General Management



|[pic] |MOR 560 (Section 16722R) |

| |Managerial Judgment and Decision-Making |

| |Popovich 102, Wed, 6:00 – 10:00PM |

| |Summer 2014 |

Terance J. Wolfe, Ph.D.

Email: terancew@marshall.usc.edu

Office: Bridge 307-F

Phone/Fax: (tel): 213.740.0765; (fax): 213.740.3582

Office Hours: by appointment

Course Overview

The more things change, the more they remain the same. French Proverb

No problem can be solved within the same consciousness that created it. Einstein

The observer affects the observed. Heisenberg

To expect the unexpected shows a thoroughly modern intellect. Oscar Wilde

A problem well-stated (framed) is a problem half-solved. John Dewey

Aside from breathing, there is probably no more ubiquitous human activity than decision-making. From the everyday and routine (what to eat for breakfast, following your everyday route to school) to the unusual and unique (how to circumvent freeway traffic – good luck!, purchasing a house, getting married, creating/changing strategic direction), decision-making is omnipresent. As humans, we are literally making thousands of decisions on a daily basis. Some are consequential, many are not. Given the pervasiveness of decision-making and its significance in our personal and professional lives, it is important to better understand decision-making as a process, and to better understand oneself as a decision-maker.

The purpose of this course is to enhance your ability to make effective decisions. We will do so by examining contemporary thinking derived from the fields of decision theory, cognitive science, behavioral finance and economics, and organizational behavior. The course is very applied in its orientation. It is structured by themes and applications.

The four major organizing themes are:

1) The person: attention will be given to who you are as a decision-maker. What factors and experiences shape your approach to decisions?

2) The problem: attention will be given to how you structure problems. How do you formulate and construct problems, and how does this process of formulation and construction fundamentally shape and define the probable solution?

3) The process: attention will be given to a variety of tools and methods for decision-making. Which tools/methods/approaches are best suited for different types of problems?

4) The pitfalls: attention will be given to the traps and pitfalls inherent in decision-making. What are the cognitive biases and limitations that interfere with our ability to make the most effective decisions?

5) The applications include:

1) Individual decision-making: attention will be given to the art and science of individual decision-making. How can we leverage self-knowledge and self-awareness, and analytical skills and techniques to enhance personal decision effectiveness?

2) Team decision-making: attention will be given to the process of team decision-making. How does team decision-making differ from that of individuals? What factors contribute to dysfunctional team decision processes, and what contributes to effective team decision process and outcomes?

Objectives. Given the above, the objectives of this course are to:

• Develop a clearer understanding of yourself as a decision-maker and to identify opportunities for personal change and development

• Enhance your capability in effective problem-formulation

• Demonstrate the way in which problem formulation fundamentally shapes, defines and, ultimately, constrains the range of possible feasible solutions

• Increase awareness, knowledge and competence in the use of a variety of decision tools, methods and approaches

• Understand pitfalls and traps that can undermine effective decision-making

• Apply concepts and methods of judgment and decision-making to individual and team decisions

Course Format

The course is designed around a series of lecturettes and applied exercises – be they decision cases, judgment situations or decision-making exercises. In a given class session, you can expect any combination of lecture, class discussion, case analysis or experiential activity and/or video.

Each class session requires advance preparation and active participation. You are expected to be fully prepared for each class, and to actively participate in class discussions. Some activities may require that you meet with others outside of class as part of your pre-class preparation.

Keys to Class Success

There are four keys to getting the most out of this course:

• Do the readings. Grasp the key concepts of judgment and decision-making. Apply course concepts in your preparation for, and participation in, each class, case or activity. This will enhance your learning and, ultimately, your individual and team decision-making effectiveness.

• Prepare thoroughly. You will do better in each class session if you read the material and cases carefully and prepare thoroughly for each discussion.

• Design personal learning experiments. Think about your own judgment and decision style and process, as well as your sense of your personal decision-making effectiveness. What works for you? What doesn’t? Where do you get yourself in trouble in your personal decision-making process? Design experiments to modify your style to enhance your effectiveness. These will be incorporated into your personal self-assessment and developmental action plan. (See description on page 4).

