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Business Skills
Decision Making & Problem solving
Negotiation• Planning • Evaluating Performance• Business strategy
• Motivating talent Developing &
communicating vision• Goal settingPersuasion
Persistence
Leadership Skills
How today’s competencies are taught
Reading/Lecture Experiential Exercise
Bazerman et al Group Project
Cognitive Factors Leading to Poor Decisions
Poor decisions
Noticing Information
Using Relevant Information
SharingInformation
Bounded Awareness
Poor Decisions
Bounded Awareness
Not Sharing information
Not SHARING Information limits awareness which leads to poor decisions
Consider Negotiation Exercise
• The best outcome could be that both parties got all the fruit that was available and saved $$ on the bid
Students Reflect on “information sharing” in Negotiation Exercise
• Describe what information you didn’t share AND explain how that led to a negative outcome
• OR
• Describe what information you shared AND explain how that led to a positive outcome
Bounded Awareness
Not sharing information
What members do in groups
•Discuss common information because it is agreed upon & rewarded with support•Do not discuss unique information they have •Do not seek out unique information that others may have
Poor Decision
Bounded Awareness
Not sharing information
Poor Decision
Information about all candidates given to all members
Information about excellent candidates given to some members, information about not so excellent candidate is given to all members
Quality of candidate chosen
Good Poor
• How will you ensure that information is shared in the group project?– common information– unique information
• What steps have you already taken to ensure that information is shared in the group project
Students plan on “information sharing” in Group Project
Poor Decision Quality
Bounded Awareness
Not using relevant information
Not using RELEVANT information limits awareness which affects the quality of decisions
Students Reflect on ‘using relevant information’ in Negotiation Exercise
• What relevant information did you not use/share in the negotiation discussion AND explain how that led to a negative outcome
• OR
• What relevant information did you use in the negotiation discussion AND explain how that led to a positive outcome
Bounded Awareness
Not using relevant information
Think of all the things that will make you happy
Control Group
How much of your happiness depends on team’s win?
A little A lot
Bounded Awareness
Not using relevant information
What percent of group’s performance was due to your ideas?
What percent of group’s performance was due to each member’s ideas?
Self serving bias More Less
• How will you ensure that RELEVANT information is used in the group project?
• What steps have you already taken to ensure that RELEVANT information is used in the group project?
Students plan on “using relevant information” in Group Project
Poor Decision Quality
Bounded Awareness
Not Noticing information
Not NOTICING information limits awareness which affects the quality of decisions
Amt of Information Noticed
Focus on certain types of information
Expectations about existing information
Gradualchanges inenvironment
What affects whether you notice information?
Limits Information Noticed
Expectations about information
Dangerous objects will appear 50% of time
Dangerous Objects will appear 1% of time
Error Rate 7% 30%
Limits Information Noticed
Focus on certain types of information
Those who were told to watch superimposed videos of teams playing at different times AND who were asked to count the number of passes between members wearing the same jerseys did not notice woman walking with open umbrella on court
Gradually increased estimates to exaggerated number
Suddenly increased estimates to exaggerated number
Likelihood of judging estimates as inflated
Less More
Gradual changes in environment
Limits Information Noticed
Students plan on how you will notice the information that is out of your
awareness during the Group Project
Give concrete examples of how you will ensure that you will notice information by enabling possibility of • change your focus• changing your expectations, • monitoring degree of changes in environment
• Need to locate information that is out of your awareness to improve decision quality
• Locate out of awareness information by – Perceiving it
• changing focus, changing expectations, environment type
– Using relevant bits – Sharing it with each other
Summary of Cognitive Factors that Can Inhibit your Decision Quality
Bias in judgments
Motivational biases to our judgments
Attachment
Bias in Judgment
Attachment
Plaintiffs (in an accident) predicted that they would receive larger awards from the judge than did defendants
How evidence supports the link
Bias in Judgment
Attachment Given a pay rate of $25 for 7 hrs, those who worked 10 hrs thought they should be paid $35 for 10 hrs of work (equal hourly pay) whereas those who worked 7 hrs thought the 10 hr workers should be paid $30 (equal total pay)
How evidence supports the link
Bias in Judgment
Attachment
Sellers’ auditors were more biased than buyers’ auditors despite an incentive for accuracy
How evidence supports the link
Theoretical Understanding via lecture on Bazerman et al Readings
• Cognitive & motivational factors
• Practical Application of knowledge gained by doing/planning for the Group Project
What’s next..
• How did your group fail/succeed in locating information out of awareness in terms of– Noticing it
• focus, expectations, environmental changes
– Using relevant bits– Sharing it
Potential Exam Questions onCOGNTIVE biases in Group Project
• How did attachment play a role in biasing group members’ judgments?OR
• How might you prevent the effects of attachment on judgments in your group project
Potential Exam Questions on MOTIVATIONAL biases in Group Project