MOR 560 (Section 16692R) Managerial Judgment and Decision-Making Popovich 102, Tu-Th, 12:30 1:50PM

Spring 2013
Terance J. Wolfe, Ph.D. Email: Office: Phone/Fax: Office Hours: terancew@marshall.usc.edu Bridge 307-F (tel): 213.740.0765; (fax): 213.740.3582 Wednesday, 3:30 4:30PM; by appt

Course Overview The more things change, the more they remain the same. French Proverb No problem can be solved within the same consciousness that created it. Einstein The observer affects the observed. Heisenberg To expect the unexpected shows a thoroughly modern intellect. Oscar Wilde A problem well-stated (framed) is a problem half-solved. John Dewey
Aside from breathing, there is probably no more ubiquitous human activity than decisionmaking. From the everyday and routine (what to eat for breakfast, following your everyday route to school) to the unusual and unique (how to circumvent freeway traffic good luck!, purchasing a house, getting married, creating/changing strategic direction), decision-making is omnipresent. As humans, we are literally making thousands of decisions on a daily basis. Some are consequential, many are not. Given the pervasiveness of decision-making and its significance in our personal and professional lives, it is important to better understand decisionmaking as a process, and to better understand oneself as a decision-maker. The purpose of this course is to enhance your ability to make effective decisions. We will do so by examining contemporary thinking derived from the fields of decision theory, cognitive science, behavioral finance and economics, and organizational behavior. The course is very applied in its orientation. It is structured by themes and applications. The four major organizing themes are: (1) The problem: attention will be given to how you structure problems. How do you formulate and construct problems, and how does this process of formulation and construction fundamentally shape and define the probable solution? (2) The person: attention will be given to who you are as a decision-maker. What factors and experiences shape your approach to decisions? (3) The pitfalls: attention will be given to the traps and pitfalls inherent in decision-making. What are the cognitive biases and limitations that interfere with our ability to make the most effective decisions? (4) The process: attention will be given to a variety of tools and methods for decisionmaking. Which tools/methods/approaches are best suited for different types of problems?

Spring 2013 Syllabus 560-16692R

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The applications include: (1) Individual decision-making: attention will be given to the art and science of individual decision-making. How can we leverage self-knowledge and self-awareness, and analytical skills and techniques to enhance personal decision effectiveness? (2) Team decision-making: attention will be given to the process of team decision-making. How does team decision-making differ from that of individuals? What factors contribute to dysfunctional team decision processes, and what contributes to effective team decision process and outcomes? Objectives. Given the above, the objectives of this course are to: Develop a clearer understanding of yourself as a decision-maker and to identify opportunities for personal change and development Enhance your capability in effective problem-formulation Demonstrate the way in which problem formulation fundamentally shapes, defines and, ultimately, constrains the range of possible feasible solutions Increase awareness, knowledge and competence in the use of a variety of decision tools, methods and approaches Understand pitfalls and traps that can undermine effective decision-making Apply concepts and methods of judgment and decision-making to individual and team decisions

Course Format
The course is designed around a series of lecturettes and applied exercises be they decision cases, judgment situations or decision-making exercises. In a given class session, you can expect any combination of lecture, class discussion, case analysis or experiential activity and/or video. Each class session requires advance preparation and active participation. You are expected to be fully prepared for each class, and to actively participate in class discussions. Some activities may require that you meet with others outside of class as part of your pre-class preparation.

Keys to Class Success

There are four keys to getting the most out of this course: Do the readings. Grasp the key concepts of judgment and decision-making. Apply course concepts in your preparation for, and participation in, each class, case or activity. This will enhance your learning and, ultimately, your individual and team decisionmaking effectiveness. Prepare thoroughly. You will do better in each class session if you read the material and cases carefully and prepare thoroughly for each discussion. Design personal learning experiments. Think about your own judgment and decision style and process, as well as your sense of your personal decision-making effectiveness. What works for you? What doesnt? Where do you get yourself in trouble in your personal decision-making process? Design experiments to modify your style to enhance your effectiveness. These will be incorporated into your personal self-assessment and developmental action plan. (See description on page 4). Reflect on your decision-making experiences . Draw out the principles that explain your choices and how those are likely to apply (or not) in future decisions. Spring 2013 Syllabus 560-16692R
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Achieving the objectives requires disciplined preparation and application of the course concepts. The bulk of the work is devoted to preparing for, conducting, and debriefing a variety of decisions and situations.

