Chapter 4Chapter 4

Solving Problems

Why Care About Problem Solving?Why Care About Problem Solving?

• Organizational members are increasingly being evaluated on their problem-solving ability. So, decisions may affect your career, rewards, and satisfaction.

The quality and acceptability of your decisions will affect how well you perform and the degree of your satisfaction with work.

Solving problems takes considerable time and effort and is often uncomfortable. It makes sense to try to do well on something on which you will spend so much time and psychic energy.

Activities in organizations are generally the results of decisions. By examining how decisions are made, you may better understand how organizations work.

The Problem Solving Process (Figure 4-1)The Problem Solving Process (Figure 4-1)

Define theProblem

InformationGathering

IdentifyAlternativeSolutions

Evaluateand Choose

anAlternative

Implementthe

Decision

Monitorand Control

DecisionOutcomes

Guidelines for Problem DefinitionGuidelines for Problem Definition

• State the problem explicitly. Even ‘obvious’ problems are seen differently by different people or not seen at all.

• Specify the standard(s) violated. These may be personal, group, organizational, or even societal standards.

• State the problem in specific behavioral terms, rather than with broad generalizations.

• Specify whose problem it is; that is, who “owns” the problem?

• Avoid stating the problem as a preferred solution.• Avoid stating the problem as a dilemma.

Identify Alternative SolutionsIdentify Alternative Solutions

• Alternatives are the various approaches that may be taken to solving the problem; good solutions require good alternatives.

• In their rush to judgment, problem solvers often slight the alternative-generation stage.

• At this stage, divergent thinking is needed.• That is, problem solvers must stretch their minds,

seeking new possibilities.• Creativity is especially important at this stage.

Evaluate and Choose an AlternativeEvaluate and Choose an Alternative

• Once alternatives are thoroughly generated, they can be evaluated and a choice can be made.

• This stage requires convergent thinking, a narrowing in on a solution.

• There are two general approaches to evaluation and choice:– With screening approaches, each alternative is identified as

satisfactory or unsatisfactory and unsatisfactory alternatives are screened out.

– Scoring approaches assign a total score to each alternative and the alternative with the best score is chosen.

Screening Table (Figure 4-2)Screening Table (Figure 4-2)

Attributes

Alternatives Price ($) Width Image Delay Between Resolution Capacity Shots (Seconds) (Pixels)

PolaroidPhotoMAX 249.00 640 36 10

Sony Mavica 799.95 1280 40 3

CanonPowerShot 699.00 1668 61 2

Constraints <800.00 >1000 >32 <5

Screening ApproachesScreening Approaches

• Once a screening table is developed, it can easily be used to make a choice.

• Elimination by aspects screens out those alternatives not satisfying the constraint for the most important attribute, then screens out those not satisfying the constraint for the next most important attribute, and so on, until only one alternative remains or no attributes are left.

• Satisficing checks the alternatives against the constraints, one alternative at a time, until an alternative is found that satisfies all constraints.

Scoring ApproachesScoring Approaches

• Scoring approaches assign a total score to each alternative. Then, the alternative with the best score can be chosen.

• Attributes are given weights according to their relative importance.

• Attribute levels are assigned utilities -- from 100 for the best level to 0 for the worst level -- according to their relative levels of satisfactoriness.

Scoring Approaches (Continued)Scoring Approaches (Continued)

• Overall utility for an alternative is determined as follows:

Ui = j=1 (Wj x Uij)

n

Where:

Ui is the overall utility, or satisfactoriness, of alternative I

Wj is the relative weight given to alternative j

Uij is the utility, or satisfactoriness, of alternative I on attribute J

Implement the DecisionImplement the Decision

• The first three stages of the problem-solving process are called decision making.

• Some people make the mistake of assuming the problem-solving process is over once they have completed these stages.

• Decisions do not implement themselves. Necessary resources must be available for implementation, and those who will be involved in implementation must fully understand and accept the solution.

• A fundamental question at this stage is how long to persist in trying to successfully implement the decision.

