Critical Thinking and Managerial Decision Making

Written Assessment- Reflective Essay

Task: The essay must be 2000 words (+/-10%) in length.

Cover page: The essay must include a cover page that contains your name, student number,

resident campus, assessment title, and lecturer.

Format: Text should be word-processed, with appropriate layout and use of headings/sub

headings. Times New Roman, 12 size font and line spacing (1.5).

Referencing: A minimum of 10 academic references are required. The list of references

should form the last page or two, at the end of the assessment. Referencing should be in a

consistent APA style.

Task Description: The objectives of this reflective essay are for students to (1) summarize,

critically review and reinforce key concepts and theories learned from week 1 to week 9 of this

unit. (2) reflect on these concepts/theories’ potential impact on students’ decision making, and

how these learnings are being applied and could be applied in their current jobs, development

of future career and/or their life generally. (3) reflect on new insights gained about oneself as a

result of learning the unit and propose a plan for self-development.

Minimum number of concepts/theories/themes required to pass: 6

Students ought to start the reflective essay in week 4 after the submission of their first

assignment. From week 4 to week 9 (a total of 6 weeks), students are expected to reflect on

the topics (week 1-week 9) this unit has covered and evaluate which concepts or theories

have inspired their thinking or influenced their decision making. This assignment still

requires an essay format with introduction section outlining the scope, purpose and

structure information. The body paragraphs need to contain at least six themes over the

course of six weeks, and each theme needs to contain a CONVINCING and PERSONAL

justification of why these concepts/theories are chosen and how the mentioned

concepts/theories have changed/might change the students’ thinking or the students’

decisions. For example, students could identify the concepts of “automatic versus critical

thinking” as a theme for one week’s reflection, and illustrate with personal examples how

having learned about the differences has enabled him/her to be more effective in making a

certain decision at work. Close to the end, the essay needs to reflect on self-knowledge and

highlight implications for future self-development.

To successfully complete this assessment task, students should answer the following reflective essay questions:

 Which concepts/theories from which week’s learning activities are significant or important to you?

 Why are these concepts/theories you have identified important or significant to you? (Theoretical review)

 How are the concepts/theories you have learned influencing/impacting your decision-making in relation to your current interpersonal relationships, professional workplaces and/or personal life? (Practical Application)

 What have you learned about yourself through the unit activities? What skills do you possess and what skills are you lacking? How are you going to improve your decision-making in the future? (Self-knowledge and self-development)

 You should tie all your arguments/insights together at the end of your paper, highlighting how you think you will be able to use your learning in your future career and in life generally.

Aaa assessment 2/Marking Rubrics Assessment 2_40%.pdf

Assessment 2: Written Assessment- Reflective Essay Marking Rubrics

Section/Criteria 40% Fail (< 25%) Fail (26-49%) Pass (50‐59%) Credit (60‐69%) Distinction (70‐79%) High D (80‐100%)

Introduction & Conclusion

6 No introduction. No conclusions provided.

No topic, key points and/or purpose is introduced or the introduction is irrelevant to assessment item. Brief conclusion but no links established to the introduction and body of the essay.

Topic introduced, but the introduction is underdeveloped in terms of key points and/or purpose. Brief conclusion with limited links established to the introduction and body of the essay.

Topic, key points and purpose of the essay is introduced with satisfactory clarity.

The conclusion provided some links to the introduction and body, but was not concise or unclear.

Topic, key points and purpose of the essay is introduced in a clear and interesting way. The conclusion provided links to the introduction and body, but concise or unclear at times.

Topic, key points and purpose of the essay is introduced in a clear and interesting way. Clear and concise summary of the essay with links to the introduction and body of the essay.

Critical review of key concepts/theories Are the following two questions well addressed? Which concepts/theories from each week’s learning activities are significant or important to you? Why are these concepts/theories you have identified important or significant to you?

10 The concepts and theories that will be considered, and their impact on the students’ thinking and decision-making are not clearly identified and justified.

The concepts and theories that will be considered are identified but their impact on the students’ thinking and decision-making are not articulated.

The concepts and theories that will be considered, and their impact on the students’ thinking and decision-making are clearly identified and articulated in an acceptable manner. Containing six (6) concepts theories.

The concepts and theories that will be considered, and their impact on the students’ thinking and decision-making are clearly identified and articulated in an effective manner. Containing more than six (6) concepts theories and strong justifications.

The concepts and theories that will be considered, and their impact on the students’ thinking and decision-making are clearly identified and articulated. Containing more than eight (8) concepts theories and strong justifications.

The concepts and theories that will be considered, and their impact on the students’ thinking and decision-making are clearly identified and articulated. Containing more than ten (10) concepts theories and strong justifications.

Reflection on course impact in

personal decision making

Is the following question well

addressed? How are the concepts/theories you have learned influencing/impacting your decision-making in relation to your current interpersonal relationships, professional workplaces and/or personal life?

10 Demonstrates little, if any reflection on course impact in personal decision making with extremely limited, if any, analysis.

Demonstrates limited reflection on course impact in personal decision making by providing a limited level of analysis.

Demonstrate average level of reflection on course impact in personal decision making by providing an acceptable level of analysis.

Demonstrates a good level of reflection on course impact in personal decision making by providing some level of analysis with evidence.

Demonstrates a high level of reflection on course impact in personal decision making by providing a high level of analysis with evidence.

Demonstrates an exceptional level of reflection on course impact in personal decision making by providing a high level of analysis with strong and compelling evidence.

Assessment 2: Written Assessment- Reflective Essay Marking Rubrics

Reflection on self-knowledge and

future development Are the following questions well addressed? What have you learned about yourself through the course activities? What skills do you possess and what skills are you lacking? How are you going to improve your decision-making in the future?

10 Demonstrates little, if any reflection on Self-knowledge and self-development with extremely limited, if any, analysis.

Demonstrates limited reflection on Self-knowledge and self- development by providing a limited level of analysis

Demonstrate average level of reflection on Self-knowledge and self-development by providing an acceptable level of analysis.

Demonstrates a good level of reflection on Self- knowledge and self- development by providing some level of analysis with evidence.

Demonstrates a high level of reflection on Self-knowledge and self-development by providing a high level of analysis with evidence.

Demonstrates an exceptional level of reflection on Self- knowledge and self- development by providing a high level of analysis with strong and compelling evidence

Presentation: High quality of expression, grammar, spelling, punctuation and proofreading. Format and layout in professional manner (i.e. 1.5 spacing, 12-size font, Times New Roman). Assessment cover page included, within the word count.

2 Quality of writing is at a very poor standard so barely understandable. Many spelling mistakes. Little or no evidence of proof reading.

Some problems with sentence structure and presentation Frequent grammar, punctuation and spelling mistakes. Use of inappropriate language.

Quality of writing is of an average standard. There are a few grammar, spelling and punctuation mistakes.

Quality of writing is of a good standard. Few grammar, spelling and punctuation mistakes.

Quality of writing is of a high standard. Few grammar, spelling and punctuation mistakes.

Quality of writing at a very high standard. Correct grammar, spelling and punctuation.

Referencing: Use of APA referencing system in a consistent and correct manner in the essay itself. Inclusion of an accurate reference list on a separate page listing only the sources that actually have been used. The reference list is arranged in alphabetical order according to the authors’ last names.

2 Utilizes less than 6 academic references. Does not meet the requirement, in terms of in-text style and final reference list. In-text and final reference list are inconsistent.

Utilizes less than 8 academic references There are frequent citation errors, both in- text and in the final reference list.

Utilizes 10 academic references There are occasional referencing errors, either in-text or in the final reference list. However, the in-text and final reference list are consistent.

Utilizes more than 10 academic references There are very few reference errors. In- text and final reference list are consistent.

Utilizes more than 12 excellent, relevant and credible sources. Use of APA referencing system in a consistent and correct manner in the essay itself.

Utilizes more than 14 excellent, relevant and credible sources. Use of APA referencing system in a consistent and correct manner in the essay itself.

Late assessment penalty 5% per day x 40 marks = 2 marks per day

Aaa assessment 2/week-1.pptx

MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 1- Lecture 1

9/15/2018

MGMT20144 – Management and Business Context

2

Yourselves?

Where are you from?

What major?

Which year of study?

Why this unit?

Introduction

2

Outline

Unit objectives

Teaching staff around Australia

Assessment requirements

Forming groups for Assessment 3

Expectations

Introduction to critical thinking and managerial decision-making

Workshop, including getting to know each other, experiential exercises, etc.

3

3

Unit objectives

Introduce key concepts and theories and explain how they are applied in the real-world

Explain how we solve more complex problems and then make decisions

Help students become better thinkers and managers, including manage:

Knowledge better

One’s own and other’s comprehension limitations

Methods of analyses

Argument development

Decision-making

4

Unit profile

You should read the Unit profile from beginning to end, contact your lecturer or Unit Coordinator if you have questions or bring your questions to class

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Week 1. Learning Objectives

What is critical thinking?

What is a statement?

What is an argument?

What is argumentation?

Logic of argument

What are premises and conclusions?

How to recognise premises and conclusions?

Implicit premises and conclusions

Critical thinking defined by Kallet

6

Introducing the Unit

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What is critical thinking in your opinion?

Critical thinking in University context

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Following Alexander, Argent & Spencer that we remove the problematic term, critical thinking, and simply see this as thinking, but as a style of thinking that is questioning and transformative.

This kind of thinking, valued in university settings, is also a thinking that reflects and considers its own basis, its background and its reasons as well as considering these things in others’ thinking, a thinking that seeks to make original connections between ticks and points of view, but always supported by reasons and evidence, and a thinking that aims to be objective and free of personal bias.

Wrestling with an idea, and expression of the idea

Multiple perspectives, how your idea overlay with them

Ability to scrutinize the relation between evidence and claim

Self-critical, personal biases etc.; method critical

the ability to think systematically and objectively through decision making processes and problem solving processes.

