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Chapter 3_comm3s03.docx

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Department
Commerce
Course
COMMERCE 3S03
Professor
Skowronski, Capretta, Dodds
Semester
Fall

Description
Chapter 3; Problem Solving and Ethics - Most problem solving frameworks are simple in form and concept, but the trap is assuming simple understanding can substitute for the discipline of execution. - Decision making is another area where true expertise involves knowing the traps that so frequently hinder sound judgement. Intuition - Represents a collection of what we’ve learned about the world, without knowing we actually learned it. - Intuition can be useful if we track what we have learned and under what circumstances that learning led to success so we can replicate it in the future. - Unconscious biases we bring to bear on situations commonly influence our intuition The Ladder of Inference - Inference is drawing a conclusion about something we don’t know based on things we do know. - At the very bottom of the ladder; we observe or experience what people say and do. - We adopt a belief about how the world works. Those adopted beliefs then influence how you see future events and the actions you take. - Solving problems - Fundamental attribution error: people tend to over-attribute behaviour to internal rather than external causes. When determining the cause of another persons behaviour, you are more likely to consider factors related to the person’s disposition than to the particular situation. - Self-Serving Bias: attribute personal successes to internal causes and personal failures to external causes. Judgement Error 1: Availability - This bias clouds our our judgement because things more readily available to us are likely to be interpreted as more frequent or important. Judgment Error 2: Representativeness - People pay more attention to descriptors they believe to be more representative of the person’s career choice than the key base rate information that leads to the better choice. - It is common to assume the probabilities of future outcomes must somehow increase or decrease to offset or “compensate for” earlier outcomes. - Hasty generalization fallacy: people often draw inappropriate general conclusions from specific cases because they do not realize their specific example is not necessarily so in all, or even most, cases. Judgement Error 3: Anchoring and Adjustment - We often provide estimates based on the initial starting estimate. - Different starting points lead to different end results. Judgement Error 4: Confirmation - People’s tendency to collect evidence that support rather than negates our intuition before deciding. Judgement Error 5: Overconfidence - Leads us to believe we possess some unique trait or ability that allows us to defy odds, whereas others simply don’t have such a trait. Judgement Error 6: Escalation of Commitment - People are likely to continue to invest additional resources in failing courses of action even though no foreseeable payoff is evident. Overcoming Judgment Biases The Biases are insidious and hardest to detect in our own behaviour. Nonetheless defences exist: - Confidence Estimates: one way to curb our overconfidence bias is to attach an estimate of confidence to beliefs held by ourselves and others. o Reliance on single point estimates is dangerous – they just don’t provide enough information. - Trial and Error Calibration: if you want to improve your success rate and reduce failure tomorrow, you must learn from your successes and failures today. o With every prediction, record the reasons why you’ve established the prediction. Then track the results. Study both success and failures – you need both confirming and disconfirming evidence. - Healthy Skepticism: approach all decisions and presented evidence with healthy skepticism. o Be prepared to challenge yourself and other experts and seek out negative or disconfirming evidence. The best defenses for decision biases are: 1. Do not jump to conclusions 2. Do not assume a relationship is a cause; record and test decision outcomes. 3. Do not base your conclusion only on your own experience. 4. Do not just look to support your case; look for non-supporting evidence. 5. Do not fall prey to overconfidence; get confidence estimates and ranges. Solving Problems Ethically and Effectively - There is a difference between good decisions and good outcomes. You can never fully control the outcomes of your decisions. - We will always be subject to bounded rationality. Our brains’ limitations constrain our thinking and reasoning ability, and, thus it is impossible to consider simultaneously all information relevant to any decision. Problem solving framework PADIL: problem, alternatives, decide, implement, learn Define and Structure the Problem: the temptation to jump to a solution is powerful and leads to “solving the wrong problem precisely” which can occur in several ways: - Picking the wrong stakeholders. Solving the wrong problem often occurs because the problem solver fails to include key players. - Framing the Problem too narrowly - Failure to think systematically - Failure to find the facts. No problem solving effort is complete without an understanding of the key stakeholders. 5 approaches for engaging or disengaging others in the problem solving process: Decide, Consult Individually, Consult Group, Facilitate Group, and Delegate to Group. There are 7 factors that must be addressed before deciding which approach is best: 1. Decision Significance 2. Importance of Commitment: importance of getting employee commitment to the decision 3. Leader’s Expertise: 4. Likelihood of Commitment: the likelihood that employees would commit themselves to a decision made by the manager alone. 5. Group Support: the degree to which employees support the unit or organization’s stake in the problem 6. Group Expertise: 7. Group Competence: When you start to examine problem framing, you will notice the tendency for people to generally frame problems in “either – or” terms. Black or white fallacy, assumes our choices are clear and limited to two, when in reality there may be many other choices. Thinking systematically: - A system is a perceived whole whose elements “hang together” because they continually affect each other over time and operate toward a common purpose. - All systems express what is known as systematic structure or a pattern of interrelationships among the system components. Represents the most powerful information because it focuses on the actual cause of the patterns of behaviour, which then explain the events. - Mental Modes are the prevailing assumptions, beliefs, and values that sustain current systems. Generate Creative Alternatives: - Generating multiple alternatives to problems results in higher quality solutions. - Left to our own thinking, we rarely arrive at truly creative and unique alternatives to problems. Our alternatives are usually awfully familiar and offer only slight improvements. - Good brainstorming sissions are more likely to result from a disciplined protocol. - Brainwriting involves participants generating ideas on their own, recording them but not sharing them with the group initially. They are then read aloud. o Diversify Participants o Use Metaphors and Analogies o Performance Standards an
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