Video Segment 4 Next Door Food Stores

4

Next Door Food Stores: A Case Study of Self-Directed Work Teams

(Video available on VHS tape)

chapter 9: decision making by individuals and groups

Chapter 9 Summary

  • Bounded rationality assumes that there are limits to how rational managers can be.
  • The garbage can model shows that under high uncertainty, decision making in organizations can be an unsystematic process.
  • Jung’s cognitive styles can be used to help explain individual differences in gathering information and evaluating alternatives.
  • Intuition and creativity are positive influences on decision making and should be encouraged in organizations.
  • Empowerment and teamwork require specific organizational design elements and individual characteristics and skills.
  • Techniques such as brainstorming, nominal group technique, Delphi technique, devil’s advocacy, dialectical inquiry, quality circles and teams, and self-managed teams can help managers reap the benefits of group methods while limiting the possibilities of groupthink and group polarization.
  • Technology is providing assistance to managerial decision making, especially through expert systems and group decision support systems. More research is needed to determine the effects of these technologies.
  • Managers should carefully weigh the ethical issues surrounding decisions and encourage ethical decision making throughout the organization.

Learing Objectives

After reading this chapter, students should be able to do the following:

1. Explain the assumptions of bounded rationality.

2. Describe Jung’s cognitive styles and how they affect managerial decision making.

3. Understand the role of creativity in decision making, and practice ways to increase your own creativity.

4. Identify the advantages and disadvantages of group decision making.

5. Discuss the symptoms of groupthink and ways to prevent it.

6. Evaluate the strengths and weaknesses of several group decision-making techniques.

7. Describe the effects that expert systems and group decision support systems have on decision-making

organizations.

8. Utilize an “ethics check” for examining managerial decisions.

segment summary: next door food stores—A case study of self-directed work teams

Next Door Food Stores is a group of 30 convenience stores and gas stations. Like all members of the convenience store industry, the company faced the problem of a high turnover rate among employees. In an effort to increase productivity and better customer service, Next Door Food Stores decided to empower its employees using self-directed work teams. It was hoped that the teams would motivate the employees. It was hoped that employees’ narrow individual goals would be replaced by common goals. Self-directed work teams could make better decisions because members would learn to look at the business as a whole and see the bigger picture.

The first self-directed team was formed in the audit department, the DGIT team. The audit department processes information from the stores, checks for accuracy, and forwards its reports to the appropriate departments. The audit department must maintain good supplier relations and could reduce costs, so this department was a logical place to begin the self-directed work team effort.

What concerns would interfere with motivation and the ability to be successful as a self-directed team? Team members expressed fear of failure, lack of support from other departments, and fear of not receiving help from upper management. The team members were committed to make the self-directed team successful. To do this, members had to depend on each other, accept help, and interact as much as possible. Team members and managers met to express what each expected of the other. Managers wanted the DGIT team to succeed. To overcome the fear that some team members would dominate, managers implemented training that included team-building exercises.

As a result of teamwork, the auditing processes, productivity, and customer service improved. Good reports showed corrections and explained why errors were made. Good reporting helped the managers. Before the work team was instituted, employees worked on a designated store whereas now employees work together on all stores. This maintains a closer relationship with store managers. There are fewer mistakes, and there is more employee enthusiasm.

How would being part of a self-directed team increase motivation? “I feel more important, more responsible,” says one team member. The common focus as a team, moving in the same direction and working hard to get there, has allowed the team to expand and make things better. Team members are motivated to solve problems and eliminate their own jobs. Team members want to stop reacting to problems and start proacting, devising ways to eliminate error. The DGIT team has been so successful that Next Door Food Stores plans to create other self-directed teams.

