MAN 320F Final

What should be done with Vanatin in US/Foreign markets?

-recall V immediately and destroy it -stop product of V but allow what's been made to be sold -stop all ads/promos of V, but provide it for doctors who request it -continue efforts to most effectively market V until its sale is actually banned -take legal, pol actions to prevent authorities from banning V

How handled at Harvard

119 applicants entered the system; all rejected, "this behavior is unethical at best- serious breach of trust that cant be countered rationalizzation. any applicant found to have do so will not be admitted to the school"

Carnegie Mellon

2 applicants rejected, first school to announce, ethical breach, not admit them, equated it to walking into admissions office and opening up cabinet and looking at your file

Complex systems

2 characteristics complex interacitons tight coupling

Decision tree

3 key elements- actions, uncertainties and/or outcomes, description of consequences, want to do this in a graphical pictoral way

MIT

32 applicants all rejected, honesty and integrity critical character attributes,

Stanfrod

41 applicants; will make individ decisions "actions will factor into our assessment of the applicant's"

What really happened

Armstrong decided not to take any of the jobs, ended up taking a few and then did a buy out of a printing company with friends, then sold it for $20 mil

Coffee shop extra cash scenario

Carnegie Mellon did a survey of 5,000 students with same scenario, 22% go back to return, 60% would keep it

What is Dave going to do?

Decision tree Quantitative model

Overconfidence bias and Everest

Hall and Fischer were very accomplished climbers, had every reason to believe that they could overcome obstacles, Hall had record of successful ascents to Everest- reached summit 4 times and guided 39 clients to top, overconfidence in regard to jugments and choices- Fischer "got it completely figured out, built a yellow brick road to summit," Hall: "worked 39 times so far and some of the ppl were more pathetic than you" Krakauer: "believed a disaster would happen, was worried about having to save another team's ass, Fishcer: "I'm going to make all right decisions, 100 percent im coming back

McCaskey has misled Devon about her objective

M has told D that she reps an international company intersted in building semiconductor manufacturing plant in US, society of competitive intelligence professionals

What would you do if you were Martha?

M was shaken by her drawing awareness of what was happening- includeing her own gradual complicity in practices she disliked, over the weekend, she had several long conversations with a good friend several long phone calls home with her dad, handed in her resignation and then couldn't find work for antoher 5 months

MBA Hackers case

MBA applicants to diff schools hacked the online application system, Harvard, MIT, Carnegie Melon, Stanford

How has org cutlure at Seleris had an impact on Martha

Mc was attracted to IAD bc of its rapid growth and exciting projects, no ballast to keep culture in check, no formal or infomral control systems, IAD has no written policies, Richardson does deliver occasional lunchtime tals but these are pointless, IAD, the old guard and the new guard, two subgroups could contribute to unethical cultures, if member of new come close to new guard, would never go as far as old, Bud Hacker "prided himself on running a tight shop and on his ability to get job done, no matter what it took" consultants believe leaders primarily driven by money, missing any indication of integrity, respect, or commitment to values, leaders seem self-engrossed, ripe for intentional and unintentional misconduct

What does the org culture emphasize

Opener said high pressure, results oriented- sales and innovation,

Fischers logistical problems were burdensome and exhausting

Prior to final summit push- customs problem at Russian border, charter plane flight problem, poor weather in Nepal during trek to base camp, labor unrest among nepali porters, During final summit push- assumption that affixed rope lines in place, lead sherpa should have been at front of pack, Fischer was supposed to serve as teh sweep but lost contact with team and had no radio

Can decide to quit

Silicon 6 project would provide sufficient grounds, McCaskey's Boss has deceived client and has doctored the presentation slides, promised inside info form an ex-employee of the competitor, very little integrity, what worries McCaskey most is what's happening ot her- realizes compromising own integrity, leaving at critical time in course of project, hard searching for another job esp bc they ask why leaving

UT example

UT wants to be #1 academically ranked university, must make a lot of changes, sometimes we'll have to implement something that we don't believe in, must do radical change for real change, incremental doesn't work

Does an Ethical dilemma exist in fundamentals of business?

