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2012/2013  KAN-CM_SU1J  Psychology of Decision Making

English Title
Psychology of Decision Making

Course information
Language English
Exam ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration Summer
Course period NOTE: The course schedule is at the moment ONLY available at www.cbs.dk/summer
Time Table Please see course schedule at e-Campus
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Faculty - Kinga Könczey, Corvinus University of Budapest
    Patricia Plackett - Department of Operations Management
Main Category of the Course
  • Business psychology
Last updated on 23-04-2012
Learning objectives
At the end of the course students should be able to:
Understand the major decision making theories as they apply to various business and management settings, and be able to apply these theories to the analysis of problems, situations and develop effective problem solving strategies.
In particular students should be able to:
  • Identify and describe the mental models that underlie our thinking processes;
  • Effectively utilize the advocacy and inquiry method to understand our way of reasoning;
  • Effectively prepare for team work or problem solving in interaction through situational awareness, self assessment, and the assessment of the other party(ies);
  • Understand and effectively deal with stress situations, including the choice of appropriate stress management techniques;
  • Recognise crisis situations and effectively approach them by using appropriate crisis management strategies and techniques;
  • Identify problem situations and assess uncertainty;
  • Recognise the various processes that lead us to be „less than rational” in our decision making;
  • Recognise and overcome the limitations and inconsistencies in our decision making;
  • Effectively deal with ambiguity and develop strategies to deal with different levels of ambiguity in problem solving;
  • Understand the role of intuition in the decision making process;
  • Develop creative problem solving strategies both individually in team settings, and apply them.
Prerequisite
English proficiency (speaking, comprehension and writing) is required. I will also assume that students had already studied - and will build upon students’ knowledge and understanding of – at least one of the following topics and subjects: Organisational Behaviour and/or Management and/or Human Resource Management.
Examination
Psychology of Decision Making
Home project assignment:
Type of test Home Assignment
Marking scale 7-step scale
Second examiner No second examiner
Exam period Summer Term
Aids Please, see the detailed regulations below
Duration Please, see the detailed regulations below
Project/home assignment, individual, 15pages.
Students will perform an independent piece of research on a complex case, and they will need to analyse the problem issues with the use of course concepts and theories.  Students need to select and critically apply relevant theories in their attempt to provide alternative solutions.  Each proposed solution should be cross checked for feasibility and potential failures.
 
Optional feedback assignment:
  • A short reflective paper may be submitted on individual problem solving or decision making experiences, and course concepts should be applied in the analysis of the situation.  With this paper students may practice the depth of analysis required in the final project.
 
Course content
This interactive, pragmatic course focuses on the individual as a less than perfect decision maker in competitive and cooperative contexts. The course examines how individuals process uncertainty and make decisions based on information they obtain from the environment, and how they take risks. In-class simulations and out-of-class assignments will be employed to provide experience and understanding of decision making concepts and develop new skills in a variety of contexts.
Course content:
  • thinking about thinking – discovering and understanding the way our mind works;
  • mental models, ladder of inference, advocacy and inquiry – understanding our way of reasoning;
  • stress and crisis management;
  • problem solving and decision making; assessing uncertainty;
  • rationality concept – are we “irrational”?; various rationality concepts;
  • limitations and inconsistencies in decision making;
  • concepts of fairness, preference reversals and heuristics;
  • dealing with ambiguity, creative decision making
  • interactive problem solving and decision making – negotiation
  
