RATIONAL DECISION MAKING & CREATIVITY

PRESENTED BY-
Abhishek Pandav (01)
Abhishek Somal (02)
Aishwarya Parthasarathy (03)
Amardeep Bhogal (04)
 Decision making & Planning

 Eleanor Roosevelt:
It takes as much energy to wish as it does to plan.

 Anthony Robbins:
It's in your moments of decision that your destiny is
shaped.

 H. L. Hunt:
Decide what you want, decide what you are willing to
exchange for it. Establish your priorities and go to work.
 What is Decision Making???
 mental processes (cognitive process)
 resulting in the selection of a course of action
 Choice among several alternatives.

“Every decision making process produces a

final choice.”
 Simple Steps in Decision Making
In order to make a right decision, carefully identify
and define the issue. Use the basic questions that you
were taught to use in school.
* Who or what is involved?
* What has occurred or needs to occur?
* Where does the issue happen?
* When did the issue or problem start?
* Why is it a problem?
* How are people currently dealing with issue?
Rational Decision Making

 Reasonable
mental process
resulting in the
selection of a
course of action
among several
alternatives.
Rational Decision Making
model
 Strengths & Weaknesses of Rational
Decision Making

 Provides structure and  Inadequate

discipline to the participation of
decision making stakeholders in
process the decision
 Helps to ensure making process;
consideration of the full 
Insufficient time
range of factors relating
spent generating
to a decision, in a
a range of
logical and
comprehensive manner.  possible solutions.
 Vroom-Jago Decision Model
•First proposed by Vroom and Yetton in 1973
•Later modified by Vroom and Jago in 1988.

What's it for?
The Vroom-Jago decision model is a rational
model used by leaders to determine whether they
should make a decision alone or involve a group, and
to what extent the group should be involved.
 

Studies have shown that the greater precision in situational assessment

of the Vroom-Jago decision model allows for better discrimination in
choosing a process.
 
The 5 processes
In some business situations it's
 Autocratic l (A1)  better for a leader to be the
decision maker for the group. In
others, it's best for the group to
 Autocratic ll (A2) have some input or even make the
decision.

 Consultative l (C1)

 Consultative ll (C2)

 Group ll (G2)
 Article 1
Cognitive Process of Radical Decision Taking
Domagoj Hruška, Faculty of Economics and Business Zagreb

Abstract Cognitive process of radical decision taking

Research interests are at
1.Introduction-understanding & analysing the 3 steps
intersection of business
decision making and human
2.Radical decision-Radical decision is one which leads to significant
cognitive processes. Radical change in enactment. Although enactment is ever changing , by
decision is one which leads constant actions of its participants, it is always familiar to them.
to morphogenetic change in 2.1 Enactment- social construct of organization developed by
enactment. its members trough their search for sense.
 2.2 Construction of cognitive representation-Extracting the
1st step = decision taker’s
cue
cognitive representation of 2.3 Development of cognitive representation of changed
organization. object
 2nd step = development of 2.4 Implementation of new cognitive representation into
cognitive representation of reality
changed object.
3. Methodology-assessed with qualitative methodology. The
 3rd step = implementation methods used should provide a deeper understanding of social
of new cognitive phenomena that would be obtained from a purely quantitative
representation into reality. methodology.
Case Study 1
Soccer Betting in Hong
Kong
 
Home Affairs Bureau (2001) Gambling Review: A consultation
paper……………………….

“ The long-established Government policy is to restrict

commercial gambling opportunities (other than social
gambling) to a limited number of authorized outlets only.
The rationale is that while limited gambling outlets may be
allowed to meet public demand, they should be authorized
and regulated so that gambling opportunities would not
become excessive as to be detrimental to the community.”
CASE STUDY OF SOCCER BETTING IN
HONGKONG – “a challenge”
 After the soccer World Cup in 1998, soccer betting became increasingly
popular and widespread, both in terms of the number of people
participating in it and the betting money involved. But there was no
any legal gambling outlet for soccer betting in Hong Kong.
Consequently, local punters tended to place betting on cross-border
illegal gambling outlets. For almost three decades prior to the late
1990s, legal sports betting in Hong Kong seemed to serve two major
purposes very effectively. Government regulation provided a safe and
reliable way for Hong Kong residents to wager, primarily on local horse
races, at the same time providing for a steady stream of both tax
revenues and charitable funds for local social service agencies, schools
and parks. In the late 1990s, however, the closed doors of Hong Kong
gambling were forced open by introduction of new technologies such
as cable television, inexpensive cell phone service and the advent of the
Internet.
 Contd..

Illegal gambling, especially on international soccer matches boomed.

