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Judgment in Managerial Decision Making
... Consistent with prior literature (Abdullah et al., 2016), we evaluate innovative behavior as both the enhancement of a manager's accuracy and the number of potentially successful innovative ideas. When organizational members are asked to select ideas for further exploration and development, research has shown that decision makers tend to rely on intuition and heuristics, paired with their general knowledge of the subject area of an innovative idea, technology and target market, despite these being known to lead to predictable errors (Bazerman, 2006). Further, to reduce uncertainty and risk in innovationrelated decisions, many organizations favor ideas that are only incrementally different from those that have worked in the past (Boudreau et al., 2016), leading to ineffective choices (Tversky and Kahneman, 1974). ...
... Equally, such theories force the decision maker to answer pertinent questions about feasible alternatives and relevant values that interplay with the potential consequences of the decision to be taken; yet, these questions cannot be satisfactorily answered under the given uncertainties, leaving organizational members in a substantial predicament (Lipshitz and Strauss, 1997). As such, approaches grounded in deductive or inductive reasoning ultimately favor searching locally for what is believed to be recurring patterns in low or high-utility options, making managers less inclined to accept less-familiar ideas (Gavetti and Levinthal, 2000;Bazerman, 2006). This can manifest as well-known framing effectsa process of selective influence on the meanings that an organizational member attributes to words or phrases, ultimately determining behavior (Kahneman and Tversky, 1982). ...
... While other studies have used various theoretical quality measures (Dahl and Moreau, 2002), these have been found to be flawed in predicting market success and susceptible to biases (Dong et al., 2015). Evaluation by a panel of experts, another commonly used method, has repeatedly been criticized as equally flawed (Bazerman, 2006). The degree to which the crowdfunding project achieved or exceeded its targeted funding goals served as the criterion for the success of a project. ...
Purpose
Does future thinking enhance managers’ innovative behavior? This study aims to posit that the ability to project events while considering current/future variables and their development (i.e. future thinking) – inextricably linked with the knowledge creation process – may enhance the manager’s accuracy and the number of potentially successful innovative ideas for organizations.
Design/methodology/approach
The authors use a between-group experiment to examine the innovation choices of 47 subjects with experience in evaluating the market potential of new products when asked to support or otherwise reject real-life innovation-related ideas. The authors test the accuracy of decisions made by participants primed to apply future thinking, practically implemented through abductive reasoning, in their decision-making.
Findings
The authors found a significant change in managers’ innovative choices, with participants primed for future thinking making significantly more accurate decisions than the control group. Those participants both correctly chose innovation-related ideas with significant future potential and rejected ideas with limited potential that ultimately failed.
Originality/value
This study explores how future thinking enhances managers’ innovative behavior in organizations. It provides empirical evidence on how future thinking, practiced through abductive reasoning, can work to foster innovative behavior, which is an antecedent of knowledge creation. Organizations that foster future thinking concurrently create knowledge, increasing their competitive advantage in the long run.
... The phenomenon of design does not fit in the simple domain just argued by the fact that design has multiple solutions. And for production, there are variables that no project can truly ignore, human interactions, weather, geographical conditions, surroundings, etc. People's tendency to be biased towards simplification (Bazerman, 2001;Bertelsen, 2003) also gives warnings against placing projects in the simple domain. We argue that a construction project should therefore never be treated as a simple endeavour. ...
... Many human biases that ignore the complexity of the world have been noted (Bazerman, 2001;Kahneman, 2011;Kahneman et al., 2021), two of the most relevant for this discussion might be: ...
... According to dual process theory, decision making occurs within and between two cognitive systems (Turel & Qahri-Saremi, 2018). System 1 is a fast, automatic and intuitive system (Bazerman & Moore, 2012). It operates first through instinctive behavior when making a decision (Arnott et al., 2017). ...
... It is not innate and requires considerable cognitive endeavor (Arnott et al., 2017). People have to improve their capabilities in System 2 by learning (Bazerman & Moore, 2012). The core of System 2 is to utilize some form of logic and/or systematic approaches for decision making (Turel & Bechara, 2016). ...
Background: As a breakthrough technology, big data provides an opportunity for organizations to acquire business value and enhance competitiveness. Many companies have listed big data analytics (BDA) as one of their top priorities. However, research shows that managers are still reluctant to change their work patterns to utilize this new technology. In addition, the empirical evidence on what determines their adoption of BDA in management decision making is still rare.
Method: To more broadly understand the determinants affecting managers’ actual use of BDA in decision making, a survey was conducted on a sample of 363 respondents from New Zealand, China, and Vietnam who work in different managerial roles. The dual process theory, the technology–organization–environment framework, and the key associated demographic characteristics are integrated to form the theoretical foundation to study the internal and external factors influencing the adoption.
Results: The findings illustrate that the common essential factors across countries linking BDA in decision making are technology readiness, data quality, managers’ and organizational knowledge related to BDA, and organizational expectations. The factors that are more situation-dependent and evident in one or two countries’ results are managers’ predilection toward valuing intuition and experience over analytics and organizational size.
Conclusion: The findings enrich the current literature and provide implications for practitioners on how they can improve the adoption process of this new technology.
... In neo-classical microeconomic theory, the decision with the highest utility function among all other options is the one selected. Numerous critics followed the rational decision-making process, contesting in particular the assumptions underlying this theoretical model, which are not likely to exist in a real world scenario (see for example Bazerman, 2002;Cohen, March, & Olsen, 1972;Etzioni, 1967;Lindblom, 1980;March, 1987;Simon, 1972). It is a model that describes how decisions should be made rather than how decisions are really made (Van de Walle & Boivard, 2007). ...
The use of performance information is the backbone of performance management. Performance information use refers to the willingness of public managers or other relevant stakeholders to incorporate quantitative or qualitative data in their decisionmaking. Both routine and nonroutine performance information is considered essential in managers’ decision making. Understanding the organizational factors that motivate public managers to use performance i nformation is an important topic in the liter and practice of performance management. ature Although the number of studies on information use is growing, little is known about the impact of Organizational Social Capital (OSC). OSC is composed of the sub dimensions of social interaction, trust, and shared goals. The main argument of this study is that OSC fosters performance information use in public administrations. It is expected that departments with high levels of organizational social capital are more likely to use both routine and nonroutine performance information. To test the hypothesized effect, department heads, middle managers, and other individuals with a supervisory role from 513 Florida County Government departments were surveyed. Furthermore, were interviews, focus groups, and analysis of secondary data performed to provide the context and the narrative surro effect. unding the hypothesized Analysis of the survey data reveals evidence in support of the hypothesized effects. Furthermore, the comp arative case study analysis shows the existence of substantial differences in the history, background, organizational culture, and mana gement between the two counties. The main findings show how reorganization processes as well as a lack of leadership may social capital. Organizational social have detrimental effects to organizational capital could be considered a relevant predictor of performance information use and thus deserves further attention from both researchers and practitioners.
... Human behavior is a necessary feature in virtually every supply chain setting. Psychological and behavioral issues, particularly in terms of judgment and decision making, can have considerable relevance and importance for logistics and supply chain research as individuals often don't make choices consistent with normative or optimal policy and do so in specific and systematic ways (Bazerman, 2002;Stanovich & West, 1998;Tokar, 2010). Weiland et al. (2016) note that; "supply chains are not "soulless machines", but complex sociotechnical systems involving cognitive elements and impacted by face-to-face negotiations and conversations" (p. ...
The need for SME owner/managers to engage in building and maintaining collaborative business relationships is paramount for their success and the resilience of these relationships can be viewed as a crucial factor in successful supply chain management for SMEs. The present study investigates the relationship between the social intelligence of the SME owner/manager and relationship resilience between firms with which they do business. The objective of this study is to explore the relationship between four components of social intelligence (situational awareness, situational response, cognitive empathy, and social skills) of small to medium sized business owners/managers on the resilience of their supply chain relationships. A survey was conducted, and responses gathered from small business owner/managers and the data was analyzed using structural equation modeling. The study provided evidence that the four components of social intelligence are positively associated with relationship resilience.
