Chapter 10 Decision Making by Individuals and Groups In This Chapter, You’ll Find: Chapter Overview Learning Outcomes Key Terms PowerPoint Guide Review Questions and Answers Discussion and Communication Questions and Suggested Answers Ethical Dilemma Self-Assessments—What about You? Issues in Diversity Experiential Exercises Additional Examples Case Study and Suggested Responses: Groupon: Decisions! Decisions! Decisions! Video: Profile on Plant Fantasies Student Handouts: Ethical Dilemma What About You?: Which Side of Your Brain Do You Favor? What About You?: Creative or Logical Problem Solving: What Is Your Preference? Issues in Diversity: And the Grammy Goes to… Experiential Exercise: Making a Layoff Decision Experiential Exercise: Dilemma at 29,000 Feet Experiential Exercise: Who Works Saturday Night? Experiential Exercise: Who Works Saturday Night? Autocratic Manager Experiential Exercise: Who Works Saturday Night? Laissez-Faire Manager Experiential Exercise: Who Works Saturday Night? Democratic Manager Experiential Exercise: Who Works Saturday Night? Employee 1 Experiential Exercise: Who Works Saturday Night? Employee 2 Experiential Exercise: Who Works Saturday Night? Employee 3 Experiential Exercise: Who Works Saturday Night? Employee 4 Experiential Exercise: MBTI® Exercise Role: Nurse Experiential Exercise: MBTI® Exercise Role: Supervisor Case Study: Groupon: Decisions! Decisions! Decisions! Chapter Overview Decision making can be strengthened individually and in group situations. It is a process involving a series of steps. There are three models of decision making, namely the rational model, the bounded rationality model, and the Z model. Individual decision making can be analyzed by examining cognitive styles that are used for gathering information and evaluating alternatives. Intuition and creativity can be developed and improved to assist decision makers. Groups must be aware of difficulties, such as groupthink and group polarization, that negatively impact decision making. Groups can use techniques such as brainstorming, nominal group technique, Delphi technique, devil’s advocacy, dialectical inquiry, quality circles and quality teams, and self-managed teams. Styles of decision making vary greatly among cultures. The individualist/collectivist dimension has implications for decision making. Effective management of people can improve a company’s economic performance. Learning Outcomes After reading this chapter, students should be able to do the following: 1. Identify the steps in the decision-making process. Answer: The decisions a manager faces can range from very simple, routine matters for which the manager has an established decision rule (programmed decisions) to new and complex decisions that require creative solutions (nonprogrammed decisions). Decision making is a process involving a series of steps. The first step is recognizing the problem; that is, the manager realizes that a decision must be made. Next, a manager must identify the objective of the decision. The third step in the decision-making process is gathering information relevant to the problem. The fourth step is listing and evaluating alternative courses of action. Next, the manager selects the alternative that best meets the decision objective. After the solution is implemented, the situation must then be monitored to see whether the decision met its objective. Consistent monitoring and periodic feedback are essential parts of the follow-up process. 2. Describe various models of decision making. Answer: Three models of decision making are as follows: the rational model, the bounded rationality model, and the Z model. The rational model of decision making comes from classic economic theory and assumes the following: the outcome will be completely rational; the decision maker has a consistent system of preferences, which is used to choose the best alternative; the decision maker is aware of all the possible alternatives; and the decision maker can calculate the probability of success for each alternative. Bounded rationality theory assumes that managers satisfice; that is, they select the first alternative that is “good enough,” because the costs of optimizing in terms of time and effort are too great. Further, the theory assumes that managers develop shortcuts, called heuristics, to make decisions in order to save mental activity. Isabel Briggs Myers, co-creator of the Myers-Briggs Type Indicator, also developed the Z problem-solving model, which capitalizes on the strengths of the four separate preferences (Sensing, Intuiting, Thinking, and Feeling). 3. Discuss the individual influences that affect decision making. Answer: In many ways, decisions reflect the people who make them, so it is appropriate to examine the individual influences on decision making: comfort with risk, cognitive style, personality, intuition, and creativity. 4. Explain how groups make decisions. Answer: Managers use groups to make decisions for several reasons: synergy, to gain commitment to a decision, and to bring more knowledge and experience to the problem-solving situation. Seven techniques utilized in group decisions are brainstorming, nominal group technique, devil’s advocacy, dialectical inquiry, Delphi technique, quality circles and quality teams, and self-managed teams. 5. Describe the role culture plays in decision making. Answer: Styles of decision making vary greatly among cultures. Many of the dimensions proposed by Hofstede affect decision making. These include uncertainty avoidance, power distance, the individualist/collectivist dimension, time orientation, the masculine/feminine dimension, cultural diversity, functional background, and strategic decision making. 6. Explain how organizations can improve the quality of decisions through participation. Answer: Effective management of people can improve a company’s economic performance. Participative decision making occurs when individuals who are affected by decisions influence the making of those decisions. In addition, participative management has been found to increase employee creativity, job satisfaction, and productivity. Participative decision making is complex, and one of the things managers must understand is that employees can be involved in some, or all, of the stages of the decision-making process. For example, employees could be variously involved in identifying problems, generating alternatives, selecting solutions, planning implementations, or evaluating results. Key Terms Programmed decision (p. 153) Nonprogrammed decision (p. 153) Effective decision (p. 154) Rationality (p. 154) Bounded rationality (p. 155) Satisfice (p. 155) Heuristics (p. 155) Escalation of commitment (p. 155) Cognitive style (p. 157) Risk aversion (p. 157) Intuition (p. 158) Creativity (p. 160) Synergy (p. 162) Social decision schemes (p. 162) Groupthink (p. 163) Group polarization (p. 164) Brainstorming (p. 165) Nominal group technique (NGT) (p. 165) Devil’s advocacy (p. 165) Dialectical inquiry (p. 165) Quality circle (p. 166) Quality team (p. 166) Participative decision making (p. 167) PowerPoint Guide Introduction Slide 2—Learning Outcomes LO1 Identify the steps in decision-making process. Slide 3—LO - 10.1 Slide 4—Decision-Making Process LO2 Describe various models of decision making. Slide 5—LO - 10.2 Slide 6—Models of Decision Making Slide 7—Figure 10.2: The Z Problem-Solving Model Slide 8—Beyond the Book: Garbage Can Model LO3 Discuss the individual influences that affect decision making. Slide 9—LO-10.3 Slide 10—Factors Influencing Decision Making Slide 11—Beyond the Book: Mapping Changes in the Industry Slide 12—Beyond the Book: Be Creative! LO4 Explain how groups make decisions. Slide 13—LO - 10.4 Slide 14—Group Decision Making Slide 15—Group Decision Techniques Slide 16—Special Decision Making Groups LO5 Describe the role culture plays in decision making. Slide 17—LO - 10.5 Slide 18—Hofstede’s Dimensions LO6 Explain how organizations can improve the quality of decisions through participation. Slide 19—LO - 10.6 Slide 20—Participative Decision Making Slide 21—Foundations for Participation and Empowerment Slide 22—Beyond the Book: Decisions in Japan Slide 23—Beyond the Book: Decision Making in the Virtual Workplace Slide 24—Beyond the Book: Ethics Check Slide 25—Beyond the Book: Can I Use Another Computer? Slide 26—Plant Fantasies Key Terms Slide 27–28—Key Terms Summary Slide 29–30—Summary Review Questions and Answers 1. Discuss the usefulness of the bounded rationality model in today’s organizations. Answer: Students’ answers will vary. The bounded rationality model assumes that managers satisfice by selecting the first alternative that is good enough. The pressures of time and competition in today’s global environment require that managers make decisions quickly. This model reflects decision making in this fast-paced environment. Bounded Rationality Model: This model is useful as it acknowledges the limitations of decision-makers in terms of information, time, and cognitive capacity, guiding organizations to make more realistic decisions within these constraints. 2. How does the Z problem-solving model capitalize on the strengths of the four preferences? Answer: Students’ answers will vary. The Z model recommends using the following preferences in order: (1) S; (2) N; (3) T; (4) F, i.e., to examine the facts and details, generate alternatives, analyze the alternatives objectively, and weigh the impact, respectively. Z Problem-Solving Model: By leveraging preferences for perceiving and judging, the Z model enhances decision-making by balancing analytical and intuitive approaches, allowing teams to address problems comprehensively. 3. What are the individual and organizational influences on creativity? Answer: Students’ answers will vary. Cognitive factors of an individual, such as divergent thinking, affect creativity. Personality factors such as breadth of interests, high energy, etc. also influence one’s ability to be creative. Interestingly, being in a good mood provides better creativity than does a bad or even neutral mood. Organizational influences include support and a flexible organization structure. Participative decision making is also related to creativity. Creativity Influences: Individual influences include personality traits and cognitive flexibility; organizational influences involve supportive culture, resources, and a conducive environment for innovation. 4. What are the organizational foundations and the individual foundations of empowerment and teamwork? Answer: The organizational foundations of empowerment and teamwork are a participative, supportive organizational culture and a team-oriented work design. Individual foundations include the capability to become psychologically involved in participative activities, motivation to act autonomously, and the capacity to see the relevance of participation for one’s own well-being. Empowerment and Teamwork Foundations: Organizational foundations include a culture of trust and clear communication; individual foundations involve personal confidence and collaborative skills. 5. Describe the advantages and disadvantages of group decision making. Answer: Students’ answers will vary. Group decision making is slow because of the process of getting everyone involved and is susceptible to groupthink and group polarization. However, group decisions are often better decisions due to the synergy factor and social decision schemes such as majority-wins rule, truth-wins rule, and so on. The group decision-making process has a far greater acceptance level for the final outcome than singular decision making. Group Decision Making: Advantages include diverse perspectives and enhanced problem-solving. Disadvantages involve potential for conflict and slower decision processes. 6. Describe the symptoms of groupthink, and identify actions that can be taken to prevent it. Answer: Students’ answers will vary. The symptoms of groupthink include illusions of invulnerability, illusions of group morality, illusions of unanimity, rationalization, stereotyping the enemy, members’ self-censorship, peer pressure to agree, and mindguards who protect the group from negative feedback. Methods of preventing groupthink include appointing a devil’s advocate, asking each member to be a critical evaluator, creating several teams that work on the decision simultaneously, having outside experts evaluate the group’s progress, evaluating the competition carefully, and encouraging the group to rethink its position by re-examining the alternatives. Symptoms of Groupthink: • Illusion of Invulnerability: Excessive optimism leading to risk-taking. • Collective Rationalization: Ignoring warnings or negative feedback. • Belief in Inherent Morality: Assuming the group's decisions are morally superior. • Stereotyping Outsiders: Viewing outsiders negatively or dismissively. • Self-Censorship: Withholding dissenting views. • Illusion of Unanimity: Belief that everyone agrees due to lack of dissent. • Direct Pressure on Dissenters: Pressuring members who disagree. • Mindguards: Protecting the group from dissenting information. Preventive Actions: • Encourage open discussion and diverse opinions. • Assign a devil’s advocate to challenge ideas. • Seek input from outsiders and experts. • Create an environment where dissent is respected and valued. 7. What techniques can be used to improve group decisions? Answer: Students’ answers will vary. There are several structured techniques for improving decisions, including brainstorming, nominal group technique, Delphi technique, dialectical inquiry, and devil’s advocacy. Techniques to Improve Group Decisions: • Brainstorming: Generating a wide range of ideas without immediate criticism. • Nominal Group Technique: Individuals generate ideas independently before discussing them as a group. • Delphi Technique: Using anonymous surveys to gather opinions and reach consensus. • Consensus Building: Engaging in discussions to find common ground and mutual agreement. • Use of Decision-Making Tools: Implementing techniques like decision matrices or cost-benefit analysis for structured evaluations. Discussion and Communication Questions and Suggested Answers 1. Why do you think identification of the real problem is the first and most important step in the decision-making process? How does attribution theory explain mistakes that can be made as managers and employees work together to explain why the problem occurred? Answer: Students’ answers will vary. Identification of the real problem is critical because it ensures that the group will be “treating the problem instead of the symptom.” Attribution theory suggests that individuals will tend to look at external causes to explain their own failure. This could create a bias towards the problem-solving process. Identification of the Real Problem: It ensures the decision addresses the root cause rather than symptoms. Attribution theory explains mistakes by suggesting people often misattribute causes, leading to incorrect problem identification. 