• Reflect on your decision-making experiences. Draw out the principles that explain your choices and how those are likely to apply (or not) in future decisions.

Achieving the objectives requires disciplined preparation and application of the course concepts. The bulk of the work is devoted to preparing for, conducting, and debriefing a variety of decisions and situations.

Course Materials

Texts (required):

Bazerman, M.H. & Moore, D.A. (2009, 7th ed.). Judgment In Managerial Decision Making. New York: Wiley (ISBN 0471684309). [abbreviated “B” below] This is a good introduction to the psychology of managerial judgment and decision making.

Russo, J.E., & Schoemaker, P.J.H. (2002). Winning Decisions: Getting It Right the First Time. New York: Doubleday (ISBN 0749922850, pbk.). [abbreviated R&S below] The best “how to” make managerial decisions book out there.

Self-Assessment Instruments. A fee (payable to me) will be required for some instruments

Course Reader. Articles and cases available through USC bookstore

Summary of Course Assignments

Scores and grades for this course are assigned based on completion of, and relative performance on, the following:

1. Preparation & Participation 15%

2. Personal Assessment: Self as Decision Maker – June 25 25%

3. Problem-Solving a Personal / Professional Problem – July 9 15%

4. Case Analysis 20%

5. Assessment of team performance (including peer evaluations) – August 6 25%

TOTAL 100%

Details are described in the following pages; due dates are summarized in the Schedule of Sessions (pages 7 – 9).

Course Assignments and Grading

NOTE: All written requirements MUST BE SUBMITTED AS A HARD COPY AT THE BEGINNING OF CLASS on the ASSIGNED due date

1. Class Preparation and Participation (15%)

Preparation involves completing the assigned readings and preparing assigned cases.

Self Assessment and Goal Statement – due Wednesday, May 28, start of class

Complete a goal statement (< 1 page double-spaced). Include a frank assessment of your decision-making strengths and weaknesses (1 paragraph) and a declaration of a personal goal – what you want to get out of the course (1 paragraph). In addition, identify the 3 major difficulties encountered in your past decision-making, and 3 things you would most like to improve about your decision-making.

Participation in class discussions involves active participation that contributes to the class. Active participation means asking questions, answering questions, making observations, commenting on other students’ comments, or challenging a view. Making a contribution means your comments actually move discussion forward.

2. Learning Experiments and Personal Self-Assessment (25%) – due June 25

Successful C-level executives consistently respond that the single most important activity contributing to their overall effectiveness is the development of self-insight, and the translation of that into their management and leadership practice. This course represents an opportunity for you to do just that!

Personal Self-Assessment. You will receive a cross-section of individualized feedback through a variety of self-assessment instruments. Each instrument is deemed useful in better understanding yourself broadly, but as a decision-maker, specifically. Together, they represent an invaluable tool for personal reflection, building self-awareness and understanding, and advancing your personal development. Assessments will include: Decision Style Inventory, Learning Style Inventory, McKinsey Decision-Making Survey, GIAL, FIRO-B, and Rotter Locus of Control.

Learning Experiments. Each participant will design and conduct at least three (3) personal learning experiments intended to improve or enhance your judgment and decision-making skills and/or style. A learning experiment is derived from reflection upon an “as is” condition, where an “as is” condition is linked to “concrete experience” (to be defined and illustrated in class). A learning experiment is based upon an “if – then” hypothesis about behavior and its consequences that is derived from an “as is” condition. It might take the following form: “If I try new behavior (style) X, then outcome Y will happen”. Alternatively, “If I choose alternative A instead of alternative B, then Z will happen”. Your experiment will be a test of the validity of the hypothesis. The setting for a learning experiment is any situation or activity that presents you with a personally meaningful decision-making/judgment opportunity. It could be personal, professional, in-class or outside of class.

For each experiment, specify the following:

• The purpose or objective of the experiment

• Your hypothesis and its rationale

• The action or behavior undertaken

• The relevance or personal meaning of the experiment

• An assessment of your effectiveness in executing the experiment

• A statement of the outcome of the experiment and your satisfaction with the result

• A statement as to how, if at all, your first learning experiment informed the design and execution of your second learning experiment

• A statement as to how, if at all, your second learning experiment informed the design and execution of your third learning experiment

The Deliverable: An integrated assessment of self as decision-maker with a developmental action plan (6-8 pages). Briefly address each of the following:

PART A – Self-Assessment Instrument Feedback

• Reflect on your self-assessment feedback. Identify and discuss any patterns, relationships, connections.