As a result, the Hong Kong Home Affairs Department was forced to
consider how
to control the new wave of illegal
gambling….????, which
had cost the government and local charities millions
of dollars in potential lost income and was threatening
to provide a steady income for organized crime. A comparison study
was compiled On November 26 2002,
The Government announced its intention to authorize and regulate
soccer betting as a mean of tackling the problem of illegal soccer
gambling in Hong Kong. The Coalition handed in protest signatures
and held a press conference. This was followed by a seminar on the
consultations paper on July 7th. The consultation lasted for 3 months.
KEY BENEFITS OF THE POLICY CHANGE

to tackle the problem of illegal gambling

to stick with a proven record of

success by asking Hong Kong
Jockey Club to develop and operate
an authorized soccer betting system
in Hong Kong.
Conclusion:
After the comparison of the theoretical rational decision-making model
with the practical Government decision-making process, it can be
understood that the legalization of soccer betting is a rational policy
decision taken to significantly reduce the problem of illegal soccer
betting.
According to our case study, the Government’s policymaking in this
matter has represented a rational policy process as it follows :

THE FIVE SEQUENCES OF RATIONAL DECISION MAKING:

 1. Identify the problems, goals and objective

 2. List all the alternative means to the problems
 3. Estimate all the consequences of the means
 4. Compare all the alternatives
 5. Choose the most suitable policy.
 Franklin Roosevelt:
Happiness is not in the mere
possession of money; it lies in
the joy of achievement, in the
thrill of creative effort.
 Creativity
Critical Thinking Creative Thinking
 The ability to generate
analytic generative
innovative ideas and manifest
convergent divergent
them from thought into reality.
vertical lateral
 The process involves original probability possibility
thinking and then producing. judgment suspended judgment
focused diffuse
objective subjective
answer an answer
left brain right brain
verbal visual
linear associative
reasoning richness, novelty
yes but yes and
 What is Creativity? Creative Methods

An Ability. 
 Evolution. 
An Attitude. 
 Synthesis. 
A Process.   Revolution. 
 Reapplication. 
 Changing Direction. 
 Negative Attitudes That Block
Creativity

1. Oh no, a problem! 
2. It can't be done.
3. I can't do it.
4. But I'm not creative.
5. That's childish. 
6. What will people think? 
7. I might fail. 
 Mental Blocks to Creative Characteristics of the Creative
Thinking and Problem Solving Person

 curious
1. Prejudice.
 seeks problems
2. Functional fixation.
 enjoys challenge
3. Learned helplessness.   optimistic
4. Psychological blocks.   able to suspend judgment
 comfortable with imagination
 sees problems as opportunities
 sees problems as interesting
 problems are emotionally
acceptable
 challenges assumptions
 doesn't give up easily: perseveres,
works hard
 Main goals of brainstorming are:
(1) to break us out of our habit-bound thinking and
(2) to produce a set of ideas from which we can choose

Basic Guidelines for

Useful for Brainstorming
 Attacking specific problems
 Where a collection of good, 1. Suspend judgment.
fresh, new ideas are needed. 2. Think freely. 
3. Tag on. 
4. Quantity of ideas is important. 
 Major motion picture studio-
declared that the central
problem was not finding good
people-it was finding good
ideas.
 Extracting idea of creativity
 producing breakthroughs-both
technological and artistic
 Pixar’s track record is unique in
the early 1990s they were
known as the leading
technological pioneer in the
field of computer animation.
 Years of R&D culminated in the
release of Toy Story in 1995
 After Pixar’s 2006 merger with the
Walt Disney Company, its CEO, Bob
Iger, asked me, chief creative officer
John Lasseter, and other Pixar senior
managers to help him revive Disney
Animation Studios. The success of
these efforts prompted to share
thinking on how to build a
sustainable creative organization.
  What is Creativity?
 People tend to think of creativity as a
mysterious solo act, and they typically reduce
products to a single idea: in filmmaking ,
creativity involves a large number of people
from different disciplines working effectively
together to solve a great many problems. The
initial idea for the movie—is the high
concept”—is merely one step in a long,
arduous process that takes four to five years.
 A movie contains literally tens of thousands
of ideas; in the design of characters, sets, and
backgrounds; in the locations of the camera;
in the colors, the lighting, and the pacing.
The director ,other creative leaders of a
production do not come up with all the ideas
on their own; and every single member
production group makes suggestions.
 Creativity must be present at every level of
every artistic and technical part of the
organization
Taking Risks
 We are at least a little scared,
 .We’re in a business whose customers want
to see something new
 This means we have to put ourselves at
great risk
 We as executives have to resist our natural
tendency to avoid or minimize risks, which,
of course, is much easier said than done. In
the movie business and plenty of others,
this instinct leads executives to choose to
copy successes rather than try to create
something brand-new. That’s why you see
so many movies that are so much alike.
 Case Study 2
GM - was ranked a top 20 innovative company in the world
according to the BCG - Business Week 2008 survey

• General motors recalls 276729 vehicles for repair.

• Main problem was flaw in transmission system
which cause car to roll down during gear.
• The 2009 Models affected include the Chevrolet
Cobalt, HHR, Malibu, Traverse and the GMC Acadia,
Pontiac G5, G6 and the Saturn Aura and Outlook.
 Positives of the
decision
 Chevrolet retail cars continue to gain Negatives of the decision:
share, led by Malibu's 33 percent retail
sales gain compared with last year.
 Sale was reduced to
52.9% in February.
 Chevrolet Traverse, GMC Acadia, Buick  The main problem was
Enclave and Saturn Outlook drive mid-
utility crossover retail sales up 35%, share “The Cash burn”.
up 10% points, compared with a year ago.  GM operating cost are
very high due to which
 GMAC retail penetration increased
dramatically to more than 30 percent of it has to sell the cars for
sales in February; Credit Union-financed high profit.
sales now about 10 percent of total.
 GM turnaround plan for
2010
 GM has to cut every loss-
making operation.
 Innovation should be
done.
 Make products that
matter to today's
consumer.
 GM has to capture the
imagination of the young
buyer in the twenties and
thirties.