What do customers, employees, and shareholders want? employees- good salary, benefits, travel time, treated well customers- low prices, high quality shareholders- incr stock value can you have all of these? natural conflict exists which can cause ethical dilemma

Dave Armstrong Case Questions to Consider

Why is the decision facing Dave such a difficult one? If you had to make a decision today, what aspect would you focus on? What advice would you give Dave to help him make a wise choice? Which job should he take

Dont go into negotiation thinking

all issues distributive- where one party wins, other loses, often there are compatible and integrative issues as well

Overconfidence bias

believing too much in own ability

Neglecting BATNA

best alt to negotiated agreement, have to be a point where youre willing to walk away

Errors in Decision making

biases and group think

loyalty

both options ID in the case assume McCaskey will proceed with project, not violating any laws, better that she does it than hand it off to someone else- has some concerns, more conscientious, if she completes, then promoted then she could bring about change in org, have influence in how this culture evolves

compatible issues

both parties have same interests- anything one party wins, the other wins also

The client also sending mixed signals

client want to avoid antitrust law violations, but client willing to offer incentives to a former employee

McCaskey is gathering competing intelligence for a client on a former client

company whose chip manufacturing plant is of interest to McCaskey's current client was itself a previous client of McCaskey's consulting firm, problem arises if a firm is serving competitors simultaneously

How to proceed

concentrate on: issues, key areas of importance, address the problem, not personalities, be creative, emphasize win-win

Representative bias

considering current situation as identical to past situations, ex: Mutual Fund bias- in everyone, they all have same saying that past performance is not indication of future results

How did Bratton do it?

created sense of urgency by letting public officials see if first hand, made public officials use subway instead of chauffeured cars, How did bratton form coalition? How did bratton create strategies?

What personal qualities does it take to reach summit of everest?

determination, insanity, physical and mental fitness, awareness of own limitations, experience, money, luck, synergy

quantitative model

determines how you reached teh decision, the conclusion, determines list of criteria and weights, taken everything into account other than risk, multiply the total number by the risk chance, even with biggest risk factor, Job A came out on top

Bounded Rationality

developed by Herbert Simon- received the Nobel Prize in 1978 for his work, satisficing- seek the first alt that solves the problem, limited info processing capability of humans makes it impossible to understand all the info necessary to optimize, so ppl seek solutions that are satisfactory and sufficient, rather than optimal, once reached, we consider ourselves to be done

complex interactions

diff elements of system interact in ways that are unexpected and difficult to perceive or comprehend

Things to think about in inventing options

diff in interests can be friend, not necessarily foe, look for diff values placed on time: rearrange payoffs to give earlier returns to more impatient party-in exchange for higher payoff to less impatient party

How to negotiate to the "right"

do your hw- understand challenges company faces, explain how you will help them solve their problems, underscore the impact you will have on co-workers, how your involvement will have a positive impact on org

Letting Price Bulldoze Other Interests

dont focus exclusively on price, most deals are 50% emotion and 50% economics, need to develop a working relationship ex: buying a car, if you were only focusing on the car and transaction then focus on price but its more than that, want a longer relationship, need to feel good about the deal. if you have to go back to original contract, then in great danger ex: Amicus Networks, one of competitors was venture capital and they raised 45mil and going after their market, visited some of their cusotmers- offered to provide Amicus's service for free, but no one grabbed it bc they didn;t have a relatiohship, tried to buy them out but wasnt good deal

To reach the best integrative agreements

dont just compromise on issues make tradeoffs across isuses of differential importance, consider some issues simultaneously, dont just go one by one

The Electric Sewer aka NY Subway

during early 90s, NYC subway reeked of fear, city on brink of bankruptcy: gangs, beggers, winos, drugs, muggings, robberies, citizens boycotted subway- revenues decr, complaints to NYPD, polic stats showed that only 3% of major crimes happened on subway- wasn't ppl's perceptions of it, cries fell on deaf ears, no one listening, Bill Bratton hired as NYPD commissioner, was told that due to ecnomic problems, no incr in NYPD budget, achieves sharpest drop in subway crime in transit's history, didn't incr costs

