disappointed.

3. Introduction • Models of decision-making. • Rational model. • Political model. • Process model. • Garbage can model.

4. Rational Model • Grounded in goals/objectives, alternatives, consequences, and optimality. • Assumptions. • Complete information. • One correct conception of the problem.

5. Rational Model • Steps. • Define problem. • Determine goals and objectives. • Identify all alternatives. • Identify consequences of alternatives. • Weigh the costs and benefits of each consequence. • Select the alternative that produces the most optimal outcome.

6. Rational Model • Advantage – Logical, sequential approach. • Disadvantage – Assumes no intrinsic biases.

7. Political Model • Considers preconceived notions that decision-makers bring to the table. • Assumes decision-makers are motivated by and act on their own needs and perceptions. • Decision-making involves a cycle of bargaining as each decision-maker attempts to get his or her approach adopted. Attempt to sway powerful stakeholders.

8. Political Model • Assumes incomplete information and does not focus on optimal outcome. • Advantages – represents subjective nature of decision-making and may minimize conflict. • Disadvantage – does not necessarily produce the best solution, only the most political acceptable one.

9. Process Model • Decisions are made on the basis of standard operating procedures or pre-established guidelines within the organization. • The organization of past, present, and future events.

10. Process Model • Key value is conformity. If in doubt, conform to pre-existing standard. • Advantages – Adds predictability to decision-making process. • Disadvantages – Sacrifices flexibility to predictability, can leave the organization vulnerable to rapid external change.

11. Garbage Can Model • Most appropriate where technologies are unclear, participant involvement fluctuates, and choices are inconsistent and not well-defined. (Ill-structured problems). • Decision opportunity is a garbage can into which many types of problems and solutions are dropped independently.

12. Garbage Can Model • Linkages among problems, solutions, and decision-makers are often determined by both chance and necessity. • Advantages – Real world representation of non-rational manner in which decisions are often made. • Disadvantages – Not the most efficient way to make a decision.

13. Introduction • Several different causes contribute to unsuccessful outcomes. • Unforeseeable obstacles to effective implementation (countermoves) and uncontrollable events. • Leader’s oversimplified beliefs and ideological stereotypes. • Ambiguity of available evidence. • Misleading information. • Bad luck.

14. Introduction • But one of the key factors: poor quality of the decision making procedures used either to arrive at a new policy or to reaffirm the existing policy.

15. Introduction • Defective procedures do not guarantee a bad outcome, but the likelihood is substantially less if sound procedures of information search, appraisal, and planning are used.

16. Introduction • Among the defective pathways that lead to disastrous policy decisions are those that fail to correct avoidable errors – rectifiable misperceptions, refutable false assumptions, resolvable ignorance, and remediable lapses in judgment concerning the probability or magnitude of expected costs or benefits.

17. Introduction • An organization’s success or failure, indeed its very survival, depends in large part on the leadership it is able to attract.

18. Introduction

19. Introduction • Key assumptions of the decision-making model. • The quality of decision procedures used to arrive at a fundamental policy decision is one of the major determinants of a successful outcome. • Most top-level leaders are capable of carrying-out the procedures that are essential for high-quality policymaking. • Policymakers generally make no effort to use high-quality procedures for arriving at a policy decision if they regard the issue as unimportant. • If one of the constraints is critical, policymakers will give the constraint priority even if the issue is very important.

20. Introduction • Procedural criteria for effective decision-making • Surveys a wide range of objectives. • Canvasses a wide range of alternatives. • Intensively searchers for new information relevant to the alternatives. • Correctly assimilates and takes account of new information or expert judgments. • Reconsiders the positive and negative consequences of alternatives originally regarded as unacceptable. • Carefully examines costs and risks of negative consequences. • Makes detailed provisions for implementation and monitoring.