Focus on Management: Escalation of Focus on Management: Escalation of Commitment in the NBACommitment in the NBA

• In one interesting study, new players in the National Basketball Association were examined.

• The research found that players for whom the initial investment was greater, as measured by their higher draft position, had more playing time and longer NBA careers, independent of their performance.

• The NBA draft is highly visible, and team managers may have expected criticism if they failed to field their expensive players.

• As such, they gave their higher draft choices more playing time, even when their performance didn’t justify it.

Guidelines for Minimizing the Dangers Guidelines for Minimizing the Dangers of Escalation of Commitmentof Escalation of Commitment

• Create “stopping rules” prior to launching a project.• Specify objective criteria for evaluating the status of a

project.• Actively gather information on project performance, and

accept warning signals when they occur.• Make it clear that “pulling the plug” is a viable option, and

don’t be afraid to follow through when needed.• Be wary of penalizing managers if their projects fail.• Seek objective views on project status, such as from external

auditors.

Monitor and Control Decision OutcomesMonitor and Control Decision Outcomes

• The final step in the problem-solving process is to monitor decision outcomes and take necessary corrective action.

• If decision control is to be effective, steps must be taken to ensure that necessary information is gathered.

• Also, contingency plans are needed. Contingency planning is the process of developing alternative courses of action that can be followed if a decision, perhaps because of unexpected events, does not turn out well.

Focus on Management:Focus on Management:The Roar of the CrowdThe Roar of the Crowd

• Bill Walsh, formerly the offensive coordinator of the Cincinnati Bengals football team, recalls a close game where the Bengals trailed the Oakland Raiders 31-28 with three minutes left in a playoff game at Oakland.

• The Bengals had the ball but crowd noise and a malfunctioning phone Walsh used to communicate with his spotter in the press box caused coordination to break down and the Bengals lost.

• Walsh says the event taught him the importance of contingency planning. We wrote, “We lost the game, and I decided that I would never again be confronted by circumstances I hadn’t prepared for, no matter how unlikely.”

The PDCA CycleThe PDCA Cycle(Figure 4-3)(Figure 4-3)

Plan:• Define purposes and goals• Develop theory• Define measures of success• Plan activities

Do:• Undertake activities• Introduce interventions• Apply best knowledge in pursuit of desired purpose and goals

Check:• Monitor outcomes• Study results for signs of progress or unexpected outcomes• Search for new lessons to learn and new problems to solve

Act:• Integrate lessons learned• Reformulate theory• Adjust methods• Learn more about what needs to be learned

Influences on Problem SolvingInfluences on Problem Solving

• In an ideal world:– the decision maker would have all the information needed -- and

no more -- when it was needed and in the desired form.

– the perceptual processes would select and process the information in an unbiased way.

– the cognitive processes would quickly, accurately, and objectively evaluate the information and arrive at an optimal choice.

– Subsequent evaluation of consequences would be unbiased and storage would be efficient.

• The “real-world” situation is far from this ideal scenario.

Factors Influencing Decision MakingFactors Influencing Decision Making(Figure 4-4)(Figure 4-4)

InformationInputs

Evaluation ofConsequences

StoredInformation

PerceptualProcesses

CognitiveProcesses

DECISION

DecisionOutcomes

Time and CostConstraints

OrganizationalInfluences

GroupInfluences

Stress

Information InputsInformation Inputs

• People must often act on the basis of less-than-perfect information.

• It may be incomplete, late, or in the wrong form.

• There may be too much of it, and it may simply be wrong.

• One reason information may be imperfect is that there may be too little time to carry out a full information search.

• Rapidly changing, complex situations make it especially difficult to get good information.

• Some sorts of problem solvers -- including those who are young, risk takers, or dogmatic -- act on the basis of relatively little information.

Perceptual ProcessesPerceptual Processes

• Our perceptual processes can result in distortions.• For instance:

– we perceive what we’re expecting to perceive– our perceptual selection is influenced by needs and

personality factors and many things about the nature of the object being perceived

– when we interpret information, we are subject to stereotyping, halo error, projection, perceptual defense, and a host of other troublesome influences

Cognitive ProcessesCognitive Processes

• We have very limited short-term memories, with a capacity for only a few pieces of information.