2. How can organizations effectively manage both risk taking and escalation of commitment in the decision-making behavior of employees? Answer: Students’ answers will vary. Students may suggest solutions including policies such as those which require that someone outside the decision-making team reviews a decision to try to guard against excessive risk taking. Organizations may manage the escalation of commitment by having different individuals make initial and later decisions. Managing Risk and Escalation of Commitment: Implement decision-making frameworks, set clear criteria for evaluating decisions, and encourage a culture of constructive feedback to manage risk and prevent escalation. 3. How will you most likely make decisions based on your cognitive style? What might you overlook using your preferred approach? Answer: Students’ answers will vary. The key to this question is to identify what one’s predominant style is and recognize that it may not be appropriate in all situations. The Z model incorporates the strengths of all four preferences. Cognitive Style in Decision-Making: Your cognitive style will influence how you process information and make decisions, potentially leading to overlooking details or alternative perspectives not aligned with your preferred approach. 4. How can organizations encourage creative decision making? Answer: Students’ answers will vary. Organizations can reward risk taking, provide a supportive environment, and permit failure. Additionally, high quality, cohesive social networks encourage creative decision making by facilitating shared sense-making of relevant information and consensus building. Encouraging Creative Decision-Making: Foster an open environment, support risk-taking, provide diverse teams, and encourage brainstorming sessions to stimulate innovative thinking. 5. How do the potential risks associated with participating in quality circles differ from those associated with participating in quality teams? If you were a member of a quality circle, how would the management’s decision to reject your recommendations affect your motivation to participate? Answer: Students’ answers will vary. Quality circles are not empowered to implement their own recommendations. They operate in parallel fashion to the organization’s structure, and they rely on voluntary participation. Risks in Quality Circles vs. Quality Teams: Quality circles may face risks of limited influence, while quality teams may face broader project scope risks. Rejection of recommendations could demotivate participants, affecting engagement and enthusiasm. 6. Have students find two examples of recent decisions made in organizations: one that they consider a good decision, and one that they consider a bad decision. Instruct them to write a brief description of the decisions and then write a summary of what went right, what went wrong, and what could be done to improve the decision-making process. Student should compare and contrast the two examples in a presentation to the class. Answer: Students’ answers will vary. Encourage students to apply the material from the text to their analysis of the decisions that were made. Examples of Decisions: • Good Decision: A tech firm upgraded its cybersecurity measures after a thorough risk assessment, improving security and trust. Improvement: Continual updates and testing would ensure ongoing protection. • Bad Decision: A retail chain adopted a new inventory system without proper trials, leading to operational issues. Improvement: Implement phased rollouts and thorough testing to avoid disruptions. 7. Reflect on your own experience in groups with groupthink. Describe the situation in which you encountered groupthink, the symptoms that were present, and the outcome. What remedies for groupthink would you prescribe? Summarize your answers in a memo to your instructor. Answer: Students’ answers will vary. Be sure that the students have provided good examples from a personal experience rather than just reiterating what the textbook says about groupthink. Memo on Groupthink: To: Instructor From: [Your Name] Subject: Reflection on Groupthink Situation: Our team rushed a project decision, ignoring dissent. Symptoms: Overconfidence, lack of critical thinking. Outcome: The project failed. Remedies: Encourage dissent, seek diverse opinions, and promote open discussion. Ethical Dilemma The purpose of Ethical Dilemma is to encourage students to develop their awareness of ethical issues in the workplace and the managerial challenges they present. The dilemmas are set up to present situations in which there is no clear ethical choice. The goal for the instructor is to guide students through the process of analyzing the situation and examining possible alternative solutions. There are no “right” answers to the questions at the end of each scenario but only opportunities to explore alternatives. Students can generate discussions on the appropriateness of each alternative. The student portion of the activity is on a handout at the end of this chapter guide. Aaron’s first option is to tell his employees about the extremely poor financial condition of the company and make the necessary cuts to regain profitability. However, this involves risking the possibility that worried employees will leave voluntarily, thus forcing the company into bankruptcy and devastating stockholders. The second option is to protect his employees from worrying by keeping the company’s financial condition quiet as long as possible, keeping them on in the hope that things will turn around financially. 1. Using consequential, rule-based, and character theories, evaluate Aaron’s options. Answer: Consequential Theory If Aaron tells his employees about the company’s poor financial condition and makes necessary cuts to personnel, additional employees may leave to find other jobs. This adds to the possibility that Varnett may not be able to continue publishing newspapers, which would spell the end of the company. If he decides to hold out, hoping things will turn around, he still risks losing the company and will lose the respect of his employees in the process because he didn’t tell them about the company’s situation. Rule-Based Theory Aaron has a fiduciary responsibility to do whatever is necessary to protect the stockholders’ wealth. Character Theory Varnett has always been a company that promoted a sense of family among its employees, and Aaron’s nature is to continue that effort by trying to protect his employees from losing their jobs. The problem is that either way he decides to go, he will ultimately be unable to protect everyone’s jobs and may end up closing the company in the end. 2. What should Aaron do? Why? Answer: Aaron should do everything he can to protect the stockholders’ wealth while at the same time continue to treat his employees like family by: • Being up front with his employees, informing them of the company’s financial situation, and asking for their help in finding ways to cut costs, including voluntary layoffs and other options • Cutting staff where he can without endangering the company’s ability to produce newspapers Self-Assessments—What about You? 10.1 Which Side of Your Brain Do You Favor? This self-assessment exercise encourages students to explore which hemisphere (if either) of their brain is dominant. It provides a good starting point for a discussion of: • The importance of being able to see the big picture and plan strategically, which requires right-brain skills • The importance of being able to understand the details of day-to-day operations, which requires left-brain skills This discussion could easily lead into an analysis and discussion of learning styles and the effectiveness (or lack thereof) of requiring all students in a class to make the best of a single teaching method. Another option might be a discussion of whether students are “hardwired” for certain subjects and the utility (or lack thereof) of requiring them to engage in other subjects for which they are not “hardwired.” The student portion of the activity is on a handout at the end of this chapter guide. 10.2 Creative or Logical Problem Solving: What Is Your Preference? There is a student handout at the end of this chapter guide. Solutions to Formula Challenge 1. Maine + Massachusetts + New Hampshire + Vermont + Connecticut + Rhode Island = New England 2. “A bird in the hand is worth two in the bush.” 3. 8 days minus 24 hours = 1 week 4. 3 pair = 6 5. Hour hand + Minute hand at 12 = Noon or midnight 6. 4 Jacks + 4 Queens + 4 Kings = All the face cards 7. Sunday & Monday & Tuesday & Wednesday & Thursday & Friday & Saturday are Days of the Week. 8. Army + Navy + Air Force + Marine Corps + Coast Guard = Armed Forces 9. Texas = Lone Star State 10. 23 years - 3 years = 2 decades 11. Eight - 8 = Zero 12. Yesterday + 2 Days = Tomorrow 13. Christmas + 6 Days = New Year’s Eve 14. Year - Summer - Spring - Autumn = Winter 15. Adam & Eve were in the Garden of Eden. 16. My Fair Lady and South Pacific are both Musical Comedies. 17. No news is Good news. 18. Nina + Pinta + Santa Maria = Ships of Columbus 19. 1 + 6 zeros = 1 million 20. “A rose is a rose is a rose.” 21. Abraham Lincoln & James Garfield & William McKinley & John Kennedy were all assassinated. 22. Noun + Verb + Pronoun + Adverb + Adjective + Conjunction + Preposition + Interjection = Parts of Speech 23. Senate + House of Representatives = United States Congress Solutions to “Who Owns the Fish?” Challenge 1. The Norwegian owns the cats, lives in the yellow house, plays chess, and drinks water. 2. The Dane owns the horses, lives in the blue house, plays poker, and drinks tea. 3. The Brit owns the birds, lives in the red house, plays tennis, and drinks milk. 4. The German owns the fish, lives in the green house, plays golf, and drinks coffee 5. The Swede owns the dogs, lives in the white house, plays billiards, and drinks beer. Issues in Diversity And the Grammy Goes to… Imagine that you are the president of the music industry’s biggest, most prestigious, and only peer-recognized award, the Grammy. For several years, you’ve received criticism that the number of Grammy awards dilutes the awards’ impact. How do you respond? If you’re Grammy president and CEO, Neil Portnow, the decision is rather straightforward—consolidate some award categories and eliminate others altogether. Portnow should have expected dissatisfaction from some artists about the decision, especially from those whose category would be eliminated. But what Portnow could not have anticipated was that the decision to restructure the awards would lead to threats of legal action, allegations of racism, and calls to boycott the telecast. The Grammy awards have undergone many changes over the years, from the expansion of award categories to changes in the nomination and voting process, most of the changes are in response to a changing music industry. What began with 28 award categories in 1959 had increased 289 percent to 109 in 2010, leading to criticism that the increased number of categories not only confused consumers, but also reduced the perceived value of winning a Grammy. The 2011 review of the Grammy award structure was its first-ever comprehensive evaluation. Some of the most highly publicized changes included the elimination of gender-specific subcategories in the R&B, pop, and country fields; the elimination of the Zydeco and Cajun category and its consolidation into a “regional roots music” category with Hawaiian and Native American music; and the reduction of awards in the R&B category, from eight to four. Critics of the changes insisted that the Academy’s restructuring of the awards unfairly targeted ethnic music. Latin jazz musician, Bobby Sanabria called the decision “the most blatant example of racism in the history of any arts organization and a slap in the face to cultural and musical diversity.” Sanabria attributes his own mainstream success to having been nominated for a Grammy in 2001 and again in 2008. He and other Latin jazz artists claimed that the Academy’s decision to restructure the awards would negatively affect their ability to make a living. 1. Is Sanabria justified in his claim that consolidating ethnic category awards will reduce the Grammy’s musical and cultural diversity? Explain. Answer: Students’ answers will vary. While the musical and cultural diversity of the awards show itself may be reduced as a result of consolidating the ethnic category awards, the diversity of the music in itself will not be reduced. Also, there must be some limit on the number of different categories for awards or the show will become too long to broadcast in one night. However, it is also the case that fewer awards will mean fewer people have the opportunity to be in the spotlight and to highlight their particular music. Sanabria's claim is partially justified; consolidating ethnic categories might reduce visibility for niche genres and artists. This could impact cultural representation if fewer awards are given to diverse music styles. 2. To what extent should the NARAS have considered representation of the different genres in its restructuring decision? Answer: Students’ answers will vary. This question is a bit of a red herring, as any decision to restructure the award categories is, at its core, a decision about which genres to recognize with awards. Moreover, music can essentially be divided into an infinite number of genres, since each existing genre could then be further subclassified in a wide variety of ways. NARAS should have considered genre representation to ensure all musical styles are fairly acknowledged. Balancing category consolidation with preserving diversity helps maintain the Grammy’s role in recognizing a wide range of musical contributions. Experiential Exercises 10.1 Making a Layoff Decision Instructor’s Notes This exercise challenges students to make a fair, but difficult decision regarding a layoff in an organization. Students will discover their biases as they examine their reasons for selecting the person to be laid off. This is a good exercise to turn into a short paper, in view of the growing amount of information related to reductions in force and their effect on morale in organizations. Typical issues that will emerge are survivor syndrome, guilt, leadership style, sexism, racism, ageism, and communication. The student portion of the activity is on a handout at the end of this chapter guide. 