Discussion Questions

Word Count:

150-200 each question

Objective:

Describe decision-making techniques in the workplace.

Assess individual and group decision-making processes in the workplace.

Assignment (Discussion Questions):

·
What are some beneficial trends you think will affect health psychology in the future? What are some detrimental trends you think will affect health psychology in the future?

·
Where can you learn more about careers and training in health psychology after graduation? Describe potential careers and training opportunities that interest you.

See Attachments (Ch 3 & 15) if needed

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Foundations
of Decision
Making

CHAPTER

PART 2 Planning

3.1

Describe
the

decision-
making
process.

Explain
the three

approaches
managers
can use to

make
decisions.

3.2

Discuss
group

decision
making.

3.4

Discuss
contemporary

issues in
managerial

decision
making.

3.5

3.3

Describe
the types of

decisions and
decision-making

conditions
managers

face.

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With a small year-round population, Branson, Missouri, is in a location not easily accessible
by air service.1 The city, best known for its country music, aging pop-star variety shows, and
family-style attractions, also has the kinds of outdoor activities that attracted eight and a half
million visitors last year, “earning it the unofficial nickname ‘Vegas without the gambling.’ ”
About 95 percent of those visitors come by car or bus. But now it’s show time for a new
entrant—the Branson Airport. The $155 million airport, which opened in May 2009, is an
experiment that many people are watching.

The new airport is generating interest from city governments and the travel industry because
it’s the nation’s first commercial airport built and operated as a private, for-profit business with
absolutely no government funding. As one expert said, “…unpretentious little Branson Airport
could have an outsize effect it if works. It could turn what now is a mostly regional
tourist spot into a national destination for tourists.”

Steve Peet, the airport’s chief executive admits that he had no idea where
Branson was in 2000. But by 2004, he was convinced there was money to
be made flying tourists there. He says, “If you were ever going to think
about building a private commercial airport, this would be the place to do
it. How many more visitors would come here if we made it easier and
affordable for them? It seemed like an incredible opportunity.” So he
decided to build a new commercial airport using private financing
a short distance south of Branson’s popular theater district. Decisions
made by both Peet and Jeff Bourk (pictured), executive director of the
airport, have been a big part of turning that dream into reality.

After deciding where to locate the airport, work began on constructing
the 7,140-foot runway (which can accommodate most narrow-body jets) and
the terminal. Despite all the major decisions, project construction went
smoothly. Bourk believed that much of that was due to minimal red tape.
Because the airport wasn’t using federal assistance, it didn’t face the
restrictions that accompany taking government money. Thus, it
could also pick and choose the airlines it would let in. The
airport’s owners offered exclusive contracts to AirTran
and Sun Country on certain routes to Branson. To
attract those providers, the airport agreed to not
allow other competitors in. Also, the airport owners
kept the airlines’ operating costs low since airport
employees do much of the work usually done by
an airline’s ground staff. Peet stated that they want
the airlines to succeed. “We want to build real
service, sustainable service.” The airport earns
money from landing fees (based on number of
passengers, not on weight), aircraft fuel sales, a
percentage of every sale at the airport’s facility,
and a $8.24 fee paid by the city of Branson for
each arriving passenger. To reach Peet’s goal
of 250,000 passengers a year, the airport needs
only 685 passengers (five to six planeloads)
a day. He says, “What we’re doing is going
to work.”

Flight Plan

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3.1
Describe
the
decision-
making
process.

Making decisions, especially when there are no precedents to guide you, can’t be easy.

However, that doesn’t mean that managers can just forget about or ignore making decisions.

Rather, as the decision makers in the chapter-opening story about Branson Airport illustrate,

even when decisions are difficult or complex, you gather the best information you can and

just do it.

Managers make a lot of decisions—some minor and some major. The overall quality of

those decisions goes a long way in determining an organization’s success or failure. In this

chapter, we examine the basics of decision making.

How Do Managers Make Decisions?
Decision making is typically described as choosing among alternatives, but
this view is overly simplistic. Why? Because decision making is a process
rather than the simple act of choosing among alternatives. Exhibit 3-1
illustrates the decision-making process as a set of eight steps that begins
with identifying a problem; it moves through selecting an alternative that

can alleviate the problem and concludes with evaluating the decision’s
effectiveness. This process is as applicable to your decision about what

you’re going to do on spring break as it is to the decisions Branson Airport
executives made as they got the new airport up and running. The process can also be

used to describe both individual and group decisions. Let’s take a closer look at the process
in order to understand what each step entails.

What Defines a Decision Problem?
The decision-making process begins with the identif ication of a problem (step 1) or,
more specifically, a discrepancy between an existing and a desired state of affairs.2 Let’s
develop an example illustrating this point to use throughout this section. For the sake of
simplicity, we’ll make the example something to which most of us can relate: the deci-
sion to buy a vehicle. Take the case of a new-product manager for the Netherlands-based
food company Royal Ahold. The manager spent nearly $6,000 on auto repairs over the
past few years, and now the car has a blown engine. Repair estimates indicate that it is
not economical to repair the car. Furthermore, convenient public transportation is
unavailable.

So now we have a problem that results from the disparity between the manager’s
need to have a functional vehicle and the fact that her current one isn’t working. Unfor-
tunately, this example doesn’t tell us much about how managers identify problems. In the
real world, most problems don’t come with neon signs identifying them as such. A blown
engine is a clear signal to the manager that she needs a new vehicle, but few problems

Identification
of a

Problem

Identification
of Decision

Criteria

Allocation
of Weights
to Criteria

Development
of

Alternatives

Analysis
of

Alternatives

Selection
of an

Alternative

Implementation
of the

Alternative

Evaluation
of

Decision
Effectiveness

EXHIBIT 3-1 The Decision-Making Process

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Fundamentals of Management: Essential Concepts and Applications, Seventh Edition, by Stephen P. Robbins, David A. DeCenzo, and Mary Coulter.
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C H A P T E R 3 | F O U N D AT I O N S O F D E C I S I O N M A K I N G

The steps involved in buying a vehicle
provide a good example of the
decision-making process, which applies
to both individual and group decisions.
For this young man, the process starts
with a problem: He needs a car to drive
to a new job. He identifies decision
criteria (price, color, and performance);
assigns priorities to the criteria; develops,
analyzes, and selects alternatives;
implements the alternative; and finally,
evaluates the effectiveness of his
decision.

are so obvious. Instead, problem identification is sub-
jective. Furthermore, the manager who mistakenly
solves the wrong problem perfectly is just as likely to
perform poorly as the manager who fails to identify
the right problem and does nothing. Problem identifi-
cation is neither a simple nor an unimportant part of
the decision-making process.3 How do managers
become aware they have a discrepancy? They have to
make a comparison between the current state of affairs
and some standard, which can be past performance,
previously set goals, or the performance of some other
unit within the organization or in other organizations.
In our vehicle-buying example, the standard is a previ-
ously set goal—a vehicle that runs.

What Is Relevant in the Decision-
Making Process?
Once a manager has identified a problem that needs attention, the decision criteria that
will be important in solving the problem must be identified (step 2).

In our vehicle-buying example, the product manager assesses the factors that are
relevant in her decision, which might include criteria such as price, model (two door or
four door), size (compact or intermediate), manufacturer (Japanese, German, American),
optional equipment (automatic transmission, side-protection impact system, leather
interior), and repair records. These criteria reflect what she thinks is relevant in her
decision. Every decision maker has criteria—whether explicitly stated or not—that
guide his or her decision making. Note that in this step in the decision-making process,
what is not identif ied is as important as what is. If the product manager doesn’t con-
sider fuel economy to be a criterion, then it will not influence her choice of vehicle.
Thus, if a decision maker does not identify a particular factor in this second step, it’s
treated as irrelevant.

How Does the Decision Maker Weight the Criteria
and Analyze Alternatives?
The criteria are not all equally important.4 It’s necessary, therefore, to allocate weights to
the items listed in step 2 in order to give them their relative priority in the decision (step 3).
A simple approach is to give the most important criterion a weight of 10 and then assign
weights to the rest against that standard. Thus, in contrast to a criterion that you gave a 5,
the highest-rated factor would be twice as important. The idea is to use your personal
preferences to assign priorities to the relevant criteria in your decision as well as to indicate
their degree of importance by assigning a weight to each. Exhibit 3-2 lists the criteria
and weights that our manager developed for her vehicle replacement decision. Price is
the most important criterion in her decision, with performance and handling having low
weights.

Then the decision maker lists the alternatives that could succeed in resolving
the problem (step 4). No attempt is made in this step to appraise these alternatives, only
to list them.5 Let’s assume that our manager has identif ied 12 vehicles as viable
choices: Jeep Compass, Ford Focus, Mercedes C230, Pontiac G6, Mazda CX7,

decision-making process
A set of eight steps that includes identifying a
problem, selecting a solution, and evaluating
the effectiveness of the solution.

decision criteria
Factors that are relevant in a decision.

problem
A discrepancy between an existing
and a desired state of affairs.

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Important Criteria and Weights
in a Car-Buying Decision

Dodge Durango, Volvo S60, Isuzu Ascender, BMW 335, Audi A6, Toyota Camry, and
Volkswagen Passat.

Once the alternatives have been identif ied, the decision maker must critically
analyze each one (step 5). Each alternative is evaluated by appraising it against the
criteria. The strengths and weaknesses of each alternative become evident as they’re
compared with the criteria and weights established in steps 2 and 3. Exhibit 3-3 shows
the assessed values that the manager put on each of her 12 alternatives after she had test
driven each vehicle. Keep in mind that the ratings given the 12 vehicles shown in
Exhibit 3-3 are based on the assessment made by the new-product manager. Again,
we’re using a 1-to-10 scale. Some assessments can be achieved in a relatively objective
fashion. For instance, the purchase price represents the best price the manager can get
from local dealers, and consumer magazines report data from owners on frequency of
repairs. However, the assessment of handling is clearly a personal judgment. The point
is that most decisions contain judgments. They’re reflected in the criteria chosen in step
2, the weights given to the criteria, and the evaluation of alternatives. The influence of
personal judgment explains why two vehicle buyers with the same amount of money
may look at two totally distinct sets of alternatives or even look at the same alternatives
and rate them differently.

Exhibit 3-3 is only an assessment of the 12 alternatives against the decision criteria; it
does not reflect the weighting done in step 3. If one choice had scored 10 on every criterion,
you wouldn’t need to consider the weights. Similarly, if the weights were all equal, you
could evaluate each alternative merely by summing up the appropriate lines in Exhibit 3-3.

INITIAL INTERIOR REPAIR
ALTERNATIVES PRICE COMFORT DURABILITY RECORD PERFORMANCE HANDLING TOTAL

Jeep Compass 2 10 8 7 5 5 37

Ford Focus 9 6 5 6 8 6

Mercedes C230 8 5 6 6 4 6 35

Pontiac G6 9 5 6 7 6 5 38

Mazda CX7 5 6 9 10 7 7 44

Dodge Durango 10 5 6 4 3 3 31

Volvo S60 4 8 7 6 8 9 42

Isuzu Ascender 7 6 8 6 5 6 38

BMW 335 9 7 6 4 4 7 37

Audi A6 5 8 5 4 10 10 42

Toyota Camry 6 5 10 10 6 6

Volkswagen Passat 8 6 6 5 7 8 40

EXHIBIT 3-3 Assessment of Possible Car Alternatives

CRITERION WEIGHT

Price 10

Interior comfort 8

Durability 5

Repair record 5

Performance 3

Handling 1

EXHIBIT 3-2

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C H A P T E R 3 | F O U N D AT I O N S O F D E C I S I O N M A K I N G 61

For instance, the Pontiac G6 would have a score of 38, and the Toyota Camry a score of 43.
If you multiply each alternative assessment against its weight, you get the f igures in
Exhibit 3-4. For instance, the Isuzu Ascender scored a 40 on durability, which was deter-
mined by multiplying the weight given to durability [5] by the manager’s appraisal of
Isuzu on this criterion [8]. The sum of these scores represents an evaluation of each alter-
native against the previously established criteria and weights. Notice that the weighting of
the criteria has changed the ranking of alternatives in our example. The Mazda CX7, for
example, has gone from first to third. From our analysis, both initial price and interior
comfort worked against the Mazda.

What Determines the Best Choice?
Step 6 is the critical act of choosing the best alternative from among those assessed.
Since we determined all the pertinent factors in the decision, weighted them appropri-
ately, and identified the viable alternatives, we merely have to choose the alternative that
generated the highest score in step 5. In our vehicle example (Exhibit 3-4), the decision
maker would choose the Toyota Camry. On the basis of the criteria identif ied, the
weights given to the criteria, and the decision maker’s assessment of each vehicle’s
achievement on the criteria, the Toyota scored highest [224 points] and, thus, became the
best alternative.

What Happens in Decision Implementation?
Although the choice process is completed in the previous step, the decision may still fail if
it is not implemented properly (step 7). Therefore, this step is concerned with putting the
decision into action. Decision implementation includes conveying the decision to those
affected and getting their commitment to it.6 As we’ll demonstrate later in this chapter,
groups or committees can help a manager achieve commitment. The people who must
carry out a decision are most likely to enthusiastically endorse the outcome if they partici-
pate in the decision-making process.

INITIAL INTERIOR REPAIR
PRICE COMFORT DURABILITY RECORD PERFORMANCE HANDLING TOTAL

ALTERNATIVES [10] [8] [5] [5] [3] [1]

Jeep Compass 2 20 10 80 8 40 7 35 5 15 5 5 195

Ford Focus 9 90 6 48 5 25 6 30 8 24 6 6 2

Mercedes C230 8 80 5 40 6 30 6 30 4 12 6 6 198

Pontiac G6 9 90 5 40 6 30 7 35 6 18 5 5 218

Mazda CX7 5 50 6 48 9 45 10 50 7 21 7 7 221

Dodge Durango 10 100 5 40 6 30 4 20 3 9 3 3 202

Volvo S60 4 40 8 64 7 35 6 30 8 24 9 9 202

Isuzu Ascender 7 70 6 48 8 40 6 30 5 15 6 6 209

BMW 335 9 90 7 56 6 30 4 20 4 12 7 7 215

Audi A6 5 50 8 64 5 25 4 20 10 30 10 10 199

Toyota Camry 6 60 5 40 10 50 10 50 6 18 6 6 224

Volkswagen Passat 8 80 6 48 6 30 5 25 7 21 8 8 212

EXHIBIT 3-4 Evaluation of Car Alternatives: Assessment Criteria × Criteria Weight

decision implementation
Putting a decision into action.

