[SOLVED] MGT 4472 Troy University Management Worksheet – Business Finance

2/23/2020
Homework #1 (Chapter 6)
Homework #1 (Chapter 6)
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Answer each question and question component thoroughly and using complete sentences and proper grammar to
receive full credit.
Use the numbering scheme provided in your responses to clearly indicate to which question you are responding.
All information needed to respond comes from your textbook readings, lecture, and, in some circumstances, information
provided in the assignment, itself. Unless otherwise noted, do not consult outside resources to shape your answers.
Answer questions using only the material you read in the chapter, learned in lecture, read in the assignment, and your
personal knowledge/experience/opinions. I want to know your thoughts and ideas. Evidence of the use of outside
sources beyond the approved sources will result in a zero on the assignment. Turnitin is enabled for this
assignment.
An explanation of how responses are graded is provided at the bottom of this page.
Read Case Incident 1: Warning: Collaboration Overload (p. 208 of your textbook).
1. (a) Provide [up to 5 points for each way; 10 total points possible] two ways you think collaboration overload could have an
impact on decision making in the workplace.
(b) Explain why you think each way (explain each separately) could impact decision making [up to 5 points for each
explanation; 10 total points possible].
2. List two common biases from this chapter that you think play into managers’ continued expectations for the use of
collaboration and collaboration tools in the workplace, [providing the name of the bias is required for credit on this
question] and then explain how you think each bias (discuss each separately) influences these continued expectations [up
to 10 points for each explanation; 20 total points possible].
Hint: Refer to the “Common Biases and Errors and Decision Making” section of your textbook (pp. 189-193).
3. (a) In your own words, what is “escalating citizenship”? [up to 10 total points possible]
(b) Have you ever noticed this phenomenon occur (either with yourself or others)? [Direct answer is required for credit on
the rest of this question] Explain (even if your answer is “no”). [up to 10 total points possible]
Next, read the following article:
(2016, Jan 23). The collaboration curse. The Economist, 418, 67-63. Retrieved from https://search-proquestcom.libproxy.troy.edu/docview/1759060895?accountid=38769
(https://search-proquest-
com.libproxy.troy.edu/docview/1759060895?accountid=38769) [If this link does not work, you can download the article here: The
collaboration curse article.pdf
]
https://troy.instructure.com/courses/56198/assignments/820374
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2/23/2020
Homework #1 (Chapter 6)
4. (a) In your own words, what is “attention residue”? [up to 10 total points possible]
(b) What can you do (in your “real” job or your job as a student) to avoid problems resulting from attention residue? [up to
10 total points possible]
5. (a) What is argued in this article to be the “biggest problem with collaboration”? [up to 5 total points possible]
(b) Why? [up to 5 total points possible]
(c) Do you agree this is a problem? [Direct answer is required for credit on the rest of this question] [up to 10 total points
possible]
Grade Determination
The starting point value associated with each question component is provided in brackets after the question component.
Grading anchors for each discussion and/or explanation question component are as follows:
full credit (100%): Very thorough, in-depth discussion reflecting strong critical thinking (requires at least several
sentences); answers the question asked
partial credit (90%): Thorough, in-depth discussion reflecting strong critical thinking (requires at least several
sentences); answers the question asked
partial credit (80%): Somewhat thorough, in-depth discussion reflecting moderate critical thinking (requires at least
several sentences); answers the question asked
partial credit (70%): Minimally thorough discussion; answers question but reflects little critical thinking; answers the
question asked
partial credit (60%): Surface-level discussion; no depth to response/discussion reflecting very little critical thinking;
answers the question asked
no credit (0%): Does not answer the question asked
Deductions to starting score:
Use of outside sources (beyond the ones included in the assignment): automatic zero
Not writing in complete sentences: 10-point deduction per occurrence
Grammatical/typographical errors:
0-2: no deduction
3-4: 5-point deduction
5-6: 10-point deduction
7-10: 20-point deduction
more than 6: 30-point deduction
https://troy.instructure.com/courses/56198/assignments/820374
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6
Source: PJF Military Collection/Alamy Stock Photo
Perception and Individual
Decision Making
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
176
6-1
Explain the factors that influence
perception.
6-2
6-3
Describe attribution theory.
6-4
Contrast the rational model of
decision making with bounded rationality and intuition.
Explain the link between perception
and decision making.
6-5
Explain how individual differences
and organizational constraints affect
decision making.
6-6
Contrast the three ethical decision
criteria.
6-7
Describe the three-stage model of
creativity.
Perception and Individual Decision Making
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CHAPTER 6
Employability Skills Matrix (ESM)
Critical
Thinking
Myth or
Science?
Career
OBjectives
✓
✓
An Ethical
Choice
Point /
Counterpoint
Experiential
Exercise
Ethical
Dilemma
Case
Incident 1
Case
Incident 2
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Communication
✓
Collaboration
Knowledge
Application and
Analysis
✓
✓
✓
✓
✓
✓
✓
✓
Social
Responsibility
✓
✓
✓
✓
✓
✓
✓
✓
MyLab Management Chapter Warm Up
If your instructor has chosen to assign this activity, go to www.pearson
.com/mylab/management to complete the chapter warm up.
“UNETHICAL” DECISIONS IN “ETHICAL” ORGANIZATIONS
W
ould you expect the decisions made by employees within prosocial, nonprofit organizations to be ethical in all circumstances? At
first perhaps you might say of course not, but subconsciously, you might
believe they would. For example, we might stereotype these organizations and believe that they are “immune” from ethical mishaps because
of their prosocial orientation. Or we might “put a halo over these organizations” and never consider that members of these organizations can
do harm. Indeed, organizations such as the Wounded Warrior Project do
an immense deal of good in the community. The Wounded Warrior Project in particular raises funds and awareness for many prosocial aims
through charity events, such as the Soldier Ride in Jacksonville, Florida,
that raises money and awareness to support and honor wounded service
members (as pictured).
In recent years, however, many of these organizations have been caught
up in executive scandals. For example, the board of the Healing Arts Initiative, a New York–based nonprofit that stages performances, concerts,
and other arts events for New Yorkers without the means to attend such
events, moved to fire its executive director and chief financial officer (CFO)
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in April 2016. What were their crimes? With only several weeks on the job,
the executive director, D. Alexandra Dyer, uncovered a $750,000 embezzlement scheme within her organization and hired Frank Williams (the CFO) to
resolve the bookkeeping inconsistencies. The board moved to fire them in
retaliation. Many members of the board have since been indicted, but not
just for the embezzlement charges. In August 2016, shortly after uncovering the scheme, Dyer was assaulted with drain cleaner, an attack orchestrated by the board, that left her hospitalized for months and required
multiple operations.
Even nonprofits such as the Wounded Warrior Project are not without
scandal, in spite of the fact that the project has earned a three-star, 84.5
out of 100 score on the Charity Navigator ratings service and has spent
nearly 60 percent of its income on programs and services. A CBS News
report found that the project uses much of its money on very large executive compensation packages and luxurious travel accomodations. William
Chick, a former supervisor with the project, notes that “it slowly had less
focus on veterans and more on raising money and protecting the organization.” Chick was fired in 2012 after a dispute with a supervisor, and of
the 18 former employees who have come forward, a company spokewsoman (Ayla Tezel) notes that they were fired for either poor performance
or even ethical breaches. Tezel emphasized that not all are safe from
biased, poor, or unethical decision making; “sometimes employees make
poor choices that can’t be overlooked, and sometimes those employees
are veterans.”
Perhaps there is a danger, however, when we focus on isolated
instances of nonprofit mishaps: Instead of “putting the halo over” these
organizations, we may instead “put the horns over” them. We should
be careful not to generalize these isolated incidents to all nonprofits and
think that they are all bad and that everything they do must be illegitimate. As one commenter on one of the project’s Facebook posts wrote,
“[I]t’s really unfortunate that wounded veterans will really be hurt by the
drop-off in donations to come . . . my checkbook is now closed to this
organization.” The push, according to an emerging social movement,
should instead be on ensuring that the decision making in these nonprofits and social organizations are more accountable and transparent.
For example, so-called meta-charities (such as the Charity Navigator
mentioned earlier) and other groups work to provide objective ratings
of the services that nonprofit organizations provide. This movement,
effective altruism, has included many organizations, some of which (like
GiveDirectly) involve direct donations toward helping some of the world’s
poorest.
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179
Sources: Based on B. Chappell, “Wounded Warrior Project Fires Top 2 Executives after Reports
of Overspending,” NPR, March 11, 2016, http://www.npr.org/sections/thetwo-way/
2016/03/11/470081279/wounded-warrior-project-fires-top-2-executives-after-reports-ofoverspending; A. Newman, “Missing Money, a Vicious Attack and Slow Healing for a Charity’s
Leader,” The New York Times, April 28, 2016, https://nyti.ms/2mEIXYs; A. Newman, “Charity
Fires Leader Who Questioned Finances and Suffered Lye Attack,” The New York Times, May
6, 2016, https://nyti.ms/2mEIXYs; D. Philipps, “Wounded Warrior Project Spends Lavishly
on Itself, Insiders Say,” The New York Times, January 27, 2016, https://nyti.ms/2jOTAFs;
R. Rojas, “Nonprofit Executive Attacked with Drain Cleaner in Embezzlement Cover-Up, Officials Say,” The New York Times, April 5, 2016, https://nyti.ms/2ozPd0d; and G. Tsipursky,
“The Wounded Warrior Project Scandal Should Encourage More Philanthropy,” Time, March
15, 2016, http://time.com/4257876/wounded-warrior-project-scandal/.