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Define Critical thinking

—A ‘slippery eel” (Molinary & Kavanagh, 2013)

—Complex

—Context-dependent

Three linked terms

Critical thinking

Argument

Argumentation

While critical thinking is more related to thinking and learning, argumentation and argument are more closely related to communicating critical thinking to others.

Argument

What do arguments consist of?

Conclusion

What the author wants you to believe

Signal words: hence, thus, therefore, so, consequently, as a result…

Can be either beginning or end of the argument

Premises

Statements that are used as evidence

Signal words: because, since, due to…

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Important concepts in Critical thinking

Argument disagreements

Argument = presenting a set of reasons that show that a conclusion is correct or valid, in other words, the smallest observable unit of critical thinking.

Argumentation= process of linking arguments together, or taking a certain position or stance in relation to a topic. This position is one supported by critical thinking.

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Exercise

Argument: An attempt to defend, validate or explain a conclusion using specific reasons or evidence.

Are the following statements arguments?

1. I like CQuniverisity.

2. I do not like being a vegetarian.

3. She is late because she missed the tram.

4. The unit is practical, interesting, hence, I recommend it to you.

5. It is a common held belief that female students work harder than males.

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This is actually a statement, not an argument. An argument must have premises and conclusions.

N

Y

Y

Y

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Statement

A statement is any sentence that is either valid or invalid. For example, the sky is blue. Your blood is purple.

It is not a question, nor instructions. E.g., have you eaten yet? Wake up!

Statements can function as either premises or conclusions.

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Example

“Students already have enough work to do. What I really mean is that students do not have to face the difficulties of homework. Teachers should not give out homework because students cannot spend time with their family, students have no time to have fun and students have responsibilities to do at home”

source: http://avoca37.org/18tobiasd/2014/02/21/teachers-should-not-give-out-homework/

Which one is the conclusion?

Which ones are premises?

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Brainstorm with the class

What makes an argument stronger?

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Strong argument use structure of Logic

Premise 1: All international students are foreign.

Premise 2: Patel is an international student.

Conclusion: Therefore, Patel is foreign.

Logic structure:

All A are B,

C is A,

Therefore, C is B.

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B

A

C

Logic

Argument=conclusion + reasoning you have used

The conclusion is only as strong as the evidence/reasons you have used.

In formal logic, if premises are valid, conclusion must be valid. If any of the premises are invalid, the conclusion will be invalid.

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Implicit premises and/or conclusion

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When premises and/or conclusion is left unsaid, because it is common knowledge, or implied by the situation or when we do not want to overstate the point.

All ads are arguments with conclusion: Buy this product

Introducing the Unit

What is critical thinking?

Critical thinking is disciplined thinking that is clear, rational, open-minded, and informed by evidence

Conscious and deliberate

With purpose

Involves being critical of your own thought processes

Best processes or tools are used to aid thinking

Objective is to make better decisions than if just used “gut feel” to inform decision-making

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Kallet’s definition

Purposeful method for enhancing your thoughts beyond your automatic, everyday way of thinking. It’s a process that uses a framework and tool set.

Some examples?

What have you learned to do in your working/student life that was improved by critically thinking through a problem?

Context: Thinking about problems and critical issues in the wider world,

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Benefits of critical thinking

Kallet:

Clear understanding of the problems of situations

Faster and accurate conclusions and quality decisions

A richer variety of explanations and solutions

Opportunity recognition

Mistake avoidance

Thought-out strategies and early elimination of dead ends

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Overview

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Clarity

Conclusions

Decisions

Clear headscratcher (more serious thought and/or process required)

Problem, Issue, or Goal (headscratcher)

Reach conclusions abut the headscratcher (Solution + To Do)

Make a decision (take action on a conclusion)

Automatic versus critical thinking

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Decisions

Conclusions

Clarity

Critical Thinking

Clarity

Conclusions

Decisions

Automatic Thinking

Weak foundations for decisions, less time getting clear, and more time needed for decisions

Strong foundations for decisions, more time getting clear, and less time needed for decisions

Section III: Conclusions

Section IV: Conclusions & Innovation

Section V: Decisions

Section II: Clarity

Critical thinking framework: The textbook

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Clarity

Conclusions

Decisions

Discovery information and ideas

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Critical thinking framework: This Unit

Clarity

Conclusions

Decisions

Week 1: Module 1: Introduction to critical thinking

Week 3: Module 1:

Accessing and synthesising information, and forming views

Week 2: Module 1: Framing and scoping

Week 4: Module 2:

Understanding and development of self

Week 5: Module 2:

Making major decisions

Week 6: Module 2:

Balancing rational and non-rational approaches

Week 7: Module 3: Decision-making in uncertain or difficult situations

Week 8: Module 3: The nature of the contract

Week 9: Module 3: Working collaboratively

Week 12: Module 4: Managing for all

Aaa assessment 2/week-2.pptx

MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 2 – Lecture

Recap of concepts introduced last week

What is critical thinking?

What is a statement?

What is an argument?

What is argumentation?

Logic of argument

What are premises and conclusions?

How to recognise premises and conclusions?

Implicit premises and conclusions

Critical thinking defined by Kallet

2

Outline of this week

Conceptual foundation–what is scientific knowledge: Kuhn versus Popper

Conceptual foundation–Understand formal logical structures

Logical reasoning—Deductive

The first step of critical thinking/managerial decision making—Clarity, and ten points for achieving it.

3

3

Conceptual foundation–what is scientific knowledge: Kuhn versus Popper

4

KUHN POPPER
Science enjoys long periods of stable growth but will experience scientific revolution or “paradigm shifts” Theory of formalised falsification. The objective is through deduction to eliminate theories that are false
Paradigms are an accepted way or theory for explaining phenomenon Scientific knowledge is therefore revolutionary. It grows because old theories are discarded
Paradigms guide research Move towards truth through an evolutionary process
Researchers working within the paradigm do not seek to discover new paradigms/ theories but focus on confirming the paradigm Based on empirical facts. Look at the evidence and test the evidence, progressing by testing increasingly difficult variations of the evidence
Paradigms suggest a pre-determined answer Critical of paradigms approaching dogma
But once there is a enough anomalies/ incongruent findings a new paradigm will be sought/embraced but this can take decades Argues that there should be no such thing as a dominant paradigm or theory, although they may guide thinking while searching for “truths”

Kuhn versus Popper

5

Kuhn versus Popper

Who is right?

They are both right in their own way…..

Both are important to managers and management scholarship**

Key differences:

Kuhn accepts that science progress through the application of paradigms/theories and these do not impede progress

Popper argues that ruling dogma/dominant paradigms or theories impedes scientific progress and the search for truths

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7

**NB. When you study management you are studying a subject which is a social science!

More on theories

Pervasive, we all use theories every day

Not just something you learn at university

Theories are developed based on observing the real-life.

They require discretion

Example:

The theory that some people are motivated by intrinsic factors was observed

some people do work harder if paid more money, but some people did not work harder because they were paid more

Some people worked harder if they found their work interesting, something they could be proud of and/or found meaningful

Intrinsic versus extrinsic motivators

8

Another example

How to cost effectively get to university on time each week?

9

Fairly fast, cheap and keeps me fit.

Bus is usually fastest and cheap too.

Only losers don’t drive or waste time by not driving.

THEORY

Thinking deeper

10

Bus is cheap but only fastest during peak times.

When I have weekend classes the bike is faster and cheapest.

Parking costs money but I can get to evening classes faster/safely.

Decide cheapest and fastest way to get to class on time

Take the bus when attending university during weekdays and peak periods

Ride bike on weekends to stay fit and save on gym fees

Drive the car when there are evening classes, since it is fastest and safest at night, can get back home to work on assignments faster, and can enjoy car ownership a little then

Integrated the theories

Conceptual foundation–Understand formal logical structures

Formal logic represents the structure of the argument, and is the building blocks of critical reasoning.

The distillation of arguments into “standardised forms for the purpose of building, comparing and analysing” them (Inch & Warnick, 2011, p. 38)

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Formal logic can be broken down into 3 broad structures for arguments

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Inch & Warnick, 2011

Formal logic

Categorical

Hypothetical

Disjunctive

1. Categorical

Your argument uses classification of things, e.g.,

Major premise: All dogs (A) are mammals (B).

Minor premise: All Labradors (C) are dogs (A).

Conclusion: Therefore, all Labradors (C) are mammals (B).

Also called syllogisms

Logic structure:

All A are B,

All C are A,

Therefore, all C are B.

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B

A

C

A syllogism is a kind of logical argument that applies deductive reasoning to arrive at a conclusion based on two or more propositions that are asserted or assumed to be true

13

Caveat

Careful not to make mistakes when using the formula. E.g.,

All A are B, All C are B, therefore, All A are C (X).

E.g., all cats are animals, all dogs are animals, therefore, all cats are dogs.

If formal logic is used correctly, it’s impossible for the premises to be valid and the conclusion invalid.

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2. Hypothetical

If A, then B.

A, therefore, B.

This type of structure implies a conditional meaning that an event will occur, if another event occurs.

E.g., If it rains, then the floor will be wet.

It rains, therefore, the floor is wet.

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Caveat

Careful not to change the events around:

If A, then B.

B, therefore, A (X)

If Chris oversleeps, then he will miss his bus.

Chris missed his bus, therefore, he overslept.

(Invalid, could be many other reasons why Chris missed his bus…)

If formal logic is used correctly, it’s impossible for the premises to be valid and the conclusion invalid.

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3. Disjunctive

Either A or B.

Not A, therefore, B.

It’s either pass or fail.

It’s not pass.

Therefore, it’s fail.

Interestingly, changing the premises around still results in a logical argument for this structure.

Either A or B

not B. Therefore, A (still correct)

 

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Forms of reasoning

Deductive

Inductive

Abductive

Formal logic is the process of breaking down an argument into its parts and evaluating it in terms of the structure of the argument and the structure of the premises.

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Deductive reasoning

Deductive reasoning is a type of logic where general statements, or premises, are used to form a specific conclusion.

Red meat has iron in it and beef is red meat, so beef has iron in it.

Acute angles are less than 90 degrees and this angle is 40 degrees so this angle is acute.