• We are basically serial-information processors, and as a result process information relatively slowly.

• We have limited computational ability.

• Unlike a computer, we care about the outcomes of our decisions, and have doubts about whether our decisions are correct.

• We evaluate information differently depending on how it is presented to us (or “framed”).

Focus on Management: Deep BlueFocus on Management: Deep Blue

• There is an ongoing debate and controversy over whether computers can “think” and whether computers can really outperform humans at challenging mental tasks.

• One battleground in the human versus computer skirmishes is the chessboard.

• In 1997, a much-watched match between world champion Gary Kasparov and IBM’s Deep Blue supercomputer ended with Kasparov’s resignation in the sixth and final game and his losing the competition to Deep Blue.

• A dispirited Kasparov said, “I’m a human being. When I see something that is beyond my understanding, I’m afraid.”

Time and Cost ConstraintsTime and Cost Constraints

• Time and cost constraints restrict our ability to get good, thorough information.

• Time constraints also may cause us to change the nature of our decision processes.

• When pressed to make a quick decision, for instance, we may seek negative information about alternatives to screen them out quickly instead of carefully balancing positive and negative aspects.

• Many managers face strong pressure from the organization to take action as quickly as possible rather than to analyze an issue at length.

StressStress

• Decision makers often act under great psychological stress.

• Especially when stakes are high, we may find it difficult to react with cool rationality.

• While things such as chemical disasters, nuclear incidents, plant crashes, and product tamperings are notable examples, executives regularly face less visible hot decision situations.

• These hot decision situations often lead to inadequate decision making.

Consequences of Decision BarriersConsequences of Decision Barriers(Figure 4-5)(Figure 4-5)

Barriers toProblemSolving

Use ofHeuristics

Procrastination

Incrementalizing

Conservatismin Information

Processing

DissonanceReduction

DecisionConfirmation

DefensiveAvoidance

Use of HeuristicsUse of Heuristics

• Heuristics (from the Greek word heuriskein, meaning “to find or discover”) are devices we use -- often without knowing it -- to simplify decision making. They are simplifying rules of thumb.

• While potentially harmful, heuristics may not be all bad. For one thing, in actual job settings we often receive continuous feedback concerning our performance. So, if a heuristic “points us in the right direction” we can use feedback to make adjustments.

• However, we may not know we are using heuristics, so they can be dangerous, especially in one-time decision situations.

Some Important HeuristicsSome Important Heuristics

• Satisficing means choosing the first acceptable alternative.

• When faced with a great amount of information, we may simply ignore most of the information and focus on just two or three attributes.

• Representativeness is the tendency to place something in a class if it seems representative of the class.

• Availability is the tendency to estimate the probability of an event based on how easy it is to recall instances of the event.

• Anchoring and adjustment is the tendency to use an early bit of information as an anchor and then use new information to adjust from that initial anchor.

ProcrastinationProcrastination

• Because we find decision making to be uncomfortable, we may put off making and announcing a decision as long as possible.

• This procrastination delays the time at which we commit ourselves to a decision and thus makes is more difficult for us to reverse that decision.

• We may justify the delay on the grounds that we’re gathering more information, but secretly we may be wishing that the problem would go away.

• Procrastination can cost time, money, reputation, and opportunity. It can also lead to scrambling to meet deadlines, and even to cheating or other unethical behaviors.

Procrastination at Blimpie’sProcrastination at Blimpie’s

• When Blimpie International sub shops teetered on the brink of insolvency in 1988, founder Anthony Conza identified procrastination in decision making as a major cause.

• In response, he set specific goals for improvements and provided firm dates for task completion.

• Within five years, Blimpie’s had rebounded. It tripled in size, and its share price rose from $0.125 to $11.50.

IncrementalizingIncrementalizing

• Incrementalizing involves changing one attribute of a current alternative a little and then another, rather than starting from scratch to design an alternative.

• For instance, someone asked to design a perfect mousetrap may think of the best currently available mousetrap and then begin to revise it bit my bit, adding a better spring or disposal mechanism.