T
he cases of the Healing Arts Initiative and the Wounded Warrior Project
illustrate how pervasive and tricky ethical decision making is within organizations. As we will see later in the chapter, ethical decision making hinges on
several criteria and can be fostered through many means. To better understand
what influences us and our organizations, we start at the roots of our thought
processes: our perceptions and the way they affect our decision making.
What Is Perception?
6-1
Explain the factors that
influence perception.
perception A process by which individuals
organize and interpret their sensory impressions to give meaning to their environment.
Perception is a process by which we organize and interpret sensory impressions to give meaning to our environment. What we perceive can be substantially different from objective reality. For example, all employees in a firm may
view it as a great place to work—favorable working conditions, interesting job
assignments, good pay, excellent benefits, understanding and responsible management—but, as most of us know, it’s very unusual to find universal agreement
across people.
Why is perception important in the study of Organizational Behavior (OB)?
It is important because people’s behavior is based on their perception of what
reality is, not on reality itself. The world as it is perceived is the world that is behaviorally important. In other words, our perception becomes the reality from which
we act. To understand what all of us have in common in our interpretations of
reality, we need to begin with the factors that influence our perceptions.
Factors That Influence Perception
Many factors shape and sometimes distort perception. These factors can reside
in the perceiver, the object or target being perceived, or the situation in which the
perception is made (see Exhibit 6-1).
Perceiver When you look at a target, your interpretation of what you see is
influenced by your personal characteristics—attitudes, personality, motives,
interests, past experiences, and expectations. In some ways, we hear what we
want to hear1 and we see what we want to see—not because it’s the truth,
but because it conforms to our thinking. For instance, research indicates
that supervisors perceived employees who started work earlier in the day as
more conscientious and therefore as higher performers; however, supervisors who were night owls themselves were less likely to make that erroneous
assumption.2 Some perceptions created by attitudes like these can be counteracted by objective evaluations, but others can be more insidious. Consider,
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Exhibit 6-1
Factors That Influence Perception
Factors in the perceiver
• Attitudes
• Motives
• Interests
• Experience
• Expectations
Factors in the situation
• Time
• Work setting
• Social setting
Perception
Factors in the target
• Novelty
• Motion
• Sounds
• Size
• Background
• Proximity
• Similarity
for instance, observer perceptions of a recent shooting in New York. There
were two eyewitnesses—one said a police officer chased and shot a fleeing
man; the other said a handcuffed man lying on the ground was shot. Neither
perceived the situation correctly: The man was attempting to attack a police
officer with a hammer when he was shot by another officer.3
Target The characteristics of the target also affect what we perceive. Because
we don’t look at targets in isolation, the relationship of a target to its background influences perception, as does our tendency to group close things and
similar things together.4 We can also perceive women, men, whites, African
Americans, Asians, or members of any group that has clearly distinguishable
characteristics as alike in other, often unrelated ways. These assumptions can
be harmful, as when people who have criminal records are prejudged in the
workplace even when it is known they were wrongly arrested.5 Sometimes differences can work in our favor, though, such as when we are drawn to targets that
are different from what we expect. For instance, participants in a recent study
respected a professor wearing a T-shirt and sneakers in the classroom more
than the same professor dressed traditionally. The professor stood out from the
norm for the classroom setting and was therefore perceived as an individualist.6
Context Context matters too. The time at which we see an object or event can
influence our attention, as can location, light, heat, or situational factors. For
instance, you may not notice someone dressed up for a formal event that you
attended on a Saturday night. Yet if you were to notice that person dressed the
same way for your Monday morning management class, he or she would likely
catch your attention, if the students do not normally wear formal attire to class.
Neither the perceiver nor the target has changed between Saturday night and
Monday morning, but the situation is different.
People are usually not aware of the factors that influence their view of reality.
In fact, people are not even that perceptive about their own abilities.7 Thankfully, awareness and objective measures can reduce our perception distortions.
Perception and Individual Decision Making
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181
For instance, when people are more aware of their own racial biases, they are
more motivated to control their own prejudice and more attuned to perceiving
their own biases.8 Let’s next consider how we make perceptions of others.
MyLab Management Watch It
If your instructor has assigned this activity, go to www.pearson.com/
mylab/management to complete the video.
Person Perception: Making Judgments
About Others
6-2
Describe attribution theory.
The perception concepts most relevant to OB include person perceptions, or the
perceptions people form about each other. Many of our perceptions of others
are formed by first impressions and small cues that have little supporting evidence. This is particularly troublesome—but common—when we infer another
person’s morality. Research indicates we form our strongest impressions based
on what we perceive about another’s moral character, but our initial information about this can be sketchy and unfounded.9 Let’s unravel some of our other
human tendencies that interfere with correct person perception, beginning
with the evidence behind attribution theory.
Attribution Theory
attribution theory An attempt to explain
the ways we judge people differently, depending on the meaning we attribute to a behavior,
such as determining whether an individual’s
behavior is internally or externally caused.
Nonliving objects such as desks, machines, and buildings are subject to the laws
of nature, but they have no beliefs, motives, or intentions. People do. When
we observe people, we attempt to explain their behavior. Our perception and
judgment of a person’s actions are influenced by the assumptions we make
about that person’s state of mind.
Attribution theory tries to explain the ways we judge people differently
depending on the meaning we attribute to a behavior.10 For instance, consider
what you think when people smile at you. Do you think they are cooperative,
exploitative, or competitive? We assign meaning to smiles and other expressions
in many ways.11
Attribution theory suggests that when we observe an individual’s behavior, we
attempt to determine whether it was internally or externally caused. That determination depends largely on three factors: (1) distinctiveness, (2) consensus,
and (3) consistency.12 Let’s clarify the differences between internal and external
causation, and then we’ll discuss the determining factors.
Internally caused behaviors are those an observer believes to be under the
personal behavioral control of another individual. Externally caused behavior
is what we imagine the situation forced the individual to do. If an employee is
late for work, you might attribute that to his overnight partying and subsequent
oversleeping. This is an internal attribution. But if you attribute his lateness to
a traffic snarl, you are making an external attribution.
Now let’s discuss the three determining factors. Distinctiveness refers to
whether an individual displays different behaviors in different situations. Is the
employee who arrives late today also one who regularly “blows off” other kinds
of commitments? What we want to know is whether this behavior is unusual. If
it is, we are likely to give it an external attribution. If it is not, we will probably
judge the behavior to be internal.
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fundamental attribution error The
tendency to underestimate the influence
of external factors and overestimate the
influence of internal factors when making
judgments about the behavior of others.
self-serving bias The tendency for individuals to attribute their own successes to
internal factors and put the blame for failures
on external factors.
If everyone who faces a similar situation responds in the same way, we can
say the behavior shows consensus. The behavior of our tardy employee meets
this criterion if all employees who took the same route were also late. From an
attribution perspective, if consensus is high, you would probably give an external attribution to the employee’s tardiness, whereas if other employees who
took the same route made it to work on time, you would attribute his lateness
to an internal cause.
An observer looks for consistency in a person’s actions. Does the person
respond the same way over time? Coming in 10 minutes late for work is not perceived the same for an employee who hasn’t been late for several months as for
an employee who is late three times a week. The more consistent the behavior,
the more we are inclined to attribute it to internal causes.
Exhibit 6-2 summarizes the key elements in attribution theory. It tells us, for
instance, that if an employee, Katelyn, generally performs at about the same
level on related tasks as she does on her current task (low distinctiveness),
other employees frequently perform differently—better or worse—than Katelyn on that task (low consensus), and Katelyn’s performance on this current
task is consistent over time (high consistency), anyone judging Katelyn’s work
will likely hold her primarily responsible for her task performance (internal
attribution).
Errors or biases distort attributions. When we make judgments about the
behavior of other people, we tend to underestimate the influence of external
factors and overestimate the influence of internal or personal factors.13 This fundamental attribution error can explain why a sales manager attributes the poor
performance of her sales agents to laziness rather than to a competitor’s innovative product line. Individuals and organizations tend to attribute their own successes to internal factors such as ability or effort while blaming failure on external
factors such as bad luck or difficult coworkers. People tend to attribute ambiguous information as relatively flattering, accept positive feedback, and reject negative feedback. This is called self-serving bias.14
The evidence on cultural differences in perception is mixed, but most suggests there are differences across cultures in the attributions people make.15
In one study, Asian managers were more likely to blame institutions or whole
organizations when things went wrong, whereas Western observers believed
Exhibit 6-2
Attribution Theory
Observation
Attribution
of cause
Interpretation
High
Distinctiveness
Low
High
Individual behavior
Consensus
Low
High
Consistency
Low
External
Internal
External
Internal
Internal
External
Perception and Individual Decision Making
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183
individual managers should get blame or praise.16 That probably explains why
U.S. newspapers feature the names of individual executives when firms do
poorly, whereas Asian media report the firm as a whole has failed. This tendency to make group-based attributions also explains why individuals from
Asian cultures, which are more collectivistic in orientation, are more likely to
use group stereotypes.17
Self-serving biases may be less common in East Asian cultures, but evidence
suggests they still operate there.18 Studies indicate Chinese managers assess
blame for mistakes using the same distinctiveness, consensus, and consistency cues Western managers use.19 They also become angry and punish those
deemed responsible for failure, a reaction shown in many studies of Western
managers. It may just take more evidence for Asian managers to conclude
someone else should be blamed.
The concept of attribution theory significantly advances our understanding
of person perception by helping us identify why we draw certain conclusions
from people’s behavior. Having introduced person perception, let’s consider
the common shortcuts we use to simplify our processing of others’ behavior.
So what if I’m a few minutes late to work?
I’m often late to work; something
always comes up at the last minute.
But my boss is such a jerk about it!