Deductive logic is the kind of formal logic that we’ve been looking at (three structures of logic) so far. - Go back to the previous three slides for a review

 

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Deductive logic In deductive arguments, the truth of the argument is assured by the truth of the premises…

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Formal logic

Categorical

All A are B

All C are A

Therefore, All C are B

Hypothetical

If A, then B

A, therefore, B

Disjunctive

Either A or B,

Not A (B), hence, B (A)

Exercise

Get in groups of 3-5 people, come up with examples using deductive logic in your everyday life.

E.g., I like all apples.

Granny smith is an apple.

Therefore, I like Granny Smith.

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Inductive logic

However, some arguments don’t follow these structures, i.e., the truth of the premises does not guarantee the truth of the conclusion:

Most CQUniversity students are from India.

Pattini is a CQUniversity student,

Therefore, Pattini is from India.

Valid? Not according to deductive logic, Pattini could be from Nepal, China, Korea…

However, the argument is still logical, this is where Inductive logic comes in. We will talk about inductive logic next week.

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Moving on to Kallet (2014)

The first step of critical thinking/managerial decision making—Clarity, and ten points for achieving it.

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Last week introduced the course

Kallet (2014)’s definition:

Purposeful method for enhancing your thoughts beyond your automatic, everyday way of thinking. It’s a process that uses a framework and tool set.

Objective of critical thinking is to make better decisions than if just used “gut feel.”

Benefits:

Clear understanding of the problems of situations

Faster and accurate conclusions and quality decisions

A richer variety of explanations and solutions

Opportunity recognition

Mistake avoidance

Thought-out strategies and early elimination of dead ends

24

Section III: Conclusions

Section IV: Conclusions & Innovation

Section V: Decisions

Section II: Clarity

Critical thinking framework: The textbook

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Clarity

Conclusions

Decisions

Discovery information and ideas

26

Clarity: Pattern and context recognition

Read the following text:

You mghit tnihk i’ts aaminzg that you can raed this with vrlialuty no diluftficuy even tuohg the ltetres are mxedid up.

It trnus out that all you need are the fsrit and lsat leetrts.

What is happening?

Clarity: Screening, noise as a concept

Read the following in 15 seconds….

How many f’s can you count?

FINISHED FILES ARE THE RE

SULT OF YEARS OF SCIENTI

FIC STUDY COMBINED WITH

THE EXPERIENCE OF THE YEARS

Why didn’t everyone count the same number?

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Clarity: What shape do you see?

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But not really there……

Clarity: Automatic versus critical thinking

Automatic thinking, good but…..

Discards, distorts and creates information, limiting

Critical thinking

Purposeful

Aware of the partiality of your thinking

Consider other perspectives

Avoid distortions and biases

Is a process

Conducted within a framework and a toolset

Organise your thoughts

Incorporate others’ thinking

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Automatic versus critical thinking

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Decisions

Conclusions

Clarity

Critical Thinking

Clarity

Conclusions

Decisions

Automatic Thinking

Weak foundations for decisions, less time getting clear, and more time needed for decisions

Strong foundations for decisions, more time getting clear, and less time needed for decisions

Ten Tools of Clarity

Emptying your bucket

Inspection

Why

Distinguish this from that

Get at the root cause

Determine if the issue is “I don’t know”

To get to because

So what

What is the need

Anticipatory thinking

What else?

The ingredient diagram

Vision

The thinking coach

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1. Emptying your bucket

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WHICH BETTER? WHY
Been there, done that? Every experience is unique
Conflicting priorities, strategies and projects Is there scope to include this, juggle things?
Lack of resources, time and budget How can we use resources, time and budget better?
Job of other departments I think about how the whole organisation can work together to achieve goals
Focus on the negative There is always a way

An open mind?

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Example:

What do you say at a meeting when someone says “we’ve done this before, and the outcome was terrible…”?

Example:

The boss wants to see you in their office later in the day to talk to you in private? Do negative thoughts arise, do you feel nervous?

2. Inspection and 3. Why

Eliminating ambiguity and problems with interpretation through inspection of the problem, etc.

Identify the true meaning

That everyone interpreting the same way

Ask why to get it right the first time, get a better understanding of what is required

Get to the root cause to solve the problem efficiently

Determine that you don’t know, need more information

Identification of the because helps you identify constraints

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Example: Ask 5 whys to get your organizational core purpose

We make X products

We deliver X services

E.g., market research company •

We provide the best market research data available. (Why?) So that our customers could understand their markets better than they could otherwise. (Why?) So that they could be successful. (why?)

• Purpose statement:

• To contribute to our customers’ success by helping them understand their markets.

• Product decision: • Will it sell? (X)

• Will it make a contribution to our customers’ success? (√)

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4. So what and 5. What is the need?

By asking so what you can identify why something is relevant or significant, and should be considered.

Includes actions and consequences.

Example:

Someone is away for 2 weeks….?

Getting everyone aligned behind the need is important to make sure the right problem, decision or goal is addressed and properly.

Example:

Why are you and the people in your team for the group assignment doing this course? What do you want to achieve?

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6. Anticipatory thinking and 7. What else?

By anticipating you think what else should I be doing?

More efficient and think about any unintended consequences.

Example:

Your grandmother or another elderly relative will be visiting you. What do you do in anticipation? ……..Scatter open textbooks around the house, buy her favourite tea and cakes to serve?

What else keeps the thinking going, stimulates new ideas/possibilities and prevent premature closure of issue, idea or solution.

Example:

What else could we include in our group assignment to increase our chances of getting a high mark.

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8. The Ingredient diagram

Diagram to transition between clarity and conclusions.

Example: Going for a long drive diagram.

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Traffic

———-

Tune-up

Number of people

———-

Luggage

———-

Trailer

Tyre pressure

———-

Wind direction

———-

Speed limits

Day of week

———-

Time of day

On roof and in trunk

Roadworks slowing traffic

Distance to gas station. How much to fill up the tank?

Km/tank of the car

Extra weight of the car

Average speed on highway

9. Vision

Vision can be first and/or last tool, and involves lofty goals.

Helps clarify purpose, timelines for goals and problems to solve, gatekeepers know what to accept/reject, get a sense of what constitutes a real need.

Example: CQU University.

Our Vision: To be Australia’s most engaged University by 2020.

“We will become one of Australia’s truly great universities through partnerships with students, industry, and the community.”

How can this statement help everyone at CQU involved in decision-making exactly?

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10. The thinking coach

The thinking coach objectively gets others to think.

Unbiased and helps others to think more deeply and effectively.

Explains the role as coach.

Makes as much time available as is necessary. So won’t take on the role if has no time.

Asks open-ended questions.

“Pretends” knows nothing of the subject.

Do not ask questions designed to sway thinking a particular way.

Always wait for an answer to the question.

Some examples?

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Clarity in Summary

“The single most important reason why projects, initiatives, problem solving, decisions, tactics, and strategies go awry is that the head-scratcher wasn’t clear in the first place.

Getting clear is the first step in the critical thinking process and will help you and others understand a goal or problem.”

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Aaa assessment 2/week-3 (part 1).pptx

MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 3 – Lecture

Recap of concepts introduced in week 2

Conceptual foundation–what is scientific knowledge: Kuhn versus Popper

Conceptual foundation–Understand formal logical structures

Logical reasoning—Deductive

The first step of critical thinking/managerial decision making—Clarity, and ten points for achieving it.

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Outline of this week

Logical reasoning—Inductive

Appreciating the underlying premise

5 Components of the premise

The process of coming to a conclusion

Influencing and persuading

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Deductive logic In deductive arguments, the truth of the argument is assured by the truth of the premises…

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Formal logic

Categorical

All A are B

All C are A

Therefore, All C are B

Hypothetical

If A, then B

A, therefore, B

Disjunctive

Either A or B,

Not A (B), hence, B (A)

Inductive logic

However, some arguments don’t follow these structures, i.e., the truth of the premises does not guarantee the truth of the conclusion, e.g.,:

Most CQUniversity students are from India.

Pattini is a CQUniversity student,

Therefore, Pattini is from India.

Valid? Not according to deductive logic, Pattini could be from Nepal, China, Korea…

However, the argument is still logical, this is where Inductive logic comes in.

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Inductive logic

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An inductive argument claims that the truth of the premises show that the conclusion is likely to be true.

 

Even if all the premises are true, the conclusion to an inductive argument might still be false. Thus, this kind of reasoning relies on showing the probability of an argument being true.

 

Susan came to school yesterday.

Susan came to school every day before yesterday.

Hence, Susan will come to school tomorrow.

The Sun rose up yesterday.

The Sun rose up every day before yesterday.

Hence, the Sun will rise up tomorrow

Inductive thinking and premises

We mostly engage in inductive thinking

The stronger the premise, the more probable the event.

The outcome is not guaranteed

Almost all of our thinking is inductive, and we come to 1000s of conclusions each day

The stronger the premise, the more probable the outcome

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Misperception

Inductive arguments are inferior than deductive arguments?

NO! They are different.

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Deductive versus Inductive Arguments

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Deductive Inductive
Valid or Invalid Strong or Weak
All or Nothing Degrees, to what extent
Indefeasible * Not open to objection Defeasible * Open to objection, annulment
Movement from general statements to specific conclusions. Top down. Reasoning that moves from specific observations to general conclusions (there are other types too).

we use deductive reasoning when we do not want our ideas to

be questioned or when we’re presenting a fact or a definition of something.

In academic arguments, you need to be careful when you’re using deductive logic,

because they can leave your arguments open to attack.

Inductive arguments on the other hand are for when you want to convince people

using probabilities or likelihood of something being the case.

 

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Different types of inductive reasoning

1. Inference to the best explanation (Abductive reasoning)

E.g., broken plates on the kitchen floor, your son is in school, your wife is on a business trip, hence, it is probably your cat who broke it.

2. Analogy

E.g., This year’s CQU students are very similar to last year’s (similar nationality, age and level of hard work). Last year, 10% students failed this unit, hence, this year, 10% will fail.