... Terdapat banyak sekali bias dalam keputusan (Bazerman, 1994). Studi ini berfokus pada confirmation bias (bias konfirmasi), yaitu bias keputusan yang disebabkan seseorang cenderung mencari bukti yang mengkonfirmasi keyakinannya (Kassin et al., 2013). ...
... Anchoring adalah salah satu jenis bias kognitif, yang akan menjadi fokus utama dari laporan ini. Anchoring mengacu pada bagaimana kasus saran, seperti kata-kata, angka atau gambar, dapat mempengaruhi pembuat keputusan untuk membuat keputusan tertentu (Kahneman, 2011 (Bazerman, 1998;Baron, 1998). Heuristik disebut sebagai "aturan praktis" yang mengarah pada bias kognitif. ...
Abstrak Penelitian ini bertujuan untuk mengetahui pengaruh bias perilaku keuangan Anchoring bias dan Loss aversion yang dimiliki oleh investor yang ada di MNC Trade Kota kendari. Penelitian ini menggunakan 59 responden investor aktif yang diambil dari lembaga sekuritas yang ada di MNC Trade Kendari. Teknik pengumpulan data menggunakan kuisioner yang kemudian dianalisis menggunakan alat analisis regresi linear berganda. Berdasarkan hasil penelitian ini, terdapat pengaruh Anchoring bias dan Loss aversion terhadap pengambilan keputusan investor di MNC Trade Kota Kendari. Secara terpisah, perilaku Anchoring bias tidak berpengaruh signifikan terhadap pengambilan keputusan investasi. Hal ini di sebabkan oleh investor lebih fokus pada pengetahuan dan informasi atas saham secara teknikal, sedangkan perilaku Loss aversion berpengaruh signifikan terhadap pengambilan keputusan investasi investor di MNC Trade Kota Kendari karena investor lebih cenderung dipengaruhi oleh sikap risk averse dalam melakukan pengambilan keputusan.
... There have been some studies on the design process of project renovation. Bazerman et al. [101] described the ideal steps in a design process as first defining the problem, then identifying goals and criteria, weighting criteria, generating alternatives, rating each option on each criterion, and computing the optimal solution. Ferreria et al. [102] and Alanne [103] also described the design process of renovation projects. ...
The renovation of existing buildings provides an opportunity to change the layout to meet the needs of facilities and accomplish sustainability in the built environment at high utilisation rates and low cost. However, building renovation design is complex, and completing architectural design schemes manually needs more efficiency and overall robustness. With the use of computational optimisation, automatic architectural design (AAD) can efficiently assist in building renovation through decision-making based on performance evaluation. This paper comprehensively analyses AAD's current research status and provides a state-of-the-art overview of applying AAD technology to building renovation. Besides, gaps and requirements of using AAD for building renovation are explored from quantitative and qualitative aspects, providing ideas for future research. The research shows that there is still much work to be done to apply AAD to building renovation, including quickly obtaining input data, expanding optimisation topics, selecting design methods, and improving workflow and efficiency.
... Wolfberg (2017) specifically points at one of them: the confirmation trap bias. This bias implies that one tends to look for confirmatory data to support one's own beliefs when making a decision (Bazerman 2002). As a result, contradictory data are easily rejected. ...
Intelligence is the primary mechanism that military organizations use to generate understanding and its main purpose is to provide information to decision-makers such as commanders that may help illuminate their decision options. This chapter assesses the role of intelligence in military missions, more specifically the counterinsurgency and stabilizations missions that took place in, for example, former Yugoslavia, Iraq, Afghanistan, and Mali.
The chapter starts by addressing the changing and increasingly complex nature of many of the conflicts from the 1990s onwards. It explores how this has influenced the use of intelligence and presents two distinct schools of thought. The first school of thought, referred to as Jominian intelligence, tries to unravel the operational environment in a systematic way and regards the intelligence challenges as a series of problems with definite solutions. The second school of thought, referred to as Clausewitzian intelligence, argues that the goal of intelligence is to assess uncertainty and reach a deliberate judgment.
The main body of the chapter then analyzes the intelligence process and identifies several of the main intelligence issues within military missions. The intelligence process starts with the direction phase in which policy makers, military commanders, or planners state their needs, often referred to as information requirements. Several issues complicate such direction, including (1) the comprehensive focus of many current military missions, (2) their abstract and ambiguous strategic objectives and expectations, and (3) the military’s unfamiliarity with the area of operations.
In the second phase of the intelligence process, the necessary information is collected. In addition to consulting their archives and databases, military units often have a plethora of means, both technical and human, available to collect information. Cross-cultural competencies are of crucial importance, in particular, during the collection phase.
The third phase of the intelligence process, labeled processing, turns raw data into intelligence. During the processing phase, the data are analyzed in order to gain understanding or insight. This exceeds the registration of events, but includes understanding the meaning of these events as well as their importance.
The fourth and final phase is dissemination of intelligence. Here, the relationship between the producers and consumers of intelligence during military missions is explored. This includes the reasons why consumers sometimes do not fully accept the intelligence they receive.
The chapter concludes with an agenda for research on military intelligence. It calls, for example, for a more eclectic author base; multidisciplinary as well as comparative research; increased attention to oversight, ethics, and open source intelligence; and more emphasis on intelligence within the navy, special forces, and constabulary forces.
... Statistical confidence is a property of the decision problem and can be understood as the posterior likelihood of a desired outcome distribution given sample draws (e.g., Hill, 1968;Laplace, 1986). Statistical confidence is not to be mistaken for people's subjective confidence in outcome probabilities (Bazerman & Moore, 2013;Lejarraga & Lejarraga, 2020). Exact elicitation of the latter is hard and not a concern of this paper. ...
Decision makers weight small probabilities differently when sampling them and when seeing them stated. We disentangle to what extent the gap is due to how decision makers receive information (through description or experience), the literature’s prevailing focus, and what information they receive (population probabilities or sample frequencies), our novel explanation. The latter determines statistical confidence, the extent to which one can know that a choice is superior in expectation. Two lab studies, as well as a review of prior work, reveal sample decisions to respond to statistical confidence. More strongly, in fact, than decisions based on population probabilities, leading to higher payoffs in expectation. Our research thus not only offers a more robust method for identifying description-experience gaps. It also reveals how probability weighting in decisions based on samples — the typical format of real-world decisions — may actually come closer to an unbiased ideal than decisions based on fully specified probabilities — the format frequently used in decision science.
... Moreover, many management and I/O psychology theories assume that people form speedy group impressions (see for instance DeRue & Ashford, 2010; Anderson & Kilduff, 2009). In pursuing this goal, we strive to provide added evidence that low-level cognitive and nonverbal interpersonal processes occurring between an individual and a group impact organizational behaviour (Bazerman & Moore, 2013). ...
We examine the impact of group attractiveness on the relationship between workplace ostracism and organizational citizenship behaviours directed toward the group (OCBG). Research has long overlooked contextual features of ostracism at work. Using an experimental vignette methodology (N = 312), we found that physical attractiveness was critical in determining the mechanism by which ostracism influenced OCBG. The victims' social anxiety served as a mediator through which ostracism influenced OCBG when the ostracizing group was deemed to be low on attractiveness. However, the negative direct effect between ostracism and OCBG was observed only when group attractiveness was high. Our findings have implications for understanding the interplay between victims' individual differences and the context in which workplace ostracism is manifested. Dans cette étude, nous examinons l'impact de l'attractivité du groupe sur la relation entre l'ostracisme au travail et les comportements de citoyenneté organisationnelle dirigés vers le groupe (OCBG). Les chercheurs ont longtemps négligé les caractéristiques contextuelles de l'ostracisme au travail. En utilisant une méthodologie de vignette expérimentale (N = 312), nous constatons que l'attrait physique est essentiel pour déterminer le mécanisme par lequel l'ostracisme influence l’OCBG. L'anxiété sociale des victimes modère l'influence de l'ostracisme sur les objectifs de bien‐être au travail lorsque le groupe ostracisé est considéré comme peu attrayant. Cependant, on observe un effet direct négatif entre l'ostracisme et l’OCBG uniquement lorsque l'attractivité du groupe est élevée. Ces résultats permettent de comprendre l'interaction entre les différences individuelles des victimes et le contexte dans lequel se manifeste l'ostracisme au travail.