He’s threatening to install a time
clock. This is so insulting—I’m in management, I’m a professional, I’m on
salary, and I do the work! Please tell
me how to talk some sense into him.
—Renée
Dear Renée,
This issue seems to be very frustrating to you, and we’d like to help you
eliminate that dissatisfaction. Let’s
start by analyzing why you and your
boss think differently on the issue. You
and he certainly perceive the situation
differently—he sees your lateness as a
violation, and you see it as a natural
occurrence. In many other jobs, precise
timing may not be expected, valued, or
needed. Perhaps your boss is trying to
highlight the value he places on punctuality. Or maybe he sees your lateness
as unethical behavior that cheats your
organization of your valuable work time.
According to Ann Tenbrunsel, director of the Institute for Ethical Business
Worldwide, the way we look at our decisions changes our perception of our
behaviors. You view your tardiness as
something that just happens, not part
of a decision process. What if you
looked at your tardiness as a daily ethical decision? Your organization has a
start time to which you agreed as a
condition of your employment, so coming in late is a deviation from the standard. There are actions you can take
throughout your early morning that control your arrival time. So, by this model,
your behavior is unethical.
Your situation is not uncommon; we
all have moral blind spots, or situations
with ethical ramifications we don’t see.
Also, as we said earlier, other organizations may not care about your arrival
time, so it’s not always an ethical situation. But for situations where ethics are
in play, research indicates punishment
doesn’t work. Reframing the decisions
so we see the ethical implications does
work. Try these steps to gain insight:
• Look at the motives for your decisions
•
during your morning routine. Can you
see where you make choices?
Consider your past actions. When you
think back about your early morning
decisions, do you find yourself justifying your delays? Justification signals
that our decisions might be suspect.
Career OBjectives
• Look at the facts.
How do the reasons for your past delays reflect
attitudes you have unconsciously
acted on?
If you can see the ethical aspect of
your daily lateness, you can work to
meet the expectation. Think briefly
about the ethics of your morning
choices when you first wake up, and
you’ll be much more likely to be on
time.
Sources: Based on C. Moore and A. E.
Tenbrunsel, “‘Just Think about It’? Cognitive
Complexity and Moral Choice,” Organizational
Behavior and Human Decision Processes
123, no. 2 (2014): 138–49; A. Tenbrunsel,
Ethical Systems, www.ethicalsystems.org/
content/ann-tenbrunsel, accessed May 7,
2015; review and podcast of Blind Spots:
Why We Fail to Do What’s Right and What
to Do about It, May 4, 2015, http://press
.princeton.edu/titles/9390.html, accessed
May 7, 2015.
The opinions provided here are of the
authors only. The authors are not responsible
for any errors or omissions, or for the results
obtained from the use of this information. In
no event will the authors or their related partnerships or corporations thereof be liable to
you or anyone else for any decision made or
action taken in reliance on the opinions provided here.
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Common Shortcuts in Judging Others
Shortcuts for judging others often allow us to make accurate perceptions rapidly and provide valid data for making predictions. However, they can and do
sometimes result in significant distortions.
selective perception The tendency to
choose to interpret what one sees based on
one’s interests, background, experience, and
attitudes.
halo effect The tendency to draw
a positive general impression about an
individual based on a single characteristic.
horns effect The tendency to draw
a negative general impression about an
individual based on a single characteristic.
contrast effect Evaluation of a person’s
characteristics that is affected by comparisons with other people recently encountered
who rank higher or lower on the same
characteristics.
stereotyping Judging someone based on
one’s perception of the group to which that
person belongs.
Selective Perception Any characteristic that makes a person, an object, or an
event stand out will increase the probability we will perceive it. Why? Because it
is impossible for us to assimilate everything we see; we can take in only certain
stimuli. Thus, you are more likely to notice cars like your own, and your boss
may reprimand some people and not others doing the same thing. Because we
can’t observe everything going on around us, we use selective perception. But
we don’t choose randomly: We make selections based on our interests, background, experience, and attitudes. Seeing what we want to see, we sometimes
draw unwarranted conclusions from an ambiguous situation.
Halo and Horns Effects When we draw a positive impression about an individual based on a single characteristic, such as intelligence, sociability, or appearance, a halo effect is operating.20 The horns effect, on the other hand, is when
we draw a negative impression from a single characteristic. These effects are
easy to demonstrate. If you think someone was, say, sociable, what else would
you infer? You probably wouldn’t say the person was introverted, right? You
might assume the person was loud, happy, or quick-witted when in fact the
word sociable does not include those other positive attributes. Managers need to
be careful not to draw inferences from small clues.
Contrast Effects An adage among entertainers is “Never follow an act that has
kids or animals in it.” Why? Audiences love children and animals so much that
you’ll look bad in comparison. This example demonstrates how the contrast
effect can distort perceptions. We don’t evaluate a person in isolation. Our
reaction is influenced by other people we have recently encountered.
For example, research on 22 teams in a Chinese hospitality organization
that was undergoing radical organizational change and new leader appointments suggests that transformational leadership (see Chapter 12) is more effective in improving support for the changes among followers when the former
leader was not transformational—when the former leader was transformational,
the new leader behaviors were not as effective.21
Stereotyping When we judge someone based on our perception of the group
to which he or she belongs, we are stereotyping.22
We deal with our complex world’s unmanageable number of stimuli by
using stereotypes or shortcuts called heuristics to make decisions quickly. For
example, it does make sense to assume that Allison from finance will be able to
help you figure out a forecasting problem. The challenge occurs when we generalize inaccurately or too much. Stereotypes can be deeply ingrained and powerful enough to influence life-and-death decisions. One study that controlled
for a wide array of factors (such as aggravating or mitigating circumstances)
showed that the degree to which black defendants in murder trials looked
“stereotypically black” essentially doubled their odds of receiving a death sentence if convicted.23 Another study found that students tended to assign higher
scores for leadership potential and effective leadership to whites than to minorities, supporting the stereotype of whites as better leaders.24
One problem with stereotypes is that they are widespread generalizations,
although they may not contain a shred of truth when applied to a particular
person or situation. We must monitor ourselves to make sure we’re not unfairly
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185
Nurse Li Hongfei, who works at No.
4 People’s Hospital in Shenyang,
China, experiences negative stereotyping based on his gender. Like Li,
male nurses in many countries report
that gender stereotyping generalizes inaccurately that nursing is a
profession for women only because
men lack the patience, empathy, and
compassion required to succeed as
a nurse.
Source: Zhang Wenkui Xinhua News Agency/Newscom
applying a stereotype in our evaluations and decisions. Stereotypes are an
example of the warning, “The more useful, the more danger from misuse.”
It should be obvious by now that our perceptions, many of which are nearinstantaneous and without conscious deliberation, color our outlook. Sometimes they have little impact on anyone, but more often our perceptions greatly
influence our decisions. The first step toward increasing the effectiveness of
organizational decision making is to understand the perception process on an
individualized level, a topic we discuss next.
Specific Applications of Shortcuts in Organizations
People in organizations are always judging each other. Managers must appraise
their employees’ performances. We evaluate how much effort our coworkers
are putting into their jobs. Team members immediately “size up” a new person.
In many cases, our judgments have important consequences for the organization. Let’s look at the most obvious applications.
self-fulfilling prophecy A situation
in which a person inaccurately perceives a
second person and the resulting expectations
cause the second person to behave in ways
consistent with the original perception.
Employment Interview Few people are hired without an interview. But interviewers make perceptual judgments that are often inaccurate and draw early
impressions that quickly become entrenched.25 Research shows that we form
impressions of others within a tenth of a second, based on our first glance.26
Most interviewers’ decisions change very little after the first 4 or 5 minutes of
an interview. Thus, information elicited early in the interview carries greater
weight than does information elicited later, and a “good applicant” is probably
characterized more by the absence of unfavorable characteristics than by the
presence of favorable ones. Our individual intuition about a job candidate is
not reliable in predicting job performance, so collecting input from multiple
independent evaluators can be predictive.27
Performance Expectations People attempt to validate their perceptions of reality even when these perceptions are faulty. The terms self-fulfilling prophecy
and Pygmalion effect describe how an individual’s behavior is determined by
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others’ expectations.28 If a manager expects big things from her people, they’re
not likely to let her down. Similarly, if she expects only minimal performance,
the employees will likely meet those low expectations. Expectations become
reality. The self-fulfilling prophecy has been found to affect the performance of
students, soldiers, accountants, and a number of other occupations.29
Performance Evaluations We’ll discuss performance evaluations in Chapter 17,
but note that they very much depend on the perceptual process.30 An employee’s future is closely tied to his or her appraisal—promotion, pay raises, and
continuation of employment are among the outcomes. Although the appraisal
can be objective (for example, a salesperson is appraised on how many dollars of sales he generates in his territory), many jobs are evaluated subjectively.
Subjective evaluations, though often necessary, are problematic because of the
errors we’ve discussed—selective perception, contrast effects, halo effects, and
so on. Sometimes performance ratings say as much about the evaluator as they
do about the employee!
All Stereotypes Are Negative
T
his statement is false. Positive
stereotypes exist as much as negative ones.
A study of Princeton University students shows, for example, that even
today we believe Germans are better
workers, Italians and African Americans
are more loyal, Jews and Chinese are
more intelligent, and Japanese and
English are more courteous. What is
surprising is that positive stereotypes
are not always positive.
We may be more likely to “choke”
(fail to perform) when we identify with
positive stereotypes because they
induce pressure to perform at the stereotypical level. For example, men are
commonly believed to have higher math
ability than women. A study showed
that when this stereotype is activated
before men take a math test, their performance on the test decreases. The
belief that white men are better at science and math than women or minorities caused white men in another study
to leave science, technology, engineering, and math majors. One study used
basketball to illustrate the complexity of
stereotypes. Researchers provided evidence to one group of undergraduates
that whites were better free throw
shooters than blacks. Another group
was provided evidence that blacks were
better free throw shooters than whites.