McCaskey interaction with D

ensure D doesn't violate current non compete agreements, is Devon's knowledge relevant to what the client seeks?

plans for implementing change

est a sense of urgency by creating a compelling reason for why change needed- if no sense then why would ppl change? form a coalition with enough power to lead the change, create new vision to direct the change, create strategies for achieving the vision, empower others to act on the vision- the authority to change, remove barriers to change, encourage risk-taking and creative problem solving, companies now encourage this, plan for, create and reward short-term wins that move org toward new vision, reassess changes and make adjustments

West Point

est by Thomas Jeffereson in 1802, has tradition of integrity, in professional world, cost of dishonesty measured in dollars, in army, measured in human lives, honor code: a cadet will not lie, cheat, or steal or tolerate those who do, had to bring about change to restore integrity, done by Dr. Howard Prince who is now at the LBJ school

Mt. Everest Case Objectives

examine how teams make high stakes decisions in stressful situations, examine a catastrophic failure in detail, examine 2 leaders in action during a crisis situation

Tradeoffs

face up to the fact that he can't have it all, has to resolve tradeoffs btwn him and wife

Flexibility in Accounting

figure out a way to use complex accounting change to make results look much better in short run, even though you know there is no underlying change in company's performance, in long run, could have serious consequences for shareholders, but you'll make a lot more money, 86% said yes it is wrong and big deal, story based on Enron

Marine Corps Lecture

focus on integrity- doing the right thing even when nobody is watching, individ self policing system. measure integrity in micro scale, can translate into business but not directly

consequences

full description of consequences hard to enumerate due to uncertainty

Key sources of uncertainty

govt-FDA making it hard to do new product testing, doctors- have a lot of options, patients- have lots of options, competitors- offer effective subs w/ less side effects, investors, general public, labor market- attract talented ppl

What criteria for grade for Hall and Fischer?

grade give them as leaders? as climbers? are they the same skills- no

factors affecting decision making

greatness of harm- level of harm we're causing, proximity of victim- if you know the ppl, has a diff impact, immediacy of consequences- how immediate consequences are and the severeness, probability of more harm- are we going to continue to harm ppl, concentration of effect- hurt individ v group- drugs affect certain ppl and wont affect others ex: Vionce, Tomaxacin

Group think

group members try to minimize conflict and reach a consensus decision without critical evaluation of alt ideas

Key ethical issues in Martha McGaskey Case

had to decide whether she was going to use proprietary info from Devon, wasn't a document that said what was ethical and what wasn't

A Hiring decision

hiring Weber as sales rep- really great, interested, and good performer, then as he is leaving tells story about shooting neighbor's dog, problem we're trying to solve- we want to incr revenue which he has done before

Understanding the V decision

in making decision, what is the primary focus?- individs, groups, org, stakeholders, society, who/what are key sources of uncertainty in enviro? What does the culture emphasize?

Client has been led to believe that Seleris has access to inside info

is it true? does Devon really have info? the info would be based on his recent work for Europeans, Malone has misled client, the paradox

integrative issues

issues that are of more importance to one party than the other

Alts

jobs are very different, would be easier if jobs similar, is the list of alts he's lookking at sufficiently broad? or should he open it up beyond what he has?

info

lacks experience, has little to base decision on

uncertainties

many dimensions of which he cant control as well as normal business and operational uncertainties

Arguments for social responsibility

meet public expectations, max long-run profits, meet ethical obligations, enhance public reputations, discourage further govt regulation,

Common Ground

most overlooked value often comes from differences, diff can work in favor

Objectives

new decision for Armstrong, Multidimensional- personal, family, profession (fresh Harvard grad), involves longterm objectives, needs to balance his wife's objectives

Why change can be so difficult

normal practice of prodcut development- focus on investment and delevopment on most profitable prodcuts, focus on demand among top customers, risk is that companies may reject innovative products taht do not meet this criteria,

