Book: Organizational Behavior: Emerging Knowledge Global Reality

Chapter 5 Decision Making and Creativity

1. A management consultant is hired by a manufacturing firm to determine the best site for its next production facility. The consultant has had several meetings with the company's senior executives regarding the factors to consider when making the recommendation. Discuss the decision-making problems that might prevent the consultant from choosing the best site location.

2. You have been asked to personally recommend a new travel agency to handle all airfare, accommodation, and related travel needs for your organization of 500 staff. One of your colleagues, who is responsible for the company's economic planning, suggests that the best travel agent could be selected mathematically by inputting the relevant factors for each agency and the weight (importance) of each factor. What decision-making approach is your colleague recommending? Is this recommendation a good idea in this situation? Why or why not?

3. Intuition is both an emotional experience and a nonconscious analytic process. One problem, however, is that not all emotions signaling that there is a problem or opportunity represent intuition. Explain how we would know if our "gut feelings" are intuition or not, and if not intuition, suggest what might be causing them.

4. A developer received financial backing for a new business financial center along a derelict section of the waterfront, a few miles from the current downtown area of a large European city. The idea was to build several high-rise structures, attract large businesses to those sites, and have the city extend transportation systems out to the new center. Over the next decade, the developer believed that others would build in the area, thereby attracting the regional or national offices of many financial institutions. Interest from potential business tenants was much lower than initially predicted and the city did not build transportation systems as quickly as expected. Still, the builder proceeded with the original plans. Only after financial support was curtailed did the developer reconsider the project. Using your knowledge of escalation of commitment, discuss three possible reasons why the developer was motivated to continue with the project.

5. Ancient Book Company has a problem with new book projects. Even when others are aware that a book is far behind schedule and may engender little public interest, sponsoring editors are reluctant to terminate contracts with authors whom they have signed. The result is that editors invest more time with these projects than on more fruitful projects. As a form of escalation of commitment, describe two methods that Ancient Book Company can use to minimize this problem.