As a result, they offer larger settlements than are actually warranted. F. Task(s) Question 1 (a) Caring Sdn Bhd (CSB), a Malaysian tax resident company, is principally engaged in the business of manufacturing and sale of vitamins and supplements. Englewood Cliffs, NJ : Prentice HallKuhnert, K.W. Rory Felton has spent most of his past two decades in music being pro-artist. Are you really gathering information to help you make a smart choice, or are you just looking for evidence confirming what you think youd like to do? Photo by Rainbow Weinstock. J. Hammond, R. Keeney, H. Raiffa. (2011). In one psychological study of this phenomenon, two groupsone opposed to and one supporting capital punishmenteach read two reports of carefully conducted research on the effectiveness of the death penalty as a deterrent to crime. They find the status quo comfortable, and they avoid taking action that would upset it. Their efforts to be thorough are causing delays, and the whole team is feeling frustrated. This will help you avoid being anchored by an initial estimate. We get through the day with heuristics. These traps make us see patterns that aren't there, overestimate our abilities, or try to make reality conform to what we want rather than what's likely to happenthey can be especially tricky in . Furthermore, in one of the group discussions, Admiral Anderson clarified rules of engagement for ships that do not follow the quarantine in a meeting. This essay on Confirming-Evidence Trap in Decision-Making was written and submitted by your fellow student. But managers who are aware of the dangers of anchors can reduce their impact by using the following techniques: We all like to believe that we make decisions rationally and objectively. They were then told that they could easily exchange the gift they received for the other gift. It can highlight sunk costs or lead you toward confirming evidence. The framing trap can take many forms, and as the insurance example shows, it is often closely related to other psychological traps. An example of such work is Bhat et al., in which a team of psychiatrists and economists followed up on psychotherapy clinical trials in India and deployed the tools of behavioral economics and psychiatry to study long-run effects of psychotherapy on mental health, economic well-being, and decision-making . Think of the implications for business decisions, in which major initiatives and investments often hinge on ranges of estimates. Decision makers display, for example, a strong bias toward alternatives that perpetuate the status quo. Plan D: This plan has a two-thirds probability of resulting in the loss of all three cargoes and the entire $600,000 but has a one-third probability of losing no cargo. Its important to remember, though, that the best defense is always awareness. Think through your position before any negotiation begins in order to avoid being anchored by the other partys initial proposal. Acknowledging a poor decision in ones personal life may be purely a private matter, involving only ones self-esteem, but in business, a bad decision is often a very public matter, inviting critical comments from colleagues or bosses. That's why it was ironic that Rory was recently criticized for being anti . If the business does have a good chance of coming back, thats a wise investment. To reduce the effects of overconfidence in making estimates, always start by considering the extremes, the low and high ends of the possible range of values. While your answers to both questions should, rationally speaking, be the same, studies have shown that many people would refuse the fifty-fifty chance in the first question but accept it in the second. To minimize the distortion caused by variations in recallability, carefully examine all your assumptions to ensure theyre not unduly influenced by your memory. Why cant people free themselves from past decisions? But, even more dangerous, they can work in concert, amplifying one another. Even though most of us are not very good at making estimates, we tend to be overconfident about our accuracywhich can lead to bad decisions. There was a clear distinction of roles among the various members which made the decision making process easier and selective. Sticking with the status quo represents, in most cases, the safer course because it puts us at less psychological risk. Making estimates or forecasts about uncertain events, however, is a different matter. Strategic Decision Making and Leadership Principles in the Movie "Thirteen Days" Introduction The movie presents a situation where decisions (with long term consequences) need to be made. It can distort how we collect and interpret data, and lead us to neglect important evidence. When considering a problem, the mind gives disproportionate weight to the first information it receives. Avoid exaggerating the effort or cost involved in switching from the status quo. The film focuses on Kennedy, his brother Robert Kennedy, and White House aide Kenneth O'Donnell. I recommend airstrikes followed, by invasion. The dean made this decision because of what happened in, the past and how they played it back in those days. The anchoring trap leads us to give disproportionate weight to the first information we receive. No