MGT503 Paper Topics Lectures 19-45

Lecture 19 MGT 503

GROUP DECISION MAKING AND CREATIVITY

Creativity is the ability to combine ideas in a unique way or to make unusual associations between ideas.

Innovation is the process of taking a creative idea and turning it into a useful product, service, or method of operation.

Creativity is the cognitive process of developing an idea, concept, commodity, or discovery that is viewed as novel by its creator or a target audience.

A. Creativity requires both convergent and divergent thinking.

a. Convergent thinking is the effort to solve problems by beginning with a problem and

attempting to move logically to a solution.

b. Divergent thinking is the effort to solve problems by generating new ways of viewing a

problem and seeking novel alternatives. B. Creativity has three necessary ingredients. a. Domain-relevant skills are those associated with expertise in the relevant field. b. Creativity-relevant skills include a cognitive style, or method of thinking that is oriented to exploring new directions, knowledge of approaches that can be used for generating novel ideas, and a work style that is conducive to developing creative ideas. c. Task motivation is interest in the task for its own sake, rather than because of some external reward possibility, such as more C. An individual’s creative process has several stages. a. Verification involves testing the ideas to determine the validity of the insight. D. Group creativity can be enhanced by means of a number of techniques. Two of which are following: a. Brainstorming is a means of enhancing creativity that encourages group members to generate as many novel ideas as possible on a given topic without evaluating them. i. Computer assisted brainstorming have been found to give superior results. b. The Nominal Group Technique (NGT) is a means of enhancing creativity and decision making that integrates both individual work and group interaction within certain ground rules. i. NGT was developed to foster creativity and to overcome the tendency to criticize ideas when they are presented

Lateral Thinking Vs Vertical Thinking

Vertical thinking is logical but only in one direction. You ignore the possibilities and alternatives around you or various other ways of doing same thing. Vertical way of thinking is the problem solving way the way computers do.

Rotating a problem from different angles to try and locate alternative points of entry involves Lateral thinking.

Other Decision Making Methods

1. Delphi Method:

The Delphi method is a structured approach to gain the judgments of a number of experts on a specific issue relating to the future. If there is a wide divergence of opinion in Delphi Method this step is repeated.

2. Scenario Analysis:

The Scenario analysis, developed in France, approach addresses a variety of possible futures by evaluating major environmental variables, assessing the likely strategies of other significant factors (e.g., other organizations), devising possible counter strategies, developing ranked hypotheses about the variables, and formulating alternative scenarios.

Scenarios are outlines of possible future conditions, including possible paths the organization could take that would likely lead to these conditions.

One object of the method is to enable the organization to make decisions that do not greatly inhibit further freedom of choice.

Deming’s TOOL FOR Improvement and Innovation:

PDCA or PDSA i.e. Planning, Doing, Checking/Studying and Acting are the four activities which Dr. Deming taught to Japanese companies to solve work related daily and yearly problems.

1. Differentiate between creativity and innovation. Creativity is the ability to combine ideas in a unique way or to make unusual associations between ideas. Innovation is the process of taking a creative idea and turning it into a useful product, service, or method of operation.

2. How can the systems model be used to help organizations become more innovative? In the

systems model we use inputs like creative people and groups and, through a creative process or situation, transform the inputs into the desired output such as creative products. The right environment is also important.

3. Describe the specific structural, cultural, and human resource variables associated with innovation. Variables associated with innovation are structural (organic structure, abundant resources, and high inter unit communication), cultural (acceptance of ambiguity, tolerance of the impractical, low external controls, tolerance of risks, tolerance of conflicts, focus on ends, and open- system focus), and human resource (high commitment to training and development, high job security, and creative people).

Lecture 20 · PLANNING AND DECISION AIDS-I · TECHNIQUES FOR ASSESSING THE ENVIRONMENT

Several techniques have been developed to assist managers in assessing the organization’s environment.

Environmental Scanning: Environmental scanning is the screening of large amounts of information to anticipate and interpret changes in the environment.

SWOT analysis is an analysis of an organization’s strengths, weaknesses, opportunities, and threats.

It brings together the internal and external environmental analyses in order to identify a strategic niche the organization might exploit.

Competitor intelligence is an environmental scanning activity that seeks to identify who competitors are, what they are doing, and how their actions will affect the organization.

Another type of environmental scanning is global scanning in which managers assess the changes and trends in the global environment.

Environmental scanning provides the foundation for developing forecasts, which are predictions of outcomes.

There are three categories of forecasting techniques.

a Quantitative forecasting applies a set of mathematical rules to a series of past data to predict outcomes. b Qualitative forecasting uses the judgment and opinions of knowledgeable individuals to predict outcomes.

c Judgmental forecasting

Forecasting

Forecasting is the process of predicting changing conditions and future events that may significantly affect the business of an organization.

1. Forecasting is important to both planning and decision making.
2. Forecasting is used in a variety of areas such as: production planning, budgeting, strategic planning, sales analysis, inventory control, marketing planning, logistics planning, and purchasing among others.

Some suggestions for improving forecasting effectiveness are as follows:

1. Use simple forecasting techniques. 2) Compare every forecast with “no change.” 3) Don’t rely on a single forecasting method. 4) Don’t assume that you can accurately identify turning points in a trend. 5) Shorten the length of the forecasts. 6) Forecasting is a managerial skill and can be practiced and improved.

Methods of Forecasting

A. Quantitative forecasting relies on numerical data and mathematical model to predict future. There are two types of quantitative forecasting most frequently used.

1. Time-series methods used historical data to develop forecasts of the future.

A seasonal pattern indicates upward or downward changes that coincide with particular points within a given year.

A cyclical pattern involves changes at particular points in time that span longer than a year.

Time-series are more valuable for predicting broad environmental factors than in predicting the impact of present or future actions.

Time-series rely on past trends there can be a danger in their use if environmental changes are disregarded.

Q2. Explanatory or causal models attempt to identify the major variables that are related to or have caused particular past conditions and then use current measures of those variables (predictors) to predict future conditions.

1. Explanatory models allow managers to assess the probable impact of changes in the predictors.
2. Regression models are equations that express the fluctuations in the variable being

forecasted in terms of fluctuations among one or more other variables.

c. Econometric models are systems of simultaneous multiple regression equations involving several predictor variables used to identify and measure relationships or interrelationships that exist in the economy.

d. Leading indicators are variables that tend to correlate with the phenomenon of major

interest but also tend to occur in advance of the phenomenon.

B. Technological, or Qualitative, Forecasting is aimed primarily at predicting long-term trends in technology and other important aspects of the environment The focus is upon longer-term issues that are less amenable to numerical analysis as quantitative approaches.