MNO 2705 INDIVIDUAL ASSESSMENT
MNO 2705 INDIVIDUAL ASSESSMENT
wrong
Moral disengagement
Moral knowledge is not always translated into moral
actions: there are inconsistencies between people’s desire
to be ethical and their actual unethical conduct and
decisions
Intuition
• Make decisions on the basis of
experience, feelings, and
accumulated judgment.
Prospect Theory
Outcomes as gains and losses
• Decision-makers see outcomes as gains
and losses relative to a reference point
Diminishing sensitivity
• The impact of an additional gain or loss
diminishes as the value of the original sum
increases (S shape)
Loss aversion
• The displeasure (disutility) of losing is much
greater than the pleasure (utility) of gaining
the same amount
Certainty effect
• The tendency to overvalue options with
certain outcomes compared to those with
merely probable outcomes (even when the
expected values are similar or worse)
Framing/loss aversion
• Gain vs. loss framing
• People make different choices depending on whether a
situation is characterized as a gain or a loss
risk averse when outcomes are framed as gains.
risk seeking when outcomes are framed as losses.
Endowment effect
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• The tendency to assign a higher value to items or
possessions they
already own compared to the value they would place on
obtaining an
item they do not own.
• Ascribe more value to things just because they “own”
them.
• Why?
o Loss aversion
o Mere ownership effect (emotional attachment with what they
own)
Availability/recallability bias
• The tendency to weigh judgments toward immediately
available
examples and/or information
• Highly imaginable and vivid information/examples
(more recent,
more salient) have a disproportionate effect on
judgments and
decisions.
• Assess risks by how readily examples come to mind
▪ Perceived risk of terrorism was high after 9/11
▪ Perceived frequency of homicides tends to be higher than that of
suicide (examples
of homicides are more available than suicide)
Anchoring bias
• People tend to rely heavily on the first piece of
information offered
(the “anchor”), even when the information is irrelevant or
arbitrary.
• The anchor is salient and easily accessible in memory
(availability
heuristic)
Confirmation bias
• The tendency to search for, recall, and favor information that
confirms their
preexisting beliefs, whereas to downplay or avoid information that
disconfirms
prior views or positions.
• Also, the tendency to interpret information as supportive of
existing views.
Overconfidence
• Tendency to be overconfident about our accuracy of
estimate or
forecast, although we are not very good.
Group polarization
• Members of a deliberating group end up
adopting a more extreme version of the
position they tended before the group
deliberation.
• Group deliberation produces systematic
“risky shift” or “cautious shift,” depending
on whether members are initially disposed
towards risk or caution.
Groupthink
• Groupthink occurs when the desire for consensus takes
precedence over
the quality of the decision process and quality of decision
• The zeal for unanimity in groups with high cohesiveness may
override realistic appraisal of alternative actions
• Groupthink causes deterioration of judgment and rationality in
groups
Negotiation as decision making
• Negotiation is “a form of decision making in which two
or more parties talk with one another in an effort to
resolve their opposing interests.” (Pruitt, 1981)
• Negotiated decision making occurs when:
▪ Multiple (2 or more) parties are involved in decision
making
▪ Interests of multiple parties are not completely aligned
Negotiation basics
Assess target and reservation points
Assess/develop alternatives
Alternatives are important because they give negotiators the
power to walk away when the emerging deal is not attractive
anymore.
Distributive negotiation
• The goals of one party are in fundamental and direct conflict
with the goals of the other party
• One party’s gain is at the other party’s expense: win-lose
situation
• Negotiation parties compete to claim more values
• But, negotiation ≠ competition
• Negotiation can involve both cooperation and competition
Integrative negotiation
Look for win-win solutions through open discussion & mutual
exploration
• Work on surfacing each other’s interests and needs (move from
position to interests)
• Collaborate to “create value” (expanding the pie)
• Turn single-issue to multi-issue negotiations & invent options to
satisfy all parties’ interests (e.g., logrolling)
• Positions: The specific options each person wants
• Interests: Why they want it; the underlying goals, needs, and
concerns
• Bring more issues into the negotiation
• Negotiate by package, not by a single issue
• Create opportunities for tradeoffs based on interests
❑ Logroll: agree to trade off among multiple issues so that each party
achieves a highly preferred outcome for each issue
Integrative negotiation
Collaborative mindset &
communication
Tight coupling
Subcomponents of a process
are interlinked with little room
for error or time for
adjustment. There is very little
slack or buffer among different
components of the system.
Normal accidents
• A normal accident happen when unexpected
interaction of two or more errors (because of
interactive complexity) causes a cascade of
failures (because of tight coupling).
• Normal ≠ frequent/common
• Normal means rare but inevitable, the system’s
characteristics make it inherently vulnerable to
such accidents
• Individual decision errors × complex system =
failure/accident
What is an “error?”
• Unintentional deviation from truth or accuracy
o Intentional deviation = violation
• Bound to occur in complex systems
• Errors are ubiquitous and inevitable, but they do
NOT necessarily cause an accident or
disaster/system meltdown
Psychological safety
“Shared belief that the team is safe for interpersonal
risk-taking”
(Edmondson, 1999)
Interpersonal risk-taking behaviors: admitting an error,
expressing a different point of view, asking for help
eg of everest
Individual level
Cognitive biases
• Decision biases impaired the judgment and choices
that individuals
made
• Evidence of at least three biases in this case:
• Overconfidence bias: tendency to be overconfident with regard
to their judgments and choices
• Sunk cost effect: tendency to escalate commitment to a course
of action in which they have made substantial prior investment of
resources
• Recency effect: tendency to over-emphasize information from
recent events when making decisions and judgments
Lessons for decision making
• Use a multi-level framework for examining an
organizational decision-making failure
o There’s hardly one key factor that caused a catastrophe
o The effects of multiple errors in complex systems can be
compounded and interact in unexpected ways to cause tragic
events
• A climate of psychological safety is essential for open
and collaborative decision making. A lack thereof inhibits
constructive dissent
• Leaders should set the tone for collaborative decision
making; leaders should learn from errors and be aware
of own tendency to err (don’t be overconfident!)
Needs
Things your partner is trying
to achieve
Insights
Your partner’s feelings and motivation underlying
his/her needs, which can be leveraged in your
design
Why prototype?
The cost of failure is the lowest during earlier
phases of the project
Project risk reduces as the number of build & test
cycles increase
Test your solution
• Testing is your chance to gather more feedback, refine
solutions, and continue to learn about your users.
• Testing is iterative, and it should inform the next
iteration of prototyping
Link DT to Decision-Making
• How can the “design thinking” approach facilitate more
effective decision making?
o DT encourages a mindset of experimentation and iteration,
which may help innovative, “outside-of-box” alternatives to
emerge
o By empathizing with people who will be impacted by a
decision, decision makers gain a deeper understanding of the
problem and potential outcomes of their decision
o DT often leverages cross-function teamwork; emphasizes
expansive, divergent thinking in a collaborative setting