• While incrementalizing may be appropriate if only a “somewhat better” alternative is needed, it can seriously stifle truly creative alternatives.

Conservatism in Information ProcessingConservatism in Information Processing

• We tend to show conservatism in information processing, characterized by underrevision of our estimates when presented with new information.

• For instance, if we initially believe the probability of an event is .5 and are presented new information that should increase the probability to .8, we are likely to revise our estimate to only .6 or .7.

• Conservatism can have serious consequences for decision making since we don’t respond fully to changing situations.

Dissonance ReductionDissonance Reduction

• Most decisions require us to make difficult choices.• Even though our choice may seem best overall, we may still like some

things about the alternatives we reject and may not care for some things about the chosen alternative.

• This creates a condition of conflicting thoughts, called cognitive dissonance.

• Since cognitive dissonance is uncomfortable, we take a variety of actions, including a search for confirming information, a distortion of attitudes, and an avoidance of disconfirming information, to justify our decisions.

• As a result, we are likely to overestimate the quality of our past decisions, and to underestimate the need to improve our decisions.

Decision ConfirmationDecision Confirmation

• Decision confirmation is dissonance reduction that occurs before the announcement of a decision.

• For instance, research found that it was possible to identify students’ job choices weeks before the students announced them.

• The students apparently made a decision fairly early in the process.

• The remainder of the process was spent building a case for the preferred alternative.

• When they finally announced the decision, the students could present a strong argument in its favor.

Defensive AvoidanceDefensive Avoidance

• Psychological stress in hot decision situations may result in errors in scanning of alternatives.

• When a hot situation -- such as a major decision, an impending attack, or major surgery -- occurs and it looks like important goals cannot be met, stress increases.

• This stress is especially great if someone is committed to a course of action that is challenged by new information.

• As stress grows, there is a tendency to lose hope of finding a better solution to the decision conflict, and defensive avoidance occurs.

Defensive Avoidance (Continued)Defensive Avoidance (Continued)

• Defensive avoidance is a condition in which the individual avoids information about risks of the chosen alternative or opportunities associated with an unchosen alternative.

• Defensive avoidance is characterized by:– lack of vigilant search

– distortion of the meaning of warning messages

– selective inattention and forgetting

– rationalizing

The Many Faces of IntuitionThe Many Faces of Intuition

• Intuition as paranormal power or sixth sense. According to this view, intuitive managers succeed because they have extrasensory powers.

• Intuition as a personality trait. Intuition is sometimes used to mean a personality type that prefers to rely on hunches, inspiration, and insight to solve problems.

• Intuition as an unconscious process. This view sees intuition as a set of processes that occur at the unconscious level at the same time that analysis is proceeding at the conscious level.

The Many Faces of Intuition (Continued)The Many Faces of Intuition (Continued)

• Intuition as a set of actions. Intuition is sometimes seen as a set of observable methods or actions used by decision makers. For example, successful intuitive decision makers are said to often skip levels and seek information directly from key individuals, to meet face to face with those individuals, and to subtly probe for information.

• Intuition as distilled experience. According to this view, a manager who makes the same sorts of decisions many times over the years can identify an appropriate course of action without conscious information processing.

• Intuition as a residual category. This perspective says essentially that any choice that isn’t a product of systematic, conscious data gathering and analysis must be intuition.

Guidelines Regarding Use of the Term Guidelines Regarding Use of the Term “Intuition”“Intuition”

• If someone refers to intuition, ask what he or she means.• There is no support for the “intuition as paranormal power”

perspective and no reason to believe that such abilities could be developed if they did exist.

• There is no value in treating intuition as a residual category.• If intuition is seen as a personality trait, it may be possible to

select managers based on their intuitive ability, but training will have little impact. There is little evidence, though, to suggest that personality traits are associated with more effective “intuitive” decisions.

Guidelines Regarding Use of the Term Guidelines Regarding Use of the Term “Intuition” (Continued)“Intuition” (Continued)

• If intuition is seen as distilled experience, it is learnable but not teachable; developing intuition will require years of practice.