• How would you characterize yourself as a decision-maker given this feedback?

• What do you now see as your decision-making strengths? Shortcomings?

• How might your style interfere with achieving the outcomes you desire?

• How do you rate your personal effectiveness in making managerial judgments and decisions?

PART B – Learning Experiments

• Restate (modifying as appropriate) the learning goals you submitted at the second class session.

• Briefly describe each of your three judgment and decision-making learning experiments in terms of its goal, hypothesis, rationale, design, implementation, and outcome. Include a statement of your perception of each experiment’s effectiveness.

• What did you learn through each experiment?

• How, if at all, have your experiments affected your decision-making style and skills?

PART C – Personal Development Plan

• Given your self-identified strengths and shortcomings as a decision-maker as well as the personal insights/understandings achieved through the self-assessments, and taking into account the experiences and the outcomes of your personal learning experiments, what new learning goal(s) in relation to judgment and decision-making can you formulate for yourself?

• Develop a personal development action plan to address your identified areas for development. Your development plan should be specific and actionable; that is, it should identify specific activities and/or behaviors, milestones, a timeline, and some characterization of how you would assess the outcomes of your plan.

3. Problem-Solving a Personal / Professional Problem (15%) – due July 9

Identify a meaningful current personal or professional problem that you are facing. Utilizing appropriate course concepts and tools (including the 4-Ps – person, problem, process, pitfalls), frame the problem, gather and analyze appropriate data, identify possible pitfalls and how they can be addressed, generate and evaluate possible alternatives, and formulate a solution/decision. Be sure to appropriately identify relevant tools and concepts, and provide bibliographic references.

4. Case Analysis (20%) – due start of class of assigned case

Each student will write up a case analysis for one of the assigned cases. Thought questions will be provided for each case. Cases will be evaluated based upon the selection and application of appropriate tools and concepts, not on their responses to the thought questions, as well as the quality of the rationale developed to support your approach, and decision and action recommendations.

5. Team Decision Assessment (25%) – due August 6

A group project and team paper is required. The target length for the paper is ten-to-twelve pages of 12 point, double-spaced, paginated text excluding bibliography and appendices. The optimal group size will be based on the number of students enrolled.

Team Project Topic. The final term project should entail a reflective account of your team’s decision-making process as it emerged (evolved) through the three team decision-making exercises: consensus, devil’s advocate, dialectical inquiry.

The paper should address relevant team decision concepts and processes introduced either through classroom lectures and discussions, or through the assigned readings on team decision processes. How do various concepts inform your (a) reflections of your own team’s decision processes, and (b) understanding of team decision making?

You may find it useful to include clips from your three different team case discussions, as well as references to the qualtrics data. Total class and team responses to ALL questions will be available in spreadsheets posted to Blackboard.

ALL written materials must be submitted based on following:

• 12 point Times Roman font

• 1” margins all around

• Pages numbered

Academic Integrity Policy

The Marshall School is committed to upholding the University’s Academic Integrity code as detailed in the SCampus Guide. It is the policy of the Marshall School to report all violations of the code. Any serious violation or pattern of violations of the Academic Integrity Code will result in the student’s expulsion from the degree program.

It is particularly important that you are aware of and avoid plagiarism, cheating on exams, fabricating data for a project, submitting a paper to more than one professor, or submitting a paper authored by anyone other than yourself. If you have doubts about any of these practices, confer with a faculty member.

Resources on academic dishonesty can be found on the Student Judicial Affairs Web site (.). The “Guide to Avoiding Plagiarism” addresses issues of paraphrasing, quotations, and citation in written assignments, drawing heavily upon materials used in the university’s writing program. “Understanding and avoiding academic dishonesty” addresses more general issues of academic integrity, including guidelines for adhering to standards concerning examinations and unauthorized collaboration. The “2005-2006 SCampus” () contains the university’s student conduct code.

Students with Disabilities

Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. – 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.

