Business Skills Decision Making & Problem solving Negotiation Planning Evaluating Performance Business strategy Motivating talent Developing & communicating vision Goal setting Persuasion Persistence Leadership Skills

How today’s competencies are taught Reading/LectureExperiential Exercise Bazerman et alGroup Project

Cognitive Factors Leading to Poor Decisions Poor decisions Noticing Information Using Relevant Information Sharing Information 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 GoodPoor

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 littleA 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 biasMoreLess

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 Gradual changes in environment 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 Rate7%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 LessMore 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 on COGNTIVE 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