10.2 Dilemma at 29,000 Feet Instructor’s Notes The assignment is for students to make an argument for either staying with the teammate or descending alone. There is no right or wrong answer to this case. The technical aspects of mountain climbing are not important, nor is it good enough for students to state that they would not get in this situation in the first place! The point is for students to consider and make clear their own ethical choices by evaluating all relevant information, evaluating the underlying assumptions of each, and creating a clear and convincing argument for action. The student portion of the activity is on a handout at the end of this chapter guide. SOURCE: D.C. Kayes, “Dilemma at 29,000 Feet: An Exercise in Ethical Decision Making Based on the 1996 Mt. Everest Climbing Disaster,” Journal of Management Education 26 (2002): 307–321. Reprinted by permission of Sage Publications. 10.3 Who Works Saturday Night Instructor’s Notes This is a role-play to be used with groups of five. For groups of four, omit either employee 1 or employee 2. For larger groups, add one or more observers (see observer sheet) or double up on one of the employees. The entire exercise can take more than an hour: 50 minutes or more to read the background material and roles and carry out the role play, 30 minutes or more for discussion. Be sure that the groups have enough physical space so as not to interfere with one another’s discussions. There are student handouts at the end of this chapter guide. Step 1. Make enough copies of each role so that each member of the class has one role description. Step 2. Be sure that everyone in the class has read the brief background description. (It may help to read it aloud to the class.) Step 3 (optional). After distributing the roles to the members of each group, divide the class into groups of the same role members—that is, all of the managers together, all employees together, and so forth. This gives individuals a chance to identify with and better understand their roles. Give the groups about 20 minutes to discuss their roles as they wish and clarify that they are not bound by the group’s suggested strategies. Meet with the group of managers to answer any questions concerning what they are to do. Assign about one-third of the managers to be highly autocratic. This means that the managers can listen to the employees, but that they should make clear from the outset that the decision is going to come from management. Autocratic managers should say things such as: “I don’t really care about your brother’s wedding,” and so forth. Assign about one-third of the managers to be extremely laissez faire. This means that the managers should constantly remind the workers that the decision is not of interest to them. In other words, the workers should be told, “Do whatever you want,” and so forth. Assign the last third of the managers to be democratic. This means that the managers should clearly frame the problem for the workers, listen to their concerns, and actively lead them to a solution that has the widest acceptance and still meets the needs of the organization. Step 4. Redivide the class into work groups, each of which includes a manager and a player for each employee role. (Interesting results, for the purposes of comparison within the class, can come from arranging the groups in specific ways that is, all male workers with a female manager, all female workers with a male manager, workers from one culture with a manager from another, all members from the same cultural background, and so forth. Or, try assigning the manager’s role in some groups to students who are highly authoritarian and to others who are highly participative.) Step 5. Instruct the groups that the manager must make a decision at the end of the 30 minutes of role-play. Step 6. At the end of the 30 minutes, call time and ask the managers for their decisions, the methods they used in arriving at their decisions, and the basis for the decision. In addition, ask them to describe the role that they were assigned (democratic, autocratic, laissez faire). Record each group’s decision in a visible place, such as a blackboard, overhead, or flip chart. Step 7. Ask the observers, if any, to report on their findings. Are these consistent with the managers’ descriptions of how decisions were made? Step 8. Discuss the questions below and those on the observer sheet. Questions for Discussion 1. Given the problem presented, did the manager of your group use an appropriate leadership style? Why or why not? (If you were the manager in your group, how did you feel about the effectiveness of the leadership style you used?) Answer: Appropriateness of Leadership Style: The effectiveness of the leadership style varied; autocratic styles may have ignored employee input, while democratic styles likely engaged the team. The manager's style should match the team's needs and situation. 2. What do you think the manager should have done differently? Answer: Suggested Changes: Managers should adapt their style to encourage input and address concerns if it aligns better with the team’s dynamics. 3. Did the manager listen to and consider each employee’s arguments? Answer: Consideration of Employee Arguments: The degree of listening varied; democratic managers generally considered all arguments, while autocratic and laissez-faire managers might have been less receptive. 4. How was the decision made? Did the manager elicit input from the employees? Answer: Decision-Making Process: Decisions varied; democratic managers sought broad input, while autocratic managers decided independently, and laissez-faire managers let employees lead. 5. What are the implications of decision for each member? For the effectiveness of the team on Sunday? For the ultimate success and quality of the project? Answer: Implications: The decision impacts employee morale, team effectiveness on Sunday, and the project's overall success. Effective engagement and decision-making contribute to higher quality and success. * SOURCE: Janet W. Wohlberg, Scott Weighart, OB in Action, Cases and Exercises, 3rd edition, c1992, Houghton Mifflin. 10.4 MBTI® Exercise Exercise Learning Objectives a. Demonstrate to the students that people make decisions using different styles. b. Students will experience a real-world situation that they will face. c. Show students that regardless of their decision-making process, they must be able to “sell” their decision to other people. Student handouts are at the end of this chapter guide. Exercise Overview 1. Students should have taken the MBTI instrument or the short version in Chapter 3. 2. Ask students to form two groups—those who prefer thinking and those who prefer feeling as their decision-making basis. 3. Students in like-groups will work on a scenario and then sell their decision to the opposite-group type. 4. The instructor must be knowledgeable of the “T” and “F” dynamics of the MBTI type preferences. We highly recommend that the instructor reviews the material listed in the MBTI reference section. Additionally, the instructor should be on the look out for the potential of hurt feelings and bruised egos. This exercise usually takes 65–70 minutes. This is the single most powerful and potentially useful MBTI-based exercise in this series. Exercise Description a. Form “T” and “F” groups of 4–6 students each. Form as many groups as you need so that everyone is in a group. b. Ask each group to select an observer. That person will observe a group of the opposite type; (i.e., “T” will observe “F” and vice-versa.). c. Give the following roles to students: Role You are a head nurse. You have been a head nurse over several other nurses for too long. You just don’t have any interest in supervising people anymore. It seems to cause you so much anxiety that you literally lose sleep at night when you go home. You would really love to get out of being in your current position. You have considered taking a demotion to a nurse’s job until you retire. You would leave the hospital, but it is too close to retirement and it will just cost you entirely too much to leave now. Your work is not super, but it has been satisfactory and you really don’t think you can push yourself to do it anymore. Satisfactory should be enough for what you get paid. Your boss has called you in for a talk. Role You are the supervisor of a group of head nurses who manage other nurses. You are very concerned about one of your head nurses. Over the last couple of years, he has had low performance, failed to do many of the jobs assigned, and brings almost all decisions to committee meetings in order to avoid making decisions. You feel you must call him in for discussion. You are at the point of telling him that if he doesn’t correct his performance you will have to terminate his employment since there is no position to which he can be demoted. You have called him in to talk over his performance. a. Give the students the following instructions: 1. You are to decide to fire or not to fire this employee. 2. You must develop a rationale for your decision. 3. You should select a person who will represent your group and your boss to support your decision. Your boss is of the opposite type from your T/F preference. 4. You will have 10 minutes to discuss the case and determine the facts. You have all the facts before you—nothing else is known. 5. You will then have 5 minutes to decide whether or not to fire this employee. 6. You will then have 15 minutes to develop the rationale that you will use to defend your position. 7. You will have 5 minutes to present your case to the other group who will collectively act as your boss. 8. After the first group is finished, the bosses must now present their case. This is done BEFORE reporting happens. b. If you have more than one group of each type, each group should present. You can run these presentations simultaneously if you use student observers to assist you in reporting what happened. c. Timing must be precise. Part of the benefit of this exercise is the time pressure. Most of the time, when we are under pressure, we will subconsciously use our preferred strength to achieve the results we seek. As with other things, this holds true for our decision-making process and its subsequent verbalization. To show the class the real distinctions between “T” and “F,” we need to highlight the best use of the strength of each group. d. Debriefing the exercises. Debrief the second presentation first. 1. Ask each boss if he/she agreed with the decision. Answer: Boss Agreement: Ask if the boss agreed with the decision made and why. 2. What in the presentation led to your decision to agree or not? Answer: Presentation Impact: Identify what aspects of the presentation influenced the boss's agreement or disagreement. 3. How did the presenter think/feel about the experience? Answer: Presenter’s Reflection: Explore how the presenter felt about the process and outcome. 4. What did the observers notice (if you used them)? Answer: Observer Insights: Discuss any notable observations from the observers regarding the decision-making process and presentation. 5. What did the presenters learn? Answer: Learning Outcomes: Summarize what the presenters learned about decision-making styles and their effectiveness. e. Debrief the first presentation, using these same steps. f. Debrief the class. If you used observers, solicit the observers first and, then, solicit feedback from the entire class. 1. Ask the class, “What did you see?” Answer: Class Feedback: Ask, “What did you see?” to get a broad view of observations. 2. What differences and similarities did you notice? Answer: Compare and Contrast: Identify differences and similarities between the presentations by "T" and "F" groups in decision-making and presentation styles. Compare and Contrast: Identify differences and similarities between the presentations by "T" and "F" groups in decision-making and presentation styles. What the Instructor Should Expect 1. “Ts” want the decision to be stated up front and followed by the rationale for the decision. They want the facts stated clearly as to what the issues are, what steps have been taken, what have been the results of any interventions, and what will be the cost if your decision is implemented. “Ts” are concerned about getting sued if there is no logical, rational approach that led to the decision. “Ts” will turn the employee problem into a management competency issue if they believe the situation should have been resolved earlier. 