Objectives

• To identify phases in the decision making process,
• To learn about the traps in each of these phases and
• To learn about tools and techniques for making sound and rational decisions.
• To learn about types of negotiations.
• To learn how to increase the chances for making a good deal in a negotiation.

Contents

Business revolves around making decisions, often risky decisions, usually with incomplete information and too often in less time than desirable. Decision-making is a business skill that managers often take for granted in themselves and others, but it is not as easy as some might think. This course will familiarize students with important approaches to decision making, thereby covering both normative and descriptive theories, as well as prescriptive tools. Moreover, various topics relevant for managers as decision makers will be discussed, for instance, intuition, group processes, the impact of time and time pressure, experience, accountability, or ethics, to mention just a few. Several examples, case-studies and exercises will illustrate how various tools can be applied to improve managerial decision making and to what extent various theoretical approaches are useful to understand what managers are actually doing.

A special focus will be on negotiations. A negotiation can be seen as the interaction of at least two parties whose interests are not aligned and who use their judgments and make decisions while trying to find an agreement. We will look at different types of negotiations, and learn about negotiation tactics/strategies. Particularly this part of the course will be quite practical, that is, include many actual negotiations and exercises, but also real cases (which have been documented for teaching purposes).

Organization of the course (and corona-adjustments):

We will start with the first session on September 21st in Anthropole 2013. The current plan is to have physical classroom sessions every week, though uncertainty about future developments may impose some constraints on us and force us to be flexible. Irrespective of this uncertainty and flexibility, a few things can already be stated now and will not change: (1) Physical presence on campus will at no point be necessary and absence will not be penalized – in fact, the grading scheme does not involve a component for contribution. (2) The sessions will be recorded and the recordings will be made available on the moodle. (3) There will be no sit-in exam at the end, but a final project, to be completed in January 2022, that will be centered around a decision-making case.

For many, if not most, decision problems it is hard or even impossible to determine what the optimal process and decision would be. As a consequence, this course involves not only lecturing and theory, but also discussion, arguments and controversies. For some weeks, a set of videos will be uploaded before class. You will have to watch these videos before the respective session, prepare the relevant assignments and upload them on the moodle platform before the deadline. Assignments have to be done either individually or in groups (the composition of some of these group will involve some random element). Most assignments will be discussed in class. We will, presumably, have (a) one community who comes to the classroom every week, (b) another one who follows remotely but in real-time, and (c) still another one who only watches the recordings of the sessions later. It is highly recommended that you come to the classroom and – finally again, after the last “corona” semesters – appreciate the opportunities offered by face-to-face interactions. Moreover, (b) is strongly favored over (c). We definitely cannot ensure that you get a full and good learning experience if you belong to community (c) – and even being in community (b) will come with some restrictions (e.g., you will not be able to listen to the in-class discussions and questions by your fellow students).

References

The course is largely (but not exclusively) based on the following literature. Some parts are required, others are recommended, more detailed information will be provided in the class.

Russo, J. E. & Schoemaker, P. J. H. (2002). Winning decisions: Getting it right the first time. New York: Currency/Doubleday.

Book review (of Russo & Shoemaker) by Patric Andersson (2003). Journal of Economic Psychology, 24, 795-797 (http://www.sciencedirect.com/science/article/B6V8H- 48V83GT-3/2/21062afe8a7aba5be6d3914e0955c2f7)

Bazerman, M. H. (2006). Judgment in managerial decision making (6th ed.). New York: Wiley.

Hammond, J. S., Keeney, R. L., & Raiffa, H. (1999). Smart choices: A practical guide to making better decisions. New York: Broadway Books.

Galotti, K. M. (2002). Making decisions that matter: How people face important life choices. Mahwah, NJ: Erlbaum.

Halpern, D. F. (2002). Thought and Knowledge: An introduction to critical thinking. Lawrence Erlbaum Assoc. Inc.

Hoffrage, U., & Marewski, J. (2015). Unveiling the Lady in Black: Modeling and aiding intuition. Journal of Applied Research in Memory and Cognition, 4, 145–163.

Klein, G. (2004). The power of intuition: How to use your gut feelings to make better decisions at work. New York: Currency/Doubleday.

Hogarth, R., (2001). Educating Intuition. Chicago: University of Chicago Press.

Gigerenzer, G. (2007). Gut feelings: The intelligence of the unconscious. New York: Viking Press. (Translated in 17 languages, so probably also in your native language).

Nutt, P.C. (1989) Making tough decisions: tactics for improving managerial decision making. San Francisco: Jossey-Bass Publishers.

Fisher, R., Ury, W. L., & Patton, B. (2011). Getting to yes: Negotiating agreement without giving in. Penguin.

Inside Risk. A documentary of a kidnapping case, with a focus on the negotiation with the kidnappers, (not publicly available).

Pre-requisites

Interest in the topic. Registration on the moodle. No limitation concerning number of students.

Evaluation

First attempt

Exam:

Without exam (cf. terms)  

Evaluation:

There is no exam for this course. The grade is determined by the following two components.

(1) Individual (or group) assignments during the semester (together 70%). Assignments will be graded as a package that will reflect the overall quality and the evolution of your understanding/learning during the course (the focus is on your overall development over the course). In general, late submissions will be penalized as long as they are still uploaded before the session in which they will be discussed (thereafter, the grade will be “1”).

Note that Assignment 1 (parts a and b) are already due before the second session and will be discussed in the second session.

(2) Final assignment (30%). The final assignment consists of three parts, all of them to be completed in the virtual space: a group presentation, feedback that you give on your peers´ presentations, and a revised presentation that incorporates the feedback you received from your peers. All three corresponding deadlines will be in January. Missing parts will receive a grade of “1”. Late submissions will be penalized, from mildly to severely depending on the time of submission.

Retake

Exam:

Without exam (cf. terms)  

Evaluation:

If component 1 received a grade below 4, it will be replaced by a set of questions on the content of the weekly assignments.

If component 2 received a grade below 4, it will be replaced by an essay that centers around a decision making case.