62 PA R T T WO | P L A N N I N G

What Is the Last Step in the Decision Process?
In the last step in the decision-making process (step 8) managers appraise the result
of the decision to see whether it has corrected the problem. Did the alternative chosen
in step 6 and implemented in step 7 accomplish the desired result? The evaluation of
the results of decisions is detailed in Chapter 13 where we will look at the control
function.

What Common Errors Are Committed
in the Decision-Making Process?
When managers make decisions, they not only use their own particular style, but may
use “rules of thumb” or heuristics, to simplify their decision making.7 Rules of thumb
can be useful because they help make sense of complex, uncertain, and ambiguous infor-
mation. Even though managers may use rules of thumb, that doesn’t mean those rules are
reliable. Why? Because they may lead to errors and biases in processing and evaluating
information. Exhibit 3-5 identifies 12 common decision errors and biases that managers
make. Let’s look at each.8

When decision makers tend to think they know more than they do or hold unrealis-
tically positive views of themselves and their performance, they’re exhibiting the
overconfidence bias. The immediate gratification bias describes decision makers who
tend to want immediate rewards and to avoid immediate costs. For these individuals,
decision choices that provide quick payoffs are more appealing than those in the future.
The anchoring effect describes when decision makers fixate on initial information as a
starting point and then, once set, fail to adequately adjust for subsequent information.
First impressions, ideas, prices, and estimates carry unwarranted weight relative to
information received later. When decision makers selectively organize and interpret
events based on their biased perceptions, they’re using the selective perception bias.
This influences the information they pay attention to, the problems they identify, and
the alternatives they develop. Decision makers who seek out information that reaffirms
their past choices and discount information that contradicts past judgments exhibit the
confirmation bias. These people tend to accept at face value information that confirms
their preconceived views and are critical and skeptical of information that challenges

Overconfidence

Availability

FramingRepresentation

ConfirmationRandomness

Selective PerceptionSunk Costs

Anchoring EffectSelf-Serving

Immediate GratificationHindsight

Decision-Making
Errors and Biases

EXHIBIT 3-5 Common Decision-Making Errors and Biases

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Explain
the three
approaches
managers
can use to
make
decisions.
3.2

these views. The framing bias is when decision mak-
ers select and highlight certain aspects of a situation
while excluding others. By drawing attention to spe-
cif ic aspects of a situation and highlighting them,
while at the same time downplaying or omitting other
aspects, they distort what they see and create incor-
rect reference points. The availability bias is when
decisions makers tend to remember events that are the
most recent and vivid in their memory. The result? It
distorts their ability to recall events in an objective
manner and results in distorted judgments and proba-
bility estimates. When decision makers assess the
likelihood of an event based on how closely it resem-
bles other events or sets of events, that’s the representation
bias. Managers exhibiting this bias draw analogies
and see identical situations where they don’t exist.
The randomness bias describes when decision mak-
ers try to create meaning out of random events. They
do this because most decision makers have diff iculty dealing with chance even though
random events happen to everyone and there’s nothing that can be done to predict
them. The sunk costs error is when decision makers forget that current choices can’t
correct the past. They incorrectly f ixate on past expenditures of time, money, or effort
in assessing choices rather than on future consequences. Instead of ignoring sunk
costs, they can’t forget them. Decision makers who are quick to take credit for their
successes and to blame failure on outside factors are exhibiting the self-serving bias.
Finally, the hindsight bias is the tendency for decision makers to falsely believe that
they would have accurately predicted the outcome of an event once that outcome is
actually known.

Managers can avoid the negative effects of these decision errors and biases by being
aware of them and then not using them! Beyond that, managers also should pay attention
to “how” they make decisions and try to identify the heuristics they typically use and
critically evaluate how appropriate those are. Finally, managers might want to ask those
around them to help identify weaknesses in their decision-making style and try to
improve on them.

What Are Three Approaches Managers
Can Use to Make Decisions?
Although everyone in an organization makes decisions, decision making
is particularly important to managers. As Exhibit 3-6 shows, it’s part of all
four managerial functions. In fact, that’s why we say that decision making
is the essence of management.9 And that’s why managers—as they plan,
organize, lead, and control—are called decision makers.

The fact that almost everything a manager does involves making decisions
doesn’t mean that decisions are always time-consuming, complex, or evident to an
outside observer. Most decision making is routine. Every day of the year you make
a decision about what to eat for dinner. It’s no big deal. You’ve made the decision thousands
of times before. It’s a pretty simple decision and can usually be handled quickly. It’s the type
of decision you almost forget is a decision. And managers also make dozens of these routine

C H A P T E R 3 | F O U N D AT I O N S O F D E C I S I O N M A K I N G 63

Like most managers, Carol Bartz, CEO
of Yahoo!, Inc., makes decisions within
bounded rationality. When she assumed
the top job at Yahoo!, Bartz faced the
problem of a slump in sales following
years of rapid growth. She decided to
begin her revitalization plan for Yahoo!
by improving the firm’s internal functions
such as streamlining the management
structure, bringing a disciplined
approach to product management,
and closing down underperforming
products like online storage site Yahoo!
Briefcase. To make sure that Yahoo!
develops products customers want,
Bartz formed a Customer Advocacy
Group for soliciting direct input and
feedback from customers.

heuristics
Judgmental shortcuts or “rules of thumb” used
to simplify decision making.

decisions every day, such as, for example, which employee will work what shift next week,
what information should be included in a report, or how to resolve a customer’s complaint.
Keep in mind that even though a decision seems easy or has been faced by a manager a
number of times before, it still is a decision. Let’s look at three perspectives on how
managers make decisions.

What Is the Rational Model of Decision Making?
When Hewlett-Packard (HP) acquired Compaq, the company did no research on how
customers viewed Compaq products until “months after then-CEO Carly Fiorina
publicly announced the deal and privately warned her top management team that she
didn’t want to hear any dissent pertaining to the acquisition.”10 By the time they discov-
ered that customers perceived Compaq products as inferior—just the opposite of what
customers felt about HP products—it was too late. HP’s performance suffered and
Fiorina lost her job.

We assume that managers’ decision making will be rational; that is, they’ll make
logical and consistent choices to maximize value.11 After all, managers have all sorts of
tools and techniques to help them be rational decision makers. (See the “Technology and
the Manager’s Job” box for additional information.) But as the HP example illustrates,
managers aren’t always rational. What does it mean to be a “rational” decision maker?

A rational decision maker would be fully objective and logical. The problem faced
would be clear and unambiguous, and the decision maker would have a clear and specific
goal and know all possible alternatives and consequences. Finally, making decisions
rationally would consistently lead to selecting the alternative that maximizes the likelihood
of achieving that goal. These assumptions apply to any decision—personal or managerial.
However, for managerial decision making, we need to add one additional assumption—
decisions are made in the best interests of the organization. These assumptions of rationality
aren’t very realistic, but the next concept can help explain how most decisions get made in
organizations.

64 PA R T T WO | P L A N N I N G

PLANNING

• What are the organization’s long-term objectives?

• What strategies will best achieve those objectives?

• What should the organization’s short-term objectives be?

• How difficult should individual goals be?

ORGANIZING

• How many employees should I have report directly to me?

• How much centralization should there be in the organization?

• How should jobs be designed?

• When should the organization implement a different structure?

LEADING

• How do I handle employees who appear to be low in motivation?

• What is the most effective leadership style in a given situation?

• How will a specific change affect worker productivity?

• When is the right time to stimulate conflict?

CONTROLLING

• What activities in the organization need to be controlled?

• How should those activities be controlled?

• When is a performance deviation significant?

• What type of management information system should the organization have?

EXHIBIT 3-6 Decisions Managers May Make

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rational decision making
Describes choices that are consistent and
value-maximizing within specified constraints.

C H A P T E R 3 | F O U N D AT I O N S O F D E C I S I O N M A K I N G 65

MAKING BETTER DECISIONS WITH TECHNOLOGY

I
nformation technology is providing

managers with a wealth of decision-

making support, including expert systems,

neural networks, groupware, and specific

problem-solving software.12 Expert systems

use software programs to encode the relevant

experience of an expert and allow a system to

act like that expert in analyzing and solving

ill-structured problems. The essence of

expert systems is that (1) they use special-

ized knowledge about a particular problem

area rather than general knowledge that

would apply to all problems, (2) they use

qualitative reasoning rather than numerical

calculations, and (3) they perform at a level

of competence that is higher than that of

nonexpert humans. They guide users through

problems by asking them a set of sequential

questions about the situation and drawing

conclusions based on the answers given.

The conclusions are based on programmed

rules that have been modeled on the actual

reasoning processes of experts who have

confronted similar problems before. Once in

place, these systems allow employees and

lower-level managers to make high-quality

decisions that previously could have been

made only by senior managers.

Neural networks are the next step

beyond expert systems. They use computer

software to imitate the structure of brain

cells and connections among them. Sophis-

ticated robotics use neural networks for

their intelligence. Neural networks are able

to distinguish patterns and trends too subtle

or complex for human beings. For instance,

people can’t easily assimilate more than two

or three variables at once, but neural

networks can perceive correlations among

hundreds of variables. As a result, they can

perform many operations simultaneously,

recognizing patterns, making associations,

generalizing about problems they haven’t

been exposed to before, and learning

through experience. For instance, most

banks today use neural networks to flag

potential credit card fraud. In the past they

relied on expert systems to track millions of

credit card transactions, but these earlier

systems could look at only a few factors,

such as the size of a transaction. Conse-

quently, thousands of potential defrauding

incidents were “flagged,” most of which

were false positives. Now with neural

networks, significantly fewer numbers of

cases are being identified as problematic—

and it’s more likely now that the majority of

those identified will be actual cases of

fraud. Furthermore, with the neural network

system, fraudulent activities on a credit card

can be uncovered in a matter of hours, rather

than the two to three days it took prior to the

implementation of neural networks. This is

just one example of the power of IT to enhance

an organization’s—and its managers’—

decision-making capabilities.

What Is Bounded Rationality?
Despite the unrealistic assumptions, managers are expected to act rationally when
making decisions.13 They understand that “good” decision makers are supposed to do
certain things and exhibit good decision-making behaviors as they identify problems,
consider alternatives, gather information, and act decisively but prudently. When they do
so, they show others that they’re competent and that their decisions are the result of intel-
ligent deliberation. However, a more realistic approach to describing how managers
make decisions is the concept of bounded rationality, which says that managers make
decisions rationally, but are limited (bounded) by their ability to process information.14

Because they can’t possibly analyze all information on all alternatives, managers
satisfice, rather than maximize. That is, they accept solutions that are “good enough.”
They’re being rational within the limits (bounds) of their ability to process information.
Let’s look at an example.

Suppose that you’re a finance major and upon graduation you want a job, prefer-
ably as a personal f inancial planner, with a minimum salary of $42,000 and within a

bounded rationality
Making decisions that are rational within the limits
of a manager’s ability to process information.

satisfice
Accepting solutions that are “good enough.”

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From the Past to the Present• •
Herbert A. Simon, who won a Nobel Prize in economics for his
work on decision making, was primarily concerned with how
people use logic and psychology to make choices.15 He
proposed that individuals were limited in their ability to
“grasp the present and anticipate the future,” and this
bounded rationality made it difficult for them to “achieve the
best possible decisions.” Thus, people made “good enough”
or “satisficing” choices. He went on to describe all administra-
tive activity as group activity in which an organization took
some decision-making autonomy from the individual and
substituted it for an organizational decision-making process.

Simon believed that such a process was necessary since it
was impossible for any single individual to achieve any “high
degree of objective rationality.”

Simon’s important contributions to management thinking
came through his belief that to study and understand organ-
izations meant studying the complex network of decisional
processes that were inherent. His work in bounded rationality
helps us make sense of how managers can behave rationally
and still make satisfactory decisions, even given the limits of
their capacity to process information.

hundred miles of your hometown. You accept a job offer as a business credit analyst—
not exactly a personal financial planner but still in the finance field—at a bank 50 miles
from home at a starting salary of $38,000. If you had done a more comprehensive job
search, you would have discovered a job in personal f inancial planning at a trust
company only 25 miles from your hometown and starting at a salary of $43,000. You
weren’t a perfectly rational decision maker because you didn’t maximize your decision
by searching all possible alternatives and then choosing the best. But because the first
job offer was satisfactory (or “good enough”), you behaved in a bounded rationality
manner by accepting it.

Most decisions that managers make don’t fit the assumptions of perfect rationality, so
they satisfice. However, keep in mind that their decision making is also likely influenced by
the organization’s culture, internal politics, power considerations, and by a phenomenon
called escalation of commitment, which is an increased commitment to a previous decision
despite evidence that it may have been wrong.16 The Challenger space shuttle disaster is
often used as an example of escalation of commitment. Decision makers chose to launch the
shuttle that day even though the decision was questioned by several individuals who
believed that it was a bad one. Why would decision makers escalate commitment to a bad
decision? Because they don’t want to admit that their initial decision may have been flawed.
Rather than search for new alternatives, they simply increase their commitment to the
original solution.

What Role Does Intuition Play in Managerial
Decision Making?
When managers at stapler-maker Swingline saw the company’s market share declining,
they used a logical scientific approach to address the issue. For three years, they exhaus-
tively researched stapler users before deciding what new products to develop. However, at
Accentra, Inc., founder Todd Moses used a more intuitive decision approach to come up
with his line of unique PaperPro staplers.17

Like Todd Moses, managers often use their intuition to help their decision making.
What is intuitive decision making? It’s making decisions on the basis of experience, feel-
ings, and accumulated judgment. It’s been described as “unconscious reasoning.”18

Researchers studying managers’ use of intuitive decision making have identified five dif-
ferent aspects of intuition, which are described in Exhibit 3-7.19 How common is intuitive
decision making? One survey found that almost half of the executives surveyed “used intu-
ition more often than formal analysis to run their companies.”