2. “Fs” want to be reassured that everything possible was done for the employee. For example, has the supervisor made training available, rotated jobs, counseled the employee, and so forth? The “Fs” also want to know that the person who is presenting really cares about this person—no phony affects here. They need to know the impact the decision (fire or not) will have on the other people in the organization. They are not as concerned about the effect on the organization as an entity as they are about the person and those people directly impacted. Finally, you will need to show “Fs” that the employee has violated the organization’s values. Instructor’s Summary Making decisions is something we all face. Most of the time, we have to “sell” our decisions to others. It is important to remember that some people make decisions based on objective logic while others make decisions based on subjective values. Neither process is inherently better; both have strengths and pitfalls. In an organization, asking people who use different decision-making processes to come together should result in a more complete and supportable decision. Materials Needed Students don’t need anything other than paper and pencil. Adapted from Dr. Margaret Hartzler, Type Resources, Inc., used with permission. Additional Examples What’s that Cool Building? Moore Ruble Yudell won numerous awards, including an American Architecture Award and a Design Green honor award for the Santa Monica Civic Center parking structure. Recycled steel was used, and reflective glass panels not only look good—they allow the maximum use of natural lighting and greatly reduce the consumption of electricity. Photovoltaic panels on the ceiling of the garage use solar energy, and the panels generate a third of the electricity used in the garage. A water recycling system is used in the sprinklers. Projects like this one illustrate that creative ideas can be used to address social and environmental challenges–in essence, green business is creative business. Brainstorming at Ideo—Are Cookies the Secret? Brainstorming is so much a part of the culture at Ideo that it has its own set of beliefs about what makes it work best. Morning meetings are best for creativity. Group sizes of three to ten people are most productive for brainstorming. Cookies always help people be more productive. At Ideo, the brainstorming sessions are designed around fluency and flexibility. Fluency is a rapid-fire succession of ideas, so silence is minimized. Flexibility is looking at the idea from as many viewpoints as possible. Ideo’s simple beliefs have helped Ideo Product Development become a leading product design firm. Why Do People Make Unethical Decisions? Recently, it seems, there have been stories of unethical behavior in all aspects of society from business to sports to religious institutions. These tales beg the question of why people are making unethical decisions. It seems that in many of these cases, what would normally stop an individual from making unethical decisions, is for some reason deactivated. This process has been called moral disengagement. In a recent study investigating what influences people to morally disengage, researchers found that an individual’s personality can influence whether they morally disengage and then make unethical decisions. Individuals who are empathetic for others and individuals who perceive themselves to be moral will engage in less moral disengagement; but individuals who are cynical and individuals who believe most things occur by chance rather than personal initiative will more likely become morally disengaged. These findings suggest that organizations may be able to identify people who are more likely to morally disengage and avoid putting these individuals in ethically sensitive positions. Organizations may also be able to put in place more specific decision-making processes like group decision making that could lessen the impact of any individual decision maker’s personality. SOURCE: J. R. Detert, L. K. Treviño, and V. L. Sweitzer, “Moral Disengagement in Ethical Decision Making: A Study of Antecedents and Outcomes,” Journal of Applied Psychology, 93 (2008): 374–391. Case Study and Suggested Responses Groupon: Decisions! Decisions! Decisions! Linkage of Case to Chapter Material Groupon, an Internet coupon company, was founded in Chicago in November 2008 by Andrew Mason. Groupon’s business innovation is merging collective buying with couponshence the company’s name: group plus coupon. The strategic goal of Groupon is to “fundamentally change the way that people buy from local businesses in the same way that e-commerce has changed the way that people buy products.” The case describes four major decisions that Mason and the Groupon organization made in the pursuit of this strategic goal. Mason’s first key decision was the selection of an innovative business model that combined product/service discounts with group buying in an online platform. The second major decision involved managing growth into new markets. The third major decision was Mason’s rejection of a $6 billion buyout offer from Google. The fourth key decision involved raising capital through an Initial Public Offering (IPO) of stock to help fund the company’s operations and continuing expansion. The case is relevant to numerous decision-making concepts from Chapter 10. The decision-making process as well as the nature of programmed decision making and nonprogrammed decision making can be applied to understanding Andrew Mason’s choices. Additionally, the three decision-making modelsrational, bounded rationality, and the Z modelprovide further perspective on Mason’s choices. Finally, the roles that intuition and creativity play in decision making are useful in understanding Mason’s choices. Suggested Answers for Discussion Questions 1. What are the key decisions that Andrew Mason has made during Groupon’s brief history? How have these decisions influenced Groupon’s evolution as an Internet-based business? Answer: The case describes four major decisions that Andrew Mason has made during Groupon’s brief history. Mason’s first key decision was the selection of an innovative business model that combined product/service discounts with group buying in an online platform. The second major decision involved managing growth into new markets. The third major decision was Mason’s rejection of a $6 billion buyout offer from Google. The fourth key decision involved raising capital through an Initial Public Offering (IPO) of stock to help fund the company’s operations and continuing expansion. The Groupon business model is based on “[c]onsumers sign[ing] up to receive offers from local firms by e-mail each day, ranging from restaurant meals to pole-dancing lessons, at discounts of up to 90 percent. But, Groupon made virtual coupon-clipping exciting by: • Having offers expire after just a few hours • Cancelling them if they do not attract a minimum number of buyers (the ‘group’ in Groupon)” Given that a minimum number of people need to buy into a coupon deal before it is activated (tips), buyers eagerly spread information among family and friends, which in turn increases the number of buyers. Mason’s decision to pursue this business model has established Groupon as a dominant Internet business for promoting and selling group discount coupons. The success of the business model has spawned hundreds of competitors, some of which very closely imitate Groupon. Mason’s second major decision, with the significant involvement of other organization members, concerned Groupon expansion into new markets. In the two years after its founding in November 2008, Groupon expanded to 150 markets in the United States and 100 markets in Europe, with approximately 35 million registered users. Then, by early June 2011, Groupon reported having 83 million subscribers in 43 countries, including an entry to China in March 2011. This phenomenal expansion into new markets further increased Groupon’s dominance of the American and international markets for group discount coupons. The third major decision was Mason’s rejection of Google’s buyout offer of $6 billion. Groupon’s growth and success attracted much attention among the Internet business communityand it was viewed as having extraordinary profit potential, thereby piquing the interest of investors who were seeking to “make a killing.” However, Mason’s rejection of the buyout offer was characterized by one observer as “frustrating, maddening, and inexplicable to most people.” Mason’s fourth major decision involved a sale of stock to the public. In early June 2011, Groupon filed paperwork with the United States’ Securities and Exchange Commission (SEC) for an Initial Public Offering (IPO) of stock, with the objective of raising $750 million. One reporter observed that “Groupon has every incentive to IPO fast, to cash in while its expansion is in overdrive. But investors should take their time assessing whether the company’s explosive growth really will translate to surging profits.” Additionally, The Economist maintained that Groupon was vulnerable despite its rapid growth and huge market share, and that, in order to meet and beat its competition, Groupon would be forced to lower the share of revenue it keeps from its deals. Key Decisions: Andrew Mason's key decisions include the initial focus on daily deals, rapid geographic expansion, and IPO strategy. These decisions shaped Groupon's growth and market presence. 2. How would you describe the decisions identified in your response to question 1 in terms of programmed and nonprogrammed decision making? Answer: Programmed decision making involves following established decision rules for dealing with simple, routine problems. Nonprogrammed decision making involves finding creative solutions to new and complex problems. Nonprogrammed decision making is definitely shown in Mason’s decision to establish an innovative business model that combined product/service discounts with group buying in an online platform. Managing growth into new markets most likely started out as a nonprogrammed decision-making process that evolved into a programmed decision-making process as the company gained greater experience in scouting out and opening promising new markets. As this experience accumulated, the decision-making process probably became more standardized and routine, and appropriate decision guidelines and rules were implemented. Mason’s decision to reject the buyout offer from Google was a nonprogrammed decision; such an offer would be an unusual occurrence and formulating a response to this new, complex problem would merit a thorough and thoughtful analysis. Likewise, the IPO decision is a nonprogrammed decision because it concerns a new, complex, infrequently occurring problem situation. Programmed vs. Nonprogrammed: Decisions like daily deal structuring were programmed, while rapid expansion and strategic shifts were nonprogrammed, requiring unique solutions. 3. How would you describe these decisions in terms of the rational and bounded rationality models of decision making? Answer: Rational decision making involves a logical step-by-step approach that relies on a thorough analysis of alternatives and their consequences, with the objective of selecting the best possible alternative. With bounded rationality, decision makers do not seek an optimal decision. Rather, they use heuristics (or shortcuts) to select a satisficing alternative (i.e., the first alternative that provides a “good enough” solution). Mason’s decision regarding the selection of an innovative business model that combined product/service discounts with group buying in an online platform probably used either the rational model or the bounded rationality model. The fact that he developed and executed an innovative concept that became highly successful suggests that he probably considered several entrepreneurial possibilities and then chose to pursue the most promising one. This would mean that he relied on bounded rationality. It’s possible as wellthough perhaps less probablethat Mason did an exhaustive search for all possible ways of selling group-based discount coupons. Had he taken this exhaustive approach, the decision making model in use would be the rational model rather than the bounded rationality model. The decision to expand to additional geographic locations likely utilized the bounded rationality model in the early geographic expansion. Most likely, the process then moved toward using the rational decision-making model as experience and expertise were developed within the organization with regard to locale selection. The IPO decision most likely was the result of rational decision making, given the detailed planning and filing requirements that exist for seeking financing from the investment community. Rational vs. Bounded Rationality: Decisions often followed bounded rationality due to limited information and rapid changes, rather than a purely rational, step-by-step approach. 4. How, if at all, has creativity and intuition played a role in the decisions to found and rapidly expand Groupon? Answer: Intuition is a fast, positive force in decision making that is utilized at a level below consciousness and involves learned patterns of information. In many cases, managers make judgments based on “hunches” rather than using a systematic, step-by-step approach to decision making. Creativity is a process influenced by individual and organizational factors that result in the production of novel and useful ideas or products or both. The decision to develop the Groupon business model may have been the initial product of intuitiona hunch that group-based discount coupons would be a marketable and popular concept. However, once that initial hunch occurred, Andrew Mason most likely relied upon creativity to develop the business model itself as an innovative Internet business platform. The expansion into different geographic locales was most likely a more systematic decision process, perhaps laced with a bit of intuition regarding which locales would be most promising. Mason’s decision to reject Google’s $6 billion buyout offer defied logicat least from the perspective of some observersbut may have been a hunch-generated decision considering the perceived profit potential of Groupon. Creativity and Intuition: Creativity and intuition drove the initial idea and rapid scaling, as Mason capitalized on emerging market trends and unconventional strategies. 