• If intuition is conceptualized as an unconscious process it may not be possible to develop the unconscious, and there is little evidence that decision makers can be trained to rely more on the unconscious.

• If intuition is viewed as a set of actions taken by certain types of decision makers, it may be possible to study those decision makers and learn from them.

Guidelines for Improving Problem Guidelines for Improving Problem Solving (Figure 4-6)Solving (Figure 4-6)

ImprovedProblemSolving

Be Aware of Barriersto Effective

Problem Solving

Learn More AboutYour Characteristicsas a Problem Solver

Pay Attention to AllStages of the Problem

Solving Process

Work to AttainComplete and

Accurate Information

Employ CreativityEnhancementTechniques

Consider UsingComputers as an Aidto Problem Solving

Use Systematic Toolsfor Evaluation

and Choice

Consider Using aGroup Problem-Solving Process

Fostering CreativityFostering Creativity

• Good problem solving occurs when managers have many viable, creative alternatives to consider.

• To inspire employees to approach problems creatively and to nurture a creative environment, organizations follow three general approaches:– hiring creative individuals– applying specific creativity-enhancement techniques– developing a creative organization

The Nature of CreativityThe Nature of Creativity

• Creative behavior is defined as production of ideas that are both new and useful.

• Creative ability is the ability to produce ideas that are both new and useful.

• Both motivation and a proper setting may be necessary if innate creative ability is to blossom into creative output.

The Creative ProcessThe Creative Process

Preparation Incubation VerificationInsight

The Creative ProcessThe Creative Process

• Preparation involves gathering, sorting, and integrating information and other materials to provide a solid base for a later breakthrough.

• During the incubation stage, the mind is not consciously focused on the problem. The individual may be relaxed, asleep, reflective, or otherwise involved.

• The insight (“Eureka!”) stage is the familiar, sudden moment of inspiration.

• Finally, verification is necessary. Here, the individual carries out the chores involved in carefully checking facts to support the insight.

Characteristics of Creative IndividualsCharacteristics of Creative Individuals

• Creative persons seem to be sensitive and to prefer complexity. They typically value independence, enjoy esthetic expressions, have high aspiration levels, are open minded, and have a wide range of activities. They were generally given the ability to act responsibly early in life.

• Studies across a wide range of occupations show creative behavior to peak in the 30s or early 40s.

• Creativity has only a weak link to IQ.

Characteristics of Creative Individuals Characteristics of Creative Individuals (Continued)(Continued)

• There are some gender differences in creativity, but these appear to be due to socialization processes.

• Creative individuals resist conformity pressures if they see those pressures as interfering with their creative accomplishments, but otherwise they are willing to conform.

• Creative individuals tend to have high turnover rates, leaving school and jobs more frequently than those who are less creative.

Techniques for Enhancing CreativityTechniques for Enhancing Creativity

EnhancedCreativity

GordonTechnique

Synectics

IdeaChecklists

AttributeListing

CheckerboardMethod

Retroduction

Gordon TechniqueGordon Technique

• When asked to come up with a creative idea, people often instead incrementalize, taking an available alternative and improving it bit by bit.

• The Gordon technique is used to avoid such incrementalizing.

• It uses an initial focus on function.• For instance, rather than being told to build a better

mousetrap, the group might first be told that the focus was capturing.

SynecticsSynectics

• Synectics means “the joining together of apparently unrelated elements.”

• Synectics relies heavily on use of analogies, including:– Direct analogy involves looking at parallel facts, knowledge, or

technology in a different domain from the one being worked on.– With personal analogy, synectics group members try to identify

psychologically with key parts of the problem.– Fantasy analogy asks, “How in my wildest dreams can I make this

happen?”

• Synectics also includes a full structured problem-solving sequence.

Idea ChecklistsIdea Checklists

• Idea checklists involve asking a series of questions about how we might use something that we already have.

• For example, one checklist of idea-spurring questions is called SCAMPER, for:– Substitute?– Combine?– Adapt?– Modify or magnify?– Put to other uses?– Eliminate or reduce?– Reverse or rearrange?