3. Generalizing from samples

E.g., the first student I called upon is from India, 2nd…, 3rd..4th…35th

Most of the students in this class are from India.

4. Applying generalizations

E.g., Google reviews, 80% of the customers did not have a pleasant experience in that restaurant, hence, I am not going.

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Defeasibility of Inductive Reasoning

I knew it was him because I saw his face when he was fleeing the scene.

Did you know the perpetrator has a twin brother?

 Not so sure, could be his twin brother or him?

Inductive arguments could become weaker (defeasible) in light of new knowledge/information/context

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Section III: Conclusions

Section IV: Conclusions & Innovation

Section V: Decisions

Section II: Clarity

Critical thinking framework: The textbook

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Clarity

Conclusions

Decisions

Discovery information and ideas

Conclusions

The end goal of clarity is to solve problems

You need ideas, solutions and things to do

Must look at situations creatively and make decisions

Critical thinking is about coming to conclusions thoughtfully

Looking at ideas, potential solutions and actions from a variety of perspectives, including taking account of one’s own limitations

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Premises

We have talked about Deductive thinking last week and inductive reasoning this week.

Conclusions are all about the premise

Drawing conclusions from premises Involves both deductive and inductive thinking

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Premises

Using inductive reasoning to come to conclusions involve 5 components coming together:

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Assumptions

Facts

CONCLUSIONS

Observations

Experiences

Beliefs

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1. Facts

Are absolute truths, not debateable

But saying something is the truth does not necessarily mean it is factual

Disciplines such as mathematics are based on truth

Other disciplines have grey areas, truths are not 100%

Examples:

It is raining outside. (If you are standing outside and it is raining on you then it is true so it is a fact.)

“It currently takes us an average of about 2 hours to complete this task.” (If the data are correct, this would be fact.)

“If we get this contract, we will need to hire 5 people.” (This is not fact, because it is something that is taking place in the future. There are contingencies that have not been explored, such as finding an employee who can do the work of 2 people.)

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2. Observations

Involves what we read and what we hear, what we sense

Observations are not facts

Examples:

You read a review of a restaurant on TripAdvisor. (You are observing what others have thought of the restaurant.)

A weather forecaster says “it is going to rain.” (You are learning about a probable event.)

“I own a home.” (If you think about it, if you have a mortgage then the bank owns a proportion of your home.)

Involve the possibility of being true or untrue

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Quiz

Difficult to sometimes distinguish fact from observation

What do you think, fact or observation?

You are reading this sentence now.

On the Earth, if you drop something, it will fall to the ground.

As a manager, I’m responsible for evaluating the performance of my direct reports

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Answers

You are reading this sentence now.

FACT, unless someone is reading it to you, then it would be an observation.

On the Earth, if you drop something, it will fall to the ground.

OBSERVATION, because if you dropped a helium balloon it will rise.

As a manager, I’m responsible for evaluating the performance of my direct reports

FACT. If it is in your job description, then it is a fact.

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3. Experiences

Come from the past

Sometimes difficult to distinguish from observation

They are your first-hand encounters

Where you have actually been or what you have done or tried or witnessed

You can recollect inaccurately, and so have a distorted view of your experience

Strong experiences lead to more confidence in your premises

Examples:

Someone says to you, “its raining outside.” (Observation)

You were in the rain and you say, “it’s raining outside.” (Experience)

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4. Beliefs

Moderate facts, observations and experiences and ultimately assumptions

Example:

You’re walking down the road and you notice a wallet. You pick it up. There’s about $200 in it and no identification. Should you keep it or turn it over to the police? Your choice depends on what your values are.

You print out a 100-page report and then notice a minor error. The typos will have little or no effect and would probably not be noticed. Do you fix the error and print out again or just hand out as it is?

These values are your beliefs, which consist of your merits and flaws, including prejudices

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Beliefs and others

Beliefs are generally formed when we are young and are influenced by our environment and experiences

People can have very different beliefs

If beliefs and values clash it is important to negotiate:

Acknowledge the differences in beliefs

Weigh up the pros and cons of each person’s underlying belief

Identify what is a reasonable/optimal outcome under the circumstances

Understanding our beliefs does not remove emotion but helps us understand how they influence our conclusions

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5. Assumptions

An assumption is a thought you have and presume to be correct

In automatic mode, you take it for granted your assumptions are correct.

In critical thinking mode, you ask, “How do I know my assumption is a good one?”

Assumptions are formed from facts, observations and experiences

Example:

The store will have milk.

The car’s petrol gauge is correct.

If the facts, observations and experiences are valid and relevant, then the assumption is strong

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Conclusions

If you have a strong premise, then the conclusion you come to is more likely to lead to good results.

Need to constantly ask if the premise was based on facts, observations and experiences that are sound

Easy to jump to conclusions when in automatic mode

Different personalities will apply different premises

Example:

The whole family goes to buy a car. You all hear about the safety features, its running costs and its music system.

One person wants to buy the car because of its safety record, another because it is cheap to run, another does not want to buy the car because the music system is not very good.

Need to negotiate with each other about the conclusion by understanding each person’s assumptions

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Strong conclusion?

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Credibility of the premise

Feasible and realistic

Consistent with your knowledge

Received from a reliable source

Verifiable

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Consistency of the premise components

Are all observations consistent with each other?

Are observations and facts consistent with your experience?

Are you making assumptions consistent with the premise components?

Examples:

You see prices on Ebay for an item – $45, $50, $52, then $10.

You have always enjoyed flying with Qantas and then read one bad review about Qantas.

You are sensing that something is bothering your wife, she tells you that everything is fine, but you see her spend longer than usual time in the bathroom, and also stop to dress up. Is everything really still fine?

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Triangular thinking/triangulating

Identify high confidence estimates of the probable future

You use multiple perspectives or indirect measures

If the answer is mostly the same then you have high confidence in your estimate

Example:

You want to know how long a project will take.

1. You calculate the different steps in hour terms, for instance, step 1 should take 2 hours.

2. You recollect your team’s track record for completing similar projects.

3. You compare to other projects of similar scale and complexity

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Further examples?

Conduct a research on consumer purchasing behaviour of apples, conclusion: royal gala>granny smith

1. interview data on consumer’s preferences (e.g., Royal gala, granny smith)

2. sales volume

3. observation

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Critical thinking at work

Could you think of examples at your workplace in which your conclusion is strengthened with triangular thinking?

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Change

People resist change or are uncomfortable with it because they have less experience

When they think about the components of the premise, they find experience is weak

If you strengthen the premise with observations then change is easier to accept

Example:

You introduce a new computer system and everyone says they hate it

You bring in a trainer who not only trains staff but shows them how the new system is an improvement

People begin to have experiences related to the change

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Influencing and persuading

Influencing is changing others’ conclusions.

It is more subtle than persuasion

Persuasion is directly causing someone to adopt or concur with your conclusion, which may at times be very different from their initial thinking

Example:

Influence someone to adopt different facts, observations and experiences.

For instance, describe interesting facts about the car’s fuel consumption, what reviewers have said and how much you enjoyed driving the car.

Persuade someone by weakening their premise.

For instance, someone who thinks you do not have to invest money in satisfied customers is told “research has shown that even highly satisfied customers defect.”

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Other purposes of arguments?

Explanation

Justification

Can you provide examples from your workplaces?

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Thank you

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Aaa assessment 2/week-3 (part 2).pptx

MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 3 – WHO IS ELIZABETH?

Elizabeth

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Elizabeth Blackburn

The person you met on the train station is Australian, Dr Elizabeth Blackburn, Morris Herzstein Professor in Biology and Physiology in the Department of Biochemistry and Biophysics at the University of California, San Francisco.

She is a leader in the area of telomere and telomerase research, which is an area of research that could one day explain why some people biologically age slower than others, among other things.

In 2009, Elizabeth Blackburn was awarded the Nobel Prize in Physiology or Medicine.

She regularly flies across the world to give talks at scientific conferences.

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Aaa assessment 2/week-4.pptx

MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 4 – Lecture

Outline

Important points about the course once more

Student presentations

Self-awareness

Johari Window

Self esteem, and

Self efficacy

Self-awareness and leadership

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Why self-awareness?

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Self-awareness

The most empowering thing you can do in your own life is know yourself. Self-awareness is the key to everything.

Mindy Grossman

Chief Executive Officer of HSN, Inc.

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According to Chris Lowney, bestselling author of “Heroic Leadership”

“…leaders thrive by understanding who they are and what they value, by becoming aware of unhealthy blind spots or weaknesses that can derail them, and by cultivating the habit of continuous self-reflection and learning.”

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When the 75 members of Stanford Graduate School of Business’s Advisory Council were asked to recommend the most important capability for leaders to develop, their answer was nearly unanimous: self-awareness. Yet many leaders, especially those early in their careers, are trying so hard to establish themselves in the world that they leave little time for self-exploration. They strive to achieve success in tangible ways that are recognized in the external world—money, fame, power, status, or a rising stock price. Often their drive enables them to be professionally successful for a while, but they are unable to sustain that success. As they age, they may find something is missing in their lives and realize they are holding back from being the person they want to be. Knowing their authentic selves requires the courage and honesty to open up and examine their experiences. As they do so, leaders become more humane and willing to be vulnerable.

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Good Leaders Know Themselves

Watch YouTube Video on the importance on Knowing Yourself to be a good leader.

https://www.youtube.com/watch?v=eIUkzc9OOZ4

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Netflix

Co-founder Mitch Lowe reveals the people most likely to get hired — and fired

IF YOU utter this phrase at Netflix HQ, you’ll be out the door in no time — no matter who you are, or how senior your position is.

Alexis Carey

news.com.au

Speaking at the 2018 Online Retailer trade event, Netflix co-founder Mitch Lowe said the business was extremely focused on hiring the right people — and firing the wrong ones.