Rank order each of the members of your group INCLUDING yourself on each of the items below (1 is best, 2 is next best, etc.). The Peer Evaluation counts towards each student’s final grade. Use the back of this form for required comments as per the guidance at the bottom of this page.

Please list each of your group members below in alphabetical order by last name. Be sure to include yourself.

ALPHABETICAL by LAST NAME, then FIRST

Group Members: A. ________________________________________________

B. ________________________________________________

C. ________________________________________________

D. ________________________________________________

E. ________________________________________________

F. ________________________________________________

|Rating Criterion / Group Member |A |B |C |D |E |F |

|1. Quality of contribution to group discussions | | | | | | |

|2. Quality of contribution to writing the assignment | | | | | | |

|3. Quality of contribution to organizing the assignment | | | | | | |

|4. Quality of initiative when something needed to get done. | | | | | | |

|5. Reliability in completing assigned responsibilities | | | | | | |

|6. Amount of effort put forth. | | | | | | |

|7. Commitment to the group | | | | | | |

|8. Leadership, motivation provided to the group. | | | | | | |

|9. Emphasis on getting the task done. | | | | | | |

|10. Emphasis on cooperation and working well with others. | | | | | | |

|11. Would want to work with this group member again. | | | | | | |

|TOTAL | | | | | | |

|Assign an alphabetical grade to each member of the group based on your | | | | | | |

|OVERALL impression of her/his contribution to the group’s performance. You | | | | | | |

|may assign a group member any grade from 0 to A+. However, you cannot assign| | | | | | |

|A’s to more than 60% of your total group members. | | | | | | |

|A 5-person group cannot have more than three A’s, 6 persons = no more than | | | | | | |

|four A’s. | | | | | | |

|Failure on the part of each team member to observe this constraint will | | | | | | |

|result in each team member receiving a B. | | | | | | |

On the following page, provide at least three directly observable behaviors that represent what you believe each team member did well, AND at least three behaviors that you observed that represent areas for improvement/development for each team member. This is NOT about personalities, but rather it is about those behaviors that are in service and supportive of successful team work and those behaviors that are not.

|A:___________________ |

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|Did Well (behaviors): |

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|Area for improvement/development (behaviors): |

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|B:___________________ |

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|Did Well (behaviors): |

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|Area for improvement/development (behaviors): |

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|C:___________________ |

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|Did Well (behaviors): |

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|Area for improvement/development (behaviors): |

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|D:___________________ |

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|Did Well (behaviors): |

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|Area for improvement/development (behaviors): |

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|E:___________________ |

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|Did Well (behaviors): |

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|Area for improvement/development (behaviors): |

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|F:___________________ |

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|Did Well (behaviors): |

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|Area for improvement/development (behaviors): |

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MOR 560 – Managerial Judgment and Decision-Making, Schedule of Sessions, Readings and Deliverables, Summer ‘14

|Week |Date |Topic / Assignment |Exercise/Deliverable |

|1 |May 28 |Introduction / Course Overview | |

| | |Garbuio, Lovallo, Viguerie: How Companies Make Good Decisions (McKinsey) |See links on last page for these three articles – Come prepared to discuss |

| | |Goel: How Google Decides to Pull the Plug (NY Times) |Student Info Sheet (Qualtrics Survey) |

| | |Gil, Start-Up Speed, Think Quarterly |One page Self-Assessment and Goal Statement due |

| | | | |

| | |Setting the Stage |Sheena Iyengar, The Art of Choosing |

| | |Bazerman, C1: Introduction to Managerial Decision-Making | |

| | |R&S, Introduction: Decision-Making in the Real World |Case 0: Dave Armstrong – A (not to be used for case write-up) |

| | |R&S, C1: Setting the Course | |

|2 |June 4 |The Person: Who Am I as a Decision-Maker? | |

| | |B, C3: Bounded Awareness |Concept and Method in Self Assessments |

| | |B, C5: Motivational and Emotional Influences | |

| | |Snowden & Boone: A Leader’s Framework for Decision-Making (HBR) |Self-Assessment Feedback and Interpretation – I: |