... De acordo com a teoria das pistas heurísticas da psicologia (Bazerman, 2017), sob compressão de carga de trabalho, os revisores regulatórios são mais propensos a explorar pistas heurísticas para concluir de forma mais rápida e eficiente se a auditoria é de alta qualidade. Nessa situação, os revisores regulatórios provavelmente confiam na independência dos comitês de auditoria como um determinante significativo dos relatórios financeiros. ...
This paper examines the relationship between audit committee characteristics and regulatory scrutiny. Comment letters issued by the Securities and Exchange Organization of Iran were used to measure regulatory scrutiny. Empirical results show that audit committee financial expertise increases (decreases) regulatory scrutiny when audit committee independence is low (high). This paper informs the cost-benefit debate on audit committee financial expertise. It contributes to the literature by showing that regulatory scrutiny is jointly influenced by the audit committee independence and financial expertise. The paper is of interest to researchers and shareholders, boards of directors, and other practitioners who wish to improve the composition and quality of audit committees, especially in emerging markets where corporate governance codes are still developing.
Keywords:
financial expertise; independence; comment letter; audit committee; regulatory scrutiny.
... In line with the heuristic cues theory from psychology (Bazerman, 2017), under workload compression, regulatory reviewers are more likely to explore heuristic cues to fast and efficiently conclude whether auditing is high quality. In this situation, regulatory reviewers are more likely to rely on the independence of audit committees as a significant determinant of financial reporting. ...
This paper examines the relationship between audit committee characteristics and regulatory scrutiny. Comment letters issued by the Securities and Exchange Organization of Iran were used to measure regulatory scrutiny. Empirical results show that audit committee financial expertise increases (decreases) regulatory scrutiny when audit committee independence is low (high). This paper informs the cost-benefit debate on audit committee financial expertise. It contributes to the literature by showing that regulatory scrutiny is jointly influenced by the audit committee independence and financial expertise. The paper is of interest to researchers and shareholders, boards of directors, and other practitioners who wish to improve the composition and quality of audit committees, especially in emerging markets where corporate governance codes are still developing.
Keywords:
financial expertise; independence; comment letter; audit committee; regulatory scrutiny.
... (v) Negotiation is part of daily life. Scarcely a day goes by without a negotiation, widely studied over the past decades (Kissinger, 1969;Zartman, 1988;Raiffa, Richardson & Metcalfe, 2002;Rubin and Brown, 1975;Pruitt, 1981;Acuff, 1993;Fisher, Ury & Patton, 1981;Salacuse, 2003Salacuse, , 2006Lax and Sebenius, 1986;Shell, 2006;Dias, 2016;Schatzki & Coffey, 1981;Bazerman and Moore, 1994;Neale & Northcraft, 1991;Druckman, 1997;Thompson, 2001;Moore and Woodrow, 2010;Cohen, 2007;Patton, 2012). ...
In a globalized and universal civilization, it is not enough to produce individuals who can count, read, and write. Effective global citizenship requires nurturing respect for others, and acting against racism, discrimination, and intolerance and also, developing skills related to issues inherent to global problems of a socio-political and environmental nature, including understanding and respecting universal values of tolerance, respectability, discipline, perseverance, diligence, as well as respecting the Brazilian cultural institutions and the World Heritage. This article presents a reform proposal for the National Curriculum Base (BNCC), with the insertion of Global Citizenship Education as a mandatory course, an unprecedented initiative. In addition, this article provides scholars with a new perspective on Elementary Education in Brazil, helping students to become constructive global citizens.
... When consumers perceive time pressure, it will lead to an increase in "cognitive loading" such that they tend to make decisions based on fewer attributes and think about fewer alternative models [74]. Time pressure encourages consumers to use heuristic methods to simplify complex problems [75]. Consumers will treat time as money and think about opportunity cost [74]. ...
This paper explores the relationship between consumers’ public self-consciousness, purchase behavior, post-purchase regret, and time-limited promotions in e-commerce. Time-limited flash sales have become a common promotion strategy in e-commerce, particularly in China, the largest e-commerce market. Firstly, the effect of public self-consciousness on consumers’ impulsive purchase tendency and post-purchase regret is examined. Secondly, this paper extends the scope of previous studies and investigates how time pressure affects the relationships between self-consciousness, impulsive buying tendency, and post-purchase regret. Data were gathered via an anonymous online survey of 580 online shoppers and subjected to empirical analysis including validity testing and ANOVA. The results provide both practical and theoretical contributions to existing models and offer empirical evidence showing the positive relationships between public self-consciousness and impulse buying, between public self-consciousness and post-purchase regret, and between impulse buying and post-purchase regret.
... One recommendation by Korthals (2008) is to ensure that unethical conduct that pertains to contractor selection is avoided to mitigate project risks. I would also argue that having a prequalified list will be ideal to limit some illusions of control by decision making managers (Bazerman, 2008). ...
... Consideration of such perceptions is considered as highly significant as SME decision makers tend to rely on their perceptions when making decisions (Collinson & Houlden, 2005;Gibcus , et al., 2006;DeVoe & Lyengar, 2004;Sanders, 1999;Bazermanan, 1994). It is important to understand that perceptions vary between individuals and as a result different people may perceive the same situation differently. ...
Due to the increasing involvement of enterprises in international markets, the strategic management of the transition of an organisation from purely domestic into a multinational organisation has become increasingly important. The literature shows that a significant number of the organisation that choose to internationalise are SMEs which command little resources to enable this transition. Increased diversity, ambiguity and complexity as well as uncertainty, instability and high levels of competition are considered to be the characteristics of the context of SME internationalisation and the root cause of some of the challenges that SME managers face. This thesis focuses on the ever-growing emphasis on the management of small and medium sized enterprises (SMEs) specifically by exploring the managerial competencies required for SME internationalisation. It aims to identify the managerial competencies required for SME internationalisation. This qualitative study is informed by the grounded theory methodology. Using semi-structured interviews, primary data was collected from interviewing 52 SME managers who were directly involved in the internationalisation of their respective SME. In contrast to existing thinking in strategic management, which outlines a set of competencies (a functionalist perspective) which can be dynamically arranged (dynamic capabilities/entrepreneurship perspective), this study highlights that managerial competency is a unique, individual and dynamic experience. The study highlights that, in practice, SMEs do not engage in a great deal of systematic strategic planning and their managers have significantly different experiences of the SME internationalisation process. This becomes evident in how they perceived themselves and their different individual experiences during the internationalisation of their SMEs. Additionally, the findings indicate that managerial competency may involve an interaction and interrelation with information and the dynamic arrangement of functional competencies, but the focus of academics and practitioners needs to shift to understanding internationalisation as an experience. This thesis investigates the importance of agency and structure and how competency is a negotiation with the environment that is driven by the SME agent (i.e., the manager) via the managerial experience of SME internationalisation. The implication of the thesis is that there is a need for a paradigm shift in existing thinking from theorising managerial competencies required for SME internationalisation (functionalist perspective) to theorising individual managerial experiences of SME internationalisation i.e., agential experience (agency theory perspective). These are experiences which support SME managers in managing their organisations throughout the transitional period and when their organisation has been fully internationalised and is competing in the diverse international environment. Thus, the study highlights that the ontology of SME managerial competency is not understood in full currently. It identifies the paradigm shift that is needed and has developed the theoretical understanding of managerial competencies as an agential experience. The empirical approach reflects future research.
... Bounded rationality focuses on the difference between the economic and psychological interpretations of decision-making and is typically revealed in systematic and predictable human mistakes. 13 Simon 2 argues that the computational demands of decision-making far exceed people's limited capacity for thinking. Simon 14 assumed that limited rationality included: incompleteness of knowledge, difficult predictions, and managers using a limited rationality when making decisions because obtaining and processing all the information required is arduous. ...
Herbert Simon’s concept of bounded rationality, often cited in classical works, has evolved to include managerial decision-making. This paper brings the concept of bounded rationality and satisficing further forward into the data age to identify if satisficing behaviors still exist now that managers “have the data,” a previous limitation in decision-making. In the past, data was a commonly cited void in managerial decision-making. Nonetheless, Simon wrote that time is a primary scarcity in the data age.¹ We survey managers about their data usage and analytics habits, their individual and organizational use of data, as well as data quality. We find that while data is omnipresent, data quality, utility, and value are inconsistent and remain as limitations to managerial decision-making. These findings suggest that satisficing behaviors can and do exist even in the age of data-at-your-fingertips.