Eliminating and Putting to Other UsesEliminating and Putting to Other Uses

• As an example of eliminating, Kiichiro Toyoda, the founder of Toyota, developed the “just-in-time” approach of eliminating inventories after viewing American supermarkets.

• George Washington Carver asked the question “How can peanuts be put to other uses?” and came up with over 300 applications.

Adapting from the InuitsAdapting from the Inuits

• Clarence Birdseye worked as a fur trader in Labrador before World War I.

• He note that Inuit preserved fish by quick-freezing and that the dish, when thawed, were flaky and moist.

• Birdseye adapted this process to make quick-frozen food available to the general public.

• This replaced the old slow-freeze process that left food dry and tasteless.

• The huge success of quick-frozen food led to the creation of General Foods.

Attribute ListingAttribute Listing

• According to the developer of attribute listing, “Each time we take a step we do it by changing an attribute or a quality of something, or else by applying that same quality or attribute to some other thing.”

• There are two forms of attribute listing:– With attribute modifying, the main attributes of the problem

object are listed. Then, ways to improve each attribute are listed.

– Attribute transferring is similar to direct analogy in synectics; attributes from one thing are transferred to another.

Checkerboard MethodCheckerboard Method

• The checkerboard method, also called morphological analysis, is an extension of attribute modifying.

• Specific ideas for one attribute or problem dimension are listed along one axis of a matrix.

• Ideas for a second attribute are listed along the other axis.

• If desired, a third axis (and attribute) can be added.

• The cells of the matrix then provide idea combinations.

• The benefit of the method is that it makes us aware of all possible combinations of the attributes.

The Checkerboard MethodThe Checkerboard Method(Figure 4-8)(Figure 4-8)

Metal Plastic

MATERIAL

Thick

THICKNESS

Thin

Square SHAPE Round

RetroductionRetroduction

• We are all slaves of our assumptions; they dictate the way we behave.

• Retroduction involves changing an assumption. This may serve two purposes:– our assumptions may be wrong

– even if our assumptions are correct, we may gain valuable new perspectives from looking at things from a different angle

• One retroduction technique says, “Suppose X were Y”• Another asks “What if?”

The Creative OrganizationThe Creative Organization

• An organization may try to choose appropriate structure and processes to foster creative behavior.

• Some writers have studied creative individuals and their desires and have drawn a picture of an organization that would seem to suit them best.

• The organization that emerges is loose, free-flowing, and adaptive -- similar to the organic organization structure,

• Organic structures seem appropriate in dynamic, complex, uncertain situations -- exactly those most requiring creativity.

Characteristics of the Creative Characteristics of the Creative Organization (Figure 4-9)Organization (Figure 4-9)

CreativeOrganization

Open Channels ofCommunication

Encouragement ofOutside Contacts

Idea Units Freed ofOther Responsibilities

HeterogeneousPersonnel Policy

Investment inBasic Research

Decentralized,Diversified

Risk-TakingEthos

Not Run as a “Tight Ship”

Separation of Creativefrom Productive Functions

Stable, SecureInternal Environment

Lighten Up: The Ig® Nobel PrizeLighten Up: The Ig® Nobel Prize

• Each year 10 individuals whose achievements “cannot or should not be reproduced” are honored with Ig® Nobel Prizes.

• Some recent winners:– Peace: Charl Fourie and Michelle Wong of Johannesburg, South

Africa, for inventing an automobile burglar alarm consisting of a detection circuit and a flame-thrower.

– Environmental protection: Hyuk-ho Kwon of Kolon Company of Seoul, Korea, for inventing the self-perfuming business suit.

– Nutrition: John Martinez of J. Martinez and Company, Atlanta, for Luak Coffee, the world’s most expensive coffee, which is made from coffee beans ingested and excreted by the luak, a bobcat-like animal native to Indonesia.

Venture TeamsVenture Teams

• A venture team is a temporary grouping of organization members for generating new ideas.

