HRM 4495 Chapter Notes -Transformational Leadership, Modus Operandi, Nominal Group Technique
2 Apr 2014
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Ch 7 team decision making- pitfalls and solutions: decision making is an integrated sequence of activities. A spread disease in us, two plans were suggested. Plan a: if adopted, 200 people will be saved. Plan b: if adopted, 1/3 probability that all people will be saved, but 2/3 probability that no one will be saved. Many people chose plan a, then another 2 plan is suggested. Plan c: if adopted, 400 people will die. Plan d: if adopted, 1/3 probability that no one will die, and 2/3 probability all people will die. When the identical problem with the same options worded differently, more people will chose the risky plan d. *this inconsistency is a preference reversal and reveals the framing effect. Almost any decision can be reframed as a gain or a loss relative to sth. Decision makers" reference points for defining gain and loss are often arbitrary.