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3.3
Describe
the types of

decisions and
decision-making

conditions
managers
face.

Intuitive decision making can complement both bounded rationality and rational
decision making.21 First of all, a manager who has had experience with a similar type of
problem or situation often can act quickly with what appears to be limited information
because of that past experience. In addition, a recent study found that individuals who
experienced intense feelings and emotions when making decisions actually achieved
higher decision-making performance, especially when they understood their feelings as
they were making decisions. The old belief that managers should ignore emotions when
making decisions may not be the best advice.22

What Types of Decisions and Decision-
Making Conditions Do Managers Face?
The types of problems managers face in decision-making situations
often determine how a problem is treated. In this section, we present a
categorization scheme for problems and for types of decisions. Then we
show how the type of decision making a manager uses should reflect the
characteristics of the problem.

intuitive decision making
Making decisions on the basis of experience,
feelings, and accumulated judgment.

C H A P T E R 3 | F O U N D AT I O N S O F D E C I S I O N M A K I N G 67

Intuition

Experience-Based
Decisions

Subconscious
Mental Processing

Values or Ethics-
Based Decisions

Cognitive-Based
Decisions

Affect-Initiated
Decisions

Managers make
decisions based on

ethical values or culture

Managers use data from
subconscious mind to

help them make decisions

Managers make
decisions based on

feelings or emotions

Managers make
decisions based on skills,
knowledge, and training

Managers make
decisions based on

their past experiences

EXHIBIT 3-7 What Is Intuition?

Sources: Based on “Exploring Intuition and Its Role in Managerial Decision Making,” Academy of Management Review (January 2007), pp. 33–54; M. H. Bazerman
and D. Chugh, “Decisions Without Blinders,” Harvard Business Review (January 2006), pp. 88–97; C. C. Miller and R. D. Ireland, “Intuition in Strategic Decision
Making: Friend or Foe in the Fast-Paced 21st Century,” Academy of Management Executive (February 2005), pp. 19–30; E. Sadler-Smith and E. Shefy, “The Intuitive
Executive: Understanding and Applying ‘Gut Feel’ in Decision-Making,” Academy of Management Executive (November 2004), pp. 76–91; L. A. Burke and
J. K. Miller, “Taking the Mystery Out of Intuitive Decision Making, Academy of Management Executive (October 1999), pp. 91–99; and W. H. Agor, “The Logic
of Intuition: How Top Executives Make Important Decisions,” Organizational Dynamics (Winter 1986), pp. 5–18.

escalation of commitment
An increased commitment to a previous
decision despite evidence that it may have
been a poor decision.

68 PA R T T WO | P L A N N I N G

Netflix founder and CEO Reed Hastings
made a nonprogrammed decision that
changed the course of his company—
and the movie-rental business. Hastings
originally launched Netflix as a movie
rental by mail firm that operated much
like Blockbuster. While some customers
liked the concept, Hastings admitted it
wasn’t very popular. So he decided to
try a more radical approach of
a subscription-based service. Hastings’
new strategy resulted in Netflix becoming
the world’s largest online movie rental
service with more than 10 million
subscribers.

How Do Problems Differ?
Some problems are straightforward. The goal of the decision maker is clear, the problem
familiar, and information about the problem easily defined and complete. Examples might
include a supplier’s tardiness with an important delivery, a customer’s wanting to return an
Internet purchase, a news program team’s having to respond to an unexpected and
fast-breaking event, or a university’s handling of a student who is applying for financial aid.
Such situations are called structured problems. They align closely with the assumptions
underlying perfect rationality.

Many situations faced by managers, however, are unstructured problems. They are
new or unusual. Information about such problems is ambiguous or incomplete. Examples
of unstructured problems include the decision to enter a new market segment, to hire an
architect to design a new office park, or to merge two organizations. So, too, is the decision
to invest in a new, unproven technology.

How Does a Manager Make Programmed Decisions?
Just as problems can be divided into two categories, so, too, can decisions. Programmed, or
routine, decision making is the most efficient way to handle structured problems. However,
when problems are unstructured, managers must rely on nonprogrammed decision making
in order to develop unique solutions.

An auto mechanic damages a customer’s rim while changing a tire. What does the
manager do? Because the company probably has a standardized method for handling this
type of problem, it is considered a programmed decision. For example, the manager
may replace the rim at the company’s expense. Decisions are programmed to the extent
that they are repetitive and routine and to the extent that a specific approach has been
worked out for handling them. Because the problem is well structured, the manager does
not have to go to the trouble and expense of an involved decision process. Programmed
decision making is relatively simple and tends to rely heavily on previous solutions. The
develop-the-alternatives stage in the decision-making process is either nonexistent or
given little attention. Why? Because once the structured problem is defined, its solution
is usually self-evident or at least reduced to only a few alternatives that are familiar and
that have proved successful in the past. In many cases, programmed decision making
becomes decision making by precedent. Managers simply do what they and others have
done previously in the same situation. The damaged rim does not require the manager to
identify and weight decision criteria or develop a long list of possible solutions. Rather,
the manager falls back on a systematic procedure, rule, or policy.

PROCEDURES. A procedure is a series of interrelated sequential steps that a manager can
use when responding to a well-structured problem. The only real difficulty is identifying the
problem. Once the problem is clear, so is the procedure. For instance, a purchasing manager

receives a request from computing services for licensing arrangements to install 250
copies of Norton Antivirus Software. The purchasing manager knows that a definite

procedure is in place for handling this decision. Has the requisition been
properly filled out and approved? If not, one can send the requisition

back with a note explaining what is deficient. If the request is
complete, the approximate costs are estimated. If the total

exceeds $8,500, three bids must be obtained. If the
total is $8,500 or less, only one vendor need be

identified and the order placed. The decision-
making process is merely the execution of a simple

series of sequential steps.

RULES. A rule is an explicit statement that tells a manager
what he or she ought—or ought not—to do. Rules are

frequently used by managers who confront a struc-
tured problem because they’re simple to follow and

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unstructured problem
A problem that is new or unusual for which
information is ambiguous or incomplete.

structured problem
A straightforward, familiar, and easily defined
problem.

programmed decision
A repetitive decision that can be handled using
a routine approach.

rule
An explicit statement that tells employees what
can or cannot be done.

policy
A guideline for making decisions.

procedure
A series of interrelated, sequential steps used to
respond to a structured problem.

ensure consistency. In the preceding example, the $8,500 cutoff rule simplifies the pur-
chasing manager’s decision about when to use multiple bids.

POLICIES. A third guide for making programmed decisions is a policy. It provides
guidelines to channel a manager’s thinking in a specific direction. The statement that “we
promote from within, whenever possible” is an example of a policy. In contrast to a rule, a
policy establishes parameters for the decision maker rather than specifically stating what
should or should not be done. It’s at this point that one’s ethical standards will come into
play. As an analogy, think of the Ten Commandments as rules and the U.S. Constitution as
policy. The latter requires judgment and interpretation; the former do not.

How Do Nonprogrammed Decisions Differ
from Programmed Decisions?
Examples of nonprogrammed decisions include deciding whether to acquire another
organization, deciding which global markets offer the most potential, or deciding whether to
sell off an unprofitable division. Such decisions are unique and nonrecurring. When a man-
ager confronts an unstructured problem, no cut-and-dried solution is available. A custom-
made, nonprogrammed response is required.

The creation of a new organizational strategy is a nonprogrammed decision. This decision
is different from previous organizational decisions because the issue is new; a different set of
environmental factors exists, and other conditions have changed. For example, Amazon.com’s
Jeff Bezos’s strategy to “get big fast” helped the company grow tremendously. But this
strategy came at a cost—perennial financial losses. To turn a profit, Bezos made decisions
regarding “sorting orders, anticipating demand, more efficient shipping, foreign partnerships,
and opening a marketplace allowing other sellers to sell their books at Amazon.” As a result,
for the first time in company history, Amazon.com earned a profit.24

How Are Problems, Types of Decisions,
and Organizational Level Integrated?
Exhibit 3-8 describes the relationship among types of problems, types of decisions,
and level in the organization. Structured problems are responded to with programmed deci-
sion making. Unstructured problems require nonprogrammed decision making. Lower-level

percent of U.S. companies
use teams and groups to
solve specific problems.

percent of employees say
that a key obstacle to their
job is that more attention is

paid to placing blame than to solving
problems.

percent of managers said
that the number of deci-
sions they made during a

typical workday had increased.

percent of managers said
that the amount of time
given to each decision had

decreased.

percent of American adults
said that they think most
creatively in their cars.

43
20

percent of survey respon-
dents said they would fire
a friend if necessary to get

ahead.

percent more ideas are
generated with electronic
brainstorming than with

individuals brainstorming alone.

EXHIBIT 3-8 Types of Problems, Types of Decisions,and Organizational Level

Programmed
Decisions

Nonprogrammed
Decisions

Unstructured

Type of
Problem

Structured

Top

Level in
Organization

Lower

nonprogrammed decision
A unique and nonrecurring decision that
requires a custom-made solution.

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group
decision
making.
3.4

70 PA R T T WO | P L A N N I N G

managers essentially confront familiar and repetitive problems; therefore, they most
typically rely on programmed decisions such as standard operating procedures. However,
the problems confronting managers are likely to become less structured as they move up
the organizational hierarchy. Why? Because lower-level managers handle the routine
decisions themselves and pass upward only decisions that they find unique or difficult.
Similarly, managers pass down routine decisions to their employees in order to spend their
time on more problematic issues.

Few managerial decisions in the real world are either fully programmed or fully
nonprogrammed. Most decisions fall somewhere in between. Few programmed decisions
are designed to eliminate individual judgment completely. At the other extreme, even the
most unusual situation requiring a nonprogrammed decision can be helped by programmed
routines. A f inal point on this topic is that organizational eff iciency is facilitated by
programmed decision making—a fact that may explain its wide popularity. Whenever pos-
sible, management decisions are likely to be programmed. Obviously, this approach isn’t
too realistic at the top of the organization, because most of the problems that top-level
managers confront are of a nonrecurring nature. However, strong economic incentives
motivate them to create policies, standard operating procedures, and rules to guide other
lower-level managers.

Programmed decisions minimize the need for managers to exercise discretion. This factor
is important because discretion costs money. The more nonprogrammed decision making a
manager is required to do, the greater the judgment needed. Because sound judgment is an
uncommon quality, it costs more to acquire the services of managers who possess it.

What Decision-Making Conditions
Do Managers Face?
When making decisions, managers may face three different conditions: certainty, risk, and
uncertainty. Let’s look at the characteristics of each.

The ideal situation for making decisions is one of certainty, which is a situation where
a manager can make accurate decisions because the outcome of every alternative is known.
For example, when North Dakota’s state treasurer decides where to deposit excess state
funds, he knows exactly the interest rate being offered by each bank and the amount that
will be earned on the funds. He is certain about the outcomes of each alternative. As you
might expect, most managerial decisions aren’t like this.

A far more common situation is one of risk, conditions in which the decision maker is
able to estimate the likelihood of certain outcomes. Under risk, managers have historical
data from past personal experiences or secondary information, which lets them assign
probabilities to different alternatives.

What happens if you face a decision where you’re not certain about the outcomes and
can’t even make reasonable probability estimates? We call this condition uncertainty.
Managers do face decision-making situations of uncertainty. Under these conditions, the
choice of alternative is influenced by the limited amount of available information and by
the psychological orientation of the decision maker.

How Do Groups Make Decisions?
Do managers make a lot of decisions in groups? You bet they do! Many
decisions in organizations, especially important decisions that have far-
reaching effects on organizational activities and personnel, are typi-
cally made in groups. It’s a rare organization that doesn’t at some time
use committees, task forces, review panels, work teams, or similar

groups as vehicles for making decisions. Why? In many cases, these
groups represent the people who will be most affected by the decisions

being made. Because of their expertise, these people are often best qualified
to make decisions that affect them.

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Studies tell us that managers spend a significant portion of their time in meetings.
Undoubtedly, a large portion of that time is involved with defining problems, arriving at
solutions to those problems, and determining the means for implementing the solutions.
It’s possible, in fact, for groups to be assigned any of the eight steps in the decision-
making process.

What Are the Advantages of Group Decision Making?
Individual and group decisions have their own set of strengths. Neither is ideal for all
situations. Let’s begin by reviewing the advantages that group decisions have over
individual decisions.

Group decisions provide more complete information than do individual ones.25

There is often truth to the saying that two heads are better than one. A group will bring a
diversity of experiences and perspectives to the decision process that an individual act-
ing alone cannot.26 Groups also generate more alternatives. Because groups have a
greater quantity and diversity of information, they can identify more alternatives than
can an individual. Quantity and diversity of information are greatest when group
members represent different specialties. Furthermore, group decision making increases
acceptance of a solution.27 Many decisions fail after the f inal choice has been made
because people do not accept the solution. However, if the people who will be affected
by a certain solution, and who will help implement it, participate in the decision they
will be more likely to accept the decision and encourage others to accept it. And, finally,
this process increases legitimacy. The group decision-making process is consistent with
democratic ideals; therefore, decisions made by groups may be perceived as more legiti-
mate than decisions made by a single person. The fact that the individual decision maker
has complete power and has not consulted others can create a perception that a decision
was made autocratically and arbitrarily.

uncertainty
A situation in which a decision maker has
neither certainty nor reasonable probability
estimates available.

risk
A situation in which a decision maker is able to
estimate the likelihood of certain outcomes.

certainty
A situation in which a decision maker can make
accurate decisions because all outcomes are
known.