• So that creative thinking is not stifled, team members are freed from the organization’s bureaucracy and in many cases have a separate location and facilities -- these separate entities are known as skunk works.

• Companies such as IBM, 3M, Dow Chemical, and Texas Instruments have used venture teams to solve technical problems and promote change.

• Ford Motor Company used a skunk works to keep the new Mustang alive.

Focus on Management: MetrojetFocus on Management: Metrojet

• Two dozen mechanics, flight attendants, dispatchers, and reservation agents of US Air, selected by senior managers and union leaders, were offered an unusual assignment: Help start a low-fare airline for US Air.

• The employees did everything from pricing peanuts to conducting focus groups to arguing over how fast the planes should fly.

• Taking just one day off, the team completed the assignment in only four months.

• Named MetroJet, the airline has been a great success.

Idea ChampionsIdea Champions

• An idea champion is a member of the organization who is assigned responsibility for the successful implementation of a change.

• The idea champion may be a senior manager or a non-manager, such as the inventor of the idea that has prompted the change.

• An idea champion is devoted to the change and is willing to spend time and energy to see that the change takes place.

• Texas Instruments found the presence of an idea champion to be critical to the success of its technical projects and now requires an idea champion before approving a project.

IntrapreneurshipIntrapreneurship

• Intrapreneurship is the name given to entrepreneurial activities within a larger organization.

• Intrapreneurs are essentially internal entrepreneurs.• Intrapreneurs and entrepreneurs have things in common; they

value creativity and autonomy and have a strong desire to achieve.

• However, since intrapreneurs work within a corporate system, they face the benefits and constraints of that system.

• Intrapreneurs may need different competencies to succeed than do entrepreneurs, including skill at organizational politics.

Freedom FactorsFreedom Factors

FreedomFactors

Self Selection

No Handoffs

Corporate Slack

Ending the Home-Run Philosophy

Tolerance of Risk,Failure, and Mistakes

Freedom from“Turfiness”

Cross-FunctionalTeams

Multiple Options

The Doer DecidesPatient Money

Creativity and DiversityCreativity and Diversity

• People differing in gender, race, age, disability status, and sexual orientation bring to organizations a variety of attitudes, values, and perspectives as well as a broad and rich base of experience to address a problem.

• As a result, as a group becomes more diverse, the potential for creativity is enhanced.

• Diverse groups may also foster more open, honest, and effective decision making.

• However, diversity may also increase the potential for misunderstandings and increase conflict and anxiety among members.

Company Programs to Enhance Company Programs to Enhance CreativityCreativity

• Quaker Oats Co. executives go horseback riding when they need fresh approaches to problems.

• Those Characters from Cleveland has a half dozen weekend retreats in the woods each year, where its creative personnel brainstorm, play games, and sketch to come up with creative ideas.

• At Omron Corp. midlevel employees attend a monthly juku, or cram school, where they try to think and plan as if they were 19th century warlords, private detectives, or Formula One racecar drivers.

• Fuji Film asks its senior managers to study topics such as the history of Venice and the sociology of apes.

Global Perspectives:Global Perspectives:Creativity Programs WorldwideCreativity Programs Worldwide

• The growing emphasis on creativity is evident worldwide.

• For example, independent thinking and improvisation have historically been stifled in many Japanese firms, but competitive pressures and rapid change are demanding greater creativity.

• Shiseido, Japan’s largest cosmetics maker, has implemented a series of seminars to enhance the creativity of its managers. The seminars cover such topics as “Time and Space,” “Expression and Language,” “Beauty and Truth,” and “Body and Soul.”

Negotiating and BargainingNegotiating and Bargaining

• Decision making is difficult enough when we must “simply” choose alternatives.

• When our decision making is in the face of another party who may have opposing interests, things become even more complicated.

• This requires consideration of strategies for negotiating, and associated approaches to attaining “win-win” solutions.

Strategies for NegotiatingStrategies for Negotiating

• Forcing. With forcing, the negotiator is assertive and uncooperative, attempting to satisfy his or her own needs at the expense of the other party.