He said Netflix recruited people who were self-motivating, self-aware, self-disciplined and self-improving — and that employees needed to “behave like owners and pick up trash”.

https://www.news.com.au/finance/business/media/cofounder-mitch-lowe-reveals-the-people-most-likely-to-get-hired-and-fired/news-story/8ca48de53ad415c7588ebb006af774d0

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Self awareness – the core of good leadership

Meaning- Knowing one’s own

Attitudes – opinions

Feelings – emotions

Motives – purposes

Desires – needs

Strengths – weaknesses

Accurate self assessment

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Key areas of self awareness

Personality traits

Personal values

Habits

Emotions

Psychological needs

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How to create self awareness?

Seeking feedback from others

Reflecting on one’s own feelings and behaviours

Admitting mistakes

Being aware of your own emotions and the effect you are having on others

Taking self-scored “profiling” tests

Being introspective….

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Johari Window

The Johari window is a technique created in 1955 by Luft and Ingham, used to help people better understand their relationship with self and others.

When performing the exercise, subjects are given a list of 55 adjectives and pick five or six that they feel describe their own personality.

Peers of the subject are then given the same list, and each pick five or six adjectives that describe the subject.

These adjectives are then mapped onto a grid.

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Known to self Not known to self
Known to others OPEN- Known to me and known to others BLIND- Known to others but Not known to me
Not known to others HIDDEN- Known to Me but not known to others UNKNOWN- Neither known to me nor known to others.

Johari Window

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Minimum openness- Ineffective personality for good leadership

Open Blind
Hidden Dark

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More openness- More Effective personality for leadership

Open Blind
Hidden Dark

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How to widen the OPEN corner

Open Seeking Feedback Self Disclosure Practice New Behaviours Blind
Hidden Dark

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Self analysis

It involves asking our selves the following questions:

Do you like where you are and what you have become?

Have you ever wished that your life was different?

Can your relationships be improved?

Are you producing the results that you want?

And, Using psychological profiling instruments

Terms associated with self-awareness:

Self esteem

Self efficacy

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Self analysis

Think for a moment and identify:

The areas you normally excel

The areas you normally face difficulties

Kind of people, events, and things you like the most and those you dislike

The people, events that bring you happiness/sadness

The nature and extent of openness you have with others

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What makes you

Happy

What are your Strengths

What are your Beliefs

What are your Values

What motivates you, inspires you

What challenges you

What’s your passion , what’s your purpose?

What’s your EQ, what impact do you have on others

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Self esteem is based on your attitudes about yourself, such as:

Your value as a person

The job you do

Your achievements

How you think others see you

Your purpose in life

Your place in the world

Your potential for success

Your strengths and weaknesses

Your social status and how you relate to others

Your independence or ability to stand on your own feet

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High and low self esteem

High

Feeling of worth

Happy

Good

Confident

Courage

Results in motivation and drive to excel

Low

Feeling of helplessness

Lack of motivation

Depressed

Fear

Meaninglessness

https://www.facebook.com/ialwaysthinkprettythings

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Self efficacy

Advocated by Albert Bandura

Meaning: Belief in one’s own capability for accomplishment

It is a “Can do” attitude

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What does Self Efficacy theory say?

Individuals who believe their capacity to produce specific performance attainments:

Can have more active and self-determined life course.

Are not threatened by environment

Take adaptive action

Withstand stress

https://www.facebook.com/ialwaysthinkprettythings

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Individuals with high and low self efficacy are

High self efficacy

Active

Courageous

Competent

High self esteem

Optimism

High social integration

High motivation

More effort

Longer persistence of goals

Higher goals

Great results

Low self efficacy

Inactive

Fearful

Inefficient

Low self-esteem

Pessimism

Isolation

Low motivation

Low effort

Shorter persistence

Lower goals

Low results

https://www.facebook.com/ialwaysthinkprettythings

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Stephen Covey

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Daniel Goleman

Emotional Intelligence

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Self-awareness and leadership

You position yourself better

You surround yourself with people who complement you (NOT “Compliment”!)

Helps you know your boundaries

You are more confident [by following your own path]

You have a vision and a purpose

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Self awareness is a journey and not a destination

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Acknowledgement

Some slide content courtesy of:

Rajendra Krishnan, and

Madhujit Singh

{From Slideshare.net}

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Aaa assessment 2/week-5.pptx

MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 5- Lecture

Outline

Important points about the course, your progress

Conclusions and Innovation

Decisions and the context

Interpreting your DISC results

Introduction to self-reflection essay

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Important information

You should be accessing Moodle regularly now

Have you finished your DISC Assessment Tool? This is essential for successfully finalising the reflective essay (Assessment 2).

You should start to think about who you want to work with for Assessment 3. You will need to sign up for your group on the unit’s Moodle page. Failure to do so may result in your not receive a grade.

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Conclusions and Innovation

The chapter of the text builds on the idea that conclusions have 5 elements:

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Assumptions

Facts

CONCLUSIONS

Observations

Experiences

Beliefs

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2

5

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Conclusions and Innovation

But just knowing how we end up with conclusions by which to base our decisions is not enough when innovating or looking for truly creative outcomes

Define innovation and creativity as:

Providing a new or modified conclusion that obtains a positive result, such as a customised process, fresh product, different marketing approach, or different way of handling a customer call.

If you are looking for a true breakthrough, a paradigm-changing solution more is needed

Conclusions that lead to innovation are something most people can identify with the right effort and mindset

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Conclusions and Innovation

Hierarchy of conclusions that allow one to “push the boundaries” and innovate

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Impossible Thinking

Abductive Thinking

Outside-the-box Thinking

Conclusions

Impossible, abductive, outside-the-box thinking produce solutions you cannot reach otherwise

Conclusions of the basic kind should produce quality solutions

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Outside-the-box thinking

Must think outside the usual boundaries that make up regular conclusions

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Assumptions

Facts

CONCLUSIONS

Observations

Experiences

Beliefs

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2

5

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The 5 elements that make up your premise that leads to your conclusion

Outside-the-box thinking

Another way of thinking of it

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Assumptions

Observations

Experiences

Beliefs

Facts

Assumptions

Observations

Experiences

Beliefs

Facts

Example

Place your pen or pencil on one of the dots, and without lifting your pen off the paper, without folding, mutilating or destroying the paper, draw 4 straight lines that connect the dots

Solution see https:// www.youtube.com/watch?v=Rq3ta6SvlTo

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Quick Exercise

In 1 minute write down other uses of brick, as many as you can think of and not be bound by your premise of what bricks are normally for

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Some people can think of quite a lot

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Abductive thinking

Like making an educated guess

Use knowledge and experience as a guide, identifying the most likely scenario

Useful when thinking outside-the-box thinking doesn’t yield results

From the time we were born, out brains are constantly doing what it can to make sense of the world

Some examples:

https://www.youtube.com/watch?v=vflZuk-_ Hz4

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Abductive thinking

Abductive thinking is important if we begin thinking like the old dog that can’t learn new tricks

Experienced professionals who are finding they need a different perspective often invite inexperienced people to help

They find their questions stimulates different ways of thinking

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Key points about abductive thinking

Experience is a tremendous asset

You can infer based on knowledge and experience, that is, identify a high-confidence conclusion

Works most of the time but easy to get a case of “old dog” thinking

Can combat this by teaming with someone who can look at a problem with fresh eyes and has much less experience but willingness to figure things out

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Impossible thinking

How to accomplish the impossible

Put aside any preconceived ideas of what can or cannot be done

Thus, do not discard ideas because the brain had determined that they were not relevant

Putting a man on the moon….

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Example

Pharmaceutical scientists are asked “how long would it take to find a cure for disease X and get it to market?”

They answer “10, 12 or even 15 years.”

Then they are asked “how about in 8 years?”

They say “not going to happen, impossible, too much red tape.”

You then say “a virus called QXX that could kill millions has just emerged, could even wipe out half of Earth’s population, what is the chance of finding a cure in less than six months?

They then start saying things like “1 to 2 months.”

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Decision-making concepts

Contexts are important

Increasingly decision-making starts with identifying if the decisions that need to be made sit in one of the following context categories:

Simple

Complicated

Complex

Chaotic

Unclear (which of the 4 above applies)

Disorder

CHAOTIC

COMPLEX

SIMPLE

COMPLICATED

UNORDERED

ORDERED

Simple

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The Context characteristics The leader’s job Danger signals Response to danger signals
Simple (e.g. Getting reports done on time) Repeating patterns and consistent events Clear cause and effect relationships evident to everyone, right answer exists Known knowns Fact based management Sense, categorise, respond Ensure proper processes in place Delegate Use best practices Communicate in clear, direct ways Understand that extensive interactive communication may not be necessary Complacency and comfort Desire to make complex problems simple Entrained thinking No challenge of received wisdom Overreliance on best practice if context shifts Create communication channels to challenge orthodoxy Stay connected without micromanaging Don’t assume things are simple Recognise both the value and the limitations of best practice

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Complicated

The Context characteristics The leader’s job Danger signals Response to danger signals
Complicated (e.g. Identified that there is a defect in the product) Expert diagnosis required Cause and effect relationships discoverable but not immediately apparent to everyone, more than one right answer possible Known unknowns Fact based management Sense, analyse, respond Create panels of experts Listen to conflicting advice Experts overconfident in their own solutions or in the efficacy of past solutions Analysis paralysis Expert panels Viewpoints of non-experts excluded Encourage external and internal stakeholders to challenge expert opinions to combat entrained thinking Use experiments and games to force people to think outside the familiar

Complex

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The Context characteristics The leader’s job Danger signals Response to danger signals
Complex (e.g. Must get a crippled space craft back to Earth safely, such as Apollo 13 in real life) Flux and unpredictability No right answers, emergent instructive patterns Unknown unknowns Many competing ideas A need for creative and innovative approaches Pattern based leadership Probe, sense, respond Create environments and experiments that allows patterns to emerge Increase levels of interaction and communication Use methods that help generate ideas, open up discussion to the group, set barriers, stimulate attractors, encourage dissent and diversity, manage starting conditions Temptation to fall back into habitual, command and control mode Temptation to look for facts rather than allowing patterns to emerge Desire to accelerate resolution of problems or exploitation of opportunities Be patient and allow time for reflection Use approaches that encourage interaction and patterns to emerge

Chaotic

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The Context characteristics The leader’s job Danger signals Response to danger signals
Chaotic (e.g. Major and unexpected disaster, Hurricane Katrina, Twin Towers) High turbulence No clear cause and effect relationships, so no point in looking for the right answer Unknowables Many decisions to make and no time to think High tension Pattern-based leadership Act, sense, respond Look for what works instead of seeking right answers Take immediate action to re-establish order (command and control) Provide clear, direct communication Applying a command and control approach longer than needed “Cult of the leader” Missed opportunity for innovation Chaos unabated Set up mechanisms (such as parallel teams) to take advantage of opportunities afforded by a chaotic environment Encourage advisers to challenge your point-of-view once the crisis has abated Work to shift the context from chaotic to complex

Summary

You explore possible assumptions and their viability, the robustness of the premise

You examine your conclusions, defending/testing them

Identify how your conclusions can persuade and influence, lead to change

You look at the full spectrum of conclusion types that are required

Outside-the-box

Abduction

Impossible thinking

Then you move to the decision stage, which in the first instance involves understanding the context

More on decisions next week….