Course Materials
Texts (required):

Bazerman, M.H. & Moore, D.A. (2009, 7th ed.). Judgment In Managerial Decision Making. New York: Wiley (ISBN 0471684309). [abbreviated B below] This is a good introduction to the psychology of managerial judgment and decision making. Russo, J.E., & Schoemaker, P.J.H. (2002). Winning Decisions: Getting It Right the First Time. New York: Doubleday (ISBN 0749922850, pbk.). [abbreviated R&S below] The best how to make managerial decisions book out there. Self-Assessment Instruments. A fee (payable to me) will be required for some instruments Course Reader. Articles and cases available through USC bookstore Summary of Course Assignments
Scores and grades for this course are assigned based on completion of, and relative performanceon, the following: 1. Preparation & Participation 15% 2. Personal Assessment: Self as Decision Maker Mar 5 20% 3. Problem-Solving a Personal / Professional Problem Mar 12 15% 4. Case Analysis 15% 5. Group Project (including peer evaluations) May 2 35% TOTAL 100% Details are described in the following pages; due dates are summarized in the Schedule of Sessions (pages 7 9).

Course Assignments and Grading

NOTE: All written requirements MUST BE SUBMITTED AS A HARD COPY AT THE BEGINNING OF CLASS ON THE ASSIGNED DUE DATE
1. Class Preparation and Participation (15%)

Preparation involves completing the assigned readings and preparing assigned cases. Self Assessment and Goal Statement due Thursday, Jan 17, start of class Complete a goal statement (< 1 page double-spaced). Include a frank assessment of your decision-making strengths and weaknesses (1 paragraph) and a declaration of a personal goal what you want to get out of the course (1 paragraph). In addition, identify the 3 major difficulties encountered in your past decision-making, and 3 things you would most like to improve about your decision-making. Participation in class discussions involves active participation that contributes to the class. Active participation means asking questions, answering questions, making observations, commenting on other students comments, or challenging a view. Making a contribution means your comments actually move discussion forward. Spring 2013 Syllabus 560-16692R
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2. Learning Experiments and Personal Self-Assessment (20%) due Mar 5 Successful C-level executives consistently respond that the single most important activity contributing to their overall effectiveness is the development of self-insight, and the translation of that into their management and leadership practice. This course represents an opportunity for you to do just that! Personal Self-Assessment. You will receive a cross-section of individualized feedback through a variety of self-assessment instruments. Each instrument is deemed useful in better understanding yourself broadly, but as a decision-maker, specifically. Together, they represent an invaluable tool for personal reflection, building self-awareness and understanding, and advancing your personal development. Assessments will include: Decision Style Inventory, Learning Style Inventory, McKinsey Decision-Making Survey, GIAL, FIRO-B, Humantelligence Scan, and Rotter Locus of Control. Learning Experiments. Each participant will design and conduct at least three (3) personal learning experiments intended to improve or enhance your judgment and decision-making skills and/or style. A learning experiment is derived from reflection upon an as is condition, where an as is condition is linked to concrete experience (to be defined and illustrated in class). A learning experiment is based upon an if then hypothesis about behavior and its consequences that is derived from an as is condition. It might take the following form: If I try new behavior (style) X, then outcome Y will happen. Your experiment will be a test of the validity of the hypothesis. The setting for a learning experiment is any situation or activity that presents you with a personally meaningful decision-making/judgment opportunity. For each experiment, specify the following: The purpose or objective of the experiment The action or behavior undertaken The relevance or personal meaning of the experiment An assessment of your effectiveness in executing the experiment A statement of the outcome of the experiment A statement as to how, if at all, your first learning experiment informed the design and execution of your second learning experiment A statement as to how, if at all, your second learning experiment informed the design and execution of your third learning experiment

The Deliverable: An integrated assessment of self as decision-maker with a developmental action plan. Briefly address each of the following: PART A Self-Assessment Instrument Feedback Reflect on your self-assessment feedback. Identify and discuss any patterns, relationships, connections. How would you characterize yourself as a decision-maker given this feedback? What do you now see as your decision-making strengths? Shortcomings? How might your style interfere with achieveing the outcomes you desire? How do you rate your personal effectiveness in making managerial judgments and decisions?
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Spring 2013 Syllabus 560-16692R

PART B Learning Experiments Restate (modifying as appropriate) the learning goals you submitted at the second class session. Briefly describe each of your three judgment and decision-making learning experiments in terms of its goal, design, implementation, and outcome. Include a statement of your perception of each experiments effectiveness. What did you learn? How, if at all, have your experiments affected your decision-making style and skills? Given your self-identified strengths and shortcomings as a decision-maker, and taking into account the experiences and the outcomes of your personal learning experiments, what new learning goal(s) can you formulate for yourself? Develop a personal development action plan to address your identified areas for development. Your development plan should be specific and actionable; that is, it should identify specific activities and/or behaviors, milestones, a timeline, and some characterization of how you would assess the outcomes of your plan.

