The Art and Science of Decision-Making

February 24, 2014

Robert S. DuboffRobert.Duboff@hawkpartners.com

617-576-4701

2

Essay – Due via Email by 5pm, March 3

• Describe the decision and the rational grounds for it

• Using the readings and discussions in this course so far, detail the subjective factors that likely played a role

• Provide your opinion about whether the decision was a good one and how the process and/or outcome could have been improved

Pick an important past decision made by you, or your company, or by a jury, a CEO or a politician/office holder, etc., and write about how non-rational human factors help to explain the decision.

In your 2-3 page essay:

3

Extraverts/Introverts within the U.S. Population

49%

51%

Extraverts

Introverts

Source: Center for Applications of Psychological Type (capt.org)

Men: 48% E 52% IWomen: 50% E 50% IClass ‘13: 62.5% E 37.5% IThis Class: 61% E 39% I

4

Judgers and Perceivers within the U.S. Population

43%

57%

Judgers

Perceivers

Source: Center for Applications of Psychological Type (capt.org)

Men: 58% J 42% PWomen: 56% J 44% PClass ‘13: 68% J 32% PThis Class: 82% J 18% P

5

Thinkers/Feelers within the U.S. Population

55%45%Thinkers Feelers

Source: Center for Applications of Psychological Type (capt.org)

Men: 61% T 39% FWomen: 29% T 71% FClass ‘13: 55% T 45% FThis Class: 29% T 71% F

6

Sensors/Intuitives within the U.S. Population

30%

70%

Intuitives

Sensors

Source: Center for Applications of Psychological Type (capt.org)

Men: 68% S 32% NWomen: 72% S 28% NClass ‘13: 52% S 48% NThis Class: 25% S 75% N

7

The 16 Types – General Population (Class)

ISTJ ISFJ INFJ INTJ

Sensing Types Intuitive Types

Extr

aver

tsIn

trov

erts

ISTP ISFP INFP INTP

ESTP ESFP ENFP ENTP

ESTJ ESFJ ENFJ ENTJ

5%(0%)

7%(0%)

4%(7%)

5%(0%)

13%(5%)

12%(7%)

2%(11%)

3%(11%)

4%(0%)

7%(0%)

7%(11%)

3%(0%)

11%(7%)

11%(7%)

4%(28%)

2%(7%)

8

The Five Components of Emotional Intelligence (or beyond the MBTI)

• Self-awareness

• Self-regulation

• Motivation

• Empathy

• Social skills

… and don’t forget risk

9

Key Questions to Resolve

• What are the implications if you think a decision was made on scientific or artistic (rational or emotional) grounds?- By a computer or by chance?- Legitimacy/acceptance??

• Do we believe that every important decision depends on the decision-maker or not?

- Do we believe there is a “right answer?”• How do we understand or analyze decisions of others?

- Project from our self- Infer- Use stereotypes

• Which is more important for success in business: IQ or EQ?

10

A Rational Decision-Making Process

• Define the problem• Identify the criteria• Weight the criteria• Generate alternatives• Rate each alternative on each criterion• Compute the optimal decision

Source: Judgment in Managerial Decision-Making, Max Bazerman.

11

When Should We Blink and When Should We Think?

Commodity brand purchases

Mushrooms in restaurant

Mystery

Interviewing people

Old/familiar

The whole

Considered brand purchase

Mushrooms in forest

Puzzle

Interviewing people, if biased

New

The piece parts

Blink Think

Is there a choice to blink? To think?

12

Implications for Market Research

What can respondents reliably respond about/to?

How about decision-makers? Just follow?