A third group was given no stereotypic
information. The undergraduates in
all three groups then shot free throws
while observers watched. The people
who performed the worst were those in
the negative stereotype condition (black
undergraduates who were told whites
were better and white undergraduates
who were told blacks were better).
However, the positive stereotype group
(black undergraduates who were told
blacks were better and white undergraduates who were told whites were better)
also did not perform well. The best performance was turned in by those in the
group without stereotypic information.
“Choking” is not the only negative thing about positive stereotypes.
Research revealed that when women or
Asian Americans heard positive stereotypes about themselves (“women are
nurturing”; “Asians are good at math”),
they felt depersonalized and reacted
negatively to the individual expressing
the positive stereotype. Another study
showed that positive stereotypes about
Myth or Science?
African Americans solidified negative
stereotypes because any stereotype
tends to reinforce group-based differences, whether positive or negative.
Stereotypes are understandable. To
function, we need shortcuts; however,
shortcuts run both ways. Because stereotypes are socially learned, we need
to be vigilant about not accepting or
propagating them among our coworkers and peers.
Sources: Based on A. C. Kay, M. V. Day, M. P.
Zanna, and A. D. Nussbaum, “The Insidious
(and Ironic) Effects of Positive Stereotypes,”
Journal of Experimental Social Psychology 49
(2013): 287–91; J. O. Sly and S. Cheryan,
“When Compliments Fail to Flatter: American Individualism and Responses to Positive Stereotypes,” Journal of Personality and
Social Psychology 104 (2013): 87–102; M. J.
Tagler, “Choking under the Pressure of a Positive Stereotype: Gender Identification and
Self-Consciousness Moderate Men’s Math
Test Performance,” Journal of Social Psychology 152 (2012): 401–16; M. A. Beasley and
M. J. Fischer, “Why They Leave: The Impact of
Stereotype Threat on the Attrition of Women
and Minorities from Science, Math and Engineering Majors,” Social Psychology of Education 15 (2012): 427–48; and A. Krendl,
I. Gainsburg, and N. Ambady, “The Effects of
Stereotypes and Observer Pressure on Athletic Performance,” Journal of Sport & Exercise Psychology 34 (2012): 3–15.
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The Link Between Perception
and Individual Decision Making
6-3
Explain the link between
perception and decision
making.
decisions Choices made from among two
or more alternatives.
problem A discrepancy between the
current state of affairs and some desired state.
Individuals make decisions, choices from among two or more alternatives. Ideally, decision making would be an objective process, but the way individuals
make decisions and the quality of their choices are largely influenced by their
perceptions. Individual decision making is an important factor of behavior at
all levels of an organization.
Decision making occurs as a reaction to a problem. That is, a discrepancy
exists between the current state of affairs and some desired state, requiring us
to consider alternative courses of action. If your car breaks down and you rely
on it to get to work, you have a problem that requires a decision on your part.
Unfortunately, most problems don’t come neatly labeled. One person’s problem is
another person’s satisfactory state of affairs. One manager may view her division’s
2 percent decline in quarterly sales to be a serious problem requiring immediate
action on her part. Her counterpart in another division, who also had a 2 percent
sales decrease, might consider it quite acceptable. So awareness that a problem
exists and that a decision might or might not be needed is a perceptual issue.
Every decision requires us to interpret and evaluate information. We typically receive data from multiple sources that we need to screen, process, and
interpret. Which data are relevant to the decision, and which are not? Our perceptions will answer that question. We also need to develop alternatives and
evaluate their strengths and weaknesses. Again, our perceptual process will
affect the outcome. Finally, we should consider how our perceptions of the situation influence our decisions. For instance, how good are you at saying no?
Research indicates that we perceive that saying no is uncomfortable, and often
after saying no we will feel obligated to say yes to subsequent requests. In fact,
people are so uncomfortable saying no that they may agree to unethical acts.
When student participants in a study asked 108 strangers to write the word
pickle in library books, half of them did it!31
Decision Making in Organizations
6-4
Contrast the rational model
of decision making with
bounded rationality and
intuition.
Business schools train students to follow rational decision-making models.
While such rationalistic models have merit, they don’t always describe how
people make decisions. OB improves the way we make decisions in organizations by addressing the decision-making errors people commit in addition to
the perception errors we’ve discussed. First, we describe some decision-making
constructs and then outline a few of the most common errors.
The Rational Model, Bounded Rationality, and Intuition
rational Characterized by making
consistent, value-maximizing choices within
specified constraints.
rational decision-making model
A decision-making model that describes how
individuals should behave to maximize some
outcome.
In OB, generally accepted constructs of decision making are employed by each
of us to make determinations. These constructs are rational decision making,
bounded rationality, and intuition. Though their processes make sense, they may
not lead to the most accurate (or best) decisions. More important, sometimes
one strategy may lead to a better outcome than another in a given situation.
Rational Decision Making We often think the best decision maker is rational
and makes consistent, value-maximizing choices within specified constraints.32
Rational decisions follow a six-step rational decision-making model33 (see
Exhibit 6-3).
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Exhibit 6-3
1.
2.
3.
4.
5.
6.
Steps in the Rational Decision-Making Model
Define the problem.
Identify the decision criteria.
Allocate weights to the criteria.
Develop the alternatives.
Evaluate the alternatives.
Select the best alternative.
The rational decision-making model assumes the decision maker has complete information, can identify all relevant options in an unbiased manner, and
chooses the option with the highest utility.34 However, most decisions don’t follow the rational model; people are usually content to find an acceptable or reasonable solution to a problem rather than an optimal one. We tend to limit our
choices to the neighborhood of the problem’s symptom and the current alternative at hand. As one expert in decision making put it, “Most significant decisions are made by judgment, rather than by a defined prescriptive model.”35
People are remarkably unaware of making suboptimal decisions.36
bounded rationality A process of making
decisions by constructing simplified models
that extract the essential features from problems without capturing all their complexity.
Nintendo president Satoru Iwata
(right) and DeNA president Isao
Moriyasu operated within the confines
of bounded rationality in deciding to
form an alliance to develop and operate new game applications for mobile
devices. The alliance brings Nintendo’s games and characters to the
mobile user market and strengthens
DeNA’s mobile gaming business.
Source: Akio Kon/Bloomberg/Getty Images
Bounded Rationality Often, we don’t follow the rational decision-making model
for a reason: Our limited information-processing capability makes it impossible
to assimilate all the information necessary to optimize, even if the information
is readily obtainable.37 Many problems don’t have an optimal solution because
they are too complicated to fit the rational decision-making model, so people
satisfice: They seek solutions that are satisfactory and sufficient. We tend to
reduce complex problems to a level we can readily understand.
Because the human mind cannot formulate and solve complex problems
with full rationality, we operate within the confines of bounded rationality.
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We construct simplified models that extract the essential features from problems without capturing all their complexity. We can then behave rationally
within the limits of the simple model.
How does bounded rationality work for the typical individual? Once we’ve
identified a problem, we begin to search for criteria and alternatives. The criteria are unlikely to be exhaustive. We identify alternatives that are highly visible
and that usually represent familiar criteria and tried-and-true solutions. Next,
we begin reviewing the alternatives, focusing on choices that differ little from
the current state until we identify one that is “good enough”—that meets an
acceptable level of performance. Thus ends our search. Therefore, the solution
represents a satisficing choice—the first acceptable one we encounter—rather
than an optimal one.
Satisficing is not always bad—a simple process may frequently be more
sensible than the traditional rational decision-making model.38 To use the
rational model, you need to gather a great deal of information about all the
options, compute applicable weights, and then calculate values across a huge
number of criteria. All these processes can cost time, energy, and money. Sometimes a fast-and-frugal process of solving problems might be your best option.
Bounded rationality can also be of concern in ethical decision making (as
discussed later in this chapter). Not only are we prone to make systematic and
predictable errors in ethical decisions,39 but our perceptions of whether we
have the freedom or right to behave in a particular way are bounded by our
duties toward the people our actions affect.40 For example, you want to take the last
doughnut in the break room but you know that you shouldn’t in case someone
has not had one yet. Researchers have identified many ways in which the automatic effects of our bounded rationality can be circumvented in an ethical
context: Be sure to triangulate on the focal issue by asking multiple questions,
drawing on multiple sources, considering the sources from which you derive
information, and leaving more time to decide.41
intuitive decision making An unconscious process created out of distilled
experience.
Intuition Perhaps the least rational way of making decisions is intuitive decision
making, an unconscious process created from distilled experience.42 Intuitive
decision making occurs outside conscious thought; relies on holistic associations,
or links between disparate pieces of information; is fast; and is affectively charged,
meaning it engages the emotions.43 While intuition isn’t rational, it isn’t necessarily wrong, nor does it always contradict rational analysis; the two can complement
each other.
Does intuition help effective decision making? Researchers are divided, but
most experts are skeptical, in part because intuition is hard to measure and analyze (although expertise-based intuitive decisions tend to be more effective and
accurate).44 Probably the best advice from one expert is: “Intuition can be very
useful as a way of setting up a hypothesis but is unacceptable as ‘proof.’” Use
hunches derived from your experience to speculate, yes, but always make sure
to test those hunches with objective data and rational, dispassionate analysis.45
As you can see, the more we use objective processes for decision making,
the more likely we are to correct some of the problems with our perceptual
process. Just as there are biases and errors in the perception process, it stands
to reason there are identifiable biases and errors in our decision making, which
we will outline next.