private DNS zone linked to VNet1. The soviet understands only one language-, Action. How would we respond if they killed ours? Strategic Management: Formulation, Implementation, and Control (12th ed.). Test assumptions, meaning your mental model of the world. Get views of people who involved in the original decisions. No one can avoid their influence; theyre just too widespread. Compare and contrast individual and group decision making. Some, like the heuristic for clarity, are sensory misperceptions. I have mentioned a list of decision-making traps and decision-making practice as follows. An official immediately responded with, "Bobby, sometimes there is only one right choice, thank goodness when, it's so clear." But the loans fail anyway. Downplay the effort or cost of switching from the status quo. Consider the position with an open mind. Similarly, for the bottom end, they were told to pick a low estimate for which they thought there would be only a 1% chance of the closing value falling below it. The hidden traps lead one into a decision trap, a thought pattern by a decision maker that can make a situation go in a negative way. Second, the Joint Chiefs continually insisted the President to go for military measures and invade Cuba. CSB prepares its, You are interested in studying what causes economic growth. Incremental Decision Process Model; 2. Identify other options and use them as counterbalances, carefully evaluating all the pluses and minuses. 13.7 Getting Connected: The Case of Social Networking. If the penalties for making a decision that leads to an unfavorable outcome are overly severe, managers will be motivated to let failed projects drag on endlesslyin the vain hope that theyll somehow be able to transform them into successes. Linda had not realized the decision-making process could be hindering her team's progress. During this time many crucial events in United States. He explains: * What happened at FTX * How drugs have induced past financial bubbles * How to be long AI while hedging Taiwan invasion * Whether Musk's Twitter takeover will succeed * Where to find the next Napoleon and LBJ * & ultimately how society can deal with . Our brains are always at work, sometimes, unfortunately, in ways that hinder rather than help us. The seven traps in decision making, and how to avoid them. Be open minded. For all decisions with a history, you will need to make a conscious effort to set aside any sunk costswhether psychological or economicthat will muddy your thinking about the choice at hand. If there is any mistakes in the process, the price is destruction of every human civilization. For example, if a person buys an object based on it's comfort, when the frame should be price, it can be a costly mistake. Favoring alternatives that perpetuate the existing situation Example: A key merger stumbles because the acquiring company avoids imposing a new management structure on the acquired company. In half the cases, we used 35 million in the first question; in the other half, we used 100 million. Their decisions about whether to settle a claim or take it to court usually hinge on their assessments of the possible outcomes of a trial. I recommend air strikes followed by invasion". The Anchoring Trap can cause alternatives to be clustered around the anchor, throwing off estimates, forecasts, and consideration of wider-ranging alternatives. (2011). There were instances of this kind of Trap in the movie. Reassign responsibilities when necessary. In one of the meetings, Adhlai clarifies the similarity in risks for the 2 options offered by the members while endorsing his view on the importance of back channel as the third option to deal with the situation. Below are 6 of 12 key decision traps from Decision Mojo that could be impacting the decisions you or your team are making. New York: McGraw-Hill/Irwin., Pearce, J. Many mergers, for example, founder because the acquiring company avoids taking swift action to impose a new, more appropriate management structure on the acquired company. This bias leads us to seek out information that supports our existing instinct or point of view while avoiding information that contradicts it. . (2009). It is caused by the Soviet Unions clandestine action of putting nuclear missiles in Cuba, which the United States perceived as an offensive and dangerous move. Its authors John S. Hammond, Ralph L. Keeny and Howard Raiffa proposed that there are eight key decision making traps that we often fall into when making decisions. The movie has validated the following public management concepts: 1. For executives, whose success hinges on the many day-to-day decisions they make or approve, the psychological traps are especially dangerous. Academy of Management Review. The same problem can also elicit very different responses when frames use different reference points. Those who had heard the list with the more famous men thought there were more men on the list, while those who had heard the one with the more famous women thought there were more women. These weapons could wipe out most of the eastern and southern United States in minutes if they become operational. Decision traps are so hard-wired into our thinking process that we often fail to recognize them even when we