PART C Personal Development Plan

3.

Problem-Solving a Personal / Professional Problem (15%) due March 12 Identify a meaningful current personal or professional problem that you are facing. Utilizing appropriate course concepts and tools, frame the problem, gather and analyze appropriate data, identify possible pitfalls and how they can be addressed, generate and evaluate possible alternatives, and formulate a solution/decision. Be sure to appropriately identify relevant tools and concepts, and provide bibliographic references.

4. Case Analysis (15%) due start of class of assigned case Each student will write up a case analysis for one of the four (4) assigned cases. Thought questions will be provided for each case. Cases will be evaluated based upon the selection and application of appropriate tools and concepts, not on their responses to the thought questions, as well as the quality of the rationale developed to support your approach, and decision and action recommendations. 5. Group Project (35%) ALL group projects due at start of class, May 2 A group project and group paper is required, along with a class presentation of it at the end of the semester. The target length for the paper is twenty pages of 12 point, doublespaced, paginated text excluding bibliography and appendices. The optimal group size will be based on the number of students enrolled. Specific guidance for the group project will be provided under separate cover. Final Group Projects due for all groups, May 2. (10%) Team Presentation and Class Ranking. Each team presentation will be ranked by the rest of the class from 1 (most effective) to X (least effective, where X is determined by the total number of teams presenting). The team ranked most effective will receive an A; the team ranked least effective will receive a B-. The remaining teams will be distributed in between. Grading of the presentation will focus on the clarity, style, and overall effectiveness of your presentation with regard to conveying the learning points of your group project. (15%) Team Paper. Evaluation criteria provided under separate guidance. Spring 2013 Syllabus 560-16692R
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(10%) Peer Evaluation. As I will have no window into your teams process and individual contributions, you will have an opportunity to evaluate the performance of each of your team members. As the peer evaluation accounts for literally 10% of your total grade, peer evaluations can represent the difference in an entire letter grade (e.g., from an A- to a B-) in the calculation of your final course grade. ALL written materials must be submitted based on following: 12 point Times Roman font 1 margins all around Page numbered

Academic Integrity Policy

The Marshall School is committed to upholding the Universitys Academic Integrity code as detailed in the SCampus Guide. It is the policy of the Marshall School to report all violations of the code. Any serious violation or pattern of violations of the Academic Integrity Code will result in the students expulsion from the degree program. It is particularly important that you are aware of and avoid plagiarism, cheating on exams, fabricating data for a project, submitting a paper to more than one professor, or submitting a paper authored by anyone other than yourself. If you have doubts about any of these practices, confer with a faculty member. Resources on academic dishonesty can be found on the Student Judicial Affairs Web site (http://www.usc.edu/student-affairs/SJACS.). The Guide to Avoiding Plagiarism addresses issues of paraphrasing, quotations, and citation in written assignments, drawing heavily upon materials used in the universitys writing program. Understanding and avoiding academic dishonesty addresses more general issues of academic integrity, including guidelines for adhering to standards concerning examinations and unauthorized collaboration. The 20052006 SCampus (http://www.usc.edu/scampus) contains the universitys student conduct code.

Students with Disabilities

Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.

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Peer Rating Form for Team Project Team # ____ Topic: __________________________________________

Rank order each of the members of your group INCLUDING yourself on each of the items below (1 is best, 2 is next best, etc.). The Peer Evaluation counts towards each students final grade. Use the back of this form for required comments as per the guidance at the bottom of this page. Please list each of your group members below in alphabetical order by last name. Be sure to include yourself. ALPHABETICAL by LAST NAME, then FIRST Group Members: A. ________________________________________________ B. ________________________________________________ C. ________________________________________________ D. ________________________________________________ E. ________________________________________________ F. ________________________________________________
Rating Criterion / Group Member A B C D E F

1. Quality of contribution to group discussions 2. Quality of contribution to writing the assignment 3. Quality of contribution to organizing the assignment 4. Quality of initiative when something needed to get done. 5. Reliability in completing assigned responsibilities 6. Amount of effort put forth. 7. Commitment to the group 8. Leadership, motivation provided to the group. 9. Emphasis on getting the task done. 10. Emphasis on cooperation and working well with others. 11. Would want to work with this group member again.
TOTAL Assign an alphabetical grade to each member of the group based on your OVERALL impression of her/his contribution to the groups performance. You may assign a group member any grade from 0 to A+. However, you cannot assign As to more than 60% of your total group members.