... Upper echelons theory demonstrates the impact of managerial cognitive bias on firms' decisions (Hambrick & Mason, 1984). Overconfidence is the root of all cognitive biases (Bazerman & Moore, 2013;Malmendier et al., 2019;Meikle et al., 2016). ...
Numerous studies have shown the prevalence of overconfidence among Chief Financial Officers (CFOs). Surprisingly, the real effect of CFO overconfidence is under-researched. Using data from a large sample of US-listed firms over the period 1993-2019 and adopting an eclectic theoretical approach, we find that overconfident CFOs are more likely to increase stock price crash risk than non-overconfident CFOs through risk-taking and bad news hoarding. These findings pass a series of robustness tests. Furthermore, departing from most overconfident studies that merely examine one type of top managers (i.e., Chief Executive Officer (CEO)), we consider the influence of CEO and CFO overconfidence jointly. Interestingly, we find that CFO overconfidence outweighs CEO overconfidence in influencing stock price crash risk. Moreover, the overconfidence effect is intensified when overconfident CFOs collaborate with overconfident CEOs, thus raising stock price crash risk. However, stronger governance and a transparent information environment constrain overconfident CFOs' effect on stock price crash risk. Overall, our findings highlight the importance of CFO overconfidence in determining stock return tail risks.
... The assumption is that this process will provide better results than no systematic analysis, although the information base is weak. There is a large amount of literature in this area, for example, Goodwin and Wright (1991), Bazerman (1994) and Williams et al. (2009). ...
... Fruitful new insights may derive from the idea that training by definition is an applicable treat in such a session. Consequently, workshops could use these insights to design tools in which managers would be trained to use thinking about thinking strategies a priori a decision is made, in order to not fall prey to wellknown managerial decision-making biases such as confirmation bias and anchoring (Bazerman, 1994). ...
This paper contributes to uncovering the role of metacognition in the decision-making process of entrepreneurs. Specifically, we analyze nascent entrepreneurs in their process of start-up development while relying on metacognitive processes. The experiences of a sample of new venture initiatives are explored in two distinct phases, a start-up competition and the subsequent launch of their venture. Following the Gioia protocol, the study contextualizes the process in which social capital reinforces metacognitive processes. This process stimulates nascent entrepreneurs to consider alternatives, such as extending expertise outside the start-up. Moreover, we find that these processes support entrepreneurs and their teams in improving their decision-making processes. The findings support that nascent entrepreneurs rely heavily on the input of others in their start-up creation process, and contribute to new empirical insights about entrepreneurial metacognition. A dynamic model in which these relationships emerge is developed. The study’s results contribute to a better understanding of the antecedents and consequences of metacognitive processes in nascent entrepreneurship.
... Forecasting is key to successful managerial decision making. When managers evaluate a set of options (Bazerman & Moore, 2012), the utility of a decision option usually depends on the future state of the world (Cyert & March, 1963;Harrison & March, 1984;March & Simon, 1958), such as the future value of assets (Ahuja, Coff, & Lee, 2005;Barney, 1986), the future competitive environment and dynamics in an industry (Amit & Schoemaker, 1993;Cockburn, Henderson, & Stern, 2000), or future technological innovation (Teece, 2007;Teece, Pisano, & Shuen, 1997) resulting in 'the next big thing' (Denrell & Fang, 2010). Therefore, strategic management scholars have argued that the competitive advantage of an organization is rooted in the ability of managers to forecast future states of the world (Amit & Schoemaker, 1993;Barney, 1986;Csaszar, 2018;Csaszar & Laureiro-Martínez, 2018;Teece, 2007;Teece et al., 1997). ...
Judgmental forecasting research has demonstrated that forecasters differ in their foresight––their ability to consistently forecast future states of the world accurately. However, the conceptualization of foresight underlying this research stream focuses exclusively on accuracy and thereby, neglects the time dimension of foresight. We develop a reconceptualization of foresight that integrates the dimensions of accuracy and time. To provide the theoretical basis for this integration, we propose a forecasting framework suggesting that forecasting future states of the world becomes easier over time as the availability of signals, which enable forecasters to forecast future states of the world more accurately, increases over time. Therefore, we reconceptualize foresight as the ability to forecast future states of the world accurately and early. To operationalize this reconceptualization of foresight in forecasting tournaments, we propose the time-weighted Brier score (TWBS), which weights errors made closer to the event horizon more heavily. We prove analytically that the TWBS is a strictly proper scoring rule that represents a mathematical generalization of the Brier score (BS). Furthermore, we show in a simulation study that the linear and square root TWBS, which weight the forecast errors over time heavier according to the linear and square root function, measure the true foresight of persons better than the BS under various theoretical signal trajectories. Taken together, we contribute to the emergent literature on foresight by providing a theoretical framework, reconceptualization, and generalized operationalization of foresight that integrate the dimensions of accuracy and time.
... Adopters are limited in the time and resources they would need to fully consider all factors present. They use cognitive shortcuts and biased decision making (Bazerman, 1997), such as the continuation of 'satisficing' (i.e., feasible but suboptimal) practices (Cyert & March, 1992). The myopic search for information leads adopters to pay selective attention (Ocasio, 1997(Ocasio, , 2011 to relevant issues. ...
Many voluntary sustainability standards govern opaque environmental and social issues, which are difficult to understand and address. Extant studies show mixed evidence around the effectiveness of such standards. We develop a theoretical framework that relates different degrees and types of opacity to standard effectiveness. Systemic opacity results from issues embedded in complex, diverse, and dynamic settings, whereas behavioral opacity stems from human challenges in interpreting and acting upon focal issues. Rigid sustainability standards, oriented toward compliance, are effective for addressing issues that are transparent or enshrouded by behavioral opacity, but are counterproductive for issues with systemic opacity. The trade‐off between rigidity and flexibility leads to optimal effectiveness when standards governing systemically and behaviorally opaque issues are moderately rigid. Our ideas are illustrated with two leading sustainability standards in the fisheries and real estate sectors, which effectively address transparent issues but show limited success when facing opacity. We conclude that unpacking issue opacity is instrumental in designing and implementing more effective sustainability standards.
... Generally, heuristics help simplify the decision-making process. However, in some cases, they lead to error and deviations from rational decision-making, as a result of which the optimal results in a problem are distorted (Bazerman and Moore, 1994). The errors involved are known as cognitive biases, and to date, researchers have identified many cognitive biases, and the subjective process of eliciting weights in MADM problems is prone to these cognitive biases. ...
In this study, the existence of anchoring bias-people's tendency to rely on, evaluate, and decide based on the first piece of information they receive-is examined in two multi-attribute decision-making (MADM) methods, simple multi-attribute rating technique (SMART), and Swing. Data were collected from university students for a transportation mode selection. Data analysis revealed that the two methods, which have different starting points, display different degrees of anchoring bias. Statistical analyses of the weights obtained from the two methods show that, compared to Swing (with a high anchor), SMART (with a low anchor) produces lower weights for the least important attributes, while for the most important attributes, the opposite is true. Despite their differences in anchoring bias, analytical approaches supported by empirical studies suggest that both methods (SMART and Swing) overweigh the less important attributes and underweigh the more important attributes. As such, we examined whether the best-worst method (BWM), which has two opposite anchors in its procedure (a possible promising anchoring debiasing strategy), could produce results that are less prone to anchoring bias. Our findings show that the BWM is indeed able to produce lower weights (com-pared to SMART and Swing) for the less important attributes and higher weights for the more important attributes. This study shows the vulnerability of MADM methods with a single anchor and supports the idea that MADM methods with multiple (opposite) anchors, like BWM, are less prone to anchoring bias.
... The moderating role of creativity In most negotiations, nonobvious, mutually beneficial solutions often exist. However, engaging in problem-solving and examining alternatives that potentially lead to good solutions is possible through creative idea generation (Bazerman, 2009;Thompson, 2015). Indeed, idea generation is positively related with the number and the quality of negotiators' alternatives (Hyder et al., 2000). ...