Consider the following factors

objectives, alts, consequences, tradeoffs, uncertainties, risk, info

Team Psychological Safety

okay to ask for help, admit an error or express diff point of view, risk of looking ignorant, incompetent, being seen as intrusive, negative, funciton of interpersonal trust and mutual respect, ppl feel safe and tend to learn more effectively as a team

Escalation of commitment

one of greatest decision making biases in business, in spite of neg info, commitment actually incr, aka sunk cost effect, tendency to continue to commit resources to failing course of action, get tied to the stuff that we work, become attached, when see complete shake up, typically bc of sunk cost effect, ex: country: Vietnam, perhaps Iraq, Personal: gambling, Company: project gone bad also seen in Mt. Everest Case

3 components to consider

org level, individ level, group level

Distributive issues

party interests are diametrically opposed, so anything one party gains, the other loses

Train scenario

push someone to stop a train and save 5 ppl or do nothing? standing at control switch and see 5 ppl on one track and 1 on th eother, will you switch it?

Understand and address your counterpart's problem

put yourself in the other person's shoes, solve their problem as a means to solving own, ex: Gas leak detector- very best but ppl didn't want it bc gas stations didn't want to tell EPA their problem, reported the lowest indication when EPA allowed larger, ex: Intranet- tried to sell to financial companies, put entire back office online, in early 90s, financial service corp- asked them to develop more of this industry, gave them a list of what they wanted, had excatly it, wanted 5% equity but ended up not doing deal. called staff next day- went wrong with 5% equity, feared that competitors woulnd't want to do business with software which would've inhibited innovation of it

Factors behind change

quest for sustainability, organic life cycle- move from top to bottom, not a matter of if at bottom but when, technology, market and client needs change, ethical behavior, globalization, crisis or M&A, same reasons ppl change

Options Martha has?

quit, go through with it, go with it at a lower monetary amount and then keep the money for herself, ask Kaufman to do it, find another source, tell Devon the truth, call a lawyer, can be summarized as loyalty (to org, making it work) exit (quit), voice (stand up for what's right)

Ethical gaps in society

rate of organ donors in US is 30%, 20% of ppl who need an organ die due to shortage, Denmark 4% UK 17% Germany 12%, Austria 99.98% France 99.91%- have high numbers bc have opt out instead of opt in like in US- govts have made the decision that ppl should be organ donors

Sunk Cost effect and Everest

refers to tendency for ppl to esacalate commitment to a course of action in which they have made substantial prior investments of time, money or other resources, during 1996 expeditions, Fischer and Hall spoke of importance of adhering to "2 oclock rule"- if not on top by 2 pm, turn around, darkeness is not your firend, during final push to summit, Krakaurer called that turn around times be ignored, climbers coulnt ignore substantial prior investments that they had made- cost to join, time spend training and prepping, investment in equipment, time spent on mountain itself,

risk

risking personal wealth

COnditions affecting safety on Everest

several conditions undermined the development of psuchological safety on everest- perceived status diffs w/i teams, leadership styles, lack of familiarity prior to climb, lack of candid discussion among team members- Fischer's deteriorating health, Halls turn around rule, each of these conditions impaired decidion making effectiveness

What behaviors has Martha exhibited that may have contributed to her being put into his situation?

she avoids confrontation/conflict and silences her own doubts and emotions, doesn't talk about the way old guard uses employees to gather data, compounding these inhibitions is the streak of success McCaskey has enjoyed, M has had a streak of success and has not had to handle much neg feedback, when she felt pressured, tended to remain silent

What will happen if you make recall and destroy it?

stock prices drop, then sued by shareholders

Team effectivness but not on Everest

team members demonstrate a high level of trust and mutual respect for one another, team members do not believe that the group will rebuke, marginalize, or penalize individs for speaking up or challenging prevailing opiinons

Negotiation

the art of letting them have your way, if you want to change someone's mind- you first learn where that person's mind is