Common Biases and Errors in Decision Making
Decision makers engage in bounded rationality, but they also allow systematic
biases and errors to creep into their judgments.46 To minimize effort and avoid
trade-offs, people tend to rely too heavily on experience, impulses, gut feelings,
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Intuition plays an important role in the
investment buying decisions of Warren
Buffett, chair and CEO of Berkshire
Hathaway. Buffett begins exploring
investment alternatives by using his
intuition as a guide in selecting a firm
he understands and finds interesting
before he starts analyzing the firm, its
industry, and its valuation.
Source: Huang Jihui/Xinhua/Alamy Stock Photo
and convenient rules of thumb. Shortcuts can distort rationality. The following
are the most common biases in decision making. Exhibit 6-4 provides some
suggestions for avoiding these biases and errors.
Overconfidence Bias We tend to be overconfident about our abilities and
the abilities of others; also, we are usually not aware of this bias.47 For example, when people say they’re 90 percent confident about the range a certain
Exhibit 6-4
Reducing Biases and Errors
Focus on Goals. Without goals, you can’t be rational, you don’t know what information you
need, you don’t know which information is relevant and which is irrelevant, you’ll find it
difficult to choose between alternatives, and you’re far more likely to experience regret
over the choices you make. Clear goals make decision making easier and help you eliminate
options that are inconsistent with your interests.
Look for Information That Disconfirms Your Beliefs. One of the most effective means for
counteracting overconfidence and the confirmation and hindsight biases is to actively look
for information that contradicts your beliefs and assumptions. When we overtly consider
various ways we could be wrong, we challenge our tendencies to think we’re smarter than
we actually are.
Don’t Try to Create Meaning out of Random Events. The educated mind has been trained
to look for cause-and-effect relationships. When something happens, we ask why. And
when we can’t find reasons, we often invent them. You have to accept that there are events
in life that are outside your control. Ask yourself if patterns can be meaningfully explained
or whether they are merely coincidence. Don’t attempt to create meaning out of
coincidence.
Increase Your Options. No matter how many options you’ve identified, your final choice can
be no better than the best of the option set you’ve selected. This argues for increasing your
decision alternatives and for using creativity in developing a wide range of diverse choices.
The more alternatives you can generate, and the more diverse those alternatives, the
greater your chance of finding an outstanding one.
Source: Based on S. P. Robbins, Decide & Conquer: Making Winning Decisions and Taking Control of Your Life (Upper Saddle River, NJ:
Financial Times/Prentice Hall, 2004), 164–68.
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number might take, their estimated ranges contain the correct answer only
about 50 percent of the time—and experts are no more accurate in setting
up confidence intervals than are novices.48
Individuals whose intellectual and interpersonal abilities are weakest are most
likely to overestimate their performance and ability.49 There’s also a negative
relationship between entrepreneurs’ optimism and performance of their new
ventures: the more optimistic, the less successful.50 The tendency to be too confident about their ideas might keep some from planning how to avoid problems
that arise.
Investor overconfidence operates in a variety of ways.51 Finance professor
Terrance Odean says, “People think they know more than they do, and it costs
them.” Investors, especially novices, overestimate not just their skill in processing information but also the quality of the information. Most investors will do
only as well as or just slightly better than the market.
anchoring bias A tendency to fixate
on initial information, from which one then
fails to adjust adequately for subsequent
information.
confirmation bias The tendency to seek
out information that reaffirms past choices
and to discount information that contradicts
past judgments.
availability bias The tendency for people
to base their judgments on information that is
readily available to them.
Anchoring Bias Anchoring bias is a tendency to fixate on initial information
and fail to adequately adjust for subsequent information.52 As we discussed
earlier in the chapter, the mind appears to give a disproportionate amount
of emphasis to the first information it receives in employment interviews.
Anchors are widely used by people in professions in which persuasion skills
are important—advertising, management, politics, real estate, and law.
Any time a negotiation takes place, so does anchoring. When a prospective employer asks how much you made in your prior job, your answer typically
anchors the employer’s offer. (Remember this when you negotiate your salary,
but set the anchor only as high as you truthfully can.) The more precise your
anchor, the smaller the adjustment. Some research suggests people think of
making an adjustment after an anchor is set as rounding off a number: If you
suggest a salary of $55,000, your boss will consider $50,000 to $60,000 a reasonable range for negotiation, but if you mention $55,650, your boss is more likely
to consider $55,000 to $56,000 the range of likely values.53
Confirmation Bias The rational decision-making process assumes we objectively
gather information. But we don’t. We selectively gather it. Confirmation bias represents a case of selective perception: We seek out (and accept) information
that reaffirms our past choices and current views, and we discount (or are skeptical of) information that contradicts or challenges them.54 We even tend to
seek sources most likely to tell us what we want to hear, and we give too much
weight to supporting information and too little to contradictory. Those who feel
a strong need to be accurate in deciding are less prone to confirmation bias.
Availability Bias More people are afraid of flying than they are of driving in
a car. But if flying on a commercial airline were as dangerous as driving, the
equivalent of two 747s filled to capacity would crash every week, killing all
aboard. Because the media give more attention to air accidents, we tend to
overstate the risk of flying and understate the risk of driving.
Availability bias is our tendency to base judgments on readily available information. A combination of readily available information and our previous direct
experience with similar information has a particularly strong impact on our
decision making. Also, events that evoke emotions, are particularly vivid, or are
more recent tend to be more available in our memory. This can lead us to overestimate the chances of unlikely events, such as being in an airplane crash, suffering complications from medical treatment, or getting fired.55 Availability
bias can also explain why managers give more weight in performance appraisals to recent employee behaviors than to behaviors of 6 or 9 months earlier.56
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escalation of commitment
An increased commitment to a previous
decision despite negative information.
randomness error The tendency of
individuals to believe that they can predict the
outcome of random events.
risk aversion The tendency to prefer a
sure gain of a moderate amount over a riskier
outcome, even if the riskier outcome might
have a higher expected payoff.
Escalation of Commitment Another distortion that creeps into decisions is a
tendency to escalate commitment, often for increasingly nonrational reasons.57
Escalation of commitment refers to our staying with a decision even if there is
clear evidence that it is wrong. Consider a friend who has been dating someone for several years. Although he admits things aren’t going too well, he says
he is still going to marry her. His justification: “I have a lot invested in the
relationship!”
When is escalation most likely to occur? Evidence indicates that it occurs
when individuals view themselves as responsible for the outcome. The fear of
personal failure even biases the way we search for and evaluate information
so that we choose only information that supports our dedication.58 It doesn’t
appear to matter whether we chose the failing course of action or it was assigned
to us—we feel responsible and escalate in either case. Also, the sharing of decision authority—such as when others review the choice we made—can lead to
higher escalation.59
We usually think of escalation of commitment as ungrounded. However,
persistence in the face of failure is responsible for many of history’s greatest
feats: the building of the Pyramids, the Great Wall of China, the Panama Canal,
and the Empire State Building among them. On a smaller scale, the desire to
consider yourself a “good person” can lead you to experience escalation toward
a prosocial goal.60 Researchers suggest that a balanced approach includes frequent evaluation of the spent costs and whether the next step is worth the
anticipated costs.61 What we want to combat is thus the tendency to escalate
commitment automatically.
Randomness Error Most of us like to think we have some control over our
world. Our tendency to believe we can predict the outcome of random events is
the randomness error.
Decision making suffers when we try to create meaning in random events,
particularly when we turn imaginary patterns into superstitions.62 These can be
completely contrived (“I never make important decisions on Friday the 13th”) or
they can evolve from a reinforced past pattern of behavior (Tiger Woods often
wears a red shirt during a golf tournament’s final round because he won many
junior tournaments wearing red shirts). Decisions based on random occurrences
can handicap us when they affect our judgment or bias our major decisions.
Risk Aversion Mathematically speaking, we should find a 50–50 flip of the coin
for $100 to be worth as much as a sure promise of $50. After all, the expected
value of the gamble over many trials is $50. However, nearly everyone but committed gamblers would rather have the sure thing than a risky prospect.63 For
many people, a 50–50 flip of a coin even for $200 might not be worth as much as
a sure promise of $50, even though the gamble is mathematically worth twice as
much! This tendency to prefer a sure thing over a risky outcome is risk aversion.
Overall, the framing of a decision has an effect on whether or not people
will engage in risk-averse behavior—when decisions are framed positively, such
as a potential gain of $50, people will be more risk averse (conversely, when
the decision is framed in a negative manner, such as a loss of $50, people will
engage in riskier behaviors).64 CEOs at risk of termination are exceptionally
risk averse, even when a riskier investment strategy is in their firms’ best interests.65 Organizations have a stronger hold on employees who are more risk
averse because these employees tend to perceive that they have more to lose
and are less likely to leave the organization.66
Risk preference is sometimes reversed: People take chances when trying to
prevent a negative outcome.67 They may thus risk losing a lot of money at trial
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rather than settle for less out of court. Stressful situations can make risk preferences stronger. People under stress are more likely to engage in risk-seeking
behavior to avoid negative outcomes and in risk-averse behavior when seeking
positive outcomes.68
hindsight bias The tendency to believe
falsely, after an outcome of an event
is actually known, that one would have
accurately predicted that outcome.
Hindsight Bias Hindsight bias is the tendency to believe falsely, after the outcome is known, that we would have accurately predicted it.69 When we have
feedback on the outcome, we seem good at concluding it was obvious.