The literature regarding the effect of power on negotiation strategies remains scattered and inconsistent. We propose that the effect of power on negotiation strategies is contingent on contextual variables but also on individual differences among negotiators. Specifically, we hypothesize that creativity moderates the effect of power such that low-power, as compared to high-power negotiators, use more collaborative and less competitive strategies and further report lower fixed-pie perception (i.e., perception of a counterpart’s goals and interests as diametrically opposite to one’s own goals and interests) when they can be creative. Moreover, we hypothesize that negotiators’ age buffers the moderated effect of power. Participants in Studies 1 and 2 played a negotiation game in dyads. Study 1 manipulated power as status, whereas Study 2 as
Best Alternative to a Negotiated Agreement (i.e., power to exit the negotiation without a deal). Study 3 (preregistered) was a field study. Across the three studies we found support for most of our hypotheses. Theoretical and practical implications are discussed.
In the multiplicity of definitions of complexity, this chapter elaborates on different types of complexity. The system definition of complexity focuses on how complex systems work, whereas the cybernetic definition of complexity explains how in complex systems goals are achieved, including survival in changing circumstances. Various types of non-linear causalities are introduced. The latter provides a link with concepts used in management and organization, especially the issue of in-control. Because control is programmed at multiple levels in society and organization, the concept of culture is opened up beyond its usual simulacra. Beniger’s four levels of control are related to complexity via the complexity of feedback. This chapter introduces concepts like dynamic objectivity, Kolmogorov complexity, detail complexity, subjective complexity, epistemic complexity, and generative complexity. This unearths some limitations to Ashby’s Law of requisite Variety. In addition to different definitions of complexity, this chapter presents a taxonomy of different types of complexity. Each of these types of complexity requires a different handling in order to cope with it, varying from mathematical modeling, to operational procedures, to reduction of complexity through growth of knowledge. Especially the difference between organized complexity, as to be used in business, and disorganized complexity is explained. This chapter lays a basis for dealing effectively with the various types of complexity. The idea of ICAS is consistent with the concept of the organic organization dating back to the sixties of the twentieth century. Now a better understanding, evaluation of that concepts is possible, as well as a better instrumentation. With that, the distinction between disorganized complexity and organized complexity is introduced. The growing complexity in the economy implies a shift from traditional, physical asset-based administrative instruments to information-based administrative instruments. With that, it becomes clear what Drucker’s concept of information-based organization is in administrative terms.
The principle of Ockham’s Razor underlying scientific explanation and thus conventional MBA concepts is no longer tenable in business. But the human need for simplicity cannot and should not be denied. In dealing with complexity a constant awareness is needed, at the individual level, group level and institutional level, for a constant and strong need for simplicity. As different types of complexity exist, so can different types of simplicity be discerned. The most responsible type of simplicity is that which is achieved through an intellectual effort of understanding the new complexity of a situation, acknowledging that the new complexity cannot be understood through conventional theories. A more short-cut but unreliable simplicity is achieved through the myopia of learning. The simplicity of the era of modernism was achieved through institutional reductionism, especially denying or suppressing the marginal in society. The post-modern movement has broken this up, but also for other reasons the effectiveness of institutions is reduced. In that context, the simplicity of MBA methods was achieved through reductionism, of which the limits no longer can be denied. A specific type of simplicity in business is the phenomenon of dominant logic. For reasons of focus a dominant logic is needed, but relying too heavily on a successfully dominant logic, especially in a changing complex organization will derail the organization. This demonstrates a more general principle that simplicity is not absolute, but is bound to time and situation, simplicity always is needed and always is to be distrusted.
The conventional tactics to solve complex decisions by reductionism falls short to deal with the new complexities. Successful CEOs use abstract thinking and reconceptualizing to make effective decisions in new complex situations. The conventional paradigmatic model of decision-making applies to well-structured problems, which are to be found in operations, but not at the level of strategy and governance. A decision-problem that can be solved through a calculation or algorithm, as pretended in AI, is not a decision-problem, but a calculation. More data in itself does not solve complex decisions nor does it result in better decisions, except within the limitations of a well-structured problem, what are rare. A decision-problem is a state-of-mind acknowledging that existing routines, practices, heuristics, and concepts are incapable to provide the insight needed for new situations and reconceptualization is needed. What is needed is integrative complexity to open up the limitations of cognitive complexity (Sect. 6.3.3) This chapter presents a taxonomy of complex decision-problems, like professional induced complex decision-problems, reflexivity complex decisions, decision-rights complexity, epistemological complex decisions, discovery/justification complex decisions, and how to handle these for different executive tasks, based on the extended international doctrine for administration.
Key digested message
This article explores the personal factors that may influence our individual decision-making approaches and how these findings could be utilised to create more diverse and successful teams.
Did you know that diversity is one of the best tools for leadership development?
It blocks bias so managers and leaders can make better decisions.
This book presents a program for mental leadership fitness where your diverse team is the gym. The workout consists of concrete tools in areas such as digital management, behavioral management, inclusive management, and emotional intelligence. It’s not a quick fix, but an ongoing process that works, just like any other exercise program. Diversity is one of the best tools for leadership development and culture change. It can block bias – not only in the leader’s mindset but also in algorithms and data structures. Training that can be read on the organization’s financial and sustainable bottom line.
The author demonstrates what it takes for diversity to promote better arguments, and innovative thinking. This means that diversity ensures better decision making because we are constantly reminded to consider alternatives. That is essential for creating successful results. The approach also provides psychological safety in the workplace and an experience of inclusion, which is the most important common denominator for being able to create a good working environment and avoid culture backlash.
Each chapter contains at least one business case that outlines a relevant issue. It provides insight into how managers and leaders minimize unconscious bias by inviting diversity into organizations and allowing it to unfold both humanly and technologically. Building on the theory of Nobel Prize receiver Daniel Kahneman, this book uses behavioral design and inclusion nudges to avoid classic pitfalls in decision-making patterns and create a good framework for innovative thinking.
There is no point in cramming up on bias with conscious discipline to avoid it. It is the leader’s mindset that needs to be trained, so behavior that makes diversity the effective ingredient can be practiced. New perspectives on power in relationships are also included, which have a decisive influence on the possibilities of reducing bias.
Written directly for leaders and managers, BIAS-CONSCIOUS LEADERSHIP is relevant for everyone with management and leadership responsibilities in private and public organizations. It is also useful for supervisors, HR people, lecturers, students, and consultants.
This paper offers a review of fundamentals in decision analysis and the construction of evidence-based probabilities for use in decision-making. The term quantitative risk analysis generally connotes reliance on probability and statistics. However, select quantitative risk-based decision-making methodologies, such as game theory, do not require knowledge of probabilities. Maximizing the minimum (maximin) gain, minimizing the maximum (minimax) loss, or maximizing the maximum (maximax) gain are but a few examples of decision-making criteria for handling risk and uncertainty without adhering to probabilities. Quantitative risk assessment builds on the existence of probabilities that describe the likelihood of outcomes, such as consequences. In general, probabilities are derived on the basis of historical records, statistical analysis, and/or systemic observations and experimentation. We commonly refer to probabilities that are derived from this process as "objective probabilities" . Often, however, situations arise where the database is so sparse and experimentation is so impractical that "objective probabilities" must be supplemented with "subjective probabilities" or probabilities that are based on expert evidence, often referred to as "expert judgment". This paper focus on generating probabilities on the basis of expert evidence, using by the decision rules under uncertainty.
We empirically investigate how regulatory oversight on external auditors is jointly influenced by audit committee financial expertise and independence. To measure regulatory oversight on external auditors, we use comment letters issued by the Securities and Exchange Organization of Iran. We show that audit committee financial expertise increases (decreases) regulatory oversight on external auditors when audit committee independence is low (high). We further show that this interactive effect is stronger under higher regulatory reviewers’ workload compression. Collectively, our findings suggest that, first, financial expertise and independence of audit committees should be analysed together as independence moderates the benefit of financial expertise. Second, the consideration of regulatory reviewers’ workload compression is important in this analysis.