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Aaa assessment 2/week-6.pptx

MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 6 –workshop (3 hours)

Outline

Important points about the course, your progress

More on Decisions (from Kallet text)

Assessments preparation

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Important information

For Assessment 3, you should be in a group now. It is your responsibility to get yourself into a group. If you are not in a group, you need to let your Lecturer know asap.

You need to start learning how to work with your team members so that when the time comes to work on your team debate topic (you already have a good idea how to allocate tasks.

You need to finish a team charter (time allocated in this workshop) and attach it as an appendix with your argumentative essay

Keep working on your Second Assessment—Reflective essay

DISK profile finished? Please incorporate it in your reflective essay.

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What we learned and are learning today

In the first instance, decisions involve understanding the context….

As we learned earlier in the course, decision-making involves:

Gaining clarity

Strength of the elements of conclusion – facts, observations, experiences, beliefs, assumptions, and then checking their credibility, consistency, ability to provoke change and persuade/influence

conclusions, including high quality conclusions, outside-the-Identified box, abductive and impossible conclusions

Decision-making also involves understanding Who, the Need, When, the Criteria and Risks for deciding which option

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Last week: Introduced decision contexts

Contexts are important

Increasingly decision-making starts with identifying if the decisions that need to be made sit in one of the following context categories:

Simple

Complicated

Complex

Chaotic

Unclear (which of the 4 above applies)

Disorder

CHAOTIC

COMPLEX

SIMPLE

COMPLICATED

UNORDERED

ORDERED

Simple

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The Context characteristics The leader’s job Danger signals Response to danger signals
Simple (e.g. Getting reports done on time) Repeating patterns and consistent events Clear cause and effect relationships evident to everyone, right answer exists Known knowns Fact based management Sense, categorise, respond Ensure proper processes in place Delegate Use best practices Communicate in clear, direct ways Understand that extensive interactive communication may not be necessary Complacency and comfort Desire to make complex problems simple Entrained thinking No challenge of received wisdom Overreliance on best practice if context shifts Create communication channels to challenge orthodoxy Stay connected without micromanaging Don’t assume things are simple Recognise both the value and the limitations of best practice

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Complicated

The Context characteristics The leader’s job Danger signals Response to danger signals
Complicated (e.g. Identified that there is a defect in the product) Expert diagnosis required Cause and effect relationships discoverable but not immediately apparent to everyone, more than one right answer possible Known unknowns Fact based management Sense, analyse, respond Create panels of experts Listen to conflicting advice Experts overconfident in their own solutions or in the efficacy of past solutions Analysis paralysis Expert panels Viewpoints of non-experts excluded Encourage external and internal stakeholders to challenge expert opinions to combat entrained thinking Use experiments and games to force people to think outside the familiar

Complex

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The Context characteristics The leader’s job Danger signals Response to danger signals
Complex (e.g. Must get a crippled space craft back to Earth safely, such as Apollo 13 in real life) Flux and unpredictability No right answers, emergent instructive patterns Unknown unknowns Many competing ideas A need for creative and innovative approaches Pattern based leadership Probe, sense, respond Create environments and experiments that allows patterns to emerge Increase levels of interaction and communication Use methods that help generate ideas, open up discussion to the group, set barriers, stimulate attractors, encourage dissent and diversity, manage starting conditions Temptation to fall back into habitual, command and control mode Temptation to look for facts rather than allowing patterns to emerge Desire to accelerate resolution of problems or exploitation of opportunities Be patient and allow time for reflection Use approaches that encourage interaction and patterns to emerge

Chaotic

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The Context characteristics The leader’s job Danger signals Response to danger signals
Chaotic (e.g. Major and unexpected disaster, Hurricane Katrina, Twin Towers) High turbulence No clear cause and effect relationships, so no point in looking for the right answer Unknowables Many decisions to make and no time to think High tension Pattern-based leadership Act, sense, respond Look for what works instead of seeking right answers Take immediate action to re-establish order (command and control) Provide clear, direct communication Applying a command and control approach longer than needed “Cult of the leader” Missed opportunity for innovation Chaos unabated Set up mechanisms (such as parallel teams) to take advantage of opportunities afforded by a chaotic environment Encourage advisers to challenge your point-of-view once the crisis has abated Work to shift the context from chaotic to complex

Who makes the decision?

Decisions easier to make if YOU are the only person involved and will take responsibility for outcomes

In business world seldom just one decision-maker because outside your authority to approve, for example:

Others’ opinion could be useful

Panel of experts required

Board of Directors have ultimate responsibility

Sub-Committees that report to the board

Capital Investment Committee must approve budgets

Recruitment panel to get the right person

Project Steering Committee to avoid project creep

If major decision, often panels of decision-makers, for example:

Major capital investments, require significant budget, resources

Who to hire decisions can be critical

Tender processes must demonstrate high levels probity

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Understanding the need

By knowing what needs are behind the decision, can make a better decision. Includes:

You or your team will be responsible, and the performance implications

Sense of urgency understood/established

Decision could be delayed if approvals are required

Must persuade/influence

The benefits of the decision for all parties, the organisation

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When is the decision to be made?

Whether the choice is time-dependent or not

Time-dependent

Will I see a movie at 8.30 pm? You need to decide well before this time and before all the tickets are gone, especially if a blockbuster

“As soon as possible” may not create urgency

Deadlines create need and stimulate action

Example: Subproject 1 must be completed otherwise Subproject 2 falls behind and the critical timeline for the whole project must be re-evaluated

Few decisions in business that you have the luxury to make whenever you feel like it

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Class activities: Exercises for ‘Who’, ‘When’, and ‘Need’

Write down the next 5 things you need to do. Examine this to-do list, and answer the following questions:

1. Are you the decision maker for each of the items on it? Are you sure? When does each item need to be completed, and why is it necessary to decide by that time?

2. Look ahead (ask what’s next) at a decision you will make. Who is the decision maker? By when must that decision be made? What is the business/personal need for the decision? What is personal need of the decision maker to make it?

3. Write down 6 decisions for which you are responsible at school/work and at home. Ask yourself: Do you need someone else to sign off on this? Do you need your significant other, a family member, a lecturer, classmate or a friend to agree before you will proceed? (If so, you are not the decision maker—or at least not the sole decision maker).

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Criteria for making the decision

Identify the conditions that need to be met

Work towards identifying the best or an optimal outcome

Example, hiring someone:

Requisite qualifications – Yes/No

Good references – Yes/No

Communicates effectively – Yes/No

Available required hours – Yes/No

Criteria could involve weightings and many parameters

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Tenders

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The weightings for the evaluation criteria were declared to tenderers. Both tenderers were evaluated as meeting the minimum requirements of the evaluation criteria.

Evaluation Criteria Weighting

Cost (50%)

Plan for proposal of services (35%)

Experience, capability and past performance (15%)

Cost Plan for services Capabilities TOTAL SCORE
Tenderer 1 Item 1: Item 2: Item 3: Service 1: Service 2: Service 3: Capability 1: Capability 2: Capability 3: Capability 4: 85
Tenderer 2 Item 1: Item 2: Item 3: Service 1: Service 2: Service 3: Capability 1: Capability 2: Capability 3: Capability 4: 90

Can drill down and specify weightings for each cost type, service type, capability type, etc. to get an overall total

Assignment rubrics

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Criteria Category % for Assessment 3 % of Course Group’s Scores out of 100%
Group Report 40 24 0
Group Powerpoint 30 18 0
Group Video 10 6 0
Teamwork 20 12 0
TOTAL (%) 100 60 0
Group Report Criteria Max Mark % Fail (0-49%) Pass (50-65%) Credit (65-74%) Distinction (75-84%) High Distinction (85-100%)
Identified an organisation that has recently implemented a sustainability strategy and explained what this involves from an organisational change problem perspective 5 5 0 2.5 3.25 3.75 4.25 5
Insufficiently articulated. Effectively articulated. Convincingly articulated. Very convincingly articulated, explaining the implications well. Superior articulation, explaining the implications well.

Only one aspect of the criteria here

Evaluating risk

Upside risk is the risk of something good not happening

Example: your new hair style not suiting you as much as your previous hair style, a new product not selling as forecast, a strategy is poorly received by staff

Downside risk is the risk of something bad happening

Example: getting caught in heavy rain on the way to an important interview, a cyclone hitting the city, fraud at work, local currency dropping 10%

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Checklist

Downside risks

Probability of downside

Upside risks

Probability of the upside

Can you ignore the statistical probability?

Absorbing/coping with the risk effects. Can you recover if it happens?

Controllability

Necessity of the upside. Doing without viable? Example. Cars can crash but would you not have a car?

Can you reverse the decision if too much downside?

What is your mitigation strategy

Preeminent statistics present? Can you predict the event so that you can avoid it altogether or mitigate effects?

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Summary

Must gain clarity and work towards conclusions that can be implemented before a decision can be made

In the first instance, decisions involve understanding the context….