For instance, the original home video rental industry, renting movies at
brick-and-mortar stores, collapsed as online distribution outlets ate away at the
market.70 Some have suggested that if rental companies like Blockbuster had
leveraged their brand to offer online streaming and kiosks, they could have
avoided failure. While that seems obvious now in hindsight, tempting us to
think we would have predicted it, many experts failed to predict industry trends
in advance. Though criticisms of decision makers may have merit, as Malcolm
Gladwell, author of Blink and The Tipping Point, writes, “What is clear in hindsight is rarely clear before the fact.”71
We are all susceptible to biases like hindsight bias, but are we all susceptible
to the same degree? It is not likely. Our individual differences play a significant
role in our decision-making processes, while our organizations constrain the
range of our available decision choices.
MyLab Management Try It
If your instructor has assigned this activity, go to www.pearson.com/
Influences on Decision Making: Individual
Differences and Organizational Constraints
6-5
Explain how individual differences and organizational
constraints affect decision
making.
We turn here to factors that influence the way people make decisions and the
degree to which they are susceptible to errors and biases. We discuss individual
differences and then organizational constraints.
Individual Differences
As we discussed, decision making in practice is characterized by bounded rationality, common biases and errors, and the use of intuition. Individual differences such as personality also create deviations from the rational model.
Personality Research suggests that personality influences our decisions. Let’s
look at conscientiousness and self-esteem.
Specific facets of conscientiousness—particularly achievement-striving
and dutifulness—may affect escalation of commitment.72 First, achievementoriented people hate to fail, so they escalate their commitment, hoping to forestall failure. Dutiful people, however, are more inclined to do what they see as
best for the organization, so they are less likely to escalate their commitment.
Second, achievement-striving individuals appear more susceptible to hindsight
bias, perhaps because they have a need to justify their actions.73 We don’t have
evidence yet on whether dutiful people are immune to this bias.
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People with high self-esteem (a general perception of being good enough)
are strongly motivated to maintain it, so they use the self-serving bias to preserve it. They blame others for their failures while taking credit for successes.74
In a more extreme case, those with the personality trait of grandiosity, a facet of
narcissism (see Chapter 5), tend to engage in the self-serving bias.75
Gender Who makes better decisions, men or women? It depends on the situation. When the situation isn’t stressful, decision making by men and women
is about equal in quality. In stressful situations, it appears that men become
more egocentric and make more risky decisions, while women become more
empathetic and their decision making improves.76 Research on rumination,
or reflecting at length, offers further insights into gender differences in decision making.77 Women spend more time than men analyzing the past, present, and future. They’re more likely to overanalyze problems before deciding
and to rehash a decision once made. This can make problems harder to solve,
increase regret over past decisions, and increase depression. Women are nearly
twice as likely as men to develop depression,78 but why women ruminate more
than men is not clear; some research points to differences in the hypothalamus, pituitary, and adrenal gland responses.79 However, the gender difference
seems to lessen with age. Differences are largest during young adulthood and
smallest after age 65, when both men and women ruminate the least.80
Mental Ability We know people with higher levels of mental ability can process
information more quickly, solve problems more accurately, and learn faster, so
you might expect them to be less susceptible to common decision errors. However, mental ability appears to help people avoid only some of them.81 Smart
people are just as likely to fall prey to anchoring, overconfidence, and escalation of commitment, probably because being smart doesn’t alert you to the
possibility that you’re too confident or emotionally defensive. It’s not that intelligence never matters. Once warned about decision-making errors, more intelligent people learn to avoid them more quickly.
Cultural Differences The rational model makes no acknowledgment of cultural
differences, nor does the bulk of OB research literature on decision making.
But Indonesians, for instance, don’t necessarily make decisions the same way
Australians do. Therefore, we need to recognize that the cultural background
of a decision maker can significantly influence the selection of problems, the
depth of analysis, the importance placed on logic and rationality, and whether
organizational decisions should be made autocratically by an individual manager or collectively in groups.82
Cultures differ in time orientation, the value they place on rationality, their
belief in the ability of people to solve problems, and their preference for collective decision making. First, differences in time orientation help us understand,
for instance, why managers in Egypt make decisions at a much slower and more
deliberate pace than their U.S. counterparts. Second, while rationality is valued
in North America, that’s not true elsewhere. A North American manager might
decide intuitively but know it’s important to appear to proceed in a rational
fashion because rationality is highly valued in the West. In countries such as
Iran, where rationality is not paramount over other factors, it is not necessary
for efforts to appear rational.
Third, some cultures emphasize solving problems, while others focus on
accepting situations as they are. The United States falls in the first category;
Thailand and Indonesia are examples of the second. Because problem-solving
managers believe they can and should change situations to their benefit, U.S.
managers might identify a problem long before their Thai or Indonesian counterparts would choose to recognize it as such.
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Fourth, decision making in Japan is much more group-oriented than in the
United States. The Japanese value conformity and cooperation, so before Japanese CEOs make an important decision, they collect a large amount of information to use in consensus-forming group decisions.
Organizational Constraints
Organizations can constrain decision makers, creating deviations from the
rational model. For instance, managers shape decisions to reflect the organization’s performance evaluation and reward systems, to comply with formal regulations, and to meet organizationally imposed time constraints. Precedents can
also limit decisions.
Performance Evaluation Systems Managers are influenced by the criteria on
which they are evaluated. If a division manager believes the manufacturing
plants under his responsibility are operating best when he hears nothing negative, the plant managers will spend a good part of their time ensuring that negative information doesn’t reach him.
Reward Systems The organization’s reward systems influence decision makers
by suggesting which choices have better personal payoffs. If the organization
rewards risk aversion, managers are more likely to make conservative decisions.
For instance, for over half a century (the 1930s through the mid-1980s), General Motors consistently gave promotions and bonuses to managers who kept a
low profile and avoided controversy. These executives became adept at dodging tough issues and passing controversial decisions on to committees, which
harmed the organization over time.
Formal Regulations David, a shift manager at a Taco Bell restaurant in San
Antonio, Texas, describes constraints he faces on his job: “I’ve got rules and
regulations covering almost every decision I make—from how to make a burrito to how often I need to clean the restrooms. My job doesn’t come with much
freedom of choice.” David’s situation is not unique. All but the smallest organizations create rules and policies to program decisions and get individuals to act
in the intended manner. In doing so, they limit decision choices.
Manager Kely Guardado (center)
prepares hamburgers alongside
employees at a Five Guys Burger
and Fries restaurant. The autonomy
of Five Guys crew members are limited because workers are required
to follow rules and regulations for
food preparation that meet the firm’s
high standards of quality, safety, and
service.
Source: Yuri Gripas/Reuters
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System-Imposed Time Constraints Almost all important decisions come with
explicit deadlines. For example, a report on new-product development may
have to be ready for executive committee review by the first of the month. Such
conditions often make it difficult, if not impossible, for managers to gather all
information before making a final choice.
Historical Precedents Decisions aren’t made in a vacuum; they have context.
Individual decisions are points in a stream of choices; those made in the past
are like ghosts that haunt and constrain current choices. It’s common knowledge that the largest determinant of the size of any given year’s budget is last
year’s budget. Choices made today are largely a result of choices made over
the years.
What About Ethics in Decision Making?
6-6
Contrast the three ethical
decision criteria.
Ethical considerations should be important to all organizational decision making. In this section, we present three ways to frame decisions ethically and then
address the important issue of the effect of lying on decision making.
Three Ethical Decision Criteria
utilitarianism An ethical perspective
in which decisions are made to provide the
greatest good for all.
whistle-blowers Individuals who report
unethical practices by their employer to
outsiders.
deonance A perspective in which ethical
decisions are made because you “ought to”
in order to be consistent with moral norms,
principles, standards, rules, or laws.
The first ethical yardstick is utilitarianism, which proposes making decisions
solely based on their outcomes, ideally to provide the greatest good for all.83 This
view dominates business decision making and is consistent with goals such as
efficiency, productivity, and high profits. Keep in mind that utilitarianism is not
always as objective as it sounds. A recent study indicated that the ethicality of
utilitarianism is influenced in ways we don’t realize. Participants were given a
moral dilemma: The weight of five people bends a footbridge so it is low to
some train tracks. A train is about to hit the bridge. The choice is to let all five
people perish, or push the one heavy man off the bridge to save four people. In
the United States, South Korea, France, and Israel, 20 percent of respondents
chose to push the man off the bridge; in Spain, 18 percent chose to do so;
and in Korea, none did. These might speak to cultural utilitarian values, but
a minor change, asking people to answer in a non-native language they knew,
caused more participants to push the man overboard: In one group, 33 percent pushed the man, and in another group 44 percent did.84 The emotional
distance of answering in a non-native language thus seemed to foster a utilitarian viewpoint. It appears that even our view of what we consider pragmatic is
changeable.
Another ethical criterion is to make decisions consistent with fundamental
liberties and privileges, as set forth in documents such as the U.S. Bill of Rights.
An emphasis on rights in decision making means respecting and protecting the
basic rights of individuals, such as the right to privacy, free speech, and due
process. This criterion protects whistle-blowers85 when they reveal an organization’s unethical practices to the press or government agencies, using their right
to free speech.
A third criterion is to impose and enforce rules fairly and impartially to
ensure justice or an equitable distribution of benefits and costs.86 This criterion is often approached from a deonance standpoint (employees feel as if
they ought to behave in a certain way, as laid out in rules, laws, norms, or
moral principles).87 For example, some employees might feel as if they should
not steal from their workplace because it is ethically “wrong” by moral norms,
Perception and Individual Decision Making
behavioral ethics Analyzing how
people behave when confronted with
ethical dilemmas.
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principles, or standards or it is forbidden by rules or laws. Notably, this “ought
force” is present regardless of whether organizational rules exist; often, a
decision is regarded as unfair or unjust because it violates a moral norm or
principle.