Key Influences on Decision Making

the facts, creativity, intuition, group dynamics and synergy

If all decisions were made by rational ppl

then they would define problem, ID decision criteria, weigh criteria, generate alts, rate each alt, compute opitmal decision

Sound decisions that lead to failure

think about breakthrough tech- cell phones, digital photos, online retailing, market may not be ready for new tech- too late or early, leading cusotmers may not be willing to risk new product, focus on the "safe bet"- may be subsequently overtaken by innovation, cost and profit margins- can limit pp's thinking limit attractiveness of innovation, customers often control pattern of resource allocation, small markets dont solve the growth needs of large corporations, difficult to ID successful applicaitons in advance, larger org's rely on core competencies and values

change is difficult

think about what it takes for you to change a bad habit that you may have? takes as much effort if not more for an entire company to change

Org resistance to change

threat to est. resource allocations, structural inertia, limited focus of change, group inertia, threat to expertise, threat to est power relationships, can boil down to: inertia and power authority, makes very difficult to change, think about some of our cases: Apple, GE, SAS, AES- huge monumental levels of chane to become most valuable companies, incremental changes too difficult, only way to get it about is by radical change

tight coupling

time dependent processes, fairly righted sequence of activities, one dominant path to achieving the goal and very little slack, have 4 characteristics: 1. time dependent processes 2. rigid sequence of activities 3. one dominant path to achieving goal, 4. little slack combine with complex intereactions have a disaster

The Bratton Way

took away cars and drivers from city managers and precinct chiefs, made all city managers ride subway to and from work, incr competition btwn chiefs by having biweekly meetings to review resulsts as a group- having this accountability, able to get chiefs to actually do something, ID and utilized a few "kingpins" to lead the charge, reallocated resources to "hot spots" spot where a lot of problems- stick more police there, took approach of radical change to get a reduction of crime on subway,

Slippery Slope

unless you have some founding principles, easy to slip into unethical practices, have to work your way up to stealing a billion dollars, John and Sandy- John thinks keeping the money isnt wrong and neither was hacking the site but Enron bad, Sandy says all of it bad, number one reason ppl make unethical decisions is based on what their boss doe

anchoring bias

using early, first received info as the basis for subsequent judgments

availability bias

using info that is most readily at hand

Confirmation bias

using only the facts that support decision, discard other facts

arguments against social responsibility

violation of profit maximization, dilution of purpose- economic productivity, additional costs, lack of skills to address social issues, lack of social accountability, lack of broad public support

voice- stand up and be counted

voicing her concerns, attempting to develop an alt approach to work at IAD, entails: be hones with Devon about project, ascertain whether Devon's knowledge will be valuable to client, an open discussion with Malone and Richardson- they're unethical but if she has convo will need to anticipate neg repercussions, honest and open discussion with D, client, M and R would provide pivotal app for M to develop herself as leader, can build a coalition among ppl at firm committed to finding less unsavory ways operating, contact managing director in CHicago

Who is involved in decision making?

what are their goals- determined by reward and evaluationg system and by structure- which are linked,

Examining Catastrophic failures

when accidents occur, often engage in search for key factor that caused it, natural tendency to blame one thing but in reality evaluate multi-dimensional components

Stifling constructive dissent

when teams operate in a climate of high psychological safety, individs more likley to express dissenting views, several conditions serve to diminish psychological safety, and thereby diminish constructive dissent in groups and orgs, ex: Emperor's new suit to determine wisest ppl, case demonstrates the impact a lack of prior interaction can have on likelihood that team members express dissent, culture of solving problems through deference to experts

Historical View on change

white water rapids simile- time when holding on for dear life and tothers where things are calm, stability and predictability don't exist, face constant change-bordering chaos, most of the time, "Innovators dilemma"- disruptive technologies, message: have choice in co can either bring about change to own products and services or you can let competitor do it for you, always have to change, can't rely on status quo

General class questions

why climb mt everest?- prestige, bragging rights, fame, expensive to climb, Why did this tragedy occur? what is the root cause of this disaster?- yes supposed to be a team but didn't know each other, group of individs, ppl's ego, the weather, dangerous place to be in general