MANAGING DIVERSITY | The Value of Diversity in Decision Making

Have you decided what your major is going to be? How
did you decide? Do you feel your decision is a good one?
Is there anything you could have done differently to make
sure that your decision was the best one?28

Making good decisions is tough! Managers continuously
make decisions—for instance, developing new products,
establishing weekly or monthly goals, implementing an
advertising campaign, reassigning an employee to a
different work group, resolving a customer’s complaint,
or purchasing new laptops for sales reps. One important
suggestion for making better decisions is to tap into the
diversity of the work group. Drawing upon diverse employees
can prove valuable to a manager’s decision making.
Why? Diverse employees can provide fresh perspectives
on issues. They can offer differing interpretations on how
a problem is defined and may be more open to trying
new ideas. Diverse employees can be more creative in
generating alternatives and more flexible in resolving
issues. And getting input from diverse sources increases

the likelihood that creative and unique solutions will be
generated.

Even though diversity in decision making can be valuable,
there are drawbacks. The lack of a common perspective
usually means that more time is spent discussing the issues.
Communication may be a problem particularly if language
barriers are present. In addition, seeking out diverse opinions
can make the decision-making process more complex, con-
fusing, and ambiguous. And with multiple perspectives on the
decision, it may be difficult to reach a single agreement or to
agree on specific actions. Although these drawbacks are
valid concerns, the value of diversity in decision making
outweighs the potential disadvantages.

Now, about that decision on a major. Did you ask others
for their opinions? Did you seek out advice from professors,
family members, friends, or coworkers? Getting diverse per-
spectives on an important decision like this could help you
make the best decision! Managers also should consider the
value to be gained from diversity in decision making.

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What Are the Disadvantages of Group Decision
Making?
If groups are so good, how did the phrase “a camel is a racehorse put together by a commit-
tee” become so popular? The answer, of course, is that group decisions are not without their
drawbacks. First, they’re time-consuming. It takes time to assemble a group. In addition, the
interaction that takes place once the group is in place is frequently inefficient. Groups
almost always take more time to reach a solution than an individual would take to make the
decision alone. They may also be subject to minority domination, where members of a
group are never perfectly equal.29 They may differ in rank in the organization, experience,
knowledge about the problem, influence on other members, verbal skills, assertiveness,
and the like. This imbalance creates the opportunity for one or more members to dominate
others in the group. A minority that dominates a group frequently has an undue influence on
the final decision.

Another problem focuses on the pressures to conform in groups. For instance, have
you ever been in a situation in which several people were sitting around discussing a
particular item and you had something to say that ran contrary to the consensus views
of the group, but you remained silent? Were you surprised to learn later that others
shared your views and also had remained silent? What you experienced is what Irving
Janis termed groupthink.30 In this form of conformity, group members withhold
deviant, minority, or unpopular views in order to give the appearance of agreement. As
a result, groupthink undermines critical thinking in the group and eventually harms
the quality of the f inal decision. And, f inally, ambiguous responsibility can become a
problem. Group members share responsibility, but who is actually responsible for the
f inal outcome?31 In an individual decision, it’s clear who is responsible. In a group
decision, the responsibility of any single member is watered down.

Groupthink applies to a situation in which a group’s ability to appraise alternatives
objectively and arrive at a quality decision is jeopardized. Because of pressures for conform-
ity, groups often deter individuals from critically appraising unusual, minority, or unpopular
views. Consequently, an individual’s mental efficiency, reality testing, and moral judgment
deteriorate. How does groupthink occur? The following are examples of situations in which
groupthink is evident:

� Group members rationalize any resistance to the assumptions they have made.
� Members apply direct pressure on those who momentarily express doubts about any of

the group’s shared views or who question the validity of arguments favored by the
majority.

� Those members who have doubts or hold differing points of view seek to avoid deviating
from what appears to be group consensus.

� An illusion of unanimity is pervasive. If someone does not speak, it is assumed that he or
she is in full accord.

Does groupthink really hinder decision making? Yes.
Several research studies have found that groupthink
symptoms were associated with poorer-quality decision
outcomes. But groupthink can be minimized if the
group is cohesive, fosters open discussion, and has an
impartial leader who seeks input from all members.32

When Are Groups Most
Effective?
Whether groups are more effective than individuals
depends on the criteria you use for defining effective-
ness, such as accuracy, speed, creativity, and acceptance.
Group decisions tend to be more accurate. On average,
groups tend to make better decisions than individuals,
although groupthink may occur.33 However, if decision

Team members at mission control of the
Jet Propulsion Laboratory celebrate
confirmation of the successful
touchdown of NASA’s Phoenix Mars
Lander on the surface of Mars. The many
decisions needed to develop, launch,
and operate this project required the
collaboration of a large group of
science and spacecraft experts. In terms
of accuracy, creativity, and
acceptance, group decision making is
more effective than individual decision
making in projects of this magnitude
and complexity.

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effectiveness is defined in terms of speed, individuals are superior. If creativity is important,
groups tend to be more effective than individuals. And if effectiveness means the degree of
acceptance the final solution achieves, the nod again goes to the group.

The effectiveness of group decision making is also influenced by the size of the group.
The larger the group, the greater the opportunity for heterogeneous representation. On the
other hand, a larger group requires more coordination and more time to allow all members
to contribute. This factor means that groups probably should not be too large: A minimum
of five to a maximum of about fifteen members is best. Groups of five to seven individuals
appear to be the most effective. Because five and seven are odd numbers, decision dead-
locks are avoided. Effectiveness should not be considered without also assessing efficiency.
Groups almost always stack up as a poor second in efficiency to the individual decision
maker. With few exceptions, group decision making consumes more work hours than does
individual decision making. In deciding whether to use groups, then, primary consideration
must be given to assessing whether increases in effectiveness are more than enough to
offset the losses in efficiency.

How Can You Improve Group Decision Making?
Three ways of making group decisions more creative are brainstorming, the nominal group
technique, and electronic meetings.

WHAT IS BRAINSTORMING? Brainstorming is a relatively simple technique that utilizes
an idea-generating process that specif ically encourages any and all alternatives while
withholding any criticism of those alternatives.34 In a typical brainstorming session, a
half-dozen to a dozen people sit around a table. Of course, technology is changing where
that “table” is. The group leader states the problem in a clear manner that is understood by
all participants. Members then “freewheel” as many alternatives as they can in a given
time. No criticism is allowed, and all the alternatives are recorded for later discussion and
analysis.35 Brainstorming, however, is merely a process for generating ideas. The next
method, the nominal group technique, helps groups arrive at a preferred solution.36

HOW DOES THE NOMINAL GROUP TECHNIQUE WORK? The nominal group technique
restricts discussion during the decision-making process, hence the term. Group members must
be present, as in a traditional committee meeting, but they are required to operate independently.
They secretly write a list of general problem areas or potential solutions to a problem. The
chief advantage of this technique is that it permits the group to meet formally but does not
restrict independent thinking, as so often happens in the traditional interacting group.37

HOW CAN ELECTRONIC MEETINGS ENHANCE GROUP DECISION MAKING? The most
recent approach to group decision making blends the nominal group technique with com-
puter technology and is called the electronic meeting.

Once the technology for the meeting is in place, the concept is simple. Numerous people
sit around a table that’s empty except for a series of computer terminals. Issues are presented
to the participants, who type their responses onto their computer screens. Individual com-
ments, as well as aggregate votes, are displayed on a projection screen in the room.

The major advantages of electronic meetings are anonymity, honesty, and speed.38

Participants can anonymously type any message they want, and it will flash on the screen

groupthink
When a group exerts extensive pressure on an
individual to withhold his or her different views
in order to appear to be in agreement.

brainstorming
An idea-generating process that encourages
alternatives while withholding criticism.

nominal group technique
A decision-making technique in which group
members are physically present but operate
independently.

electronic meeting
A type of nominal group technique in which
participants are linked by computer.

Discuss
contemporary
issues in
managerial
decision
making.
3.5

74 PA R T T WO | P L A N N I N G

for all to see with a keystroke. It allows people to be brutally honest with no penalty. And
it is fast—chitchat is eliminated, discussions do not digress, and many participants can
“talk” at once without interrupting the others.

Electronic meetings are significantly faster and much cheaper than traditional face-
to-face meetings.39 Nestlé, for instance, continues to use the approach for many of its
meetings, especially globally focused meetings.40 However, as with all other forms of
group activities, electronic meetings do experience some drawbacks. Those who type
quickly can outshine those who may be verbally eloquent but lousy typists; those with
the best ideas don’t get credit for them; and the process lacks the informational richness
of face-to-face oral communication. However, group decision making is likely to include
extensive usage of electronic meetings.41

A variation of the electronic meeting is the videoconference. By linking together media
from different locations, people can have face-to-face meetings even when they are thou-
sands of miles apart. This capability has enhanced feedback among the members, saved
countless hours of business travel, and ultimately saved companies such as Nestlé and Log-
itech hundreds of thousands of dollars. As a result, they’re more effective in their meetings
and have increased the efficiency with which decisions are made.42

What Contemporary Decision-Making
Issues Do Managers Face?
Today’s business world revolves around making decisions, often risky ones,
usually with incomplete or inadequate information, and under intense time
pressure. Most managers make one decision after another; and as if that

weren’t challenging enough, more is at stake than ever before. Bad decisions
can cost millions. We’re going to look at two important issues—national culture

and creativity—that managers face in today’s fast-moving and global world.

How Does National Culture Affect Managers’
Decision Making?
Research shows that, to some extent, decision-making practices differ from country to
country.43 The way decisions are made—whether by group, by team members, participa-
tively, or autocratically by an individual manager—and the degree of risk a decision
maker is willing to take are just two examples of decision variables that reflect a country’s
cultural environment. For example, in India, power distance and uncertainty avoidance
(see Chapter 2) are high. There, only very senior-level managers make decisions, and they
are likely to make safe decisions. In contrast, in Sweden, power distance and uncertainty

Videoconferencing improves the
efficiency of group decision making at
Accenture, a global management
consulting, technology services, and
outsourcing firm. Accenture has offices in
more than 200 cities in 52 countries and
clients spanning the world’s major
geographic regions. With such dispersion
of employees and customers,
videoconferencing enables Accenture
to conduct face-to-face meetings while
saving the time and costs involved in
business travel. This photo shows Jill
Smart, Accenture’s chief human
resources officer, conducting a meeting
from her office in Chicago with
colleagues working in Atlanta and
London.

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C H A P T E R 3 | F O U N D AT I O N S O F D E C I S I O N M A K I N G 75

avoidance are low. Swedish managers are not afraid to make risky decisions. Senior
managers in Sweden also push decisions down in the ranks. They encourage lower-level
managers and employees to take part in decisions that affect them. In countries such as
Egypt, where time pressures are low, managers make decisions at a slower and more delib-
erate pace than managers do in the United States. And in Italy, where history and traditions
are valued, managers tend to rely on tried and proven alternatives to resolve problems.

Decision making in Japan is much more group oriented than in the United States.44

The Japanese value conformity and cooperation. Before making decisions, Japanese CEOs
collect a large amount of information, which is then used in consensus-forming group
decisions called ringisei. Because employees in Japanese organizations have high job secu-
rity, managerial decisions take a long-term perspective rather than focusing on short-term
profits, as is often the practice in the United States.

Senior managers in France and Germany also adapt their decision styles to their
countries’ cultures. In France, for instance, autocratic decision making is widely practiced,
and managers avoid risks. Managerial styles in Germany reflect the German culture’s con-
cern for structure and order. Consequently, German organizations generally operate under
extensive rules and regulations. Managers have well-defined
responsibilities and accept that decisions must go through
channels.

As managers deal with employees from diverse cultures,
they need to recognize common and accepted behavior when
asking them to make decisions. Some individuals may not be as
comfortable as others with being closely involved in decision
making, or they may not be willing to experiment with some-
thing radically different. Managers who accommodate the
diversity in decision-making philosophies and practices can
expect a high payoff if they capture the perspectives and
strengths that a diverse workforce offers.

Why Is Creativity Important
in Decision Making?
A decision maker needs creativity: the ability to produce novel
and useful ideas. These ideas are different from what’s been
done before but are also appropriate to the problem or opportu-
nity presented. Why is creativity important to decision making?
It allows the decision maker to appraise and understand the
problem more fully, including “seeing” problems others can’t
see. However, creativity’s most obvious value is in helping
the decision maker identify all viable alternatives. (See the
“Developing Your Creativity Skill” box.)

Most people have creative potential that they can use when
confronted with a decision-making problem. But to unleash
that potential, they have to get out of the psychological ruts
most of us get into and learn how to think about a problem in
divergent ways.

We can start with the obvious. People differ in their inherent
creativity. Einstein, Edison, Dali, and Mozart were individuals of
exceptional creativity. Not surprisingly, exceptional creativity is
scarce. A study of lifetime creativity of 461 men and women

ringisei
Japanese consensus-forming group decisions.

Right orWrong?

The 75 employees of Atomic Games worked nearly four years creating a

realistic video game called Six Days in Fallujah, “weaving in real war

footage and interviews with Marines who had fought there.”45 Now, rela-

tives of dead Marines are angry. Said one mom whose son was killed by

a sniper in Fallujah, “By making it something people play for fun, they

are trivializing the battle.” Company executive Peter Tamte relied on the

advice of a number of Fallujah veterans and calls the video game a

“documentary-style reconstruction that will be so true to the original

battle, gamers will almost feel what it was like to fight in Fallujah in

November 2004.” What do you think? What ethical issues do you see

here? Should the company proceed with the game’s release? Why or

why not?

creativity
The ability to produce novel and useful ideas.

76 PA R T T WO | P L A N N I N G

found that fewer than 1 percent were exceptionally creative. But 10 percent were highly cre-
ative, and about 60 percent were somewhat creative. These findings suggest that most of us
have creative potential, if we can learn to unleash it.

Given that most people have the capacity to be at least moderately creative, what can
individuals and organizations do to stimulate employee creativity? The best answer to this
question lies in the three-component model of creativity based on an extensive body of
research.47 This model proposes that individual creativity essentially requires expertise,
creative-thinking skills, and intrinsic task motivation. Studies confirm that the higher the
level of each of these three components, the higher the creativity.