A 5-person group cannot have more than three As, 6 persons = no more than four As. Failure on the part of each team member to observe this constraint will result in each team member receiving a B.

On the following page, provide at least three directly observable behaviors that represent what you believe each team member did well, AND at least three behaviors that you observed that represent areas for improvement/development for each team member. This is NOT about personalities, but rather it is about those behaviors that are in service and supportive of successful team work and those behaviors that are not.

Peer Rating Form_Team Project

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Peer Rating Form for Team Project Team # ____

A:___________________ Did Well (behaviors): Area for improvement/development (behaviors):

Topic: __________________________________________

B:___________________ Did Well (behaviors): Area for improvement/development (behaviors):

C:___________________ Did Well (behaviors): Area for improvement/development (behaviors):

D:___________________ Did Well (behaviors): Area for improvement/development (behaviors):

E:___________________ Did Well (behaviors): Area for improvement/development (behaviors):

F:___________________ Did Well (behaviors): Area for improvement/development (behaviors):

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MOR 560 Managerial Judgment and Decision-Making, Schedule of Sessions, Readings and Deliverables, Spring 13
Week 1 Date Jan 15 Topic / Assignment Introduction / Course Overview Garbuio, Lovallo, Viguerie: How Companies Make Good Decisions (McKinsey) Goel: How Google Decides to Pull the Plug (NY Times) Gil, Start-Up Speed, Think Quarterly Setting the Stage Bazerman, C1: Introduction to Managerial Decision-Making R&S, Introduction: Decision-Making in the Real World R&S, C1: Setting the Course The Problem: What is the Problem? R&S, C2: The Power of Frames R&S, C3: Creating Winning Frames R&S, Interlude A: Improving Your Options B, C4: Framing and the Reversal of Preferences Garvin & Roberto: What You Dont Know About Making Decisions (HBR) Smith: An Intergroup Perspective on Individual Behavior B, C7: Fairness and Ethics in Decision-Making Exercise/Deliverable See links on last page for these two articles Come prepared to discuss Student Info Sheet (Qualtrics Survey)

Jan 17

Sheena Iyengar, The Art of Choosing (ted.com) Case 0: Dave Armstrong A (not to be used for case write-up) One page Self-Assessment and Goal Statement due Framing Lecturette / Discussion

Jan 22

Jan 24 3 Jan 29 Jan 31 4 Feb 5 Feb 7

Framing Lecturette / Discussion (contd) Case 1: Basic Industries Basic Industries (contd) Basic Industries (contd)

Wheeler & Pillemer: Moral Decision-Making: Reason, Emotion and Luck (HBS) Urbany, et al: How to Make Values Count in Everyday Decisions (MIT Sloan) The Person: Who Am I as a Decision-Maker? B, C3: Bounded Awareness B, C5: Motivational and Emotional Influences Snowden & Boone: A Leaders Framework for DecisionMaking (HBR)

Case 2: Clayton Industries: Peter Arnell

Feb 12

Concept and Method in Self Assessments Self-Assessment Feedback and Interpretation I: FIRO B Self-Assessment Feedback and Interpretation II

Feb 14

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 Decision Styles Inventory

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Week Date 6 Feb 19

Topic / Assignment Simon, et al: Making Management Decisions: The Role of Intuition and Emotion (See ABI/Inform database) Campbell & Whitehead: How to Test Your Decision-Making Instincts (McKinsey) See links on last page R&S, C8: Personal Challenges of Learning Cole: Economics Could Force Lucks Hand (Yahoo)

Exercise/Deliverable Self-Assessment Feedback and Interpretation III General Incongruity Adaptation Level (GIAL) Learning Styles Inventory (LSI) Self-Assessment Feedback and Interpretation IV Rotter Locus of Control http://www.careerdiagnostics.com/surveys/locus_control.htm http://guerin.ballarat.edu.au/ard/bssh/psych/RotterLOC.pdf McKinsey Decision-Making Survey http://survey.confirmit.com/wix3/p1317959575.aspx Decision Exercises (Green/Plous)

Feb 21

Feb 26

The Pitfalls: How Do I Get Myself in Trouble? B, C2: Common Biases Hammond, Keeney & Raiffa: The Hidden Traps in DecisionMaking (HBR) Tingling & Brydon: Is Decision-Based Evidence-Making Necessarily Bad? (MIT) The Process: How Do I Decide? Simon, Decision-Making and Problem-Solving (See links, p 10) R&S, C4: Avoiding Distortion and Bias R&S, C5: Intelligence in the Face of Uncertainty R&S, Interlude B: Technologies for Aiding Decisions R&S, C6: Choosing: A Pyramid of Approaches R&S, Interlude C: Implementing Your Chosen Option B, C6: The Escalation of Commitment Rogers & Blenko: Who has the D? (MIT) SPRING BREAK March 18 22 Yeaaaa!!!