21. Introduction • Symptoms of poor decision-making. • Gross omissions in surveying objectives. • Gross omissions in surveying alternatives. • Poor information search. • Selective bias in processing information at hand. • Failure to reconsider originally rejected alternatives. • Failure to examine major costs and risks of the preferred choice. • Failure to work out detailed implementation, monitoring and contingency plans.

22. Vigilant problem solving

23. Vigilant Problem Solving • Challenge: Threat or opportunity. • (e.g., crisis posing threat to vital interests)

24. Vigilant Problem Solving • Step 1: Formulating the problem. • Q.1 What requirements should be met: • Dangers to be averted. • Gains to be attained. • Costs to be kept to tolerable levels? • Q. 2 What seems to be the best direction of solution? • Top-of-the-head survey of alternatives.

25. Vigilant Problem Solving • Step 2. Using informational resources: • Q.3 What prior information can be recalled or retrieved? • Q.4 What new information should be obtained? • Expert’s forecasts. • Intelligence reports, etc.

26. Vigilant Problem Solving • Step 3. Analyzing and reformulating: • Q.5 Any additions or changes in the requirements? • Q. 6 Any additional alternatives? • Q. 7 What additional information might reduce uncertainties?

27. Vigilant Problem Solving • Step 4. Evaluating and selecting: • Q. 8 What are the pros and cons for each alternative? • Q. 9 Which alternative appears to be best? • Q. 10 Any requirements unmet? • If so, can they be relaxed or changed? If not, might a modification be better?

28. Vigilant Problem Solving • Step 4: Evaluating and selecting (contd.): • Q.11 How can potential costs and risks be minimized? • Q. 12 What additional plans are needed for implementation, monitoring, and contingencies?

29. Vigilant Problem Solving • Steps 1 through 4 are cyclical. Information feeds back and forth through all of the steps. • The cycling should also lead to reconsider previous rejected alternatives to make sure you are not missing something critical.

30. Vigilant Problem Solving • Deciding after adequate search, appraisal, and planning – manifested by absence of the following defects in decision-making procedures: • Gross omissions in surveying objectives. • Gross omissions in surveying alternatives. • Poor information search. • Selective bias in processing information at hand. • Failure to reconsider originally rejected alternatives. • Failure to examine major costs and risks of the preferred choice. • Failure to work out detailed implementation, monitoring and contingency plans.

31. Vigilant Problem Solving • Closure • Internal consolidation of the choice. • Bolstering it by playing up the advantages and playing down the disadvantages. • Soliciting supportive information. • Refuting unwelcome information about drawbacks.

32. Vigilant Problem Solving • Closure. • Social commitment to the choice: • Announcing it to interested parties. • Promoting it, especially among implementers and policy evaluators who are unenthusiastic.

33. Decision constraints

34. Cognitive Constraints • Limited time. • Perceived limitations of available resources for information search and appraisal. • Multiple tasks. • Perplexing complexity of the issue. • Perceived lack of dependable knowledge. • Ideological commitments.

35. Cognitive Decision Rules • Availability. • Satisficing. • Analogizing. • Nutshell briefing. • Operational code (standard operating procecures).

36. Affiliative Constraints • Need to maintain: • Power. • Status. • Compensation. • Social support. • Need for acceptability of new policy within the organization.

37. Affiliative Decision Rules • Avoid punishment. • “Rig” acceptance. • Exercise one-upmanship in the power struggle. • Groupthink: preserve group harmony.

38. Egocentric (Self-Serving and Emotive Constraints) • Strong personal motive: • Greed, desire for fame, etc. • Arousal of an emotional need: e.g., anger, elation. • Emotional stress of decisional conflict.

39. Egocentric (Self-Serving and Emotive Decision Rules) • Personal aggrandizement: “What’s in it for me?” • Angry retaliation. • Audacity: “Can do!” • Elated choice: “Wow! Grab it!” • Defensive avoidance: procrastinate, pass-the-buck, or bolster. • Hypervigilant escape: “Get the hell out fast!”