Expertise is the foundation of all creative work. Dali’s understanding of art and
Einstein’s knowledge of physics were necessary conditions for them to be able to make
creative contributions to their fields. And you wouldn’t expect someone with a minimal
knowledge of programming to be highly creative as a software engineer. The potential
for creativity is enhanced when individuals have abilities, knowledge, prof iciencies,
and similar expertise in their fields of endeavor.

Developing Your Skill

About the Skill
Creativity is a frame of mind. You need to open your mind
to new ideas. Every individual has the ability to be creative,
but many people simply don’t try to develop that ability. In
contemporary organizations, such people may have diffi-
culty achieving success. Dynamic environments and man-
agerial chaos require that managers look for new and
innovative ways to attain their goals as well as those of the
organization.46

Steps in Practicing the Skill
1 Think of yourself as creative. Although it’s a simple

suggestion, research shows that if you think you can’t
be creative, you won’t be. Believing in yourself is the
first step in becoming more creative.

2 Pay attention to your intuition. Every individual’s subcon-
scious mind works well. Sometimes answers come to you
when least expected. For example, when you are
about to go to sleep, your relaxed mind sometimes whis-
pers a solution to a problem you’re facing. Listen to that
voice. In fact, most creative people keep a notepad
near their bed and write down those great ideas when
they occur. That way, they don’t forget them.

3 Move away from your comfort zone. Every individual
has a comfort zone in which certainty exists. But cre-
ativity and the known often do not mix. To be cre-
ative, you need to move away from the status quo
and focus your mind on something new.

4 Engage in activities that put you outside your comfort
zone. You not only must think differently; you need to
do things differently and, thus, challenge yourself.
Learning to play a musical instrument or learning a

foreign language, for example, opens your mind to a
new challenge.

5 Seek a change of scenery. People are often crea-
tures of habit. Creative people force themselves out
of their habits by changing their scenery, which may
mean going into a quiet and serene area where you
can be alone with your thoughts.

6 Find several right answers. In the discussion of
bounded rationality, we said that people seek solu-
tions that are good enough. Being creative means
continuing to look for other solutions even when you
think you have solved the problem. A better, more
creative solution just might be found.

7 Play your own devil’s advocate. Challenging yourself
to defend your solutions helps you to develop confi-
dence in your creative efforts. Second-guessing your-
self may also help you find more creative solutions.

8 Believe in finding a workable solution. Like believing in
yourself, you also need to believe in your ideas. If you
don’t think you can find a solution, you probably won’t.

9 Brainstorm with others. Being creative is not a solitary
activity. Bouncing ideas off others creates a synergis-
tic effect.

10 Turn creative ideas into action. Coming up with ideas
is only half the process. Once the ideas are gener-
ated, they must be implemented. Keeping great
ideas in your mind or on paper that no one will read
does little to expand your creative abilities.

Practicing the Skill
How many words can you make using the letters in the
word brainstorm? There are at least 95.

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The second component is creative-thinking skills. It encompasses personality charac-
teristics associated with creativity, the ability to use analogies, as well as the talent to see the
familiar in a different light. For instance, the following individual traits have been found to
be associated with the development of creative ideas: intelligence, independence, self-
confidence, risk taking, internal locus of control, tolerance for ambiguity, and perseverance
in the face of frustration. The effective use of analogies allows decision makers to apply an
idea from one context to another. One of the most famous examples in which analogy
resulted in a creative breakthrough was Alexander Graham Bell’s observation that it might
be possible to take concepts that operate in the ear and apply them to his “talking box.” He
noticed that the bones in the ear are operated by a delicate, thin membrane. He wondered
why, then, a thicker and stronger piece of membrane shouldn’t be able to move a piece of
steel. Out of that analogy the telephone was conceived. Of course, some people have devel-
oped their skill at being able to see problems in a new way. They’re able to make the strange
familiar and the familiar strange. For instance, most of us think of hens laying eggs. But how
many of us have considered that a hen is only an egg’s way of making another egg?

The final component in our model is intrinsic task motivation—the desire to work on
something because it’s interesting, involving, exciting, satisfying, or personally challenging.
This motivational component is what turns creative potential into actual creative ideas. It
determines the extent to which individuals fully engage their expertise and creative skills. So
creative people often love their work, to the point of seeming obsessed. Importantly, an indi-
vidual’s work environment and the organization’s culture (we’ll look at organization culture
in the next chapter) can have a significant effect on intrinsic motivation. Specifically,
five organizational factors have been found that can impede your creativity: (1) expected
evaluation—focusing on how your work is going to be evaluated; (2) surveillance—being
watched while you’re working; (3) external motivators—emphasizing external, tangible
rewards; (4) competition—facing win–lose situations with your peers; and (5) constrained
choices—being given limits on how you can do your work.

To check your understanding of learning outcomes 3.1 – 3.5 , go to

mymanagementlab.com and try the chapter questions.

Understanding the Chapter

1. Why is decision making often described as the
essence of a manager’s job?

2. All of us bring biases to the decisions we make.
What would be the drawbacks of having biases?
Could there be any advantages to having biases?
Explain. What are the implications for managerial
decision making?

3. “Because managers have software tools to use, they
should be able to make more rational decisions.” Do
you agree or disagree with this statement? Why?

4. Is there a difference between wrong decisions and bad
decisions? Why do good managers sometimes make
wrong decisions? Bad decisions? How might man-
agers improve their decision-making skills?

ApplicationsReview and

Chapter Summary
when the problems are new or unusual (unstructured)

and for which information is ambiguous or incomplete.
Certainty is a situation when a manager can make accu-
rate decisions because all outcomes are known. Risk is
a situation when a manager can estimate the likelihood
of certain outcomes. Uncertainty is a situation where a
manager is not certain about the outcomes and can’t
even make reasonable probability estimates.

3.4 Discuss group decision making. Groups offer certain
advantages when making decisions—more complete
information, more alternatives, increased acceptance of
a solution, and greater legitimacy. On the other hand,
groups are time-consuming, can be dominated by a
minority, create pressures to conform, and cloud respon-
sibility. Three ways of improving group decision making
are brainstorming (utilizing an idea-generating process
that specifically encourages any and all alternatives
while withholding any criticism of those alternatives),
the nominal group technique (a technique that restricts
discussion during the decision-making process), and
electronic meetings (the most recent approach to group
decision making, which blends the nominal group tech-
nique with sophisticated computer technology).

3.5 Discuss contemporary issues in managerial decision
making. As managers deal with employees from
diverse cultures, they need to recognize common and
accepted behavior when asking them to make decisions.
Some individuals may not be as comfortable as others
with being closely involved in decision making, or they
may not be willing to experiment with something
radically different. Also, managers need to be creative
in their decision making since creativity allows them
to appraise and understand the problem more fully,
including “seeing” problems that others can’t see.

3.1 Describe the decision-making process. The deci-
sion-making process consists of eight steps: (1) identify
problem, (2) identify decision criteria, (3) weight the
criteria, (4) develop alternatives, (5) analyze alternatives,
(6) select alternative, (7) implement alternative, and
(8) evaluate decision effectiveness. As managers make
decisions, they may use heuristics to simplify the
process, which can lead to errors and biases in their deci-
sion making. The 12 common decision-making errors
and biases include overconfidence, immediate gratifica-
tion, anchoring, selective perception, confirmation, fram-
ing, availability, representation, randomness, sunk costs,
self-serving bias, and hindsight.

3.2 Explain the three approaches managers can use
to make decisions. The first approach is the rational
model. The assumptions of rationality are as follows:
the problem is clear and unambiguous, a single, well-
defined goal is to be achieved, all alternatives and
consequences are known, and the final choice will
maximize the payoff. The second approach, bounded
rationality, says that managers make rational decisions
but are bounded (limited) by their ability to process
information. In this approach, managers satisfice,
which is when decision makers accept solutions that
are good enough. Finally, intuitive decision making is
making decisions on the basis of experience, feelings,
and accumulated judgment.

3.3 Describe the types of decisions and decision-making
conditions managers face. Programmed decisions are
repetitive decisions that can be handled by a routine
approach and are used when the problem being
resolved is straightforward, familiar, and easily defined
(structured). Nonprogrammed decisions are unique deci-
sions that require a custom-made solution and are used

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Understanding Yourself

Am I a Deliberate Decision Maker?
People differ in how they make decisions. Some people prefer to collect information, carefully
weigh alternatives, and then select the best option. Others prefer to make a choice as quickly as
possible. This self-assessment exercise assesses how deliberate you are when making decisions.

INSTRUMENT Indicate to what extent the following statements describe you when you
make decisions.

1 = To a very little extent

2 = To a little extent

3 = Somewhat

4 = To a large extent

5 = To a very large extent

1. I jump into things without thinking. 1 2 3 4 5

2. I make rash decisions. 1 2 3 4 5

3. I like to act on a whim. 1 2 3 4 5

4. I rush into things. 1 2 3 4 5

5. I don’t know why I do some of the things I do. 1 2 3 4 5

6. I act quickly without thinking. 1 2 3 4 5

7. I choose my words with care. 1 2 3 4 5

Source: Based on L. R. Goldberg, J. A. Johnson, H. W. Eber, R. Hogan, M. C. Ashton, C. R. Cloninger, and H. G.
Gough, “The International Personality Item Pool and the Future of Public-Domain Personality Measures,” Journal of
Research in Personality 40 (2006), pp. 84–96.

5. Describe a decision you’ve made that closely aligns
with the assumptions of perfect rationality. Compare
this decision with the process you used to select your
college. Did you depart from the rational model in
your college decision? Explain.

6. Explain how a manager might deal with making deci-
sions under conditions of uncertainty.

7. Why do you think organizations have increased the
use of groups for making decisions? When would you
recommend using groups to make decisions?

8. Find two examples each of procedures, rules, and poli-
cies. Bring your examples to class and be prepared to
share them.

9. Do a Web search on the phrase “dumbest moments
in business” and get the most current version of this
list. Choose three of the examples and describe what
happened. What’s your reaction to each example?
How could the managers in each have made better
decisions?

SCORING KEY To score the measure, first reverse-code items 1, 2, 3, 4, 5, and 6 so that
1 = 5, 2 = 4, 3 = 3, 4 = 2, and 5 = 1. Then, compute the sum of the seven items. Your score
will range from 7 to 35.

ANALYSIS AND INTERPRETATION If you scored at or above 28, you tend to be quite delib-
erate. If you scored at or below 14, you tend to be more hasty in making decisions. Scores
between 14 and 27 reveal a more blended style of decision making.

How should decisions be made? The rational model states that individuals should
define the problem, identify what criteria are relevant to making the decision and weigh
those criteria according to importance, develop alternatives, and finally evaluate and
select the best alternative. Though this sounds like an arduous process, research has
shown that the rational model tends to result in better decisions.

If you tend to make decisions on a whim, you may want to be especially careful in auc-
tion settings, like those found on eBay. The time pressures involved, along with the emotional
arousal that comes with bidding, can result in “auction fever” and suboptimal decisions. Put
simply, if you make quick, impulsive decisions, you may pay more than you should have, and
that’s true not only for buying on eBay, but in other situations as well.

FYIA (For Your Immediate Action)

Magic Carpet Software

To: Rajiv Dutta, Research Manager
From: Amanda Schrenk, Vice President of Operations

Re: Software Design Decisions

For some time, I’ve been aware of a problem in our software design unit. Our

diverse pool of extremely talented and skilled designers is, undoubtedly, one of

our company’s most important assets. However, I’m concerned that our designers’

emotional attachment to the software they’ve created overshadows other important

factors that should be considered in the decision whether to proceed with the new

product design. At this point, I’m not sure how to approach this issue. The last thing

I want to do is stifle their creativity. But I’m afraid if we don’t come up with an action

plan soon, the problem may get worse.

Please research the role of emotions in decision making. What do the “experts”

say? Is it even an issue that we need to be concerned about? What’s the best way to

deal with it? Please provide me with a one-page bulleted list of the important points you

find from your research. And be sure to cite your sources in case I need to do some

follow-up.

This fictionalized company and message were created for educational purposes only. It is not meant to reflect
positively or negatively on management practices by any company that may share this name.

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Published by Prentice Hall. Copyright © 2011 by Pearson Education, Inc.

CASE APPLICATION

The Nazareth, Pennsylvania–based C. F. Martin Guitar Company hasbeen producing acoustic instruments
since 1833. Martin’s legendary guitars
have long been loved by legendary musi-
cians, and a Martin guitar is among the
best that money can buy. CEO Christian
Frederick Martin IV—better known as
Chris—continues to be committed to the
guitar maker’s craft. Although the com-
pany increased sales by 8 percent in 2008 to $93 million, it’s facing some serious issues.

Martin Guitar Company is an interesting blend of old and new. Although the equipment and tools may have
changed over the years, company employees remain true to the principle of high standards of musical excellence.
The company’s customers expect exceptional quality. Building a guitar to meet these standards requires considerable
attention and patience. Each guitar goes through a series of 60 workstations, with more than 300 distinct production
steps. Musician Eric Clapton once said that, “If [I] could be reincarnated as anything, it would be as a Martin guitar.”
It’s not surprising that Martin guitars aren’t cheap. Some of its limited-edition guitars made of Brazilian rosewood
sell for $100,000 or more. Its more popular models sell for $2,000 to $3,000.

Like many businesses, Martin’s sales have dropped off—some 20 percent since fall 2008—as consumer spending
nosedived. Guitars aren’t exactly necessities and consumers were being extremely cautious in spending. Meanwhile,
the company’s inventories of its higher-priced guitars ballooned. Chris didn’t want to lay off employees, especially
since it takes special woodworking skills to make the guitars. “The company figured it is better to find a way to
keep workers occupied than face the challenge of having to train new ones after the economy recovered.” Chris and his
managers came up with a solution: “Copy what many big retailers do by offering a lower-priced alternative.” The
challenge was how to do that without sacrificing quality or harming its image.