preViewing Activities

  1. Before Class Preparation for Students
  1. Review Chapter 9
  1. Define the following key terms: 1) empowerment; 2) participative decision making; 3) groupthink; and 4) synergy.
  1. Why might managers use groups to make decisions?
  • Managers use groups to make decisions for several reasons. One is for synergy; that is, group members stimulate new solutions to problems through the process of mutual influence and encouragement in the group.
  • Another reason for using a group is to gain commitment to a decision.
  • Groups also bring more knowledge and expertise to a problem-solving situation.
  1. In-Class Previewing
  1. How can an organization provide the foundation for empowerment?
  • Empowerment is sharing power within the organization.
  • The organizational foundations for empowerment include participative decision making, a supportive organizational culture, and a team-oriented work design. A supportive work environment is essential. Empowerment requires that lower-level organizational members be able to make decisions and take action on those decisions.
  1. Describe participative decision making.
  • 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. Employees could be involved in identifying problems, generating alternatives, selecting solutions, planning implementation, or evaluating results.
  • Research shows that greater involvement in all five processes has a cumulative effect. Employees who are involved in all five processes have higher satisfaction and performance levels.
  1. What is groupthink? Review Table 9.1, Symptoms of Groupthink and How to Prevent It.
  • One liability of a cohesive group is its tendency to develop groupthink, a dysfunctional process. Groupthink is “a deterioration of mental efficiency, reality testing, and moral judgment” resulting from in-group pressures.
  • Consequences of groupthink include an incomplete survey of alternatives, failure to evaluate the risks of the preferred course of action, biased information, and a failure to work out contingency plans.
  • Groupthink can be prevented by ensuring that decisions are evaluated completely, with opportunities for discussion from all group members.

viewing activities

  1. How do self-directed work teams contribute to the overall goals of Next Door Food Stores?
  • Empowering employees is a means of making them more motivated. One empowerment method is to use self-directed work teams. These teams look at the business as a whole and make better decisions because team members can look at each decision from the big company picture.
  • The first self-directed work team at Next Door Food Stores was formed in the audit department, the DGIT team. The audit department processes information from the stores, checks for accuracy, and forwards its reports to the appropriate departments. The audit department must maintain good supplier relations and could reduce costs through increased productivity, so this department was a logical place to begin the company’s first self-directed team.
  1. What concerns would interfere with motivation and the ability to be successful as a self-directed team?
  • Team members expressed fear of failure, fear of lack of support from other departments, and fear of not receiving help from upper management. The team members were committed to make the self-directed team successful. To do this, members had to depend on each other, accept help, and interact as much as possible. Team members and managers met to express what each expected of the other. Managers wanted the DGIT team to succeed. To overcome the fear that some team members would dominate, managers implemented training that included team-building exercises.
  1. How did being part of a self-directed team increase motivation?
  • “I feel more important, more responsible,” says one team member on the DGIT team. The common focus as a team, moving in the same direction and working hard to get there, has allowed the team “to expand and make things better.” Team members are motivated to solve problems and eliminate their own jobs. Team members want to stop reacting to problems and start proacting, devising ways to eliminate error. The DGIT team has been so successful that Next Door Food Stores plans to create other self-directed teams.

follow-up activities – students apply & extend

  1. Students will list the advantages and disadvantages of group decision making at Next Door Food Stores.
  • Point out that an effective decision is timely, is acceptable to the individuals affected by it, and meets the desired objective.
  • Advantages: 1) more knowledge and information through the pooling of group member resources; 2) increased acceptance of, and commitment to, the decision, because the members had a voice in it; and 3) greater understanding of the decision, because members were involved in the various stages of the decision process.
  • Disadvantages: 1) pressure within the group to conform or fit in; 2) domination of the group by one forceful member or a dominant clique, who may ramrod the decision; and 3) the amount of time required, because a group is slower than an individual to make a decision.
  1. Divide the class into 7 groups. Each group will explain one of the following techniques for group decision making: brainstorming, nominal group technique, Delphi technique, devil’s advocacy, dialectical inquiry, quality circles, and self-managed teams.
  • Brainstorming: a technique for generating as many ideas as possible on a given subject while suspending

evaluation until all the ideas have been suggested.

  •  Nominal group technique: a structured approach to group decision making that focuses on generating

alternatives and choosing one.

  • Delphi technique: gathering the judgments of experts for use in decision making.
  • Devil’s advocacy: a technique for preventing groupthink in which a group or individual is given the role of critic

during decision making.

  • Dialectical inquiry: a debate between two opposing sets of recommendations.
  • Quality circles: a small group of employees who work voluntarily on company time, typically one hour per

week, to address work-related problems such as quality control, cost reduction, production planning and

techniques, and even product design.

  • Self-managed team: a team that is part of an organization’s structure and is empowered to act on its decisions

regarding product and service quality.

  1. What ethical issues should the self-managed work teams at Next Door Food Stores keep in mind?
  • Ethical decision making in organizations is influenced by many factors, including individual differences and

organizational rewards and punishments.

  • According to Blanchard and Peale, decision makers should ponder three questions: 1) Is it legal? (Will I be

violating the law or company policy?); 2) Is it balanced? (Is it fair to all concerned in the short term and long

term? Does it promote win-win relationships?); and 3) How will it make me feel when others become aware of

the decision?).

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