5. Suppose that you think the market for group-based online coupons has great potential, and that you desire to enter the competitive fray. What factors would you consider in making a decision on whether or not to become a Groupon competitor? Answer: Groupon securely dominates the online coupon market in Chicago, New York, and San Francisco, “where its offers are unique and lure consumers into new neighborhoods and experiences[t]hat’s less true in second- and third-tier citieswhere Groupon relies on merchants to come to it.” Competitors likely would have a better chance of success in markets outside of Chicago, New York, and San Francisco. Potential competitors would be in a more favorable position if they could devise ways to increase the likelihood that group discount transactions are profitable for the participating merchantsespecially the smaller ones. This would help address the problem that Groupon encountered when many small businesses ceased participation after the first deal because it was unprofitable. Potential competitors would need to consider possible sources of funding for their proposed business. Venture capitalists might be a viable source of funding given the perceived profitability potential of Groupon. The ability to pursue venture capital would be affected, however, by the strength of the competitor’s proposed business model and Internet platform. Students should be encouraged to think of other factors that could come into play in the decision-making mix. This is where the students’ own intuition and creativity could be utilized. Competitive Entry Factors: Consider market saturation, differentiation strategies, potential partnerships, and technological investments before entering the competitive online coupon market. SOURCE: This case solution was written by Michael K. McCuddy, the Louis S. and Mary L. Morgal Chair of Christian Business Ethics and Professor of Management, College of Business Administration, Valparaiso University. Video Profile on Plant Fantasies In landscaping, success often boils down to big decisions over little details. While some decisions involve plant colors and types, others involve complex negotiation with people. Owner Teresa Carleo notes that it’s sometimes difficult to work with landscape architects, since they can come up with designs that the company doesn’t agree with. Despite Carleo’s confidence in her own decision making, she understands the benefits of empowering others. “More and more, as I’m trying to grow the company, I’m trying to get my team to be more independent of me. I don’t want to know every single thing.” Discussion Questions and Solutions 1. Did Plant Fantasies owner Teresa Carleo use the rational decision-making process to launch Plant Fantasies? Explain. Answer: According to Carleo, the decision to quit her old job and start Plant Fantasies was characterized by whim and emotion. Her process was not consistent with the rational decision-making model. She was emotionally upset at her former employer, and she had little experience with horticulture or operating a business. Nevertheless, she made a choice: “I just made the decision, I just went for it,” Carleo states. In the rational model of decision making, the decision maker strives for conditions of certainty, gathers complete information, and evaluates all alternatives to ensure good results. In real management settings, however, decision making can never be purely rational due to time constraints, limited knowledge of possible alternatives, bias, and human error. In addition, people and groups encounter decision-related problem areas like groupthink, escalating commitment, and uncertainty. In most decision making situations, people follow the bounded rationality model and end up satisficing—making a satisfactory rather than optimal decision. Satisficing causes managers to select the first acceptable alternative that meets minimal decision criteria, even though better alternatives may exist. 2. List an example of a programmed decision at Plant Fantasies. Identify a nonprogrammed decision at Plant Fantasies. Answer: A programmed decision involves a simple routine matter for which a manager has an established decision rule. One programmed decision at Plant Fantasies is the daily process of maintaining healthy plants for clients. For instance, a maintenance manager examines plants at client location, determines if the landscape has a healthy or unhealthy garden condition, and sends a purchase order to Teresa Carleo for new replacement plants. This routine activity is a core function of the Plant Fantasies service. Another example of a programmed decision is discussed when Carleo says she selects tulips for a client that has a long history of ordering and reordering the same plants and colors. A nonprogrammed decision is a new, complex decision that requires a creative solution. This type of decision occurs in situations that are unique, unstructured, unpredictable, or highly consequential. A nonprogrammed decision at Plant Fantasies takes place whenever Teresa Carleo has to collaborate with an outside landscape architect to install a garden, as there are many complicated and unknown factors that arise when working with an outside firm or designer. Student Handouts Ethical Dilemma Aaron Chomsky, Jr. has been CEO of Varnett Publishing for twenty-five years; his father, Aaron Sr., founded the company in 1921. In the last thirty years, Varnett has acquired many smaller publishing companies in an effort to dominate the whole of the Northeast publishing industry. The small family company has grown into a publishing house that produces daily, weekly, and monthly news publications, as well as magazines and other print media for communities in New York, Connecticut, New Hampshire, and Vermont. Aaron Jr. took over as CEO during the high point in the life cycle of the news paper industry; that industry has, however, been in decline since 1998. Aaron has just received word from the CFO that most of Varnett’s acquisitions are failing individually, and that because of the decline in the market, Varnett will not be able to easily unload them. Consequently, Varnett is facing bankruptcy. Varnett has many employees who have been with the company for more than thirty years, and many employees have family members also employed by Varnett. Aaron’s father always promoted a sense of family within the company, even as Varnett grew well beyond a small town-single newspaper organization. Aaron values his employees greatly, but if he alerts them to the severity of the situation, he knows that they will be compelled to search for employment elsewhere. If too many employees leave, however, Aaron knows that Varnett will not be able to produce the newspapers that are still operating. If Varnett stops producing newspapers, the company will absolutely fail and devastate shareholders. If Varnett absolutely fails, his employees will absolutely be out of work, and he will be able to offer them nothing. Aaron feels great loyalty to his employees, but he also feels great loyalty to run Varnett in the most profitable way for his shareholders for as long as possible. He feels that he cannot protect one without sacrificing the other. Time is passing quickly—if he doesn’t commit to an action one way or the other, both will suffer equally. He must make a decision soon. Questions 1. Using consequential, rule-based, and character theories, evaluate Aaron’s options. Answer: Evaluation: • Consequential Theory: Aaron should weigh the outcomes; keeping the situation secret might prolong operations but risk eventual collapse, whereas disclosure could expedite restructuring but harm employee stability. • Rule-Based Theory: According to ethical rules, Aaron should be transparent with employees about the company’s plight, aligning with principles of honesty and fairness. • Character Theory: Aaron’s character as a loyal leader should guide him to act in a manner consistent with integrity and responsibility, balancing loyalty to employees and shareholders. 2. What should Aaron do? Why? Answer: Recommendation: Aaron should disclose the situation to employees transparently. This approach aligns with ethical principles and could foster trust and cooperation in navigating the crisis, potentially allowing for restructuring or other measures to save the company. What about You? Which Side of Your Brain Do You Favor? There are no “right” or “wrong” answers to this questionnaire. It is more of a self-assessment than a test. Do not read the questions more than once. Don’t overanalyze. Simply circle “a” or “b” to indicate which answer is more typical of you. 1. Typically, when I have a problem to solve, a. I make a list of possible solutions, prioritize them, and then select the best answer. b. I “let it sit” for a while or talk it over with someone before I attempt to reach a solution. Answer: a (I make a list of possible solutions, prioritize them, and then select the best answer.) 2. When I sit with my hands clasped in my lap (FOLD YOUR HANDS THAT WAY RIGHT NOW BEFORE GOING ON, THEN LOOK AT YOUR HANDS), the thumb that is on top is a. my right thumb. b. my left thumb. Answer: a (My right thumb.) 3. I have hunches a. sometimes, but do not place much faith in them. b. frequently and I usually follow them. Answer: b (Frequently and I usually follow them.) 4. If I am at a meeting or lecture, I tend to take extensive notes. a. True b. False Answer: a (True) 5. I am well-organized, have a system for doing things, have a place for everything and everything in its place, and can assimilate information quickly and logically. a. True b. False Answer: a (True) 6. I am good with numbers. a. True b. False Answer: a (True) 7. Finding words in a dictionary or looking up names in a telephone book is something I can do easily and quickly. a. True b. False Answer: a (True) 8. If I want to remember directions or other information, a. I make notes. b. I visualize the information. Answer: a (I make notes.) 9. I express myself well verbally. a. True b. False Answer: a (True) 10. To learn dance steps or athletic moves, a. I try to understand the sequence of the steps and repeat them mentally. b. I don’t think about it; I just try to get the feel of the game or the music. Answer: b (I don’t think about it; I just try to get the feel of the game or the music.) Interpretation • Four, five, or six “a” answers indicate lateralization—an ability to use either hemisphere easily and to solve problems according to their nature rather than according to a favored manner. • One, two, or three “a” answers indicate right-hemisphere dominance; corresponding traits include inventiveness, creativity, innovation, risk taking, whimsy, and an ability to see the “big picture.” • Seven, eight, or nine “a” answers indicate a left-hemisphere dominance—a tendency toward attention to detail, the use of logic, and traits of thoroughness and accuracy. SOURCE: “Which Side of the Brain Do You Favor?” from Quality Driven Designs (San Francisco: Pfeiffer/Jossey-Bass, 1992). Copyright 1992 Pfeiffer/Jossey-Bass. Reprinted by permission of Jossey-Bass, Inc., a subsidiary of John Wiley & Sons, Inc. What about You? Creative or Logical Problem Solving: What Is Your Preference? Try the following creative problem-solving challenge. Each of the following problems is an equation that can be solved by substituting the appropriate words for the letters. Have fun with them! Examples: 3F = 1Y (3 feet = 1 yard.); 4LC = GL (4 leaf clover = Good luck.) 1. M + M + NH + V + C + RI = NE Answer: Moon + Moon + New Hampshire + Vermont + Connecticut + Rhode Island = New England 2. “1B in the H = 2 in the B.” Answer: 1 Batman in the House = 2 in the Batmobile. 3. 8D – 24H = 1W Answer: 8 Days – 24 Hours = 1 Week 4. 3P = 6 Answer: 3 Pairs = 6 Pieces 5. HH & MH at 12 = N or M Answer: Happy Hour & Midnight at 12 = Noon or Midnight 6. 4J + 4Q + 4K = All the FC Answer: 4 Jacks + 4 Queens + 4 Kings = All the Face Cards 7. S & M & T & W & T & F & S are D of W Answer: Sunday & Monday & Tuesday & Wednesday & Thursday & Friday & Saturday are Days of the Week 8. A + N + AF + MC + CG = AF Answer: Army + Navy + Air Force + Marine Corps + Coast Guard = Armed Forces 9. T = LS State Answer: Texas = Lone Star State 10. 23Y – 3Y = 2D Answer: 23 Years – 3 Years = 20 Days 11. E – 8 = Z Answer: Eight – 8 = Zero 12. Y + 2D = T Answer: Year + 2 Days = Two Thousand (Year 2000) 13. C + 6D = NYE Answer: Christmas + 6 Days = New Year's Eve 14. Y – S – S – A = W Answer: Yesterday – Sunday – Sunday – August = Wednesday 15. A & E were in the G of E Answer: Adam & Eve were in the Garden of Eden 16. My FL and South P are both MC Answer: My Florida and South Pole are both Magnetic North 17. “NN = GN.” Answer: Noon = Greenwich Noon 18. N – P + SM = S of C Answer: Navy – Private + Senior Major = Stars of Command 19. 1 + 6Z = 1M Answer: 1 + 6 Zeros = 1 Million 20. “R = R = R.” Answer: Rhyme = Rhythm = Rhyme 21. AL & JG & WM & JK were all A Answer: Albert Lee & John Glenn & William Martin & John Kennedy were all Astronauts 22. N + V + P + A + A + C + P + I = P of S Answer: North + Vietnam + Philippines + Australia + Antarctica + Canada + Pacific + India = Parts of the Seven Seas 23. S + H of R = USC Answer: Sun + Horizon of the Rise = University of Southern California SOURCE: From A Whack on the Side of the Head by Roger Von Oech. Copyright © 1983, 1990, 1998 by Roger Von Oech. By permission of Warner Books. Now try the following logical problem-solving exercise, entitled “Who Owns the Fish?”, which is attributed to Albert Einstein. There are five houses in a row and in five different colors. In each house lives a person from a different country. Each person drinks a certain drink, plays a certain game, and keeps a certain pet. No two people drink the same drink, play the same game, or keep the same pet. • The Brit lives in a red house. • The Swede keeps dogs. • The Dane drinks tea. • The green house is on the left of the white house. • The green house owner drinks coffee. • The person who plays tennis rears birds. • The owner of the yellow house plays chess. • The man living in the house right in the center drinks milk. • The Norwegian lives in the first house. • The man who plays poker lives next to the man who keeps cats. • The man who keeps horses lives next to the one who plays chess. • The man who plays billiards drinks beer. • The German plays golf. • The Norwegian lives next to the blue house. • The man who plays poker has a neighbor who drinks water. Question 1. Who owns the fish? Answer: The German owns the fish. Reasoning: After setting up the grid based on the clues, we find that the German, who plays golf and lives in the green house, is the only one without a pet explicitly assigned. Hence, the fish must be his pet. Issues in Diversity And The Grammy Goes To… Imagine that you are the president of the music industry’s biggest, most prestigious, and only peer-recognized award, the Grammy. For several years, you’ve received criticism that the number of Grammy awards dilutes the awards’ impact. How do you respond? If you’re Grammy president and CEO, Neil Portnow, the decision is rather straightforward—consolidate some award categories and eliminate others altogether. Portnow should have expected dissatisfaction from some artists about the decision, especially from those whose category would be eliminated. But what Portnow could not have anticipated was that the decision to restructure the awards would lead to threats of legal action, allegations of racism, and calls to boycott the telecast. The Grammy awards have undergone many changes over the years, from the expansion of award categories to changes in the nomination and voting process, most of the changes that are in response to a changing music industry. What began with 28 award categories in 1959 had increased 289 percent to 109 in 2010, leading to criticism that the increased number of categories not only confused consumers, it reduced the perceived value of winning a Grammy. The 2011 review of the Grammy award structure was its first-ever comprehensive evaluation. Some of the most highly publicized changes included the elimination of gender-specific subcategories in the R&B, pop and country fields; the elimination of the Zydeco and Cajun category and its consolidation into a “regional roots music” category with Hawaiian and Native American music; and the reduction of awards in the R&B category, from eight to four. Critics of the changes insisted that the Academy’s restructuring of the awards unfairly targeted ethnic music. Latin jazz musician, Bobby Sanabria called the decision “the most blatant example of racism in the history of any arts organization and a slap in the face to cultural and musical diversity.” Sanabria attributes his own mainstream success to having been nominated for a Grammy in 2001 and again in 2008. He and other Latin jazz artists claimed that the Academy’s decision to restructure the awards would negatively affect their ability to make a living. Questions 1. Is Sanabria justified in his claim that consolidating “ethnic” category awards will reduce the Grammy’s musical and cultural diversity? Explain. Answer: Sanabria’s Claim: Yes, Sanabria’s claim is justified to some extent. Consolidating categories may reduce visibility for specific ethnic genres, potentially limiting the recognition and promotion of diverse musical styles. 