are falling right into them. (19184). On leadership. Let's face it: Everyone wants . People sometimes, for example, inherit shares of stock that they would never have bought themselves. Lets not rock the boat right now, the typical reasoning goes. Maybe Ill rethink it later, they say. Remind yourself that even the best managers make mistakes. This trap is . The program helps people identify traps that can lead to suboptimal decisions and arms them with strategies for making the best decisions possible. ThousandOaks, CA: SageHill, M.A. The movie I watched for this movie analysis assignment is Thirteen Days. Through daily practice, our minds become finely calibrated. Thirteen Days captures the tension that the crisis provoked and provides an example of how foreign policy was made in the last half of the 20th century. Having failed to seize the occasion when change would have been expected, management finds itself stuck with the status quo. Be careful to avoid anchoring your advisers, consultants, and others from whom you solicit information and counsel. Nikita Khrushchev installed Soviet missiles in Cuba, 90 miles from Florida and within striking distance of 80 million Americans. This simple test illustrates the common and often pernicious mental phenomenon known as anchoring. . She and her team have been diligently gathering information for weeks. Personally, I think Adlai is the coolest character in this movie since he was the one who propose the idea of political negotiation (i.e. The movie Thirteen Days is a movie about a series of discussion President of the United States of America goes through to resolve its political issues with Soviet Union. Anchoring and relying on first impressions. 10-25). This category only includes cookies that ensures basic functionalities and security features of the website. This is just a, conventional way. In theory, applying your lessons learned should make your new decisions better by not making the same mistakes twice. There were several factors that likely weighed heavily on Kennedy's mind as he debated what action to take. They automatically accepted the supporting information and dismissed the conflicting information. Thirteen Days Movie Analysis.docx - Thirteen Days Movie Analysis Introduction: The movie I watched for this movie analysis assignment is Thirteen Days. Fortunately, a way out of their dilemma was near, but it wasn't the one she was expecting. If we go ahead with these air strikes, you know what it will come to in the end. Hence, making the film more entertaining and representing multiple . When a manager gets stuck in a decision because of an. Remember that the desirability of the status quo will change over time. For this reason, I would like to investigate the extent to which John F. Kennedys decision-making process changed from the Bay of Pigs Invasion to the Cuban Missile crisis during his presidency. They can be as insidious as a stereotype about a persons skin color, accent, or dress. Over the years, weve posed those questions to many groups of people. Compare and contrast individual and group decision-making. Compare and contrast different decision-making models. You may find that elements of the current situation act as barriers to your goals. Unlike other approaches to leadership, such as the trait approach, the style approach looks at a leaders behaviors and actions. Organizational Behavior (pp. More people will, for instance, choose the status quo when there are two alternatives to it rather than one: A and B instead of just A. The chronicle begins on the morning of Tuesday, October 16, when Robert Kennedy first learns that Russia has been installing nuclear weapons in Cuba. Each barge holds $200,000 worth of cargo, which will be lost if not salvaged within 72 hours. Seek information from a variety of people and sources after thinking through the problem on your own. Decision making can also be classified into three categories based on the level at which they occur. The confirming-evidence bias not only affects where we go to collect evidence but also how we interpret the evidence we do receive, leading us to give too much weight to supporting information and too little to conflicting information. If you do make the same mistake twice, you're either an idiot, you weren't paying attention the first time, or both. If you are like 71% of the respondents in the study, you chose the less risky Plan A, which will save one barge for sure. Being a dangerously close country to the United States, JFK knew he needed to make a smart and safe decision, and fast. Take more time in order to "think slow.". This simple experiment illustrates anchoring - a common and sometimes harmful trap in decision making. Ask yourself whether you would choose the status-quo alternative if, in fact, it werent the status quo. Leading Organizations: Perspective for a new era. Even if you cant eradicate the distortions ingrained into the way your mind works, you can build tests and disciplines into your decision-making process that can uncover errors in thinking before they become errors in judgment. Its also the toughest and the riskiest. When others recommend decisions, examine the way they framed the problem. 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