The course’s development of personal competences:
The course will help developing personal competences through training, examples, and in-class exercises.  Focus will be on the following areas:
  • Enhance mental effectiveness by learning the keys to rational thinking, as well as the barriers of optimal decision making;
  • Identify personal decision making competencies and styles and recognize the styles and strategies of others within and across cultures;
  • Achieve better outcomes by strengthening decision making skills;
  • Determine how these concepts, skills and competencies can be applied in the workplace.
Teaching methods
Class sessions will consist of a variety of activities including lectures, team work and discussions, projects, and in-class exercises. There will be significant emphasis on experiential learning processes including small group discussions, inventories and tests, problem solving exercises, games, case studies, role plays, along with home assignments designed to apply concepts to work situations. Students play an active part as they plan, simulate, negotiate, obtain feedback, evaluate their own decision-making problems, and discuss decision, and competitive strategies.
Since personal and professional development (i.e., awareness and skill building) through in-class and out-of-class activities is the ultimate objective of the subject, attendance and continuous work is very important. On each session significant individual, team and class work will be performed which cannot be substituted with checking others’ notes or any other means of ‘catching up’ with the missed class. I will expect that students come to each class having completed the readings and skill-building assignments, with comments and questions in hand. Asking questions, challenging theories, each other (and the lecturer), defending own arguments, offering examples, acting as a spokesperson are all essential to the learning process. The lecturer is a facilitator and students need to be an important part of the learning model.
Expected literature
John Adair (2007)Decision Making & Problem Solving Strategies (Creating Success);  Kogan Page; 2nd ed.
Harvard Business Essentials, Decision Making: 5 Steps to Better Resultsby Business Essentials Harvard (Paperback - Jan 31, 2006)
E. Frank Harrison;Monique A. Pelletier; 2000; The essence of management decision.Management Decision; London;
Mintzberg, H.;  Westley, F.; 2001; Decision making: It's not what you think,  Sloan Management Review; Cambridge; Spring 2001; Volume:42; Issue: 3; Page: 89-93 
Harlow B Cohen 1998  The Performance paradoxThe Academy of Management Executive;
Brousseau, K.R., Driver, M. J. Hourihan, G. and Larsson, R. (2006) The seasoned executive decision making style.  Harvard Business Review. 2006 February.
Robert, B.and Lajtha, C. (2002) A New Approach to Crisis Management.Journal of Contingencies & Crisis Management; Vol. 10 Issue 4, p181, 11p
Jon Aarum Andersen (2000):  Intuition in managers Are intuitive managers more effective?  Journal of Managerial Psychology Vol 15. 1 .p 46.; Bradford 
Michael A Roberto (2002): Making difficult decisions in turbulent times. Ivey Business Journal; London; Jan/Feb 2002; Volume: 66 Issue: 3 Page: 14-20
Kurt Matzler, Franz Bailom, Todd A. Mooradian.(2007)  Intuitive Decision Making.  MIT Sloan Management Review. Cambridge: Fall 2007. Vol. 49, Iss. 1; p. 13
Harvez, J. B. (1988). The Abeline Paradox: The Management of Agreement. Organizational Dynamics, 1988 Summer, pp. 17-43
Robert L Gross;Susan E Brodt; 2001; How assumptions of consensus undermine decision making   MIT Sloan Management Review; Cambridge
Hayashi, A. M. (2001). When to Trust Your Gut. Harvard Business Review, Feb 2001. p. 51
Gigerenzer, Gerd (2005):I think, Therefore I Err.Social Research.Vol 72. No 1. p.195
Hammond, J.S., Keeney, R.L. and Raiffa, H. The hidden traps in Decision making.Harvard Business Review.2006, January.
Bonabeau, E. (2003) "Don't trust your gut (in complex situations, intuition can be counter intuitive)". Harvard Business Review Vol. 81, Iss. 5, pp. 116 - 124.
Sadler-Smith, E., and Shefy, E. (2004) "The intuitive executive: Understanding and applying 'gut feel' in decision-making".The Academy of ManagementExecutive Vol. 18, 4, pp. 76 – 91.
Trailer, J., and Morgan, J. (2004). Making ‘good’ decisions: what intuitive physics reveals about the failure of intuition.Journal of American Academy of Business Vol. 4, 1/2, pp. 42 – 48.
 
Case studies will be provided at the beginning of the course.
Last updated on 23-04-2012