Prior
literature does not provide a clear prediction of how executive confidence affects the degree to which a firm engages in “myopic marketing management,” the tendency to decrease current marketing spending to mitigate any potential earnings shortfall. We propose that highly confident CEOs are more likely to cut marketing spending to raise current earnings numbers because they believe in their ability to generate high future firm earnings that can cover the long-term losses arising from their current short-term actions. The effect is heightened when the board of directors is more independent and monitors more, but attenuated if CMOs are more confident and thus are better able to convince their CEOs and boards of directors to support continued investments in marketing. The moderating impact of CMO confidence is proposed to be stronger as the CMO becomes more powerful. Using secondary data from a broad cross-section of firms, we provide robust empirical support for our model. Our results highlight situations in which CMOs need to be wary of cuts to their marketing budget, and also provide a potential mechanism through which marketers can protect their budget in the presence of highly confident CEOs—through their own confidence levels.
At the end of high school, teenagers must deal with the first life‐changing decision of determining what to do after graduation. For these decisions, adolescents need to be able to make good choices. However, most schools have not yet implemented decision trainings into their curricula. A new intervention called “KLUGentscheiden!” was developed to train complex decision‐making in high school students to close this gap. The intervention targets three key components of good decision‐making: envisioning one's objectives, identifying relevant alternatives, and comparing the identified alternatives by a weighted evaluation. We assumed that successfully training those decision‐analytical steps should enhance self‐perceived proactive decision‐making skills. In addition, the training should also enhance self‐assessed career choice self‐efficacy. The intervention was evaluated in a pseudorandomized control study including 193 high school students. Compared to a control group, the intervention group significantly increased proactive decision‐making skills and career choice self‐efficacy. Although different long‐term evaluations are still pending, the KLUGentscheiden! intervention provides an important tool to train complex decision‐making in high‐school students. It also has the potential to apply to other career choices of young individuals, such as choosing majors, a final thesis, a job, or a field of work.
To all Developmentalists, the undeniable failure rates for Developmental Interventions across the paradigms of Psychology, Organizational Science and Economics, which range from 50% for the former to 100% for the latter, should be truly shocking; and while they are alarming in their own right, they also signal a fundamental paradigmatic deficit, and it is one that is already acknowledged across the board, because, across each domain, the same fundamental remedy for the common deficit has been prescribed, and that remedy is “Learning”, whether it is as Learning Life, Learning Organization, Learning Region, Learning Economy or more recently by Nobel Economist Joe Stiglitz, Learning Society, which he refers to as the only viable long-run Government strategy. However, he and his co-author Bruce Greenwald, like others, have had little option but to defer the operationalizing of this Vision to Psychology; and even though there is such demand for a model of Developmental Learning from both outside Psychology and also internally, from prominent Psychologists such as Dan McAdams, no such model has been devised – until now.
UDT is peer-reviewed as equally valid and operationalizable across each of these paradigms, i.e., for developmental diagnosis and intervention for people, organizations and also macro socio-economic systems such as regions and nations. The modelling for each of these three levels of system – already understood as micro-, meso- and macro socio-economic system – is presented in four different volumes with the emphasis in Vol. 1, on the Psychology behind the model and what it brings to the discipline in terms of both theory and practice.
The model comprises of 7 Levels encompassing a sequence of 15 Developmental Phases through which humans naturally learn developmentally, and these Phases correspond with – but also complete – existing models of both natural and interventionist development, so that, in effect, each school is shown to have been seeing some of the same patterns, but through different lenses, and based on different and ultimately, limiting assumptions. UDT also shows how such developmental learning stalls along this progression in well-established patterns of corresponding Habituation Stages such as Groupthink at (2a), and how progression or degradation is affected by the Attractors of ultimate Maturity and Immaturity. The Levels are called Inversion, Critical, Equilibrial, Operational, Complexity, Creativity and finally, Leadership where the ultimate Maturization Phase is called Regenerative Leadership which encompasses Regenerative Eco-System – a concept that applies equally as e.g., Family, Organization or Economy where the system produces offspring that are integratively independent but networked whether as children, spin-off enterprises or enterprise clusters, respectively.
Along these Phases, functional dimensions called Construct Capabilities, that are significant to a system’s maturization can be diagnosed and developed. Failure rates are shown to be either due to interventions being overpitched relative to the previously undiagnosable learning level of the system, or through missing any of the Phases. Diagnosis with UDT optimizes traction for interventions which also gain in terms of sustainability from the normatively prescribed developmental process through the Phases. Critically, the model differentiates between systems, including people, who can take on board developmental intervention as a “next-Phase” process, from those who need radical process starting at Phase (1a); while concluding that much of the success reported across Developmentalism is dependent on the maturity of the client system (person or organization) in the first place.
In Psychology, such methodology can be used discretely through frameworks that are introduced; or more broadly, the model can provide an overarching architecture to guide and offer completion to established clinical process in practice, and it can also provide structure and discipline to more recent methods such as Open Dialogue with which it already shows considerable correspondence. One example of correspondence is that between the lowest Level’s three Stages of Habituation with DSM-5’s three Clusters of Personality-Disorders, and UDT can be seen to add considerable value to understanding and profiling them as well as operationalizing recovery, and particular attention is given to Narcissistic Personality Disorder – the prevalence of which is reported in terms of being an epidemic in prevailing Western society. It is also shown how the lowest Stage (1a) is always a drag on development in a process called Inversion that also finds common ground with established theory; and unfortunately, it is also shown that Inversion is very clearly observable in the demise of families and organizations, but is also evident in many prevailing threats to Democratic systems.
Many other issues are elaborated. For example, the concepts of Linear, Lateral and Integrative Mindset Configurations are already established to different degrees in Psychology and the other paradigms, but each are now extended considerably. They are now shown to be critical in different Phases of Development while Habituation patterns for each are associated with different stages, so that the understanding of how each shapes Personality and Culture and then leads to distinctive debilitating friction in systems, is greatly enhanced. Similarly, the concept of Culture which is seen as the collective equivalent of Mindset is transformed. The best existing theory delineates ten different types which map directly onto the hierarchy, and in the order in which they are shown to relate to higher productivity and returns for both organizations and nations alike; so again, UDT finds construct validity through correspondence with existing modelling, while at the same time bringing completion (with five other culture types), as well as operationalization of what has been a most troublesome but nebulously-operationalized concept.
The new model is shown to illuminate many other issues in society. The demise of grand theory and religion are implicated in the rise of Post-Modernist Skepticism, disrespect for authority, rise of authoritarianism, etc., which all poses an existential threat to Democracy and international order. UDT clearly shows the immaturity of all of the fallen theories and religions, and Vol. 1 introduces how Vol. 3 focuses on re-establishing, modelling, and operationalizing Emotional Maturity to bolster family life and counter failure in this area as measured by family breakup; and also, a model of Spiritual Maturity that has been eroded by different Religions that are, in turn, shown to have been shaped by particular different immature Mindsets and Cultures, and where failure is measured in terms of the catastrophic damage of religious conflict at the macro level but also Inversion at all levels of society.
Furthermore, it is proposed that UDT can provide a broad platform to build the called-for Learning Society, but as a Phase on the journey toward an optimal Regenerative Society, especially if re-enforced by UDT modelling outlined across all 4 Volumes.
The conclusion arises that UDT offers a single means of unifying a disjointed paradigm in Psychology, fulfils Psychology’s obligation to other paradigms, and facilitates it taking its rightful place at the center of world affairs that at all levels of our world can now benefit from working developmentally in congruence with human nature rather than antagonizing it.
UNITARY DEVELOPMENTAL THEORY AND ORGANIZATION DEVELOPMENT, VOL. 2: A MODEL OF DEVELOPMENTAL LEARNING FOR CHANGE, AGILITY AND RESILIENCE
Myles Sweeney BA (Psychol.), MBS (Finance), PH.D (Business & Economic Psychol.)
