Business Skills Decision Making Problem solving Negotiation Planning

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

How today’s competencies are taught Reading/Lecture Experiential Exercise Bazerman et al Group Project

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

Not SHARING Information limits awareness which leads to poor decisions Not Sharing information Bounded Awareness 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

Not sharing information Bounded Awareness Poor Decision 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

Not sharing information Bounded Awareness Information about all candidates given to all members Quality of candidate chosen Good Poor Decision Information about excellent candidates given to some members, information about not so excellent candidate is given to all members Poor

Students plan on “information sharing” in Group Project • 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

Not using RELEVANT information limits awareness which affects the quality of decisions Not using relevant information Bounded Awareness Poor Decision Quality

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

Not using relevant information Bounded Awareness Think of all the Control things that will Group make you happy How much of your happiness depends on team’s win? A little A lot

Not using relevant information Bounded Awareness What percent of group’s performance was due to your ideas? Self serving bias More What percent of group’s performance was due to each member’s ideas? Less

Students plan on “using relevant information” in Group Project • 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?

Not NOTICING information limits awareness which affects the quality of decisions Noticing information Bounded Awareness Poor Decision Quality

What affects whether you notice information? Focus on certain types of information Gradual changes in environment Expectations about existing information Amt of Information Noticed

Expectations about information Error Rate Limits Information Noticed Dangerous objects will appear 50% of time Dangerous Objects will appear 1% of time 7% 30%

Focus on certain types of information Limits Information Noticed 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 notice woman walking with open umbrella on court

Limits Information Noticed Gradual changes in environment Likelihood of judging estimates as inflated Gradually increased estimates to exaggerated number Suddenly increased estimates to exaggerated number Less More

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

Summary of Cognitive Factors that Can Inhibit your Decision Quality • 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

Motivational biases to our judgments Attachment Bias in judgments

How evidence supports the link Attachment Bias in Judgment Plaintiffs (in an accident) predicted that they would receive larger awards from the judge than did defendants

How evidence supports the link Attachment Bias in Judgment 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 Attachment Sellers’ auditors were more biased than buyers’ auditors despite an incentive for accuracy Bias in Judgment

What’s next. . ü Theoretical Understanding via lecture on Bazerman et al Readings • Cognitive & motivational factors • Practical Application of knowledge gained by doing/planning for the Group Project

Potential Exam Questions on COGNTIVE biases in Group Project • 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 MOTIVATIONAL 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