MANAGEMENT 101
WEEK 4: DECISION MAKING AND ETHICS
PROFESSOR CARTON
([email protected])
If you write code for a Smart Car, you are a
moral philosopher (whether you like it or not)
Decision Making
• How to make a good
decision
• How to make the right
decision
Decision Making
• How to make a good
decision
• How to make the right
decision
ACCURACY
Biases in Judgment
• Bounded information processing
• Heuristics — cognitive shortcuts (rules
of thumb) for making decisions
1. Availability heuristic (Kahneman)
2. Over-sampling positive cases
(Denrell)
3. Forecasting well-being (Schweinsberg;
Which time zone is Pennsylvania in?
Gilbert)
CREATIVITY
The Creative Process
• When generating new ideas, people heavily “anchor” on the first
idea they think about (the primal mark)
• It matters whether the primal mark is novel, practical, or
(preferably) both (Berg, 2014)
Practical
Primal
Mark
Novel
Primal
Mark
A folder with pockets for
resumes, business cards,
and references
A shoe that allows you
to record interviews
Choice and Decision Making
The paradox of choice (why freedom can be
oppressive)
- More choice is exhausting
- At Vanguard, for every 10 mutual funds offered, participation went down 2%.
- More choice leads to more regret
- Alternative selves (Obodaru, 2012)
- To explore further, read Barry Schwarz’s “Paradox of Choice” or watch his
TED talk)
- Maximizing versus Satisficing
Choice and Decision Making
• Maximizers: focus on
objective best
• Satisficers: focus on
meeting own standards
– Compared to satisficers,
maximizers tend to
• Do better
– More options considered,
more initiative (20% higher
starting salaries)
• Feel worse
Sources: Schwartz et al., 2002;
Medvec et al., 1995; Iyengar et al., 2006
Decision Making
• How to make a good
decision
• How to make the right
decision
Decision Making
• How to make a good
decision
• How to make the right
decision
ETHICS
Ethical Decision Making
• The ethicality of a decision
depends on which moral
framework one adopts
(Verplanken & Holland, 2002)
– Consequences versus Rights
• Fracking in North Carolina
Decision Making
• Heuristics are cognitive shortcuts that are useful given
our limited time and cognitive resources, but they lead
to predictable traps
• Primal marks that are both new and practical are best
for triggering creative thinking
• Too much choice is oppressive because it is
overwhelming and leads to anticipated regret
• A decision viewed as appropriate using one ethical
framework can appear inappropriate using another
framework
NO
Are we making progress?
Is progress even a good
thing?
YES