To all Developmentalists, the failure rates for Developmental Interventions across the paradigms of Psychology, Organizational Science and Economics that range from 75% to 100% and verified beyond doubt for organizations in five dense pages in Managing Change by Burnes (2017, x-xiv), should be truly shocking; and while alarming in their own right, they also signal a fundamentally paradigmatic problem that is acknowledged across the board, e.g., in Economics where the leading Developmentalist Jeffrey Sachs refers to the paucity of the models of human-nature available to it, and on which Economics is actually based. Furthermore, across each domain, the same fundamental remedy has been prescribed – i.e., “Learning”, whether it is as Learning Life, Learning Organization, Learning Region, Learning Economy or more recently by Nobel Economist Joe Stiglitz, Learning Society which he even refers to as the only viable Government strategy. However, even though there is such external demand – as well as internal demand from prominent Psychologists such as Dan McAdams who have called for an integration of the theories from various schools to generate a normative model of personality and developmental learning – no such model has been devised – until now!
UDT is a model that not only answers the need in Psychology, but is equally valid and operationalizable across each of these paradigms, i.e., for developmental analysis and intervention for people, organizations, societies and economic systems such as nations when each are defined as Micro-, Meso- and Macro- Socio-Economic Systems as well as sub-systems such as Teams or Regions. The modeling for each of the three levels of system is presented in four different volumes with Vol. 1 dedicated to the Psychology behind the model and what it brings to the discipline in practice; Vol. 2 shows how its application to Organization Development advances prevailing practice; Vol. 3 addresses Societal systems such as Family, Education and Justice; and Vol. 4 does the same for Macro-Economic Development.
The model comprises a sequence of Developmental Phases through which humans naturally learn developmentally, and these phases correspond with – but also complete – existing models, whether that learning is the natural development of a young person or a developmental intervention in an organization. The model also shows how learning stalls in well-established patterns of corresponding Habituation Stages such as Groupthink in organizations which corresponds to Identification Habituation for individuals growing up within restrictive parameters of a parent’s identity. These Phases are grouped into seven Levels and from Immaturity to Maturity, they are called Inversion, Critical, Equilibrial, Operational, Complexity, Creativity and Leadership. The ultimate Level is divided into the Phases of Integrative Leadership and finally Regenerative Leadership which encompasses the ultimate expression of Maturity which is the Regenerative Eco-System whether referring to a family with that Level of parenting or an organization that seamlessly and without friction facilitates Spin-Off Enterprises, M&As, etc.
Along these Phases, Construct Capabilities that are significant to a system’s purpose can be assessed, and development occurs prescriptively along these Capabilities. Failure rates are shown to be either due to interventions being overpitched relative to the previously undiagnosable Learning Level/Change-Capacity of the system, or through missing any of the Phases. UDT diagnosis optimizes Traction for interventions which also gain Sustainability from the normatively prescribed Phases. Such methodology can be used in stand-alone interventions, or to guide and offer structure to post-modern approaches such as “Dialogue” methodologies.
Construct Validity is shown in the degree to which UDT corresponds with modelling from across schools such as Psychoanalysis, Behaviorism, Cognitive Psychology, and Humanist Psychology and also developmental modelling across Organizational Science and Economics. For example, in Psychology, uniquely, the three Stages of Level (1) correspond to DSM-5’s three Clusters of Personality-Disorders and adds value to understanding them. More importantly for OD, it is shown how this Level of Habituated Mindset/Culture is always a permanent drag on development in a process called Inversion that also finds common ground with established theory, and is very clearly observable in the demise of organizations, and the only defence is the internal processes of Regenerative Leadership which cyclically refreshes the developmental process for Capabilities.
Other issues that are elaborated include Linear, Lateral and Integrative Mindset/Culture
with each associated with different Phases of Development and Habituation patterns along the hierarchy. Newly understood is the fact that all human systems are existentially either Linear or Lateral and must build Integrative capacity as well as remaining aware of their underlying biases. While Linearity brings positives such as Purpose and Discipline, its negatives include features such as 1-Dimensionalism, Exclusive Goal Focus, Command and Control, and Red Tape across the Levels such as Self-Destructive Exploitation (1a), Autocracy (2a), Silos (2b), and finally, Bureaucracy (4b) which is the highest Level of Maturity available to Linear-based Culture, which is averse to Change and Creativity. Laterality has strengths related to Change, Social Conscience and Creativity, but is associated with deficits such as Neurotic obstruction of Goal achievement (1b), Paralysis by Analysis (1c), Chronic Inclusiveness (3), Over-Connectedness (5) and Creativity without market connectedness (6).
Most significantly, Culture which is regularly cited as the main intrinsic reason for OD/CM failure and has only been so poorly understood as, e.g., “the way we do things around here” is newly defined in terms of Habituated Stages which correspond to those Cultures described in the most advanced modeling on the subject, but of course, as with all Construct Correspondence, the UDT model fills in gaps and offers a complete and operationalizable solution to the Culture problem. This line of research also critically shows that the UDT Phases are positively correlated with Returns and Productivity for organizations and nations alike. This also suggests that Culture Change which typically focuses on personal issues like Values, Assumptions, Beliefs, becomes another normative praxis-based OD intervention focusing on maturing Capabilities.
UDT similarly transforms the concept of Agility which is shown as its highest three Levels. A a case study of an exemplar Agile Company is examined in detail to show how the organization’s Philosophy, Growth Patterns and prevailing functionalities map onto essential elements of the UDT modeling which ultimately offers a methodology to achieve such Agility for all organizations through their own planning, effort and intrinsic progression rather than trying to simply copy elements of such Complexity. Only 22% of organizations reach these Levels which average 30% premium, but a critical fundamental insight is the finding that systems functioning in the non-Agile Division of the Model (i.e., 78% of organizations) have limited intrinsic Integrative capacity and therefore must begin every CM/OD intervention at the beginning of the normative process rather than use a simple Next-Step strategy which is the typical prevailing approach.
It is also shown how the UDT diagnosis can predict Resilience and how its developmental process builds the espoused combination with increased Agility whereby Resilience progresses from planned responses through the Phases to a capacity at Level 7 for an organization to re-invent itself as required in the face of adversity, and surely, this is the key lesson about Resilience from the Covid Pandemic. Case studies are offered to show how the UDT modeling of maturation and inversion corresponds with historical examples of both successful growth and degradation, as well as good and bad interventions.
For organizations, the model is used in 3 ways: as a Discussion Tool or simple Catalyst for change; as a process of discrete Change Management; and as a more systemic diagnostic-and-developmental intervention for e.g., Team Development, Organization Development, Digital Transformation, M&A Integration, etc.; and examples are offered where the model has been successfully used for each of the three levels of intervention.
Uncertainties from many factors, oil price, production, execution and operational risks, external factors, are issues that impact project profitability. For major capital projects (MCPs), with magnitude of investment well into hundreds of millions or billions of dollars, a robust, structured rational process is required to minimize uncertainties and provide all the required information for a decision maker to make a high-quality, measured decision in continuing with execution of the project. Semi-structured interview for projects with CAPEX valued around $500 million, and above $10 billion were performed; coupled with comparison between appropriation and actual results, and literature reviews to uncover the complexities, experienced issues that happened in the process. Process and bias analysis were performed to provide solution. Reviews were made on Decision Executive (DE)/Decision Review Board (DRB) effectiveness, market price intelligence, high-grading or project sequencing options, external alignment, optimum time period of investment, biases encountered and how to mitigate them. To mitigate above identified issues, inclusion of mitigation in the FID process, through DE/DRB alignment, project sequencing, market condition scenarios, technology maturity review, debiasing methods, external stakeholder engagement, and optimize time to FID, including transformation and implementation process is presented as part of the study’s conclusion.
This article challenges the conventional wisdom in economic models of litigation that optimism necessarily increases the likelihood of trial and that pessimism increases the chances of settlement. We show that optimism may, to the contrary, expand the settlement range. By increasing the perceived value at stake in litigation, optimism may induce parties to invest additional resources in a dispute, which increases the overall bargaining range. Because of the strategic nature of litigation expenditures, optimistic litigants may spend an amount that outweighs the negative impact of optimism on the bargaining surplus. Whether optimism increases or decreases the settlement rate ultimately depends on whether, in concrete instances, the negative effects of optimism on the bargaining surplus outweigh the positive effects created by the additional investments in litigation. Our results provide counterintuitive insights into the selection of disputes for litigation. ( JEL K00, K21).