Decision makers, particularly in for-profit organizations, feel comfortable
with utilitarianism. The “best interests” of the organization and its stockholders
can justify a lot of questionable actions, such as large layoffs. But many critics
feel this perspective needs to change. Public concern about individual rights
and social justice suggests managers should develop ethical standards based on
nonutilitarian criteria. This presents a challenge because satisfying individual
rights and social justice creates far more ambiguities than utilitarian effects on
efficiency and profits. While raising prices, selling products with questionable
effects on consumer health, closing inefficient plants, laying off large numbers
of employees, and moving production overseas to cut costs can be justified in
utilitarian terms, there may no longer be a single measure by which good decisions are judged.
This is where corporate social responsibility (CSR) comes in to effect a positive change. As we can see by looking at utilitarian ideals, organizations are
not motivated to respond equitably when they are looking only at a balance
sheet. However, public pressure on organizations to behave responsibly has
meant sustainability issues now affect the bottom line: Consumers increasingly
choose to purchase goods and services from organizations with effective CSR
initiatives, high performers are attracted to work at CSR organizations, governments offer incentives to organizations for sustainability efforts, and so forth.
CSR is now beginning to make good business sense, folding ethics into utilitarian computations.
Researchers are turning increasingly to behavioral ethics—an area of study
that analyzes how people behave when confronted with ethical dilemmas. Their
research tells us that, while ethical standards exist collectively in societies and
organizations, and individually in the form of personal ethics, we do not always
follow ethical standards promoted by our organizations, and we sometimes violate our own standards. Our ethical behavior varies widely from one situation
to the next.
How might we increase ethical decision making in organizations? First,
seemingly superficial aspects of the environment—such as lighting, outward displays of wealth and status, and cleanliness—can affect ethical behavior in organizations.88 Managers must first realize that ethical behavior can be affected
by these signals; for example, if signs of status and money are everywhere,
an employee may perceive those, rather than ethical standards, to be of the
highest importance. Second, managers should encourage conversations about
moral issues; they may serve as a reminder and increase ethical decision making. One study found that simply asking business school students to think of an
ethical situation had powerful effects when they were making ethical choices
later.89 We should be aware of our own moral “blind spots”—the tendency to
see ourselves as more moral than we are and others as less moral than they
are. An environment that encourages open discussions and does not penalize
people for coming forward is key to overcoming blind spots and increasing the
ethicality of decision making.90
Behavioral ethics research stresses the importance of culture to ethical decision making. There are few global standards for ethical decision making,91 as
contrasts between Asia and the West illustrate. What is ethical in one culture
may be unethical in another. For example, because bribery is more common in
countries such as China, a Canadian working in China might face a dilemma:
Should I pay a bribe to secure business if it is an accepted part of that country’s
culture? Although some companies, such as IBM, explicitly address this issue,
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many do not. Without sensitivity to cultural differences as part of the definition of ethical conduct, organizations may encourage unethical conduct without
even knowing it.
Lying
Are you a liar? Many of us would not like to be labeled as a liar. But if a liar
is merely someone who lies, we are all liars. We lie to ourselves, and we lie to
others. We lie consciously and unconsciously. We tell big lies and create small
deceptions. Lying is one of the top unethical activities we may indulge in daily,
and it undermines all efforts toward sound decision making.
The truth is that one of the reasons we lie is because lying is difficult for
others to detect. In more than 200 studies, individuals correctly identified
people who were lying only 47 percent of the time, which is less than random
picking.92 This seems to be true no matter what lie-detection technique is
employed. For example, one technique used by police officers is based on
the theory that people look up and to the right when they lie. Unfortunately,
researchers who tested the technique could not substantiate the underlying
theory.93
Another technique is to study a person’s body language, but researchers
found that the probability of detecting lying based solely on body language was
less than a random guess. Psychologist Maria Hartwig observed, “The commonsense notion that liars betray themselves through body language appears to be
little more than a cultural fiction.”94 Still another technique is to study facial
expressions. Here again, many researchers could not support the technique
with evidence. Research professor Nicholas Epley concluded, “Reading people’s expressions can give you a little information, but you can get so much
more just by talking to them.”95
What about our words? Liars may indeed give verbal cues, but which cues
apply to which people is a matter of debate. Whether liars tell better stories, or
conversely give fewer details, is not certain. Law enforcers analyze an individual’s words, looking for emphatic or repeated phrases to indicate lying. Detecting lies from our written words is even trickier because there are fewer cues.
However, that doesn’t stop lie-detection speculation for written communications. Some say that in e-mail messages, liars omit personal pronouns, use noncommittal expressions, change tenses, skip topics, provide too much detail, or
add qualifying statements.96 Yet a person who regularly does those things when
writing may not be lying.
The best hope for lie detection is to read a combination of cues unique
to the person. Perhaps it is true that a mother can sometimes tell when
her child is lying, for instance, because the mother knows how the child
changes his behavior when he’s stressed. Although we may feel that our
lying is “written all over our face,” as Epley says, “[t]he mind comes
through the mouth.”97 Lie detection is also easier if the person is a bad liar
without a lot of experience. According to Tyler Cohen Wood of the Defense
Intelligence Agency’s Science and Technology Directorate, “The majority
of people prefer to tell the truth. That’s why when they are lying, the truth
is going to leak out.”98 Research indicates that, while we do not consciously
discern lying in others, we are able to sense on some level when lying is
happening.99
Lying is deadly to decision making, whether we sense the lies or not.
Managers—and organizations—simply cannot make good decisions when facts
are misrepresented and people give false motives for their behaviors. Lying is
a big ethical problem as well. From an organizational perspective, using fancy
lie-detection techniques and entrapping liars when possible yield unreliable
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An Ethical Choice
Choosing to Lie
M
ark Twain wrote, “The wise
thing is for us diligently to
train ourselves to lie thoughtfully.” Not everyone agrees that lying
is wrong. But we probably agree that
people do lie, including each of us, to
varying degrees. And most of us probably agree that if we lied less, organizations and society would be better
off. So how can we get ourselves to
lie less often? Research conducted by
behavioral scientists suggests some
steps to recovery.
1. Stop lying to ourselves. We lie to ourselves about how much we lie. Specifically, many studies reveal that we
deem ourselves much less likely to
lie than we judge others to be. At a
collective level, this is impossible—
everyone can’t be below average
in their propensity to lie. So step 1
is to admit the truth: We underestimate the degree to which we lie,
we overestimate our morality compared to that of others, and we tend
to engage in “moral hypocrisy”—
we think we’re more moral than
we are.
2. Trust, but verify. Lying is learned at
a very young age. When a toy was
placed out of view, an experimenter
told young children not to look at the
toy and went out of sight. More than
80 percent of the children looked at
the toy. When asked whether they
had looked, 25 percent of 2½-yearolds lied compared to 90 percent of
4-year-olds. Why do we learn to lie?
Because we often get away with it.
Negotiation research shows that we
are more likely to lie in the future
when our lies have succeeded or
gone undetected in the past. Managers need to eliminate situations in
which lying is available to employees.
3. Reward honesty. “The most difficult
thing is to recognize that sometimes
we too are blinded by our own incentives,” writes author Dan Ariely,
“because we don’t see how our conflicts of interest work on us.” So if
we want more honesty, we have to
provide greater incentives for the
truth and more disincentives for
lying and cheating.
Sources: Based on D. Ariely, The Honest
Truth about Dishonesty: How We Lie to
Everyone—and Especially Ourselves (New
York: Harper, 2012); K. Canavan, “Even
Nice People Cheat Sometimes,” The Wall
Street Journal, August 8, 2012, 4B; M. H.
Bazerman and Ann E. Tenbrunsel, Blind
Spots: Why We Fail to Do What’s Right and
What to Do about It (Princeton, NJ: Princeton University Press, 2012); A. D. Evans
and K. Lee, “Emergence of Lying in Very
Young Children,” Developmental Psychology
(2013); and L. Zhou, Y. Sung, and D. Zhang,
“Deception Performance in Online Group
Negotiation and Decision Making: The
Effects of Deception Experience and Deception Skill,” Group Decision and Negotiation
22 (2013): 153–72.
results.100 The most lasting solution comes from organizational behavior, which
studies ways to prevent lying by working with our natural propensities to create
environments not conducive to lying.
Creativity, Creative Decision Making,
and Innovation in Organizations
6-7
Describe the three-stage
model of creativity.
creativity The ability to produce novel and
useful ideas.
Models will often improve our decisions, but a decision maker also needs
creativity, the ability to produce novel and useful ideas. Novel ideas are different from what’s been done before but are appropriate for the problem.
Creativity allows the decision maker to appraise and understand problems
fully, including seeing problems others can’t see. Although all aspects of
organizational behavior are complex, that is especially true for creativity.
To simplify, Exhibit 6-5 provides a three-stage model of creativity in
organizations. The core of the model is creative behavior, which has both causes
(predictors of creative behavior) and effects (outcomes of creative behavior).
In this section, we discuss the three stages of creativity, starting with the center,
creative behavior.
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Exhibit 6-5
Three-Stage Model of Creativity in Organizations
Causes of creative behavior
Creative potential
Creative environment
Creative behavior
Problem formulation
Information gathering
Idea generation
Idea evaluation
Creative outcomes (Innovation)
Novelty
Usefulness
Creative Behavior
Creative behavior occurs in four steps, each of which leads to the next:101
problem formulation The stage of
creative behavior that involves identifying a
problem or opportunity requiring a solution
that is yet unknown.
information gathering The stage of
creative behavior when possible solutions to
a problem incubate in an individual’s mind.
idea generation The process of creative
behavior that involves developing possible
solutions to a problem from relevant
information and knowledge.
idea evaluation The process of creative
behavior involving the evaluation of potential
solutions to problems to identify the best one.