Feb 28 8 Mar 5 Mar 7

Decision Exercises (contd) *** Personal Self-Assessment due *** A Review of Techniques A Review of Techniques (contd)

Mar 12

Case 3: Guest-Tek Interactive *** Personal Problem-Solving Paper due *** Case 4: TerraCog Global Positioning Systems

Mar 14 10

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Week Date 11 Mar 26 Mar 28 12 Apr 2

Topic / Assignment Teams / Participation: Whats Different About Teams? R&S, C7: Managing Group Decisions Frisch, When Teams Cant Decide (HBR) Brett, et al, Managing Multicultural Teams (HBR) Moldoveanu & Martin, Stretching the Mind: Developing an Adaptive Lens to Deal with Complexity Eisenhardt, et al, How Management Teams Can Have a Good Fight (HBR)

Exercise Lecturette / Discussion: Team Decision-Making BCPC Internet Strategy Team: An Exercise Team Decision Exercise A Growing Pains (not for individual case write-up) Team Decision Exercise B When Key Employees Clash (not for individual case write-up) Team Decision Exercise C The Case of the Unhealthy Hospital (not for individual case write-up) Team Decision Exercise Debrief Executive Decision-Making at General Motors

Apr 4 13 Apr 9 Apr 11 14 Apr 16 Apr 18

Lovallo & Sibony, Distortions and Deceptions in Strategic Decisions (McKinsey) Bringing it All Together Recap and Review B, C11: Improving Decision-Making R&S, C9: Learning in Organizations R&S, C10: Bringing It All Home: The Decisions of RealHome.com R&S, Epilogue: Learning into Action Team Presentations (n = 3) Team Presentations (n = 3) Team Presentations (n = 3) Review of Project Team Learnings

15 16

Apr 23 Apr 25 Apr 30 May 2

*** ALL Written Team Term Projects due ***

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ARTICLE LINKS FOR ASSIGNED READINGS Garbuio, Lovallo & Viguerie, How Companies Make Good Decisions (McKinsey) https://www.mckinseyquarterly.com/How_companies_make_good_decisions_McKinsey_Global_Survey_Results_2 282 Goel, How Google Decides to Pull the Plug, NY Times http://www.nytimes.com/2009/02/15/business/worldbusiness/15iht-15ping.20189152.html?_r=1&scp=3&sq=how %20google%20decides%20to%20pull%20the%20plug&st=cse Gil, Start-Up Speed, Think Quarterly http://www.thinkwithgoogle.com/quarterly/speed/start-up-speed-kristen-gil.html Simon, Making Management Decisions http://proquest.umi.com/pqdweb? index=2&did=129075&SrchMode=2&sid=1&Fmt=6&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS =1294179519&clientId=5239 Campbell & Whitehead, How to Test Your Decision-Making Instincts (McKinsey) https://www.mckinseyquarterly.com/How_to_test_your_decision-making_instincts_2598 Cole, Economics Could Force Lucks Hand (Yahoo Sports) http://sports.yahoo.com/nfl/news?slug=jc-luckdecision010411&print=1 McKinsey Decision-Making Survey (McKinsey) http://survey.confirmit.com/wix3/p1317959575.aspx Simon, et al: Decision-Making and Problem-Solving http://zb5lh7ed7a.search.serialssolutions.com/directLink?&atitle=Decision%20Making%20and%20Problem %20Solving&author=Simon%2C%20Herbert%20A.%3B%20Dantzig%2C%20George%20B.%3B%20Hogarth%2C %20Robin%3B%20Plott%2C%20Charles%20R.%3B%20Raiffa%2C%20Howard%3B%20Schelling%2C %20Thomas%20C.%3B%20Shepsle%2C%20Kenneth%20A.%3B%20Thaler%2C%20Richard%3B%20Tversky %2C%20Amos%3B%20Winter%2C %20Sidney&issn=00922102&title=Interfaces&volume=17&issue=5&date=19870901&spage=11&id=doi:&sid=Pro Q_ss&genre=article&lang=en Lovallo & Sibony, Distortions and Deceptions in Strategic Decisions (McKinsey) https://www.mckinseyquarterly.com/Distortions_and_deceptions_in_strategic_decisions_1716 NOT REQUIRED (but may be interesting) Lovallo & Sibony, The Case for Behavioral Strategy (McKinsey) https://www.mckinseyquarterly.com/The_case_for_behavioral_strategy_2551

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