All the large scale and medium scale companies have the anticipation of obtaining long term benefits perhaps of short term financial losses, probable breakdown as well. For that Enterprise Information Technologies (EIT) put into service by many large scale and medium scale companies in an increasing number in the expectation of achieving long term benefits. EIT is a very costly and risky asset of Information Technology and the assessment is done based on the increase in the production and the reinforcement of corporate restructure through the business integration process. To work out this, we propose Analytical Network Process (ANP) to handle distinguished assessment of associated set of evident, critical and operational attributes. To illustrate the stability and the consequential administrative significance, we perform analyzes and carry out experiments with real-world data.
To err is human. Errors occur wherever people make decisions—privately, in organizations or for society. Leaders, individually or in teams, are regularly faced with unintended outcomes of their choices. How the leadership deals with these situations, the cultures they create or perpetuate around themselves and in their organizations, has an enormous impact on the quality and creativity of future decisions. How social innovation, in the form of changing mindsets, leadership behaviors, and organizational cultures, can lead to better decision-making and ultimately enormous industry growth is demonstrated in the way the aviation industry has addressed the problem of reoccurring human error in flight crews.The training concept of crew resource management (CRM) was developed, based on extensive research, to reduce decision-making errors and improve leadership teamwork. This approach resulted in a new mindset and leadership culture in flight operations globally. CRM is credited with the specular and continuing reduction in human error, without which the growth of the industry since the 1980s would not have been possible. Today, CRM principles and practices are applied in many high-reliability industries and progressively also in the medical sector.The core elements of CRM discussed here are (a) a nonpunitive, system-wide search for causes and improvements with a clear focus on learning, not punishment; (b) acceptance of human limitations, requiring vigilance in error-prone situations and participation by everyone; (c) effective communication, including respectful assertiveness in hierarchical relationships; (d) accurate and shared situation awareness; (e) workload and stress management; and (f) effective decision-making. All of these elements require (g) leadership and the cooperation of the whole team.Because of its origin in aviation, this approach is well-suited for hierarchical leadership contexts. Applying CRM is a leadership responsibility and will take time to transform an organization’s culture. The results of this innovation on the quality of interaction, communication, and decision-making, however, can be spectacular, as several outstanding examples of flight crew performance and teamwork in difficult situations have demonstrated in recent years.
The aim of the study is to examine the sunk cost bias in underperforming mergers and acquisitions (M&A) deals characterized by capital spending in the post-M&A period. For this study, the deal-specific data of 184 mergers and acquisitions transactions, from SAARC and ASEAN regions, were collected from Bursa Malaysia Library. However, Firm-specific data for acquirer and target firms were gathered from annual reports and websites of the respective companies. Univariate and multivariate analyses were employed to capture the impact of firm performance on capital expenditures for 3 years period after M&A deals. Research findings favour the sunk cost bias. The study further finds that underperforming M&As experienced more capital spending in the post-M&A period which implies that management is allocating more resources to failed mergers to prove them worthy. There are a number of studies on the topic based on hypothetical surveys and/or lab experiments. However, this study was conducted on frequently occurring phenomena of mergers and acquisitions. This study is quite unique/original considering the research methodology and generalizability of study findings at strategic level decisions.
This research examines gender-based helping behavior from a social dominance perspective. We focused on the interplay between the gender of a prospective donor and the gender of the recipient in shaping donation decisions in contexts that either empower recipients or not. In two studies (N = 866), male (but not female) donors chose to donate less often (Study 2) and to give lower amounts (Studies 1–2) to women in need than to men when donations were made in a potentially empowering context – a business context (e.g., donating to a person whose shop burned down), than in a nonempowering context – a domestic context (e.g., donating to a person whose house burned down). Lack of empathy for the female recipient among men partially mediated this gender–donation bias effect (Study 2). These findings suggest that men are less likely to help women in situations that empower women and challenge the existing gender hierarchy.
In managing enterprise, uncertainty belongs to the attributes of the decision making processes. In competitive environments, where success depends on high-quality decisions, taking the wrong steps can lead to loss of market share or even contribute to running out of business. That is why it is important to choose from the many alternatives those methods which will be most effective in solving problems in a simple and quick way, and heuristics offer such a solution, which has proved its usefulness in uncertain business environments. The aim of this study is to present and evaluate heuristic methods and show their specificity and applicability in management science for enterprises in times of uncertainty. In this article, the theoretical aspect of managerial heuristics is presented, and the emphasis is also placed on presenting practical examples of applying heuristics in companies with times of uncertainty, but also in these times of the Covid-19 pandemic. The study also offers conclusions and provides practi al recommendations.
Using bounded rationality in decision-making by Simon, H. A. 1957. Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations, 2nd ed. New York: Free Press; Simon, H. A. 1976. Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations, 3rd ed. New York: Free Press) and planning theory by Cervero, R. M., and A. L. Wilson. 1994a. Planning responsibly for Adult Education. San Francisco: Jossey-Bass; Cervero, R. M., and A. L. Wilson. 1994b. “The Politics of Responsibility: A Theory of Program Planning Practice for Adult Education.” Adult Education Quarterly 45 (1): 249–68; Cervero, R. M., and A. L. Wilson. 1996. What Really Matters in Adult Education Program Planning: Lessons in Negotiating Power and Interests. San Francisco: Jossey-Bass; Cervero, R. M., and A. L. Wilson. 1998. “Working the Planning Table: The Political Practice of Adult Education.” Studies in Continuing Education 20 (1): 5–22; Cervero, R. M., and A. L. Wilson. 2006. Working the Planning Table: Negotiating Democratically for Adult, Continuing, and Workplace Education. San Francisco: Jossey-Bass, this case study explored 2017 Every Student Succeeds Act (Every Student Succeeds Act of 2015 (ESEA) 2015. Pub. L. No. 114-95 § 114 Stat. 1177) grant application documents submitted by state education agencies (SEAs). Specifically explored was the presence or absence of requests in the grant applications for funds that can be used to support school library programs and employ and/or provide professional development funding for licensed school librarians. The purpose was to provide a description of decision-making and planning at the level of state administrators who functioned in the context of SEA and Local Education Agency organizations and were responsible for writing 2017 ESSA plans. Collected was data in four phases. The findings of this research informed a new model that illustrate sources of power relationships among legitimate interests in 2017 ESSA planning. A second proposed model can be applied to all types of libraries and their decision-making and planning. Both models can be tested in future research studies.
Este documento presenta una aproximación al bucle decisional policial con sus características y atributos. Presta especial atención al asesoramiento para la toma de decisiones policiales e indaga sobre los niveles de Gestión Decisional Policial –GDP–. Se presentan los resultados de un estudio exploratorio y cualitativo que corresponde a una fase de la investigación “Gestión Decisional Policial”. Por otro lado, se aplicó el método de sistematización de experiencias y la entrevista semiestructurada como técnica de recolección; de igual forma, se empleó la observación no participante para complementar la visión de los entrevistados. De esta manera, se realizaron veinte entrevistas semiestructuradas a comandantes policiales que integran la pirámide de responsabilidades en la ejecución del Modelo Nacional de Vigilancia Comunitaria por Cuadrantes –MNVCC–. El resultado principal de la investigación es que la GDP compromete a los policías indistintamente de la posición jerárquica en la que se encuentren y obedece a un modelo implícito no declarado. Se concluye la necesidad de construir una visión conjunta sobre la toma de decisiones policiales mediante el estudio de otras unidades policiales para mejorar la propia práctica.
Past difficulties in demonstrating a link between accuracy in person perception and "empathy" are reviewed. The advantages of a forced choice accuracy assessment technique, in which observers view target subjects on video tape and then attempt to match targets with three-word self-descriptions, are discussed. Two studies designed to validate the method were performed. In both studies observers' accuracy in matching targets with self-descriptions exceeded chance. The effects on accuracy of observers' perspective-taking ability and targets' self-consciousness were also explored. Study I revealed that subjects scoring high on a measure of perspective-taking (Davis, 1980) were more accurate than low perspective-takers as predicted. Study II showed that target subjects high in private self-consciousness (Fenigstein, Scheier, & Buss, 1975) were more easily matched with their self-descriptions than were targets low in private self-consciousness. Study II also showed that the effects on accuracy of both observers' perspective-taking abilities and targets' selfconsciousness were related to the length of time targets were observed. The theoretical connections between perspective-taking and both stereotype and differential accuracy are discussed.