They’ve been able to do just that by using extreme flexibility and less labor hours on the production line,
something the company had to do back in the 1930s during the Great Depression. “The ability to come up with a
new design quickly and without tearing apart a production process allowed Martin to get a lower-priced product
into stores without a huge investment.” Initial reaction to the company’s under $1,000 guitar has been promising.
The 1 Series guitar was introduced in April 2009 and promptly sold out.

Discussion Questions

1. How do you think good decision making has contributed to the success of this business?

2. A decision to move into a new market as Chris did is a major decision. How could he have used the decision-
making process to help him make this decision?

3. What criteria do you think would be most important to Chris as he makes decisions about the company’s
future?

4. Would you characterize the conditions surrounding C. F. Martin Guitar Company as conditions of certainty,
risk, or uncertainty? Explain your choice. How would these conditions affect managerial decision making?

Sources: T. Aeppel, “Guitar Maker Revives No-Frills Act from ‘30s,” Wall Street Journal, July 6, 2009, pp. B1+; B. Erdman, “Craft a Product, Not
an Excuse,” Brandweek, June 1, 2009, p. 15; A. Ben-Yehuda, “Instruments of Change,” Billboard, March 29, 2008, p. 23; and D. Lieberman,
“Guitar Sales Jam Despite Music Woes,” USA Today, December 16, 2002, p. 2B.

IN TUNE

PART VII
LOOKING TO THE FUTURE

15
WHAT’S AHEAD FOR HEALTH
PSYCHOLOGY?
Goals for Health Psychology
Enhancing Illness Prevention

and Treatment
Improving Efforts for Helping Patients Cope
Identifying Evidence-Based Interventions and

Cost–Benefit Ratios
Enhancing Psychologists’ Acceptance in

Medical Settings

Careers and Training in Health
Psychology
Career Opportunities
Training Programs

Issues and Controversies
for the Future
Environment, Health, and Psychology
Quality of Life
Ethical Decisions in Medical Care

Future Focuses in Health Psychology
Life-Span Health and Illness
Sociocultural Factors in Health
Gender Differences and Women’s Health Issues

Factors Affecting Health
Psychology’s Future

PROLOGUE
‘‘Oh, this looks very good,’’ the palm reader said as she
studied Marty’s hand. She explained: ‘‘Your life line is
very long, which usually means you will have a long and
prosperous life. At first I thought this break here in the
line meant you might have a serious health problem
in your 50s, but these lines here at your wrist suggest
otherwise. You’ll have a long and healthy life!’’ Marty
was relieved. He had come to have his fortune told rather
than being tested for HIV. He knew that his past behavior
put him at risk for HIV infection, but he couldn’t bring
himself to reveal this to the palm reader. Unreasoned
behavior is not uncommon when people are very anxious.

Predicting the future is always a chancy enterprise.
Still, because the field of health psychology is at an early
stage in its development, many people wonder what the
field and its goals will be like in the future. This chapter
will try to predict what’s ahead for health psychology,
and our crystal ball will involve the views of noted
researchers and trends that seem clear in recent research.
As we consider what the crystal ball suggests, we will
try to answer questions you may have about the field’s
prospects. What role will future health psychologists play
in medical care? Will career opportunities and training
programs for health psychologists flourish? How will
the field’s goals, issues, and perspectives change? What
factors will affect the success and direction of health
psychology in the coming years?

Chapter 15 / What’s Ahead for Health Psychology? 387

GOALS FOR HEALTH PSYCHOLOGY

Health and health care systems around the world have
changed dramatically over the last several decades.
People in most parts of the world today are living longer
and are more likely to develop chronic illnesses than
ever before. Many current health problems result from or
are aggravated by people’s long-standing habits, such as
smoking cigarettes and coping poorly with stress, that
medical professionals lack sufficient skills and time to
change. The field of health psychology has made enor-
mous advances, generating new knowledge and applying
information gained from many disciplines to supplement
medical efforts in promoting health. Let’s look at some
major goals that lie ahead for health psychology.

ENHANCING ILLNESS PREVENTION
AND TREATMENT
A major issue driving the need for illness prevention
around the world is the escalating costs of health care
and the need to contain them. The burden of health
costs to different nations can be seen in Figure 15-1,
which presents health spending as a percent of the
gross domestic product for selected countries. As you
can see, this burden has risen sharply in the United
States since 1980, where health spending is higher and
rising faster than in other industrialized nations. We
have seen that efforts to prevent health problems should
try to reduce unhealthful behaviors. These efforts can
be directed toward health-protective activity while the
person is well, when symptoms appear, or once an illness
is identified and treatment starts.

Health-related behaviors that become features
of people’s lifestyles have received a great deal of
attention in health psychology. Efforts have been
directed toward preventing unhealthful behaviors from
developing and changing behaviors that already exist.
Unhealthful lifestyles seem to be harder to change than
to prevent (Wright & Friedman, 1991). We have seen
that psychologists’ efforts to change lifestyle behaviors,
such as smoking, exercising, and eating habits, have
focused mainly on cognitive and behavioral approaches.
Although these approaches are often very effective in
producing initial changes, the behaviors frequently revert
back to unhealthful patterns later. Relapse is a critical
problem that researchers are working to reduce, and it
will certainly be an important focus for health psychology
in the future.

Once people notice symptoms or are diagnosed
with serious health conditions, they often—but by no
means always—engage in symptom-based and sick-role
behaviors to protect their health. For instance, they may

16
United
States

Germany

Canada

Netherlands
Sweden

Australia
Italy

South Africa

Brazil
Average of Seven
Industrialized Nations
(names in color)

China

E
xp

en
d
it

u
re

s
(%

o
f

G
D

P
)

6
4

0
1980 1990

Year

2000 2005/6

United Kingdom

Turkey

India
Singapore

Figure 15-1 Total health expenditures as a percent of
the gross domestic product for the specified years. The
isolated data points (color) for 2005/6 reflect the most recent
available data on expenditures for 13 non-U.S. selected
nations. The two line graphs present expenditures for 1980,
1990, 2000, and 2005/6 for the United States (solid line)
and the average (dashed line) of the seven industrialized
countries of the 13 selected nations. This figure depicts
the relative current expenditures across 14 nations and a
comparison of the increases in expenditures for the United
States and other industrialized countries. (Data for 1980–

2000

from NCHS, 2006, Table 119; data for 2005/6 from WHO, 2009,

Table 7.)

go to physicians, take medication, or even follow medical
advice that involves changing their lifestyles. Researchers
have identified many psychosocial factors that influence
whether people will seek health care and adhere to
medical regimens. We know, for example, that individuals
often decide to reject or delay seeking medical attention
because they don’t know the symptoms of serious
diseases, such as cancer or diabetes. And people are
less likely to adhere to medical advice if the regimens
involve complex or long-term behavioral changes and
if their physicians do not seem caring or explain the
illnesses and treatment clearly. Although we know some
methods to reduce these problems, these methods often
require extra time or effort that medical professionals
are just beginning to incorporate into their practices.

Advances in Research and Theory
Health psychologists in the future will continue their
search for ways to improve people’s health behaviors

388 Part VII / Looking to the Future

before illness develops, use of health care services,
and disease management after illness develops. New
research methods and theories we’ve discussed in
this book will promote these efforts. For example,
the method called ecological momentary assessment has
enabled researchers to examine people’s behavior and
feelings in daily life. And theories have appeared that
attempt to explain why people do or do not change
unhealthful behaviors, building on knowledge gained
from earlier theories, especially the health belief model.
The stages of change model, which outlines a series of
stages in people’s readiness to change health-related
behaviors, is an example. This and other theories have
generated important research that will contribute to our
understanding of ways to promote healthier lifestyles.
Research and theory of the future need to expand their
focus in at least two ways (Smith, Orleans, & Jenkins,
2004). First, they need to incorporate more levels of
factors to represent the biological, psychological, and
social systems that work together in affecting health.
Second, they need to give more attention to life-span
changes in the nature of health threats.

Advances in Technology
Technological advances will play an increasing role in
preventing and managing illness (Saab et al., 2004). For
example, Internet sites have been developed to provide
medical information and two-way video and audio
communication to individuals in numerous countries
and inaccessible areas. This process, called telehealth or
telemedicine, provides diagnostic and treatment services
and advice on lifestyle changes (Celler, Lovell, &
Basilakis, 2003). For instance, a parent can use a
device to scan a child’s injured leg and send the image
electronically to the hospital where the child had been
treated so they can monitor recovery. Because Internet
sites for health information vary in quality, they need to
be selected carefully (Kalichman et al., 2006). As we saw in
Chapter 6, the Internet can also provide software versions
of effective psychosocial interventions to improve health.

IMPROVING EFFORTS FOR HELPING
PATIENTS COPE
Major advances have been made in using psychosocial
methods to help people cope with various difficulties
in their lives. Stress management programs are being
applied widely with nonpatient populations, such as in
worksite wellness programs, to help prevent illness.

People with serious medical conditions often must
cope with pain, anxiety and fear, and depression. Psy-
chosocial interventions are being applied more and more
widely with patients in pain clinics, hospitals, and other

medical settings. Years ago, the main function of psychol-
ogists in medical settings involved administering and
interpreting tests of patients’ emotional and cognitive
functioning (Wright & Friedman, 1991). But this situation
has changed, and psychologists are focusing much more
on a broader array of activities, such as training medi-
cal students and interns and applying interventions to
help patients cope with illnesses and medical treatment.
Health psychologists’ role is likely to continue to expand
in hospitals and outpatient rehabilitation programs for
people with chronic health problems, such as heart dis-
ease and arthritis (Nicassio, Meyerowitz, & Kerns, 2004).

IDENTIFYING EVIDENCE-BASED
INTERVENTIONS AND COST–BENEFIT
RATIOS
Should health care organizations and employers provide
psychosocial interventions to prevent illness and help
patients cope? Perhaps most people would answer, ‘‘Yes,
because it’s the humane thing to do.’’ But with today’s
spiraling medical costs, the answer is more commonly
based on two factors: the intervention’s efficacy, or degree
to which it has the needed effect, and cost–benefit ratio,
or the extent to which it saves more money in the long
run than it costs (Graham et al., 1998; Kaplan & Groessl,
2002). Bottom-line issues are often weighed heavily
in deciding whether to offer wellness or psychosocial
programs at work and in medical settings.

Health care professionals recognize the importance
of documenting the efficacy of approaches they use,
and they do careful research to compare different
approaches against each other and control groups. This
research is now being used by professionals in medicine
and health psychology to identify evidence-based
treatments—techniques or interventions with strong
efficacy that have clear support across many high-quality
studies, particularly randomized controlled trials
(Glasgow et al., 2006; Kazdin, 2008). Ideally, the research
would have:

• Been carefully evaluated in a meta-analysis or systematic
review.

• Assessed the treatment effect’s clinical significance, or
meaningfulness for the person’s life and functioning
(Sarafino, 2001). The effect is meaningful if the person’s
health or behavior has improved greatly or is now at
or near the normal or desired level. For example, a
treatment that reduces pain intensity by one-third would
be meaningful from the patient’s point of view (Jensen,
Chen, & Brugger, 2003).

• Conducted follow-up assessments to determine whether
the effect is durable.

Chapter 15 / What’s Ahead for Health Psychology? 389

After evidence-based treatments have been identified for
specific conditions or behaviors, professionals need to
be apprised of that status and encouraged to adopt and
implement those treatments (McHugh & Barlow, 2010).
Major efforts are currently underway to accomplish these
goals.

Psychologists seldom calculate the financial costs
and benefits of interventions. Often the costs of providing
an intervention are easily assessed, but the full benefits
are not. At a worksite, for instance, what benefits of a
wellness program could you assess in dollars to compare
with the costs of running it? You might assess worker
absenteeism or medical insurance claims, but these
variables would reflect only part of the benefits; they
wouldn’t reflect other important financial gains, such
as increases in workers’ job satisfaction and resulting
productivity. In medical settings, measuring the benefits
of interventions can be easier—for example, you could
assign dollar values to the reduced time intervention
patients spend recovering in the hospital and compare
these data against the cost of the program.

Many psychosocial interventions for promoting
health and helping patients cope have the potential for
producing far more financial benefits than costs. More
and more evidence is becoming available to document
these effects (Aldana, 2001; Kaplan & Groessl, 2002).
We considered research in Chapter 10 showing, for
example, that hospital patients who receive help in
coping with medical procedures recover more quickly
and use less medication than those who don’t receive
such help. Table 15.1 lists some specific behavioral or
and health problems with studies showing that psy-
chosocial–educational interventions produced financial
savings that were far greater than their costs. Other res-
earch has shown that the benefits of worksite wel-
lness programs outweigh their costs (Golaszewski,
2001; Matson-Koffman et al., 2005). Although most

psychosocial methods with documented efficacy have
not yet been subjected to cost–benefit analyses, health
psychologists in the future will probably give much more
attention to these analyses than they have in the past.
They will also need to develop more effective methods to
help people change unhealthful lifestyles—such as for
eating healthful diets and exercising—and demonstrate
that the benefits of these methods outweigh the costs.

ENHANCING PSYCHOLOGISTS’ ACCEPTANCE
IN MEDICAL SETTINGS
A woman wrote an article in the late 1980s and described
her experience when she developed breast cancer. Her
physicians advised her to get treatment from a variety of
medical professionals but

at no point did anyone in the medical fraternity
recommend that I see a mental health professional
to help me cope with the emotional impact of breast
cancer. Perhaps they didn’t realize that breast cancer
had an emotional impact. But I did. So, I went to see a
psychologist, ironically the one specialist not covered
by my insurance. It was worth the cash out of pocket.
(Kaufman, cited in Cummings, 1991, p. 119)

Although gaining acceptance by the medical profession
has progressed steadily since the 1980s, it continues
to be a challenge for health psychology (Belar &
McIntyre, 2004).