Decisions involve:

Who, need, when

Criteria

Evaluation of the risks

Next week more on decision processes

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Reflection & Application (30 mins)

Get into groups of 3-5 students, reflect on possible relevance/application of the learned concepts of this week in your life, relationships, study and/or work, give justifications and examples.

Present to the class.

Doing this exercise as a group can help you prepare for your Assessment 2—reflective essay (40%) greatly.

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Assessment 3

Your team charter for Assessment 3 (sample form available on Moodle)

Format of delivery (e.g., panel discussion, debate with a chair etc.)

The hook, winning over the audience

Obligations to shareholders debate topic:

How to hook the audience, develop a line of argument, structure a debate, identify examples, prepare counterarguments, etc.

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Team charter

Look at the document. Think about what might be important to highlight for your group

In the next 10 minutes, identify the following:

Your group’s goals for Assignment 3

How and when will you be communicating/meeting to prepare your debating arguments

Quality assurance methods

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Possible format (3 people group)

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Chair responsibilities 1 Speaker for the affirmative 1 Speaker for the negative
Introduce the debate topic and two speakers Facilitate the delivery of arguments Conclude the discussion (essential) by revisiting the topic, summarising the affirmative and negative’s major arguments and some compelling closing remarks. Provide a formal introduction Address definitions: Interprets the topic in light of the definition so has the advantage that can set the overall boundaries of the argument Outline one or two arguments and detail them, illustrating with real-life examples or other sources of evidence Summarise and leave a memorable/persuasive ending Provide a formal introduction Address definition: If the affirmative’s definitions are agreed then say so otherwise present your preferred definition and explain why they are superior State the counterargument. Attack why the affirmative team’s argument is wrong Outline one or two arguments and detail them. Illustrate your points with real-life examples or other sources of evidence Rebut previous speaker in terms of detailed arguments presented Summarise and leave a memorable/persuasive ending

Other creative format are also welcomed

E.g., https:// www.youtube.com/watch?v=GTQnarzmTOc

Creative format is a bonus, it is essential that your debate/presentation presents logical & strong arguments from both the affirmative and the negative sides on the basis of extensive research using a minimum of 10 peer reviewed academic journal articles as references.

Rehearsal is critical and should be iterative as you conduct continuous research to strengthen your premises and reinforce your arguments.

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Practice: Other People’s Money

Danny Devito’s speech on Moodle

Link https:// www.youtube.com/watch?v=62kxPyNZF3Q

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Class discussion: The hook

Why did the DeVito character refer to the prayer for the dead in his talk?

Benefits of starting with questions, images, references from history, lines from a poem, words of a song, story from your village, famous last words, analogies, actions, etc.

Some examples https:// www.youtube.com/watch?v=2_VvIr1KkLo

https:// www.youtube.com/watch?v=i0a61wFaF8A

What rhetorical devices, etc. have you/others you know used to get the audience to pay attention?

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Possible Arguments

How would you argue the following?

Lawrence Garfield (Danny Devito) is absolutely right, shareholders should concern themselves with profits and not what will happen to the community if the company closes down because it is no longer viable.

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Developing arguments

In groups consider the following:

If you were the affirmative, how would you define the debate topic?

If you were the negative, would you define the topic in much the same way?

If not, why not and what would you do?

If yes, how would you highlight your point(s) of difference?

What are 3 points that the affirmative might make or 3 examples that they might provide?

What are 3 points that the negative might make or 3 examples that they might provide?

How could the 3rd team member introduce the topic, best facilitate the delivery of two opposing arguments, and bring everything to a conclusion.

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Important points to remember

1. Clear division of responsibilities need to be coupled with working closely together as a team to develop coherent arguments and counterarguments.

2. For on campus students, the third team member’s role is critical in introducing the topic, facilitate the delivery and conclude the discussion.

3. Delivery is supposed to be mostly choreographed and rehearsed, not entirely impromptu though some spontaneity is also encouraged. Consider it an educational and entertaining performance.

4. Delivery of arguments in a creative and engaging manner is strongly encouraged.

5. Arguments need to be based on strong premises and conclusions.

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Questions

Thank you

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Aaa assessment 2/week-7 (part 1).pptx

MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 7 – Lecture

Outline

Important points about the course, your progress

Introduction to the Game theory

Methods of attacking the argument

Moral values versus factual statements

Practices for your debate

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2

Assessments 2 &3

Reflective essay in progress?

Group finalised for your debate?

Enrolled on Moodle using the ID assigned?

Team charter in progress?

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Introduction to game theory

John Neumann and Oskar Morgenstern – Theory of Games and Economic Behavior (1944)

Understand the behaviour of players (actors) in situations where fortunes are interdependent

Rule-based games and free-wheeling games (cannot take away more than you bring)

Not about being egocentric. Focus is on others

Often more about win-win than win-lose situations or both or coopetition

Win-lose often destructive – price wars good example

A good way to think of value creation and value appropriation (capture)

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Game Theory: The Science of Decision-Making

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Competitive game: Every player has something to gain by stabbing the other player in the back Cooperative game: every player has agreed to work together toward a common goal
When you are competing with others, it makes sense to choose the course of action that benefits you the most no matter what everyone else decides to do. 1. The contribution of each player is determined by what is gained or lost by removing them from the game. This is called their marginal contribution.
2. Interchangeable players have equal value.
3. Dummy players have zero value.
4. If a game has multiple parts, cost or payment should be decomposed across those parts.

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Video analyses

Three videos on Moodle that are about game theory.

What were they about again?

Dilbert and the prisoner’s dilemma

13 Days in October – Cuban Missile Crisis, also read Game theory and the Cuban missile crisis (https ://plus.maths.org/content/os/issue13/features/brams/index)

A Beautiful Mind – the principles of cooperative game theory

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The right game

Brandenburger and Nalebuff argue competitors need not fail for the firm to be successful

Can think of competition and cooperation in game terms

the challenge is to identify what game should be played and its parameters

Identify when cooperating and when competing along the vertical and horizontal dimensions

Eg. Can play by creating competition (“pay me to play”) – already known in takeovers, get paid to change the nature of the game, parameters of takeover

Eg. Cheap complements and creating competition in substitutor market

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The model illustrates the interdependencies between yourself and the four other types of player in your business:

Customers – The people who buy your product or service.

Suppliers – These provide your organization with the resources you need to produce a saleable product. (Keep in mind that suppliers can be outside organizations, or your own employees.)

Competitors – Competitors take a share of your target market by offering a similar product or service.

Complementors – These are other players who provide a product or service that can be linked to your own to make both offerings more attractive to your customers.

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The right game (continued)

Concept of PARTS

PLAYERS

Customers, competitors, substitutors, complementors

ADDED VALUES

What each brings to the game

RULES

Nature of the rules and structures that shape behavior

TACTICS

Moves to influence perception and behaviors of other players (can be positive or negative)

SCOPE

Boundaries of the game (interactions) as perceived by the players

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The right game (continued)

Changing the added values

Eg. rows of more leg room in plan by Trans World Airlines

Imitation led to reduction in excess capacity, better prices and/or less empty seats

Eg. create dependency on your product (Nintendo example)

Capture value by doing things like pre-ordering (massive soap pumps order)

No guarantee that the added value will be captured

Changing the rules

Eg. rules of pricing followed or focus on niche to stay out of way of big players or rule that incumbent supplier makes the final bid price

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The right game (continued)

Tactics

Eg. Price signalling (Murdoch newspaper price drops)

Another example negotiating over percentage fees (investment banks and major sales)

Changing scope

Eg. create linkages to other games or shrink the game

For instance, can opt not to enter a particular market or serve a particular segment to avoid competition

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Strategy and the right game concept

Could be a number of potential mental traps

Convinced cannot change the game

Believing must disadvantage others to win

Believing must always be unique or innovative, imitation can be good

Unable to see the whole game

Failing to methodologically/systematically analyse how possible to change the game – must be “allocentric” and no “egocentric”

Games are often ongoing and have no end

Summary

Game theory is useful and may help some people identify how to negotiate or work with potential collaborators

Competition but coopetition also a reality

The right game is useful

Value net framework a useful tool

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MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 7 – Workshop

Outline

More debating principles/practice

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Four ways to attack an argument

Two direct ones and two indirect ones

1. Direct Method: Attack the premises

If you can show that an argument relies on at least one implausible premise, that is a good way of showing that the argument is not good enough.

You might argue that there is simply not enough evidence to show that the premise is true. Burden of proof is passed on to the opponent.

2. Direct Method: Attack the reasoning.

Even if the premises are all very plausible, you need to check whether the reasoning of the argument is acceptable.

The argument might be invalid or inductively weak, or question begging.

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3. Indirect method 1: Attack the argument indirectly by attacking the conclusion.

If you can show that the conclusion of an argument is false, this implies that there must be something wrong with the argument. This strategy of refuting an argument is useful when it is difficult to evaluate an argument directly, perhaps because it is too long or convoluted. Of course, this strategy does not really explain what is wrong with the argument.

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4. Indirect method 2: Give an analogous argument that is obviously bad.

The idea is to compare the original argument with another argument. If the new argument is obviously bad, and it has the same structure as the original one, then the original one is likely to be a bad argument as well. This is a good strategy to use when it is difficult to see what is wrong with an argument, or your opponent refuses to admit that the argument is no good.

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Exercise for class (15 minutes)

Consider this argument:

Capital punishment is wrong because it is always possible to punish an innocent person by mistake.

How would you attack this argument using the four methods mentioned?

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Possible answer:

Attack the premises: Is it always possible that an innocent person is executed by mistake? It might be argued that in some crimes there were many independent witnesses. Perhaps the criminal was apprehended right away at the crime scene, and the whole crime was recorded on surveillance video.

There is therefore little doubt that the person being caught is guilty.

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Attack the reasoning: Even if mistakes are always possible, this is just one consideration and it does not immediately follow that capital punishment is wrong. Maybe there are many other considerations in support of capital punishment. We need to balance these factors before deciding whether capital punishment is acceptable or not.

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Attack the conclusion: Punishment should be proportional to the crime.

Capital punishment is not wrong because this is what justice requires in the case of hideous crimes.