2. To what extent should the Academy of Recording Arts and Sciences have considered representation of the different genres in its restructuring decision? Answer: Consideration of Representation: The Academy should have carefully considered genre representation to ensure diverse music styles remain recognized, maintaining the Grammy’s commitment to honoring all aspects of musical and cultural diversity. SOURCE: J.C. McKinley, Jr., “Academy defends cutting Grammy categories,” The New York Times (July 17, 2011); N.M. Moody, “Coalition announces boycott of CBS over Grammys,” Associated Press (June 30, 2011); B. Sisario, “Grammys cutting more than 30 categories,” The New York Times (April 6, 2011). Experiential Exercise Making a Layoff Decision Purpose: In this exercise, students will examine how to weigh a set of facts and make a difficult personnel decision about laying off valued employees during a time of financial hardship. They will also examine their own values and criteria used in the decision-making process. Problem: Walker Space Institute (WSI) is a medium-sized firm located in Connecticut. The firm essentially has been a subcontractor on many large space contracts that have been acquired by firms like Alliant Techsystems and others. With the cutback in many of the NASA programs, Walker has an excess of employees. Stuart Tartaro, the head of one of the sections, has been told by his superior that he must reduce his section of engineers from seven to four. He is looking at the following summaries of their vitae and pondering how he will make this decision. 1. Roger Allison, age twenty-six, married, two children. Allison has been with WSI for a year and a half. He is a very good engineer, with a degree from Rensselaer Polytech. He has held two prior jobs and lost both of them because of cutbacks in the space program. He moved to Connecticut from California to take this job. Allison is well liked by his coworkers. 2. Dave Jones, age twenty-four, single. Jones is an African-American, and the company looked hard to get him because of affirmative action pressure. He is not very popular with his coworkers. Because he has been employed less than a year, not too much is known about his work. On his one evaluation (which was average), Jones accused his supervisor of bias against African-Americans. He is a graduate of the Detroit Institute of Technology. 3. William Foster, age fifty-three, married, three children. Foster is a graduate of “the school of hard knocks.” After serving in Desert Storm, he started to go to school but dropped out because of high family expenses. Foster has worked at the company for twenty years. His ratings were excellent for fifteen years. The last five years they have been average. Foster feels his supervisor grades him down because he does not “have sheepskins covering his office walls.” 4. Donald Boyer, age thirty-two, married, no children. Boyer is well liked by his coworkers. He has been at WSI five years, and he has a B.S. and M.S. in engineering from Purdue University. Boyer’s ratings have been mixed. Some supervisors rated him high and some average. Boyer’s wife is a doctor. 5. Sherman Soltis, age thirty-seven, divorced, two children. He has a B.S. in engineering from Ohio State University. Soltis is very active in community affairs: Scouts, Little League, and United Way. He is a friend of the vice president through church work. His ratings have been average, although some recent ones indicate that he is out of date. He is well liked and has been employed at WSI for fourteen years. 6. Warren Fortuna, age forty-four, married, five children. He has a B.S. in engineering from Georgia Tech. Fortuna headed this section at one time. He worked so hard that he had a heart attack. Under doctor’s orders, he resigned from the supervisory position. Since then he has done good work, though because of his health, he is a bit slower than the others. Now and then he must spend extra time on a project because he did get out of date during the eight years he headed the section. His performance evaluations for the last two years have been above average. He has been employed at WSI for fourteen years. 7. Sandra Rosen, age twenty-two, single. She has a B.S. in engineering technology from the Rochester Institute of Technology. Rosen has been employed less than a year. She is enthusiastic, a very good worker, and well liked by her coworkers. She is well regarded by Tartaro. Tartaro does not quite know what to do. He sees the good points of each of his section members. Most have been good employees. They all can pretty much do one another’s work. No one has special training. He is fearful that the section will hear about the downsizing and morale will drop. Work would fall off. He does not even want to talk to his wife about it, in case she would let something slip. Tartaro has come to you, Edmund Graves, personnel manager at WSI, for some guidelines on this decision—legal, moral, and best personnel practice. SOURCE: W. F. Glueck, Cases and Exercises in Personnel (Dallas: Business Publications, 1978), 24–26. Experiential Exercise Dilemma at 29,000 Feet Purpose Making ethical decisions often requires taking decisive actions in ambiguous situations. Making these decisions entails not just weighing options and making rational choices, but making choices between competing but equally important demands. Managers must not only take action, but they also must provide compelling reasons that make their choices rationally accountable to others. This exercise requires you to think through an ethical situation, take an action, and create a convincing justification for your action. The exercise is designed to encourage critical thinking about complex problems and to encourage thinking about how you might resolve a dilemma outside your area of expertise. The Problem Imagine you are the sole leader of a mountain-climbing expedition and have successfully led a group of three climbers to the mountain summit. However, on your descent, trouble sets in as a fierce storm engulfs the mountain and makes progression down nearly impossible. One climber collapses from exhaustion at 24,000 feet and cannot continue down the mountain. The two stronger climbers insist on continuing down without you because they know if they stay too long at high altitude death is certain. No one has ever survived overnight on the mountain. A rescue attempt is impossible because helicopters cannot reach you above 18,000 feet. As the leader, you are faced with a difficult choice: abandon your teammate and descend alone or stay with your dying teammate and face almost certain death. On one hand, you might stay with your dying teammate in hopes that the storm might clear and a rescue party will be sent. However, you know that if you stay both of you will most likely die. On the other hand, you are still strong and may be able to make it down to safety, abandoning your teammate to die alone on the mountain. Assignment Your assignment is to make an argument for one of the actions: staying with your teammate or descending alone. The technical aspects of mountain climbing are not important, nor is it good enough to state that you would not get in this situation in the first place! What is important is that you provide a well-reasoned argument for your action. A good argument might address the following points: 1. A discussion of the pros and cons of each action: staying with your teammate or descending alone. Answer: Pros and Cons: Staying with the teammate shows commitment and ethical leadership but risks both lives if rescue isn’t feasible. Descending alone prioritizes your survival but leaves the teammate behind. 2. A discussion of the underlying values and assumptions of each action. For example, staying with the teammate implies that you have a particular obligation as the leader of a team; descending alone suggests that you may place a higher value on your own life. Answer: Values and Assumptions: Staying implies duty and loyalty, while descending prioritizes personal survival and perhaps a belief in individual responsibility. 3. A discussion of your own values and viewpoints on the topic. In other words, take a stand and justify your position. How, for example, might you justify to the family of the abandoned climber your decision to descend alone? How might you justify to your own family your decision to stay with the ailing climber? Answer: My Stand: I would stay with the teammate, valuing collective responsibility and ethical duty. Justifying to the family involves explaining the commitment to a team’s well-being, despite the risks. 4. What prior experience, knowledge, or beliefs lead you to your conclusion? Answer: Experience: Prior experience in leadership teaches that ethical decisions often involve personal sacrifice and commitment to others’ well-being. 5. How might this situation be similar to or different from the dilemmas faced in more typical organizations? For example, do leaders need to take actions that require them to make similar difficult decisions? Have you experienced any similar dilemmas that had no easy answer in the workplace, and how did you resolve them? Answer: Organizational Dilemmas: Similar to tough decisions in leadership roles where one must balance personal safety against team responsibilities and ethical considerations. Final Thoughts Remember, there is no right or wrong answer to this case. The point is to consider and make clear your own ethical choices by evaluating all relevant information, evaluating the underlying assumptions of each, and creating a clear and convincing argument for action. A quote by philosopher Martha Craven Nussbaum might act as a starting point for your study. She writes, “Both alternatives make a serious claim on your practical attention. You might sense that no matter how you choose, you will be left with some regret that you did not do the other thing. Sometimes you may be clear about which is the better choice and yet feel pain over the frustration of the other significant concerns. It is extremely important to realize that the problem is not just one difficult decision but that conflicts arise when the final decision itself is perfectly obvious.” Good luck in your decision making! SOURCE: D. C. Kayes, “Dilemma at 29,000 Feet: An Exercise in Ethical Decision Making Based on the 1996 Mt. Everest Climbing Disaster,” Journal of Management Education 26 (2002): 307–321. Reprinted by permission of Sage Publications. Experiential Exercise Who Works Saturday Night? The purpose of this role play is to give you an opportunity to explore the effectiveness of different leadership styles—in this case, autocratic, democratic, and laissez faire—in decision-making situations. Autocratic leaders generally impose their decisions without considering the interests of their subordinates. Laissez-faire leaders, on the other hand, relinquish their decision-making powers to the group and its members. Democratic leaders clarify the goals to be met by the decision and work with subordinates to find a decision that best meets those goals. As you do this exercise, consider the leadership style being used by your group’s manager and the ways in which you believe that style to be appropriate or not. Background Your small company, Turnem, Inc., a manufacturer of valves that have a wide variety of uses, including use in several aspects of the aerospace industry, is on a tight deadline to complete a project. The prototype product is due to be demonstrated to the leaders of your aerospace industry the following Monday. To finish on schedule, it will be necessary for one member of your team to work this Saturday evening from about 5 P.M. to midnight and for the entire team to work at its most productive and cooperative level for the full day on Sunday. The budget allows for one member of the team to be paid to work on Saturday night. The contract for this project, although not your company’s only source of revenue, is important. Review and plan your role thoroughly. Do not discuss your role with any of your classmates until you have been told to do so. 1. Briefly describe the manager’s dilemma. Answer: Manager’s Dilemma: The manager must decide who will work Saturday night (overtime) and ensure the team is highly productive on Sunday, with the budget allowing only one person to be paid for Saturday. 2. Were the employees given a fair chance to explain their concerns? Answer: Employee Concerns: It’s unclear if employees were given a fair chance to voice their concerns, as this detail is not specified. 3. How would you rate the manager’s overall listening skills and why? Answer: Listening Skills: The manager’s listening skills are not detailed, but effective listening would involve understanding and addressing employee concerns about working conditions and scheduling. 4. What factors do you think the manager failed to consider in making a decision? Answer Unconsidered Factors: The manager might have overlooked employee preferences, personal commitments, and the impact of weekend work on team morale. 