| | | |FIRO – B, Decision Styles Inventory, Learning Styles |

|3 |June 11 |Simon, et al: Making Management Decisions: The Role of Intuition and Emotion (See ABI/Inform |Self-Assessment Feedback and Interpretation – II |

| | |database) |General Incongruity Adaptation Level (GIAL) |

| | |Campbell & Whitehead: How to Test Your Decision-Making Instincts (McKinsey) See links on last |Rotter Locus of Control |

| | |page | |

| | |R&S, C8: Personal Challenges of Learning | |

| | | |McKinsey Decision-Making Survey |

| | | | |

|4 |June 18 |The Problem: What is the Problem? | |

| | |R&S, C2: The Power of Frames |Framing Lecture / Discussion |

| | |R&S, C3: Creating Winning Frames | |

| | |R&S, Interlude A: Improving Your Options | |

| | |B, C4: Framing and the Reversal of Preferences | |

|5 |June 25 |Garvin & Roberto: What You Don’t Know About Making Decisions (HBR) |Case 1: Basic Industries |

| | |Wheeler & Pillemer: Moral Decision-Making: Reason, Emotion and Luck (HBS) | |

| | | |*** Personal Self-Assessment due *** |

|Week |Date |Topic / Assignment |Exercise/Deliverable |

|6 |July 2 |The Process: How Do I Decide? | |

| | |Simon, Decision-Making and Problem-Solving (See links, p 10) |A Review of Techniques |

| | | |Case 2: Guest-Tek Interactive |

|7 |July 9 |The Pitfalls: How Do I Get Myself in Trouble? | |

| | |B, C2: Common Biases |Decision Exercises (Green/Plous) |

| | |Hammond, Keeney & Raiffa: The Hidden Traps in Decision-Making (HBR) | |

| | |R&S, C4: Avoiding Distortion and Bias |*** Personal Problem-Solving Paper due *** |

| | |R&S, C5: Intelligence in the Face of Uncertainty | |

| | |R&S, Interlude B: Technologies for Aiding Decisions | |

|8 |July 16 |Teams / Participation: What’s Different About Teams? | |

| | |R&S, C7: Managing Group Decisions |Lecturette / Discussion: Team Decision-Making |

| | |Frisch, When Teams Can’t Decide (HBR) |Team Decision Exercise A – Growing Pains (not for individual write-up) |

| | |Brett, et al, Managing Multicultural Teams (HBR) | |

|9 |July 23 |Eisenhardt, et al, How Management Teams Can Have a Good Fight (HBR) |Team Decision Exercise B – When Key Employees Clash – NOTE: this is NOT the same case referred |

| | | |to in the instructions for Decision-Making Exercise C (not for individual write-up) |

| | | |Team Decision Exercise C – The Case of the Unhealthy Hospital (not for individual write-up) |

|10 |July 30 |R&S, C6: Choosing: A Pyramid of Approaches |Team Decision Exercise Debrief |

| | |R&S, Interlude C: Implementing Your Chosen Option | |

| | |B, C6: The Escalation of Commitment |Case 3: TerraCog Global Positioning Systems |

| |Aug 6 |Bringing it All Together – Recap and Review | |

| | |B, C11: Improving Decision-Making |*** Individual Papers on Team Decision Processes Due *** |

| | |R&S, C9: Learning in Organizations | |

| | |R&S, C10: Bringing It All Home: The Decisions of | |

| | |R&S, Epilogue: Learning into Action | |

ARTICLE LINKS FOR ASSIGNED READINGS

Garbuio, Lovallo & Viguerie, How Companies Make Good Decisions (McKinsey)



Goel, How Google Decides to Pull the Plug, NY Times



Gil, Start-Up Speed, Think Quarterly



Simon, Making Management Decisions



Campbell & Whitehead, How to Test Your Decision-Making Instincts (McKinsey)



Cole, Economics Could Force Luck’s Hand (Yahoo Sports)



McKinsey Decision-Making Survey (McKinsey)



Simon, et al: Decision-Making and Problem-Solving



Lovallo & Sibony, Distortions and Deceptions in Strategic Decisions (McKinsey)



NOT REQUIRED (but may be interesting)

Lovallo & Sibony, The Case for Behavioral Strategy (McKinsey)

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