Part of the difficulty health psychologists have faced
in gaining acceptance in medical settings stems from
their past role and training. Before 1970, psychological
services were usually seen as tangential to the medical
needs of most patients, and psychologists had little or
no training in physiological systems, medical illnesses
and treatments, and the organization and protocols of

Table 15.1 Psychosocial–Educational Interventions with Very Favorable Cost–Benefit Ratios for
Reducing Specific Behavioral and Health Problems

Problem Population Studies

Behavior
Drinking Men and women, general Cobiac et al., 2009; Fleming et al., 2000
Drug abuse Clients in residential treatment French, Salome, & Carney, 2002
HIV transmission HIV-positive youth Lee, Leibowitz, & Rotheram-Borus, 2005
Smoking Men and women, general Alterman, Gariti, & Mulvaney, 2001; Curry

et al., 1998
Smoking Pregnant women Windsor et al., 1993

Health
Arthritis Elderly men and women patients Cronan, Groessl, & Kaplan, 1997
Asthma Children and adult patients Liljas & Lahdensuo, 1997
Back pain Employee patients Jensen et al., 2005; Turk, 2002
Heart disease Men patients Blumenthal, Babyak et al., 2002; Davidson

et al., 2007

390 Part VII / Looking to the Future

hospitals. But these conditions have changed. Today,
health psychologists are receiving the training they need
to work effectively in medical settings. And more and
more physicians are coming to recognize the importance
of psychosocial factors in their patients’ health, adher-
ence to treatment regimens, and rehabilitation. They also
realize that they do not have the skills or time to address
many of these factors.

Initial relations between medical staff and health
psychologists still tend to be strained in some settings,
particularly when one function of the psychologist
may be to teach physicians and interns the ‘‘people
skills’’ that are important for interviewing patients
and communicating with them effectively. This kind of
training may get a mixed reception, especially from some
medical staff who feel that these skills are not part of
medicine (Christensen & Levinson, 1991). Even after
medical and psychological staff have collaborated for
a long time and seen that a biopsychosocial approach
to health care can benefit patients, be intellectually
stimulating, and lead to developing new techniques,
their different styles and points of view can lead to
conflicts (McDaniel & Campbell, 1986). For example,
psychologists generally want to talk directly with the
attending physician to describe subtle and complex
issues relating to a patient’s treatment plan, but medical
specialists typically communicate with each other in
writing, such as with notes in a hospital chart. Differences
like these can be resolved. Medical education guidelines
now promote the training of physicians to include
skills in teamwork and partnering with professionals
in nonmedical fields (Belar & McIntyre, 2004; Daw, 2001).

What about patients—how do they feel about
receiving psychological services? Their view is likely
to depend on the way the physician and psychologist
introduce these services. If a patient thinks the services
are offered because his or her physician thinks he or
she is ‘‘crazy’’ or that the problem ‘‘is all in your
head,’’ the patient is likely to have negative attitudes
and fail to cooperate. People are more likely to view
psychosocial interventions positively if the services are

introduced as part of a standard ‘‘team approach’’ with a
biopsychosocial orientation. (Go to .)

CAREERS AND TRAINING IN HEALTH
PSYCHOLOGY

Most health psychologists follow one of two career
categories: working mainly in clinical capacities with
patients or working mainly in academic or research
capacities (Belar & McIntyre, 2004; Sweet, Rozensky, &
Tovian, 1991). Many health psychologists have careers
that combine these areas, being involved in both clinical
and academic or research activities, and some do
administrative work, such as in governmental agencies
or programs to promote health.

CAREER OPPORTUNITIES
The opportunities for careers in health psychology in the
United States have been good, especially in health care
settings. In the early years, the number of psychologists
working in health care more than doubled from about
20,000 in 1974 to over 45,000 in 1985 (Enright et al.,
1990). Career opportunities have continued to grow since
then. States have passed laws enabling psychologists to
obtain full staff status in hospitals, giving them the same
privileges as physicians. The current outlook for the
next decade is for strong job growth for psychologists,
particularly those with a doctoral degree in fields related
to health (USDL, 2010).

Besides hospitals, where else do health psycholo-
gists work? Some of the more prominent sites are:

• Colleges and universities

• Medical schools

• Health maintenance organizations

• Rehabilitation centers

• Pain clinics

• Private practice and consultancy offices

CLINICAL METHODS AND ISSUES

Psychologists in the Primary Care Team
In the late 1990s, some American

managed-care programs, such as HMOs, began to
include psychologists as members of the medical care
team (D. Bruns, personal communication, September 1,
1998). Why? Program administrators came to realize
that psychological factors, such as stress and emotional

problems, play a pivotal role in the symptoms most
patients present in their health care visits. Primary care
psychologists evaluate these patients’ needs and provide
help, such as with brief counseling or training to improve
adherence to treatment recommendations or manage
stress or pain (McDaniel & Fogarty, 2009).

Chapter 15 / What’s Ahead for Health Psychology? 391

Sometimes job descriptions for these settings are
broad, making eligible professionals from nonpsychology
fields, such as nursing, public health, or social work.
Although this can increase the competition for those
jobs, broad job descriptions can increase the number of
opportunities for psychologists, too.

TRAINING PROGRAMS
What kind of training is available and necessary in health
psychology? Training is offered at three educational
levels: undergraduate courses in health psychology or
behavioral medicine, graduate programs, and postdoctoral
programs. Because health psychologists typically hold
doctoral degrees, dozens of graduate programs now exist
in the United States and other countries specifically
for that training. Postdoctoral programs are available in
health psychology or behavioral medicine, particularly
for people with doctoral degrees that did not focus on
the relationship between health and psychology.

Graduate training programs in health psychology
are diverse (Belar & McIntyre, 2004; HP, 2010). Some
are highly interdisciplinary programs that are designed
solely for this field. They often specialize in training
students either for research careers or for direct clinical
service to patients. Other programs provide graduate
training in traditional psychology areas, such as clinical
or social psychology, and contain special tracks or
emphases relating to health. Common to all these
programs is a solid grounding in psychology, along with
training in research methods, biopsychosocial processes
in health and disease, and health care terminology and
organization. Programs that educate students for direct
clinical service to patients generally include medical
courses, such as in physiology and pharmacology.
The future may see greater standardization of health
psychology training programs in the United States and
around the world, based on the identification of specific
core competencies that clinical health psychologists
should have when they enter the profession (France
et al., 2008).

Information about graduate and postdoctoral train-
ing programs in health psychology can be obtained by
contacting the following professional organizations:

• American Psychological Association, Division of Health
Psychology, 750 First Street N.E., Washington, DC 20002-
4242
Web Page: http://www.health-psych.org (the Education
and Training page has a Find Training Programs
database)

• Society of Behavioral Medicine, 555 East Wells Street,
Suite 1100, Milwaukee, WI 53202-3823
Web Page: http://www.sbm.org

The European Health Psychology Society (http://
www.ehps.net) is a professional group for researchers
and practitioners; the delegates they list may be able to
suggest training programs in their specific countries.

ISSUES AND CONTROVERSIES
FOR THE FUTURE

Findings from research and clinical experience will
enable health psychologists to help societies resolve
important issues and controversies in the future. We will
look at several examples, beginning with the impact of
environmental conditions on health and psychology.

ENVIRONMENT, HEALTH, AND PSYCHOLOGY
Each of the environments in which people live around
the world contains conditions that have the potential to
harm or benefit the health and psychological status of
its inhabitants. For example, some communities contain
barriers to physical activity; they can encourage activity
by changing land-use and residential density policies
(Sallis et al., 2006; Salmon et al., 2003). We also read
and hear in the news media that the environment is
becoming increasingly polluted with toxic substances,
released accidentally or deliberately into the air, ground,
or bodies of water. The environments in which people live
are also becoming more crowded and noisy. What effects
do these conditions have? How can we reduce harmful
environmental conditions? Some answers use a public
health approach: because cigarette smoke pollutes the
air and can lead to illnesses in those who breathe it,
some psychologists have called for governmental control
of tobacco products (Cummings, Fong, & Borland, 2009;
Kaplan et al., 1995).

Many toxic environmental pollutants are produced
as byproducts either of manufacturing or of generating
energy. For instance, some manufacturing industries
produce highly toxic cyanide or mercury as byproducts,
which have made their ways into the environment. What
direct effects on health does long-term exposure to low
levels of pollutants have? How stressful is it to live or
work in contaminated environments, and how much does
this stress affect health? How much does the stress of
crowding and noise affect health? Health psychologists
can help in efforts to answer these questions and
find ways to change behaviors that produce these
problems (Weinman, 1990). Although we have some
information on these questions, much more research will
be needed in the future before we can provide accurate
answers.

392 Part VII / Looking to the Future

QUALITY OF LIFE
People’s quality of life has become a significant issue in
medical care because (1) it is reduced by becoming
sick and by staying sick and (2) it is an important
consideration in prevention efforts before and after an
illness occurs. Efforts to maintain people’s good health
also maintain their quality of life, and efforts to help
patients recover quickly and fully lessen the negative
impact of the illness on their lives. For people who are
ill, their quality of life enters into decisions about the
medical and psychological treatment they will receive.
Are they in pain? If so, what type of painkilling medication
should they get, and how much? If they’re distressed,
what psychosocial methods are likely to improve their
emotional status?

Life-or-death medical decisions are often heavily
influenced by appraisals of patients’ current and future
quality of life. Current quality of life is especially
important if there is virtually no hope of the patient’s
recovery. In such cases, the views of the patient, family,
and medical staff are likely to come down to a judgment
of whether living in the current state is better than not
living at all. Future quality of life is important in medical
decisions that can enable the patient to survive, but
will leave him or her with seriously impaired physical,
psychological, and social capacities. For example, the
family of an elderly man with a disabling cardiovascular
condition felt he would be better off not living

if he was just going to be a vegetable. They said his
whole life revolved around working in his yard and
playing bridge; these were the things in life that gave
him joy. Now the doctors were not giving any hope
that he would ever get back to what he was before;
the best that could be hoped for was that he would be
able to sit in a wheelchair. They said they didn’t want
that for him, and … he wouldn’t want that for himself
either. (Degner & Beaton, 1987, p. 64)

Decisions to withhold heroic medical efforts clearly
involve humane concerns, but financial considerations
are important, too (Spurgeon et al., 1990). Heroic medical
efforts and aftercare are extremely expensive. With the
enormous pressures to contain the cost of health care,
are these expenses always justified even when the
resulting quality of life will be poor?

Making medical and psychological decisions based
on a patient’s current or future quality of life is difficult,
partly because researchers need to determine the best
ways to measure it. One approach that some people favor
to help make these decisions uses a scale called quality-
adjusted life years (QALYs, pronounced ‘‘KWAL-eez’’). To

calculate the QALYs for a medical treatment, we would
assess how long a person is likely to live after receiving
the treatment, multiply each year by its quality of life,
and total these data (Bradley, 1993; Kaplan, 2004). Using
QALYs, we could rank the value of different treatments
for a particular person or in general, perhaps even taking
the cost per QALY into account, and decide whether to
provide the treatment. At the heart of this approach is the
measurement of quality of life. Although there are dozens
of questionnaires to assess quality of life, the qualities
they measure vary widely (Gill & Feinstein, 1994; Kaplan,
2004). Which should we use? Health psychologists
will play an important role in resolving how best to
use quality of life assessments in making treatment
decisions.

ETHICAL DECISIONS IN MEDICAL CARE
Suppose you were an obstetrician delivering a baby when
you realized that complications you see developing will
surely kill the baby and, maybe, the mother, too. Suppose
also that the mother flatly refuses a Caesarean delivery
for religious reasons. What do you do? One medical
response might be to seek an immediate court order
to override her decision. The decisions made in this
case and the quality of life decisions we just considered
all involve ethical issues. Many hospitals today have
bioethics committees to discuss ethical issues in health care,
make policy, and recommend action regarding specific
cases. The ethical issues these committees consider
often involve the patient’s right to choose treatments,
to withhold or withdraw treatment, or to die (Bouton,
1990). We will examine two other important issues: the
role of technology in medical decisions and the role of
physicians in helping patients die.

Technology and Medical Decisions
The technological advances we have seen in our lives over
the past few decades have been quite remarkable. Many
of these advances have been in medical technology, and
they have sometimes raised important ethical questions.

One of these technological advances is a computer
program that calculates the odds that individual patients
will die in intensive care or after they leave it (Seligmann
& Sulavik, 1992). Why might this be a problem? Decisions
about whether intensive care treatment will help the
patient survive are made every day, based on physicians’
broad estimates, such as, ‘‘Her chances look bleak.’’
With the computer program, physicians can get precise
estimates of the person’s odds of dying if he or she
continues in intensive care, say 42%, versus if he or she

Chapter 15 / What’s Ahead for Health Psychology? 393

is transferred, say 78%. In this example, transferring the
patient would greatly increase the odds that he or she
would die. The comparison helps in making the decision.
The ethical problems relate to how these numbers will
be used. Should physicians tell families these numbers?
Will physicians and families weigh these data too heavily
in their decisions? Will hospitals release these data to
insurance companies, which could then decide to limit
coverage when scores drop below some level? Health
psychologists can play a role in some of these decisions,
especially those relating to families having and using
these data (Weinman, 1990).

Other ethical dilemmas arise in deciding whether
to provide an organ transplant for patients. Nearly
28,000 transplants are done each year in the United
States (USBC, 2010). Health psychologists help medical
practitioners to select candidates who are best able to
benefit from the surgery and the scarce organs because
these people are able to cope with the stress and behave
appropriately to maintain their health with the new
organ. To help make these decisions, psychologists
screen potential candidates—some patients will be
clearly up to the task, and some will not, such as
candidates for liver transplant who have not been able
to control their drinking. Others will be in between and
may benefit from interventions of behavioral contracting
and therapy to help them cope better (Dew et al., 2004;
Olbrisch et al., 2002).

Advances in genetics technology may also present
ethical problems. For instance, geneticists can identify
individuals who are likely to develop serious diseases,
such as cystic fibrosis and some forms of cancer, and may
soon be able to identify individuals who are vulnerable
to environmental causes of cancer and heart disease
(Detjen, 1991; Lerman, Audrain, & Croyle, 1994). Who
should be tested for these risks, and who should have
access to the results? Insurance companies would like
this information, and some are already turning down
applicants for insurance on the basis of known family
histories of certain diseases.