5. What factors did the manager appear to use in reaching a decision? Answer: Decision Factors: The manager likely considered the project deadline, budget constraints, and the need for productivity. 6. How did the employees react to the manager’s leadership style, and why? Answer: Employee Reaction: Employees may react negatively if they feel their concerns were ignored or if the workload distribution was perceived as unfair. Rate your group manager on the following scale: Calculate the average rating in your group (not counting the manager’s opinion!) by adding all ratings and dividing by the number of workers in the group. Answer: Average Rating of Manager: To calculate the average rating, sum all the ratings and divide by the number of workers. For example, if the ratings are [7, 8, 6, 7], then: • Total sum = 7 + 8 + 6 + 7 = 28 • Number of workers = 4 • Average rating = 28/4 = 7 Rate your satisfaction with the decision on the following scale: Calculate the average rating of satisfaction in your group by adding all of the ratings and dividing it by the number of workers. Answer: Average Satisfaction Rating: Sum all the satisfaction ratings and divide by the number of workers. For example, if the ratings are [6, 7, 5, 6], then: • Total sum = 6 + 7 + 5 + 6 = 24 • Number of workers = 4 • Average satisfaction rating = 24/4 = 6 Generally, groups that perceive their leaders to be autocratic will be more dissatisfied with decisions made about who works Saturday night. Laissez-faire managers can also be frustrating to groups. Keep in mind that this may vary depending on the composition of the group: Some people actually like to be told what to do. In some cultures, managers who involve workers in decision-making processes, such as those represented by this exercise, are considered to be ineffective; in other cultures, managers are expected to seek input from subordinates regularly. The occurrence of and acceptance of laissez-faire styles of management, however, tend to be rare compared to that of more autocratic styles. • How did your group feel about the style of your manager, and why? • In what situation would you consider autocratic leadership to be both appropriate and acceptable, and why? • In what situations would you consider laissez-faire leadership to be both appropriate and acceptable, and why? Experiential Exercise Who Works Saturday Night? Autocratic Manager You are the autocratic manager in a division of Turnem, Inc. Currently, your team is working to complete development of a prototype valve having a highly specialized use in the aerospace industry and putting the finishing touches on the presentation to be made on Monday to the highest officials of your aerospace program. In order to get the project done on time, you and one member of your four-person team are going to have to work this Saturday night from about 5 P.M. until at least midnight. Everyone on the team will be expected to work all day on Sunday. You know that it’s going to be really important to have your team functioning at its highest and most cooperative level on Sunday if the work is going to be completed on time. In addition, the work that must be completed Saturday night takes a high degree of technical expertise. It is your job to decide who will work on Saturday night. Your choices are employees 1 or 2, who have the technical knowledge and ability necessary for the tasks that must be completed on Saturday night, neither of whom want to work because of other commitments; employee 3, who has the necessary technical knowledge and skills but who is completely unwilling to work on Saturday night; and employee 4, who has little of the necessary technical knowledge but who needs the money and very much wants to work on Saturday night. You have the budget and the need for one employee to work with you on Saturday night. Everyone must work on Sunday. As far as you are concerned, you don’t really care what the conflicts and concerns of your subordinates may be. That isn’t your problem! Your problem is to get the right person to do the job, and you intend to get the person you want, no matter what. You should listen to the concerns of your subordinates, but make clear from the outset that you'll decide, and they’ll just have to live with your decision. Keep reinforcing that point whenever possible. Tell your group only that you are their manager; do not tell them that you have been instructed to be autocratic. Experiential Exercise Who Works Saturday Night? Laissez-Faire Manager You are the laissez-faire manager in a division of Turnem, Inc. Currently, your team is working to complete development of a prototype valve having a highly specialized use in the aerospace industry and putting the finishing touches on the presentation to be made on Monday to the highest officials of your aerospace program. In order to get the project done on time, you and one member of your four-person team are going to have to work this Saturday night from about 5 P.M. until at least midnight. Everyone on the team will be expected to work all day on Sunday. You know that it’s going to be really important to have your team functioning at its highest and most cooperative level on Sunday if the work is going to be completed on time. In addition, the work that must be completed on Saturday night takes a high degree of technical expertise. You don’t much care who works on Saturday night, as long as someone does. One thing is for sure; you don’t want to be responsible for making the decision. You have decided to let your employees make the decision, and you’re going to stay out of it. Their choices are employees 1 or 2, who have the technical knowledge and ability necessary for the tasks that must be completed on Saturday night, neither of whom want to work because of other commitments; employee 3, who has the necessary technical knowledge and skills but who is completely unwilling to work on Saturday night; and employee 4, who has little of the necessary technical knowledge but who needs the money and very much wants to work on Saturday night. You have the budget and the need for only one employee to work with you on Saturday night. Everyone must work on Sunday. As far as you’re concerned, you don’t really care what the conflicts and concerns of your subordinates may be. That isn’t your problem—it’s theirs! You should listen to the concerns of your subordinates, but make clear from the beginning that you’re not going to interfere. Of course, you will want to let them know from time to time that they’re probably not making the right decision. Tell your group only that you are their manager; do not tell them that you have been instructed to be laissez faire. Experiential Exercise Who Works Saturday Night? Democratic Manager You are the democratic manager in a division of Turnem, Inc. Currently, your team is working to complete development of a prototype valve having a highly specialized use in the aerospace industry and putting the finishing touches on the presentation to be made on Monday to the highest officials of your aerospace program. In order to get the project done on time, you and one member of your four-person team are going to have to work this Saturday night from about 5 P.M. until at least midnight. Everyone on the team will be expected to work all day on Sunday. You know that it’s going to be really important to have your team functioning at its highest and most cooperative level on Sunday if the work is going to be completed on time. In addition, the work that must be completed on Saturday night takes a high degree of technical expertise. It is your job to decide who will work on Saturday night. Your choices are employees 1 or 2, who have the technical knowledge and ability necessary for the tasks that must be completed on Saturday night, neither of whom want to work because of other commitments; employee 3, who has the necessary technical knowledge and skills but who is completely unwilling to work on Saturday night; and employee 4, who has little of the necessary technical knowledge but who needs the money and very much wants to work on Saturday night. You have the budget and the need for only one employee to work with you on Saturday night. Everyone must work on Sunday. Since the beginning of this project, you have been working closely with the members of your team, articulating the goals, guiding the process, serving as a clearing house, and involving the employees in decision-making processes that directly affect them. Begin by setting out the goals and purposes of having the best person work on Saturday night. Put this in terms of their best interests and the best interests of the organization. You should listen to the concerns of your subordinates and help them achieve an outcome that is mutually beneficial and acceptable. Tell your group only that you are their manager; do not tell them that you have been instructed to be democratic. Experiential Exercise Who Works Saturday Night? Employee 1 You are a member of a four-person team at Turnem, Inc. The project on which you are working, development of a prototype valve having a highly specialized use in the aerospace industry, is due to be demonstrated to the highest officials of the aerospace program on Monday. To be ready on time, it is necessary for you and your teammates to work all day this Sunday, and you may possibly have to work on Saturday night from about 5 P.M. until midnight. You are one of the key experts for this project on which you have worked seven days a week for over a month. You consider that you have a special reason for not wanting to work on Saturday night. It’s your brother’s wedding, you are part of the wedding party, and your whole family will be outraged if you fail to attend. You have to convince your manager that you should not be required to work on Saturday night. Experiential Exercise Who Works Saturday Night? Employee 2 You are a member of a four-person team at Turnem, Inc. The project on which you are working, development of a prototype valve having a highly specialized use in the aerospace industry, is due to be demonstrated to the highest officials of the aerospace program on Monday. To be ready on time, it is necessary for you and your teammates to work all day this Sunday, and you may possibly have to work Sunday night from about 5 P.M. until midnight. You have been working on the project since its inception, including many nights and weekends. At this point you’re feeling pretty burned out. Worse, however, is your family’s reaction. Your spouse and children are angry at what they see as your rejection of them in favor of your job. Sunday is your spouse’s birthday and a number of friends and relatives have been invited to help celebrate the day at your home. Unfortunately, you don’t have any choice about missing that event, but Saturday evening is your youngest child’s debut as star in the third-grade play. Your family has made it quite clear that your presence is not an option. You have to convince your manager that you should not be required to work on Saturday night. Experiential Exercise Who Works Saturday Night? Employee 3 You are a member of a four-person team at Turnem, Inc. The project on which you are working, development of a prototype valve having a highly specialized use in the aerospace industry, is due to be demonstrated to the highest officials of the aerospace program on Monday. To be ready on time, it is necessary for you and your teammates to work all day this Sunday, and you may possibly have to work Saturday night from about 5 P.M. until midnight. You joined the project about two months ago, and while you’re no expert, you certainly have the abilities and skills to do the work that must be done on Saturday night. However, you definitely do not want to work. As far as you are concerned, you’re entitled to a life outside of the workplace, you’re not much of a team player, and you had originally asked not to be put on this job anyway. There was a time in your life when you would have been at the head of the line to volunteer for this job—a time when your sole purpose in life was to get ahead, make more money, and gain power, prestige, and status. About eighteen months ago, your best friend died in a car accident. It was a shock to you to suddenly be faced with the uncertainty and fragility of life. You have decided that you had better live life while you have it, and that doesn’t mean spending it at work. You’re angry enough that you have to work on Sunday. As far as you’re concerned, someone else can work on Saturday night, because you’re not going to! Experiential Exercise Who Works Saturday Night? Employee 4 You are a member of a four-person team at Turnem, Inc. The project on which you are working, development of a prototype valve having a highly specialized use in the aerospace industry, is due to be demonstrated to the highest officials of the aerospace program on Monday. To be ready on time, it is necessary for you and your teammates to work all day this Sunday, and you may possibly have to work Saturday night from about 5 P.M. until midnight. You joined the team about five weeks ago and have some minimal knowledge of the project. You have been holding off taking a moonlighting job because this project, so far, has been keeping you busy seven days a week and evenings. While you’re pretty tired, you desperately need the money. Your job is to convince your manager to let you work on Saturday night. Experiential Exercise MBTI® Exercise Role: Nurse You are a head nurse. You have been a head nurse over several other nurses for too long. You just don’t have any interest in supervising people anymore. It seems to cause you so much anxiety that you literally lose sleep at night when you go home. You would really love to get out of being in your current position. You have considered taking a demotion to a nurse’s job until you retire. You would leave the hospital, but it is too close to retirement and will just cost you entirely too much to leave now. Your work is not super, but it has been satisfactory and you really don’t think you can push yourself to do anymore. Satisfactory should be enough for what you get paid. Your boss has called you in for a talk. Instructions 1. You are to decide to fire or not to fire this employee. 2. You must develop a rationale for your decision. 3. You should select a person who will represent your group and your boss to support your decision. Your boss is of the opposite type from your T/F preference. 