1. Problem formulation. Any act of creativity begins with a problem that
the behavior is designed to solve. Thus, problem formulation is the stage
of creative behavior in which we identify a problem or opportunity that
requires a solution that is yet unknown. For example, Marshall Carbee
and John Bennett founded Eco Safety Products after discovering that even
paints declared safe by the Environmental Protection Agency (EPA) emitted hazardous chemical compounds. Thus, Eco’s development of artist-safe
soy-based paint began with identifying a safety problem with paints currently on the market.102
2. Information gathering. Given a problem, the solution is rarely directly at
hand. We need time to learn more and to process that learning. Thus,
information gathering is the stage of creative behavior when knowledge
is sought and possible solutions to a problem incubate in an individual’s
mind. Information gathering leads us to identifying innovation opportunities.103 Niklas Laninge of Hoa’s Tool Shop, a Stockholm-based company
that helps organizations become more innovative, argues that creative
information gathering means thinking beyond usual routines and comfort
zones. For example, have lunch with someone outside your field to discuss
the problem. “It’s so easy, and you’re forced to speak about your business
and the things that you want to accomplish in new terms. You can’t use
buzzwords because people don’t know what you mean,” Laninge says.104
3. Idea generation. Idea generation is the process of creative behavior in which
we develop possible solutions to a problem from relevant information and
knowledge. Sometimes we do this alone, when tricks like taking a walk105 and
doodling 106 can jump-start the process. Increasingly, though, idea generation is collaborative. For example, when NASA engineers developed the
idea for landing a spacecraft on Mars, they did so collaboratively. Before coming up with the Curiosity—an SUV-sized rover that lands on Mars from a sky
crane—the team spent 3 days scribbling potential ideas on whiteboards.107
4. Idea evaluation. Finally, it’s time to choose from the ideas we have generated. Thus, idea evaluation is the process of creative behavior in which
we evaluate potential solutions to identify the best one. Sometimes the
method of choosing can be innovative. When Dallas Mavericks owner Mark
Cuban was unhappy with the team’s uniforms, he asked fans to help design
Perception and Individual Decision Making
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and choose the best uniform. Cuban said, “What’s the best way to come up
with creative ideas? You ask for them. So we are going to crowd source the
design and colors of our uniforms.”108 Generally, you want those who evaluate ideas to be different from those who generate them, to eliminate the
obvious biases.
Causes of Creative Behavior
Having defined creative behavior, the main stage in the three-stage model,
we now look back to the causes of creativity: creative potential and creative
environment.
Creative Potential Is there such a thing as a creative personality? Indeed. While
creative genius is rare—whether in science (Stephen Hawking), performing
arts (Martha Graham), or business (Steve Jobs)—most people have some of the
characteristics shared by exceptionally creative people. The more of these characteristics we have, the higher our creative potential. Innovation is one of the top
organizational goals for leaders (see OB Poll). Consider these facets of potential:
1. Intelligence and Creativity Intelligence is related to creativity.109 Smart
people are more creative because they are better at solving complex problems. However, intelligent individuals may also be more creative because
they have greater “working memory”; that is, they can recall more information related to the task at hand.110 Along the same lines, research in the
Netherlands indicates that an individual’s high need for cognition (desire
to learn) is correlated with greater creativity.111
2. Personality and Creativity The Big Five personality trait of openness to
experience (see Chapter 5) correlates with creativity, probably because
open individuals are less conformist in action and more divergent in
thinking.112 Other traits of creative people include proactive personality,
self-confidence, risk taking, tolerance for ambiguity, and perseverance.113
Hope, self-efficacy (belief in your capabilities), and positive affect also predict an individual’s creativity.114 Research in China suggests that people with
high core self-evaluations are better able than others to maintain creativity
OB POLL
Is Innovation More Talk than Show?
When asked to identify their top three goals for the upcoming year, percentage
of leaders who ranked goals listed below in one of their top three
Developing leaders
51.6%
Retaining talent
46.1%
Recruiting talent
Containing costs
Fostering innovation
30%
37.6%
35.5%
34.0%
35%
40%
45%
50%
Source: Based on T. Henneman, “Bright Ideas,” Workforce Management (January 2013), 18–25.
55%
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in negative situations.115 Perhaps counterintuitively, some research supports
the “mad genius” theory that some people with mental illness are wildly creative partially due to their psychopathology; history certainly provides examples, such as Vincent Van Gogh, John Forbes Nash, and others. However, the
converse isn’t true—people who are creative may have less psychopathology
as a group than the general population.116
3. Expertise and Creativity Expertise is the foundation for all creative work
and thus is the single most important predictor of creative potential. Film
writer, producer, and director Quentin Tarantino spent his youth working in
a video rental store, where he built up an encyclopedic knowledge of movies. The potential for creativity is enhanced when individuals have abilities,
knowledge, proficiencies, and similar expertise to their field of endeavor. For
instance, you wouldn’t expect someone with minimal knowledge of programming to be very creative as a software engineer. The expertise of others is
important, too. People with larger social networks have greater exposure to
diverse ideas and informal access to the expertise and resources of others.117
4. Ethics and Creativity Although creativity is linked to many desirable individual characteristics, it is not correlated with ethicality. People who cheat
may be more creative than those who behave ethically, according to recent
research. It may be that dishonesty and creativity can both stem from a
rule-breaking desire.118
MyLab Management
Personal Inventory Assessments
Go to www.pearson.com/mylab/management to complete the Personal
Inventory Assessment related to this chapter.
Creative Environment Most of us have creative potential we can learn to apply,
but as important as creative potential is, by itself it is not enough. We need to be
in an environment where creative potential can be realized. What environmental factors affect whether creative potential translates into creative behaviors?
First, and perhaps most important, is motivation. If you aren’t motivated
to be creative, it is unlikely you will be. Intrinsic motivation, or the desire to
work on something because it’s interesting, exciting, satisfying, and challenging (discussed in more detail in the next chapter), correlates moderately with
creative outcomes.119
It is also valuable to work in an environment that rewards and recognizes creative work. A study of health care teams found that team creativity translated into
innovation only when the climate actively supported innovation.120 The organization should foster the free flow of ideas, including providing fair and constructive judgment. Freedom from excessive rules encourages creativity; employees
should have the freedom to decide what work is to be done and how to do it. One
study in China revealed that both structural empowerment (in which the structure
of the work unit allows sufficient employee freedom) and psychological empowerment (which lets the individual feel personally enabled to decide) were related to
employee creativity.121 However, research in Slovenia found that creating a competitive climate where achievement is valued at any cost stymies creativity.122
You may be wondering about the link between organizational resources and creativity. While it is said that “necessity is the mother of invention,” research indicates
that creativity can be inspired by an abundance of resources as well. Specifically,
jobs that are complex, autonomous, and have clear role expectations for innovation are related to innovative behavior—these job characteristics can be especially
important in inspiring creative behavior.123 It appears that managers greatly affect
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the outcomes. They may be able to heighten innovation when resources are limited by encouraging employees to find resources for their novel ideas and by giving direct attention to appropriate tools when resources are plentiful.124 Managers
also serve as an important bridge role for knowledge transfer. When managers link
teams to additional information and resources, radical creativity (introducing creative ideas that break the status quo) is more likely.125 The weaker ties between
team members and manager networks may have more impact on creativity than
the direct, stronger ties that team members have with their own networks because
the weaker sources provide more divergent thinking.126
What is the role of culture? A recent nation-level study suggests that countries scoring high on Hofstede’s culture dimension of individuality (see Chapter
5) are more creative.127 Western countries like the United States, Italy, and Belgium score high on individuality, and South American and eastern countries
like China, Colombia, and Pakistan score low. Does this mean Western cultures
are more creative? Some evidence suggests this is true. One study compared
the creative projects of German and Chinese college students, some of whom
were studying in their homeland and some of whom were studying abroad. An
independent panel of Chinese and German judges determined that the German students were most creative and that Asian German students were more
creative than domestic Chinese students. This suggested that the German culture was more creative.128 However, even if some cultures are more creative on
average, there is always strong variation within cultures. Put another way, there
are millions of Chinese more creative than their U.S. counterparts.
Good leadership matters to creativity, too.129 One study of more than 100
teams working in a large bank revealed that when the leader behaved in a punitive, unsupportive manner, the teams were less creative.130 On the other hand,
when leaders are encouraging in tone, run their units in a transparent fashion,
and encourage the development of their employees, the individuals they supervise are more creative.131
As we will learn in Chapter 10, more work today is being done in teams, and
many people believe diversity will increase team creativity. Past research has suggested that diverse teams are not more creative. More recently, however, one
study of Dutch teams revealed that when team members were explicitly asked to
understand and consider the point of view of the other team members (an exercise called perspective taking), diverse teams were more creative than those with
less diversity.132 Leadership might make the difference. One study of 68 Chinese
teams reported that diversity was positively related to team creativity only when
the team’s leader was inspirational and instilled members with confidence.133
There are other worthwhile findings regarding creativity. One study in
a multinational drug company found that teams from diverse business functions were more creative when they shared knowledge of each other’s areas of
expertise.134 However, if team members have a similar background, creativity
may be heightened only when the members are sharing specific, detailed information,135 because general information may be dismissed by members with the
same expertise. As you might expect, newcomers to a team can be a rich source
of creative ideas, although unfortunately they are often expected to contribute
less early on.136 Putting individuals who are resistant to change into teams that
are supportive of change can increase total creativity,137 perhaps because of the
group’s positive influence. Collectively, these studies show that diverse teams
can be more creative, especially if they are intentionally led.
Creative Outcomes (Innovation…
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