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Brock University
Organizational Behaviour and Human Resources
Diane Miller

Organizational Behaviour Decision making Decision Making • The process of developing commitment to some course of action Rational Decision Making Model • Maximizing decision making – Identify the problem – Search for relevant information – Develop alternative solutions – Evaluate solutions – Choose the best solution – Implement the chosen solution – Monitor and evaluate the chosen solution Bounded Rationality • using less than perfect decision making processes – Reasons • time and energy • limited capability to process information • organization politics – We satisfice rather than maximize • select the first acceptable solution rather than an optimal solution Prospect Theory • Framing options as losses or gains – >>>>> risk taking or risk avoidance • A gain of a given amount is much less attractive than the loss of the same amount is averse (feel losses more than gains) • Adapt more quickly to gains than losses – the reference point adjusts more quickly to gains • We perceive equal size gains (or losses) differently depending on the relative amounts that we are dealing with Escalating Commitment (theory) • Continuing on a losing course of action or throwing good resources after bad Reasons 1) sunk costs 2) self-justification (image management) 3) to be consistent (image management) 4) framing Escalating Commitment • To help overcome – set up specific goals – put more emphasis on the decision making process rather than the results – try to see the outcomes from a different perspective – separate initial decision maker
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