4. You will have 10 minutes to discuss the case and determine the facts. You have all the facts before you—nothing else is known. 5. You will then have 5 minutes to decide whether or not to fire this employee. 6. You will then have 15 minutes to develop the rationale that you will use to defend your position. 7. You will have 5 minutes to present your case to the other group who will collectively act as your boss. 8. After the first group is finished, the bosses now must present their case. This is done BEFORE reporting happens. Experiential Exercise MBTI® Exercise Role: Supervisor You are the supervisor of a group of head nurses who manage other nurses. You are very concerned about one of your head nurses. Over the last couple of years, he has had low performance, failed to do many of the jobs assigned, and brings almost all decisions to committee meetings in order to avoid making decisions. You feel you must call him in for discussion. You are to the point of telling him that if he doesn’t correct his performance you will have to terminate his employment since there is no position to which he can be demoted. You have called him in to talk over his performance. Instructions 1. You are to decide to fire or not to fire this employee. 2. You must develop a rationale for your decision. 3. You should select a person who will represent your group and your boss to support your decision. Your boss is of the opposite type from your T/F preference. 4. You will have 10 minutes to discuss the case and determine the facts. You have all the facts before you—nothing else is known. 5. You will then have 5 minutes to decide whether or not to fire this employee. 6. You will then have 15 minutes to develop the rationale that you will use to defend your position. 7. You will have 5 minutes to present your case to the other group who will collectively act as your boss. 8. After the first group is finished, the bosses now must present their case. This is done BEFORE reporting out happens. Case Study Groupon: Decisions! Decisions! Decisions! Groupon, an Internet coupon company, was founded in Chicago in November 2008 by Andrew Mason, a young entrepreneur who was working with $1 million in seed money provided by Internet entrepreneur Eric Lefkovsky, who was Mason’s former boss. Groupon’s business innovation is merging collective buying with couponshence the company’s name: group plus coupon. According to Mason, the strategic goal of Groupon is to “fundamentally change the way that people buy from local businesses in the same way that e-commerce has changed the way that people buy products.” How does Groupon benefit from changing the way people buy from local merchants? The Answer: Groupon collects “half of actual sales, not just profits, in exchange for the introduction to a new customer.” The Groupon business model is based on “[c]onsumers sign[ing] up to receive offers from local firms by e-mail each day, ranging from restaurant meals to pole-dancing lessons, at discounts of up to 90 percent. But Groupon made virtual coupon-clipping exciting by, first, having offers expire after just a few hours and, second, cancelling them if they do not attract a minimum number of buyers (the ‘group’ in Groupon).” “A certain number of people need to buy into any given deal before it kicks in, or ‘tips’ in Groupon parlance. Once the deal tipsfor example, 200 people have purchased a $40 coupon for an $80 massagethe merchant and Groupon split the revenue roughly 50/50, and a group of customers has an unbeatable bargain.” Given that a minimum number of people need to buy into a coupon deal before it ‘tips,’ buyers eagerly spread information among family and friends, which in turn increases the number of buyers. This effect is like a snowball rolling rapidly down a steep hilland it can benefit both Groupon and the merchants, at least in the short-term. Since its inception in November 2008, Groupon has grown like wildfire. Just two years later Groupon was operating in 150 markets in the United States and 100 markets in Europe, with approximately 35 million registered users. Then by early June 2011 Groupon reported having 83 million subscribers in 43 countries, including an entry to China in March 2011. Groupon securely dominates the online coupon market in Chicago, New York and San Francisco, “where its offers are unique and lure consumers into new neighborhoods and experiences, [t]hat’s less true in second- and third-tier cities where Groupon relies on merchants to come to it.” Although Groupon is the dominant player in online coupons, “its brand only takes it as far as it offers the best deals from the most sought-after local retailers, restaurants and servicesthe kind of businesses that used to reside in the Yellow Pages and $10 coupon books.” A major challenge for Groupon in pursuit of its strategic goal is to retain the merchants beyond the first coupon deal with them. Early reports indicated that as many as one-half of small businesses did not continue to participate in Groupon deals, and that the majority of those ceased to participate because the first deal was unprofitable. In attempting to counter this merchant drop-off effect, Groupon hired a customer relationship management agency to track merchant satisfaction; “Groupon says early surveys have shown 95 percent of businesses say they want to work with the company again.” Groupon’s success has attracted much attention among the Internet business community. Indeed, in late 2010 Google made a $6 billion buyout offer to Groupona sum that was nearly twice as much as Google had previously offered for any acquisition. Mason, however, rejected the buyout offera decision that one observer characterized as “frustrating, maddening and inexplicable to most people.” Impressed by Groupon’s meteoric rise, venture capitalists say that Google’s interest in acquiring Groupon is easily explained and understood. “Given the potential for future profitable growth, $6 billion may be just fraction of its ultimate value in the market.” Who wouldn’t want to own a money machine like Groupon? Then in early June 2011, Groupon filed paperwork with the United States’ Securities and Exchange Commission (SEC) for an Initial Public Offering (IPO) of stock, with the objective of raising $750 million. Speculation in the days following the IPO filing indicated that the amount of money Groupon could raise might be significantly more than $750 million. Indeed, one observer suggested that Groupon “may leapfrog Google Inc. as the biggest U.S. Internet-related initial public offering ever.” Another reporter said, “Groupon has every incentive to IPO fast, to cash in while its expansion is in overdrive. But investors should take their time assessing whether the company’s explosive growth really will translate to surging profits.” Additionally, The Economist points out that “Groupon’s position is not as unassailable as it appears from its rapid growth and huge market sharemore than 60 percent in America . To ward off competition Groupon will be forced to lower the share of revenue it keeps from its deals.” Moreover, an increasingly large chunk of Groupon’s revenue goes to cover marketing costs associated with acquiring new subscribers. Steve Rosenbush, writing in the Institutional Investor, asserts that “Groupon is still in the early stages of its growth [and] has yet to tap the entire U.S. market, let alone the international market.” However, analysts disagree about the future of the online coupon market, with some believing it has monopoly potential and others believing that there will be multiple players with multiple product variations. Evidence is mounting that the latter view may be more on target. Groupon may become strangled by its own success and exponential growth rate. As indicated by its founder and CEO, Andrew Mason, “Groupon’s inability to handle the businesses banging on its door has led to the proliferation of clones.” Mason “estimates that there are some 500 [clones]; many have ripped off Groupon down to the company’s bright green signature color and website layout. But only Living Social, which just received a $175 million investment from Amazon, has emerged as a genuine competitor. Groupon still maintains about 80 percent market share. Losing to a competitor, perhaps one that doesn’t exist yet, is one way the company could fall.” In a March 2011 statement, Mason opined, “[b]y this time next year, we will either be on our way to becoming one of the great technology brands or a cool idea by people who were out-executed and out-innovated by others.” With this mixed evidence, are Groupon’s business prospects rosy or dismal? Discussion Questions 1. What are the key decisions that Andrew Mason has made during Groupon’s brief history? How have these decisions influenced Groupon’s evolution as an Internet-based business? Answer: Key Decisions: Andrew Mason’s decisions included expanding Groupon globally, diversifying its offerings, and focusing on technology and data-driven strategies. These decisions helped Groupon evolve from a local deal site to a major player in the global market. 2. How would you describe the decisions identified in your response to question 1 in terms of programmed and nonprogrammed decision making? Answer: Programmed vs. Nonprogrammed: Decisions like global expansion were nonprogrammed, involving unique strategies and market assessments, while operational decisions (e.g., deal processing) were more programmed. 3. How would you describe these decisions in terms of the rational, bounded rationality, and garbage can models of decision making? Answer: Decision Models: Rational decisions involved systematic planning for expansion; bounded rationality was seen in dealing with constraints and limited information; garbage can model applied to reactive, opportunistic choices amid changing market conditions. 4. How, if at all, has creativity and intuition played a role in the decisions to found and rapidly expand Groupon? Answer: Creativity and Intuition: Creativity drove Groupon’s innovative business model and rapid expansion, while intuition guided Mason’s risk-taking and market entry strategies. 5. Suppose that you think the market for group-based online coupons has great potential, and that you desire to enter the competitive fray. What factors would you consider in making a decision on whether or not to become a Groupon competitor? Answer: Competitive Factors: Consider market saturation, differentiation strategies, technological infrastructure, consumer behavior, and financial viability before entering the group coupon market. SOURCE: This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal Chair of Christian Business Ethics and Professor of Management, College of Business Administration, Valparaiso University. S. Rosenbush, “Groupon’s Andre Mason: Not So Crazy,” Institutional Investor (December 2010). B. Weiss, “The Weekend Interview with Andrew Mason: Groupon’s $6 Billion Gambler,” The Wall Street Journal (Eastern Edition) (December 18, 2010): A15. B. Weiss, “The Weekend Interview with Andrew Mason: Groupon’s $6 Billion Gambler,” The Wall Street Journal (Eastern Edition) (December 18, 2010): A15. A. Kessler, “Easy Money and the IPO Boom,” The Wall Street Journal (Eastern edition) (May 27, 2011): A15. Anonymous, “Business: Groupon Anxiety; Online-coupon Firms,” The Economist 398(8725) (March 19, 2011): 70. B. Weiss, “The Weekend Interview with Andrew Mason: Groupon’s $6 Billion Gambler,” The Wall Street Journal (Eastern Edition) (December 18, 2010): A15. Anonymous, “Business: Groupon Anxiety; Online-coupon Firms,” The Economist 398(8725) (March 19, 2011): 70. S. Rosenbush, “Groupon’s Andre Mason: Not So Crazy,” Institutional Investor (December 2010). B. Bosker, “Groupon Files for IPO,” The Huffington Post Web site (June 2, 2011), http://www.huffingtonpost.com/2011/06/02/groupon-files-for-ipo_n_870473.html (accessed February 7, 2014). Anonymous, “Business: Groupon Anxiety; Online-coupon Firms,” The Economist 398(8725) (March 19, 2011): 70. M. McCullough, “Groupon, Clones Face Unknowns,” Canadian Business 84(6) (April 11, 2011): 18. M. McCullough, “Groupon, Clones Face Unknowns,” Canadian Business 84(6) (April 11, 2011): 18. K. Patel, “Groupon Primes Itself to Become Next Zappos; Ad Age Visits to See How this Smart Startup Aims to Keep 60 Million Global Consumers Feeling the Love,” Advertising Age 82(9) (February 28, 2011): 4. K. Patel, “Groupon Primes Itself to Become Next Zappos; Ad Age Visits to See How this Smart Startup Aims to Keep 60 Million Global Consumers Feeling the Love,” Advertising Age 82(9) (February 28, 2011): 4. B. Weiss, “The Weekend Interview with Andrew Mason: Groupon’s $6 Billion Gambler,” The Wall Street Journal (Eastern Edition) (December 18, 2010): A15. S. Rosenbush, “Groupon’s Andre Mason: Not So Crazy,” Institutional Investor (December 2010). Anonymous, “Business: Groupon Anxiety; Online-coupon Firms,” The Economist 398(8725) (March 19, 2011): 70. S. Rosenbush, “Groupon’s Andre Mason: Not So Crazy,” Institutional Investor (December 2010). A. Das and G.A. Fowler, “Groupon to Gauge Limits of IPO Mania,” The Wall Street Journal (Eastern edition) (June 3, 2011): A1. S. Ovide, “Quarterly Markets ReviewIPO Market: Bubble Talk Surfaces in web IPOSLed by LINKEDIN, Quarter Saw Questionable Valuations; Analysts Avoid B-word,” the wall street journal (eastern edition) (JULY 1, 2011): C8. R. Winkler, “Amid Euphoria, Beware Getting Caught by Groupthink on GROUPON,” The Wall Street Journal (Eastern edition) (June 4, 2011): B18. Anonymous, “Business: Groupon Anxiety; Online-coupon Firms,” The Economist 398(8725) (March 19, 2011): 70. R. Winkler, “Amid Euphoria, Beware Getting Caught by Groupthink on Groupon,” The Wall Street Journal (Eastern edition) (June 4, 2011): B18. S. Rosenbush, “Groupon’s Andre Mason: Not So Crazy,” Institutional Investor (December 2010). M. McCullough, “Groupon, Clones Face Unknowns,” Canadian Business 84(6) (April 11, 2011): 18. B. Weiss, “The Weekend Interview with Andrew Mason: Groupon’s $6 Billion Gambler,” The Wall Street Journal (Eastern Edition) (December 18, 2010): A15. B. Weiss, “The Weekend Interview with Andrew Mason: Groupon’s $6 Billion Gambler,” The Wall Street Journal (Eastern Edition) (December 18, 2010): A15. Anonymous, “Business: Groupon Anxiety; Online-coupon Firms,” The Economist 398(8725) (March 19, 2011): 70. Solution Manual for ORGB Organizational Behavior Debra L. Nelson, James Campbell Quick 9781305663916, 9781337148443
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