Lecture Three: What To do When Nobody Knows Anything [September 23, 2013]
The Business Podcast (February 24, 2013 Episode)
Head of NBC fired through the press because they are afraid he will take his people and
projects with him
Quality and outcome is unclear so reputation and relationships are important – status,
Kim kept saying Ron Howard is an A-list director and yet he still can’t get funding.
People take this Hostile World Perspective between art and commerce. Things are
getting worse and just being about money is the story that is always told in the industry.
Readings: Bunting, Glenn F. 2007. “$78 Million of Red Ink?” April 15, 2007, The Los Angeles
You have this “great” idea, but no one really knows until you actually shoot it, and see it.
You put all the money to make it but it ends up really bad. For example, Sahara shot a
crash scene for 2 million dollars but didn’t use it
There’s a problem of uncertainty. Spend money on filming before you will know whether
it’ll work, then when you see it you have either a positive or negative reaction. The
decision comes in whether to use the scene or not
Readings: Bielby, William T. and Denise D. Bielby. 1994. ‘“All Hits Are Flukes’: Institutionalized
Decision Making and the Rhetoric of Network Prime-Time Program Development." American
Journal of Sociology, 99(5):1287-1313.
Frame theory is “framing” a reality when it’s actually complicated. A way to simply reality
is to apply a frame. What is the manner with which we understand this event?
Frame it based on the reputation of who made it and imitation
o i.e. American Idol then the Voice, Scary Movie 1-6, Paranormal Activity. We base
it on movies that have already done well
Genre is where people will understand what it is
Need success with advertisers, which is why we use frames. Need to please
bosses/advertisers, not consumers
80% of things that get made lose money. Because of uncertainties, most decisions in the
industry are based on fear; how do I not lose a lot of money?
All hits are flukes: Methods to get a show on the air is through genre, imitation and
reputation – frame
i.e. NBC wanted Smash to be successful which they thought it would be because Glee
was successful but Smash was unsuccessful
i.e. Cop Rock – cop show + musical – not a bad idea, but turned out horrible
How to make Decisions under Uncertainty Organizational Decoupling
A way that organizations maintain legitimacy. What you say you do and what you actually
do and the reasons why you make your decisions are being decoupled in an organization
Validate decisions through focus group testing, market data, audience screening, etc.
Aren’t actually used to make decisions. i.e. Passing out comment cards for a testing of a
movie stating what was liked and disliked throughout the movie; found the comment card
showing comments that confirmed the studio executive’s opinions. Need to validate the
solution of the executive.
The Garbage Can Model
Under uncertainty, people go haywire and don’t act rationally (organizational anarchy)
Organizational anarchy is where you argue about things that don’t matter then you make
decisions about the things that manner in a short amount of time. This happens in
organizations with a lot of people who are responsible for a task and have to make a
Problems Solutions leads to Solutions ▯ Problems (people have solutions but not a
problem to attach it too)
During the meeting the problems and solutions gets tossed into the garbage
Can’t make a rational decision when the outcome is unknown. Have many people who all
have different interests, values and tasks.
How do we get something like Sahara? A big colossal mistake? – Series of small bad
decision not one big decision
Sunk cost fallacy – already