Subset of group or team working towards own benefit o Intuition An innate

Subset of group or team working towards own benefit o

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Subset of group or team working towards own benefit o Intuition An innate belief about something without conscious consideration Feels like the right thing, prevents you from generating more options Comfortable
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o Escalation of commitment Staying with a decision even when it appears to be wrong Going down wrong path but refuse to cut loses even though you know it’s the wrong decision Committed to course of action o Risk propensity The extent to which a decision maker is willing to gamble when making a decision Very willing to make risky tendency Low risk propensity = low risk o Availability bias Tendency to judge the likelihood that something will happen by the ease with which you can call examples to mind Guided by the ease we remember things (limited on base of ease) o Ethics and decision making Individual ethics (personal beliefs about right and wrong behaviors) combine with organization’s ethics to create managerial ethics Components of managerial ethics Relationships of the firm to employee Employees to the firm The firm to other economic agents Revisit CHAPTER 4 Other Cognitive biases (prevent us from making good decisions) o Outcome bias: judging the decision based on the outcome rather than how exactly the decision was made in the moment EX: gambling- judging based on outcome o Clustering illusion: tendency to see patterns in random events EX: flip a coin- odds 50/50 o Ostrich effect: the decision to ignore dangerous or negative information by “burying” one’s head in the sand, like an ostrich Can’t be real, if you don’t see it EX: if an investor doesn’t look at the failing company they put money into o Advantages More information and knowledge More alternatives are likely to be generated More acceptance of the final decision is likely Enhanced communication Better decisions emerge o Disadvantages ? Didn’t copy them down Group and team decision making in organizations o Forms of group decision making Interacting groups or teams Are the common form of decision making groups which consists of an existing group or newly formed team interacting and then making a decision Companies use as basis Formal EX: management interacting with people
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Delphi groups Are sometimes used for developing a consensus of expert opinion from a panel of experts who individually contribute through a moderator Contrast; non-interacting group but still have group decision EX: studies where experimenters use data separately to make decision and share with group Nominal groups Are a structured technique designed to generate creative and innovative ideas through the individual contributions of alternatives that are winnowed down through a series of rank-ordering of the alternatives to reach a decision Built off brainstorming- create a list to fix problem except forcing everyone to participate Brainstorming Idea generating; criticism not allowed; free-wheeling is welcome;
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