Group Design Project
Decision making process
Several possible decision making techniques
Incrementalism is the limitation caused by the tendency to select a choice that is only slightly different than a similar decision in the past
An example of incrementalism found in the budgeting activities of large organizations:
"Congressional budget decision-making in the U.S., where the usual questions considered about a given (existing) agency might typically range from whether to cut 4 or 5 percent from its budget to whether to tack on a 5 or 10% increase. Congress very seldom stops to think seriously about whether the agency ought to be abolished entirely as unnecessary or harmful to the public interest or whether its responsibilities would be better performed in some entirely different manner by another agency. Consequently, one of the best predictors of an agency's budget in a given year is that same agency's budget for the year before plus or minus a small increment representing the rate of growth or shrinkage of total government revenues."
Source: Johnson, P. (2005). Incrementalism (incrementalist decision-making). Retrieved from http://www.auburn.edu/~johnspm/gloss/incrementalism
Bounded rationality refers to the condition where a decision is analyzed assuming people are acting rationally when the reality is that people often have insufficient information and may act emotionally rather than rationally
Are we in control of our decisions?
Behavioral economist Dan Ariely provides examples and reasons that suggest we do not have as much control as we believe when making decisions.
Bounded rationality in the allocation of individual coursework marks
How could your group develop a policy to allocate individual marks which avoids some of the limitations caused by bounded rationality?
When bounded rationality
is considered in the context of economic and financial decisions
, Herbert Simon coined the more specific term satisficing
to described decisions in which a person or group selects the first choice that satisfies the decision criteria and requires the least effort.
Satisficing decisions are particularly common in situations when choices are available in a sequential
and time limited
Designing products to take advantage of satisficing behaviour
Find specific examples of how companies have designed their products to benefit from the satisficing behaviour of customers. (perhaps even examples of your own purchases based on satisficing decisions)
Cognitive bias refers to the condition that decision analysis and decision making is dependent on the knowledge and bias of the decision maker. Often, it is difficult for the decision maker to observe or identify their own cognitive bias. Increased self-awareness and feedback from others improve the ability to compensate for cognitive bias
Common factors that contribute to cognitive bias:
- illusion of control
- mental models
- discounting the future
- risk perception
Do individuals and groups make decisions differently?
Psychologist Sheena Iyengar provides examples and raises questions about the differences between making decisions as individuals as compared to making decisions in the context of a group.
Cognitive bias in relation to the role of group leader and/or the project manager
One of the early steps in the coursework is the selection of someone to act as leader, project manager or coordinator for the group. This activity is affected by the cognitive bias of each student in the group – the expectations (framing) and perceptions (mental models) that each student have about leadership and management based on their past experiences. Identify a specific cognitive bias that affect you when selecting a group leader and suggest a step to address that cognitive bias.