• Avoiding. A negotiator adopting an avoiding strategy is neither assertive nor cooperative, neglecting the interests of both parties by attempting to sidestep the conflict or put off making a decision.

• Compromising. A compromising negotiator shows moderate levels of both assertiveness and cooperation, not fully satisfying the needs of either party.

• Accommodating. Accommodating negotiators are cooperative without being assertive, thus satisfying the other party’s needs while neglecting their own.

• Collaborating. A negotiator adopting this style is both cooperative and assertive; this is the “win-win” style.

Negotiating StylesNegotiating Styles(Figure 4-10)(Figure 4-10)

Uncooperative Cooperative

COOPERATIVENESS

Assertive

ASSERTIVENESS

Unassertive

Forcing Collaborating

Compromising

AccommodatingAvoiding

Distributive and Integrative ApproachesDistributive and Integrative Approaches(Figure 4-11)(Figure 4-11)

100

70

50

25

0

A

F

D

G

C

B

E

0 30 50 75 100 Returns to Party 2

Returns to Party 1

Distributive (Win-Lose)

Integrative (Win-Win)

Guidelines for Attaining Win-Win Guidelines for Attaining Win-Win SolutionsSolutions

• Think win-win. It is critical to keep focused on the goal if a mutually acceptable, integrative solution.

• Plan for the negotiations. Invest the time to determine the who, what, when, why, and how of negotiations.

• Know your BATNA. Know the “Best Alternative To a Negotiated Agreement,” since it determines the reservation point, the point at which we are indifferent between a negotiated agreement and an impasse.

• Work to understand the other party. Win-win solutions demand a relationship of trust and respect. Such relationships are based on mutual understanding and sensitivity.

• Focus on a common objective and depersonalize the problem. The problem -- not the other party -- should be the adversary.

Guidelines for Attaining Win-Win Guidelines for Attaining Win-Win Solutions (Continued)Solutions (Continued)

• Negotiate from interests, not positions. Negotiations may stall if each side pushes for its position and fights the other party’s position. Try to focus instead on underlying interests.

• Build on differences. Successful negotiations may flow from differences in perceptions, preferences, or probability estimates.

• Work to control emotions. Emotions may short-circuit rational thinking. Try to understand your emotions and those of the other party, and treat them as legitimate.

• Use active listening. Active listening gives you what the other person really wants and is willing to concede, conveys to the other party that you are serious about working toward a solution, and induces the other party to “open up.”

• Be creative. For instance, challenge your assumptions about the other party’s motivation and the scope of the bargaining.

Techniques for Reaching Integrative Techniques for Reaching Integrative AgreementsAgreements

• Obtaining added resources. While obtaining added resources may not always be feasible, we should at least consider the possibility.

• Providing nonspecific compensation. With nonspecific compensation, one party gets what it wants and the other is paid on some unrelated issue.

• Trading issues. Trading issues means each party concedes on low-priority issues in exchange for concessions on higher-priority issues.

• Cost cutting. With cost cutting, one party gets what it wants and the other gets the costs associated with the concession reduced or eliminated.

• Bridging. With bridging, a new option that satisfies the interests of both parties is developed.

Tactics to Encourage Sharing of Tactics to Encourage Sharing of InformationInformation

• Decide on a distribution rule in advance. This may encourage parties to the bargaining to share information.

• Ask questions. While we may not get answers to all our questions, we’re more likely to get answers if we ask than if we don’t.

• Strategically disclose information. It is often important to provide some useful -- but probably not critical -- information to the other party. This helps develop trust and may lead to reciprocity.

Tactics to Encourage Sharing of Tactics to Encourage Sharing of Information (Continued)Information (Continued)

• Make multiple offers simultaneously. By making a set of offers, which ideally would be equally desirable to us but differing in their attractiveness to the other party, we may get faster agreement, or may at least gain information about the other party’s preferences.

• Search for postsettlement settlements. Once the parties have reached a mutually acceptable agreement, they can employ a third party who is given full information and is told to search for another agreement that is better for both parties. The initial settlement is essentially insurance in hand, and it leads to an increased willingness to seek a carefully crafted, preferable alternative.