Assisted Dying: Suicide and Euthanasia
Some people with serious illnesses come to the decision
that they want to end their lives. Should physicians help
them in their wishes? This is a very controversial issue
for society in general and in the medical community
(Miccinesi et al., 2005). Among physicians, some feel
they should not help because of certain beliefs they
hold, such as that life is sacred or that medical workers
should only save lives and not take them. Other doctors
feel they should participate in this act if the patient

is actually beyond all help and the decision was not
made because of psychological depression that could
be reduced (Sears & Stanton, 2001). Most terminally
ill people who are interested in ending their lives are
mainly worried about future pain and loss of autonomy
and function (Ganzini, Goy, & Dobscha, 2009). Others
who want to end their lives are depressed and may
change their minds if the depression is relieved (Ransom
et al., 2006; Zisook et al., 1995).

Some physicians have helped patients end their
lives in two ways (Rosenfeld, 2004; Sears & Stanton,
2001). In assisted suicide the patient takes the final act,
but the physician knowingly prescribes the needed
drugs or describes the methods and doses required.
Because of the legal consequences for physicians who
help people take their lives, a book called Final Exit
was published in 1991 describing procedures physici-
ans would recommend. In euthanasia the physician (or
someone else) takes the final act, usually by admi-
nistering a drug that ends the life. Laws permit euthana-
sia in the Netherlands and physician-assisted suicide
in Oregon under carefully specified and monitored
circumstances. When societies decide that it is accept-
able for physicians to help a patient end his or her
life, laws can require psychological assessment of the
person’s emotional status, ability to make sound deci-
sions, and likelihood of benefiting from psychosoc-
ial intervention (Sears & Stanton, 2001). (Go to .)

FUTURE FOCUSES IN HEALTH
PSYCHOLOGY

The research that contributes to our knowledge in
health psychology comes from many different fields.
But early studies gave a relatively narrow view of the
biopsychosocial processes involved in health and illness
because of the people researchers tended to recruit as
subjects: in studies of Type A behavior, for example, they
often were 18- to 60-year-old white American males. Two
reasons for this focus are that these people were readily
available and some researchers incorrectly believed that
the findings would easily generalize to other populations.
In the 1980s, studies began to focus on including subjects
representing a wider range of people. This trend will
surely continue in the future.

LIFE-SPAN HEALTH AND ILLNESS
We’ve seen that the health problems people have and
the extent to which they use health services change
with age. Very young and elderly individuals use health

394 Part VII / Looking to the Future

ASSESS YOURSELF

Some Ethical Dilemmas: What Do You Think?
Each of the following cases describes

a decision involving an ethical dilemma that is related
to health. Circle the Y for ‘‘yes’’ or the N for ‘‘no’’
preceding each case to indicate whether you agree with
the decision.

Y N A 47-year-old woman developed cirrhosis of
the liver as a result of long-term alcoholism.
She promised to stop drinking if she could
receive a liver transplant. Her request was
denied because of likely future drinking.

Y N An overweight, chain-smoking, sedentary
51-year-old man with high blood pressure
had his first heart attack 7 years ago. His
request for a heart transplant was denied
because of continuing risk factors.

Y N A 28-year-old married woman with a heredi-
tary crippling disease that is eventually fatal
decided to become pregnant, knowing that
there was a 50% chance that she would pass
on the disease to her baby and she would
not consider having an abortion.

Y N A 37-year-old executive was told by his boss
that he would have to pay half of the costs
of his employer-provided health insurance

if he did not quit smoking and lower his
cholesterol.

Y N An obese 20-year-old woman who refused
to try to lose weight was expelled from
nursing school, despite having good grades
and clinical evaluations, because it was
said she would ‘‘set a poor example for
patients.’’

Y N State workers are assessed an extra health
insurance fee each month if they smoke
cigarettes or are overweight because people
with these statuses generate far higher
medical expenses than other employees do.

Y N A 30-year-old woman was denied a promo-
tion to a job that involved working in an area
with gases that could harm an embryo if she
were to become pregnant.

Y N A year after a boy developed leukemia,
the company that provided his family’s
health insurance quadrupled their premium.

These dilemmas are all based on real examples from
the news media. Because they all involve controversies,
there is no key to the ‘‘right’’ answers. But you might
want to ask friends or classmates what they think.

services more than others do. Populations are aging
rapidly around the world, which will lead to health care
challenges in the future.

From Conception to Adolescence
Children’s prenatal environments have a major effect on
their health. Enormous numbers of babies are born each
year with illnesses or defects that develop because of
prenatal exposure to harmful conditions or chemicals,
particularly when mothers use alcohol, drugs, or tobacco
during pregnancy. The health problems these babies
develop can last for years or for life. Health psychologists
study ways to improve babies’ prenatal environments,
such as by educating and counseling prospective parents
(Weinman, 1990). Although these approaches help, we
need to find more effective ways to prevent these health
problems from developing.

Childhood and adolescence are important periods
in the life span because many health beliefs and habits
form during these years (Smith, Orleans, & Jenkins, 2004).
But very little research has examined how these beliefs

and habits develop. We do know that efforts to promote
health should be introduced early, before unhealthful
beliefs and habits develop. Early childhood is clearly
the time to intervene for some behaviors, such as for
proper diets, exercise, dental care, and seat belt use. In
later childhood, interventions should focus on preventing
accidents, cigarette and drug use, and unsafe sex. We
saw in Chapter 7, for example, that programs to prevent
children from starting to smoke cigarettes have had
some success. We have also seen that behaviors that put
people at high risk for AIDS can be changed substantially,
thereby reducing their risk. Efforts to prevent the spread
of HIV need to be intensified and applied worldwide.
To design more effective health promotion programs, we
will need to focus more research—especially longitudinal
studies—on how health behaviors form and change in
childhood and adolescence.

Adulthood and Old Age
By the time people reach adulthood, most health-related
values and behaviors are ingrained and difficult to

Chapter 15 / What’s Ahead for Health Psychology? 395

change. People’s lifestyles during the early adulthood
and middle-age years tend to continue and affect whether
or when they will develop major chronic illnesses,
particularly heart disease and cancer. The earlier people
change unhealthful behaviors, the lower their health
risks are likely to be. In addition, prolonged emotional
difficulties, particularly depression, are linked to future
illness, such as heart disease. Among elderly people
equated for initial physical health, those who are
depressed show sharper physical declines, such as in
walking speed, over the next few years than nondepressed
elders do (Penninx et al., 1998).

As the world population ages, the proportion of
individuals with disabling or life-threatening illnesses
will surely grow, requiring more health services and
psychosocial interventions. This will be compounded
if life expectancy increases (Sierra et al., 2009). In the
United States, an unusually high birth rate after World
War II created a very large generation of people called
‘‘baby boomers,’’ who are starting to swell the ranks of
the elderly. Figure 15-2 shows the aging trend in America:
the elderly are becoming an increasingly large portion
of population. This trend means that health care costs
will increase sharply in the future. How will health care
systems around the world respond to the added loads?
This potential makes it even more crucial that we find
ways to prevent or change risky lifestyles, particularly
with regard to diet, exercise, and substance use. We
will also need to improve ways to help families cope
with the difficulties of caring for elderly relatives. The
number of studies dealing with health issues in old age
published each year has increased since 1980 and will
continue to be a major focus of health psychologists in
the future.

SOCIOCULTURAL FACTORS IN HEALTH
Sociocultural differences in the United States and around
the world are related to health and health behavior.
For instance, Americans from the lower social classes
and from Black and Hispanic minority groups tend
to have poorer health and health habits than Whites
and those from higher classes. These differences have
been clear for a long time. Although researchers have
begun to investigate why these differences exist and
what can be done to reduce them, our knowledge on
these issues is not very specific. For example, we don’t
know how cultural customs and socioeconomic factors
shape the everyday lives of different ethnic groups
(Anderson & Armstead, 1995; Yali & Revenson, 2004).
And so we tend to make broad conclusions, as when
we say people in a minority group ‘‘live in environments
that do not encourage the practice of health-protective

P
op

u
la

ti
on

(
in

m
il
li
on

2000
Year

20.6%

12.4%8.1%

2050

Under 65 Years

65–74

75 and Over

100

150

250

350

450

200

300

400

Figure 15-2 United States population at 1950, 2000, and
2050 (projection), with portions consisting of elderly age
groups designated and percent of people 65 and older
specified. (Data from NCHS, 2009a, p. 111.)

behavior.’’ Health psychology must give greater emphasis
to sociocultural issues so that we can provide specific
and useful solutions in the future.

Cross-cultural research also needs more emphasis.
We have spotty information about cultural differences
in lifestyles, perceiving symptoms of illness, and using
health services, and most research on these differences
is old and very incomplete. Although some books
and journal articles address ethnic differences within
countries, especially the United States, few examine
differences across countries (Kazarian & Evans, 2001). In
the poorer nations of the world, such as in African and
Eastern Mediterranean regions where infectious diseases
and malnutrition are often rampant, it is not unusual for
10–15% of children under the age of 5 to die each year
(WHO, 2009). The number of people infected with HIV
in Africa and other developing areas of the world is
astounding and growing rapidly. The countries with the
most urgent need to change behavioral risk factors have
not yet recognized that principles of health psychology
can help promote public health. In addition, health
psychologists need to conduct research to determine
how to adapt the principles that work in the United
States and other industrialized countries to the needs of
other cultures.

396 Part VII / Looking to the Future

GENDER DIFFERENCES AND WOMEN’S
HEALTH ISSUES
Health issues relating to women and gender differences
were also neglected in health psychology research until
the 1980s. Since that time, studies have examined
women’s health behaviors, such as diet, smoking, and
exercise; cardiovascular and pain disorders; and issues
that are specific to women, such as screening for cervical
and breast cancer (Revenson & Jeltova, 2004; Rimer,
McBride, & Crump, 2001). Research has also studied
differences between males and females in a wide variety
of characteristics, such as reactions to stress, Type A and
B behavior patterns, risk of AIDS and of heart disease,
weight regulation, and tobacco and alcohol use. Gender-
related research has become a main focus of health
psychology today and for the future. This research is
making clearer the uniqueness of women and men in
their health and health-protective behaviors and the
special interventions they are likely to need to promote
their health.

FACTORS AFFECTING HEALTH
PSYCHOLOGY’S FUTURE

The picture of health psychology’s future that we have
considered is based on trends and needs that can change
in the future. The prospects for our discipline will depend
on forces and events in society, medical fields, and
psychology. What factors are likely to affect the role and
direction of health psychology in the future?

Some factors can have a broad impact on health
psychology, affecting the amount and type of research,
clinical intervention, and health promotion activities
that we do. One of these factors is monetary (Tovian,
2004): how much financial support will there be for
these activities? During hard economic times, cutbacks
in governmental and private funding may reduce this
support. But there is another side to this coin—health
care costs around the world are increasing, and many
health experts believe that two of the best ways to
decrease these costs involve improving people’s health
behaviors and helping those individuals who become ill

to recover quickly. We’ve seen that health psychologists
can help reduce costs in both of these ways. Funding will
also depend on how health insurance and services are
structured. Health care systems are changing rapidly
in many countries. The changes that emerge will
probably continue or strengthen support for psychosocial
interventions with favorable research evidence regarding
their cost–benefit ratios.

Another factor that can have a broad impact on
health psychology’s future is education and training in
this discipline (Weinman, 1990). Undergraduate courses
in health psychology can reach students from various
nonpsychology fields, such as nursing, premed, and
sociology. Students who have a positive view of the
role and success of health psychology are likely to
promote its research, application, and interdisciplinary
contacts in the future. If these students go into medical
fields, they are likely to be receptive to learning
about psychosocial methods by which they and health
psychologists can promote the health of their patients.
These circumstances can enhance acceptance of health
psychologists in medical settings.

Developments in medicine will also influence the
future of health psychology (Weinman, 1990). New and
growing health problems generally require psychosocial
interventions to reduce people’s risk factors for these
illnesses and help patients and their families cope. This
can be seen clearly in the role of health psychology in
addressing these kinds of issues in AIDS and Alzheimer’s
disease, for instance. Health psychologists often have an
important role to play when new medical treatments are
found, particularly if these treatments are unpleasant or
if they may impair the patient’s quality of life.

As you can see, many factors can affect the future
of health psychology. The field has made dramatic and
rapid advances in its short history, but we still have
much to learn. Although we sometimes head in the
wrong direction, we can take heart and humor from the
following perspective:

Life is a test,
It is only a test.
If this were your actual life,
You would have been given better instructions!
(Anonymous, cited in Pattishall, 1989, p. 47)

SUMMARY

Major changes have occurred in health and health care
systems around the world in the past several decades.
People are living longer today and are more likely to
develop chronic illnesses that result from or are aggravated

by their longstanding health habits. Health psychology has
made major advances in helping to prevent or change
these behaviors. The field has also developed effective
psychosocial methods to help patients and their families

Chapter 15 / What’s Ahead for Health Psychology? 397

cope with chronic illnesses, and some of these methods
have been identified as evidence-based treatments. For
many interventions health psychologists use, research
has also demonstrated favorable cost–benefit ratios.
These successes have helped to promote the acceptance
of health psychologists in medical settings.

Career opportunities for health psychologists have
expanded rapidly, and the employment outlook for the
future continues to look good. The availability of training
in health psychology has grown at the undergraduate,
graduate, and postgraduate levels. This training is solidly
based in psychology and includes a substantial amount
of information on biopsychosocial processes in health
and illness and on medical terminology and procedures.

Health psychology has begun to address important
health issues and controversies that societies will need
to resolve in the future. These issues and controversies
include the impact of environmental factors on people’s
health and psychological status, patients’ quality of life,
and ethical decisions in medical care. Some ethical
questions relate to the use of technological advances
in health care and whether physicians should participate
in helping hopelessly ill patients end their lives. Health
psychology has also begun to focus its attention on
life-span, sociocultural, and gender issues in health.
Forces and events in society, medicine, and psychology
will affect the future role and direction of health
psychology.

KEY TERMS

cost–benefit ratio evidence-based treatments

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