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Give an analogous argument that is obviously bad: With imprisonment, it is also possible to punish an innocent person by mistake. But it would be absurd to stop sending people to jail because of this.

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More practices on using the four methods of attacking arguments:

a) Cloning animals or human beings is unnatural, so it is wrong and we should not do it.

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b) We should not trust scientists because they keep on changing their theories. Today they say that this is true. Tomorrow they come up with a

different theory and say something else.

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c) It is useless to punish students because they will always make mistakes.

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Thinking about VALUES

Three types of values

Personal values: values accepted by individuals that affect how they evaluate things and make decisions about their lives (e.g., independence > relationships)

Aesthetic values: concern the evaluation of art and literature, and standards for beauty

Moral values: Moral values correspond to objective standards in ethics that are supposed to be universal and apply to everyone. They govern how we should interact with each other, and they determine when something is morally right or wrong (e.g., Slavery is wrong, because freedom is a moral value).

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Moral values versus Factual statements

Morality is normative, i.e., that determines what we should do or not to do, what is good or bad.

Factual statements are what the world is actually like.

Something is the case ought to be the case

E.g., gov. officials are corrupt, but they ought not to be.

Everyone is selfish, but selfishness ought not to be desirable.

Children are starved, but they ought not to be.

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Implications for moral reasoning

1. whether something is factually true is logically independent of its moral status

E.g., eating babies will make your skin more beautiful.

You might think the idea is disgusting (morally incorrect), but this does not mean the claim is false (factually independent of moral judgement).

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Moral reasoning

2. be careful of arguments that use purely descriptive assumptions to derive a normative conclusion (This mistake is known as the naturalistic fallacy), e.g.,

Woman should stay at home and look after children because this has always been part of the social tradition.

Eating meat is fine because we are more intelligent than other animals.

Governments should not provide social welfare because survival of the fittest is just part of nature.

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Please bear in mind that:

Factual claims by themselves have no normative implications.

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Think about arguments for your debate topic

Are you conflating moral values with factual statements?

……

o      Ethics and business are not compatible

o      People who are smokers should not be employed

o      People who are working in the same company  should not have romantic relationships with each other

o      CEOs deserve the big salary package that they get…..

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Group Exercise

Get into groups and discuss the following three topics:

Reality TV does more harm than good.

Bribery is sometimes acceptable.

University lecturers should not be required to use social networking to help deliver learnings to students.

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In your groups, think of one argument for and one argument against each of these topics.

Be prepared to share your ideas with the whole class.

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What did we learn?

Game theory?

Defining arguments?

Making compelling arguments?

Methods of attacking arguments?

Use of evidence?

Rebutting?

Moral values versus factual statements?

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Aaa assessment 2/week-7 (part 2).pdf

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Aaa assessment 2/week-8.pptx

MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 8 – Lecture

Outline

Introduction of two theories relevant to decision making

Prospect theory

Psychological contract theory

Workshop exercise, scenario role play

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3

Quick Introduction to Prospect Theory

Theory developed in 1979 by Professors Daniel Kahneman and Amos Tversky.

Kahneman won the Nobel Prize for this work in 2002.

Tversky had passed away before the Award but would have no doubt been awarded the prize.

“Prospect theory: An analysis of decision under risk” was published in 1979 and led the way to the development of behavorial economics.

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Prospect Theory shows that, as individuals, we make decisions based on the value of potential losses and gains rather than the final outcome.

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The horizontal x axis measures the value of our gain or loss,

whilst the vertical y axis measures how we value that gain or loss.

Looking at the red arrow (shown as ‘A’) on the right-hand

side of the graph, it shows the objective value of a certain gain.

The blue arrow pointing upwards reflects the subjective value

we attach to this gain. The observation to take note of is that the

subjective value we place is less than the actual objective gain.

Looking at the other red arrow (measured at the same value,

that is ‘A’) on the left-hand side of the graph, it shows the same

value, but this time as a loss. The blue arrow pointing downwards

is longer than the red arrow, showing that the subjective value we

attach to this loss is much larger than the actual loss itself.

If the value of A, be it a gain or a loss, was R100, it shows that

we place a larger value on a loss of R100 than on a gain of R100.

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Focuses on:

How people make probabilistic decisions not optimal probabilistic decisions.

Understanding bias and level of risk averseness.

The ways in which consumers and others not always rational.

Attempts to understand the people’s cognitive biases/frames.

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Some examples from marketing

Mental accounting

Unexpected gains.

Example:

Mr and Mrs X go on a fishing trip, and catch some salmon. The fish are lost by the airline, and the airline pays insurance of $300 a week later. Mr and Mrs X go out for dinner at an upmarket restaurant, spending $225 on a seafood meal. They have never spent this on a meal before.

Humans treat money as if they are in different bank accounts.

What happens at Christmas, birthday time, tax refund time? How do businesses capitalise?

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“mental accounting is the set of cognitive operations used by individuals and households to organize, evaluate and keep track of financial activities.” Read more: Mental Accounting https://www.investopedia.com/terms/m/mentalaccounting.asp#ixzz5Po86qJlx  Follow us: Investopedia on Facebook

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Another example

Segregation and integration of losses and gains.

Example:

Mr A was given 2 lottery tickets. He won $50 in one and $25 in the other.

Mr B was given a single lottery ticket. He won $75.

Who is happier?

Most would say A.

Example:

One of the reasons why marketers push for monthly and not quarterly debits – people don’t notice the smaller loss as much as the larger loss.

Tolls are from an electric device rather than in the form of coins. You notice lack of coins more.

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One more example

Losses are weighted more heavily than gains.

Example:

Mr A bought his first lottery ticket and won $100. On the same day, he spilled juice on the carpet in his apartment and had to pay $80 to have it cleaned.

Mr B bought his first lottery and won $20.

Who is happier?

Mr A was told that if he insulated his home he would be 75c better off per day.

Mr B was told that if he did not fully insulate his home he would be 75c a day worse off.

Who was more likely to fully insulate his home?

Normally, most would say B.

Marketers focus on framing the benefit in terms of avoiding a loss.

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How is the knowledge of the Prospect Theory going to impact your decision making? Examples?

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Reflection

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Introduction to psychological contracts

Rousseau (2004)

Provides a briefing of her research to date into psychological contracts.

These are implied or explicit contracts.

Psychological contracts can be defined as:

Beliefs based upon promises expressed or implied, regarding an exchange agreement between an individual and, in organizations, the employing firm and its agents.

Changes in the psychological employment contract – by Denise Rousseau

https:// www.youtube.com/watch?v=EKGYUyFn6rA

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Six features

Voluntary choice;

Belief in mutual agreement;

Incompleteness;

Multiple contract makers;

Managing losses when contract fail;

The contract as model of the employment contract.

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1. Presence of voluntary choice

Psychological contracts are more likely to be successful and the source of motivation if they involve voluntary choice.

For instance, the employee is more motivated to stay if they say “I agree to stay with the firm for a minimum of a year.”

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2. Belief in mutual agreement

An individual’s psychological contract refers to their own understanding of the commitments made with each other.

A vague undertaking may be interpreted to be something more specific by the employee, for example, occasional travel is interpreted as travel may be required every couple of months, not every couple of weeks.

More experienced recruits are better at probing what is mutually understood (and getting things made clear in writing).

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3. Incomplete nature of contracts

By their nature, it is never possible to have a complete contract.

Hard to define each party’s commitment in the first instance so there is a need to re-define at later dates.

“Interestingly, aspects of employment that workers find satisfying but that are not part of the psychological contract (eg. camaraderie of colleagues) can, over time, come to be viewed as part of the promises status quo.”

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4. Multiple contract makers

Information sources of the contract can include top management, human resource managers and prospective/current immediate supervisor.

Co-workers can also be a source of information.

Thus, if information sources send different or conflicting messages, the mutuality of the psychological contract is eroded.

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5. Managing losses when contract fail

If an anticipated commitment was not fulfilled then a failure of the contract is interpreted to have occurred.

They can lead to negative reactions and this can be two-way, involving employee and/or the employer.

Failure needs to be managed because reaction to the failure could be quite negative.

Management could involve offering someone an interesting project instead as a result of a promotion not eventuating as originally promised.

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6. As model of employment contract

Can create an “enduring mental model of the employment relationship.”

Can make it easier to function in an employee-employer relationship even though information is incomplete about who expects what.

Sometimes the old contract is no longer relevant and an elaborate change process needs to be undertaken.

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Three types

Also identifies that there are 3 types of psychological contracts:

Relational;

Transactional; and

Hybrid or balanced.

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Relational

Include such terms as loyalty (meeting each other’s needs) and stability (open-ended commitment to be in a relationship in the future.)

Workers in these contracts will be more willing to do overtime, help co-workers, support change, etc.

But get very upset if they perceive the contract has been violated.

Failure to remedy will lead to turnover, reduced contributions, and other break-downs.

On the positive side, employers will take on more risk and more responsibility, for example, Malden Mills CEO paid salaries after the mill burned down.

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Transactional

Involve work where tasks tends to be narrower or limited in duration.

Workers tend to adhere to the specific terms and will move on if conditions change without any compensation, etc.

Risk is more weighted towards workers.

Generally, employees tend to be good at fulfilling the specific terms of the contract.

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Hybrid or balanced

Involve the open-ended timeframes of relational contracts and with the performance demands and renegotiable aspects of transactional contracts.

To some extent, some job security is being traded in return for risk being spread more evenly, ability to learn on the job and be paid for performance.

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Ensuring success

What is universally understood and is more likely to lead to a successful psychological contract:

Mutuality. If both parties agree to the terms and understand them to be the same thing, then more likely to have a successful outcome.

Allow for the fact that perceptions though can differ between parties, including different employees and agents.

Be aware of the fact that it can be difficult to understand the point when re-negotiation is required.

Appreciate that one has to be sensitive to what constitutes a breach of the psychological contract. A breach could lead to many dysfunctional outcomes and behaviours.

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Employers’ role

Ensure employee is properly socialised, trained and involved in activities that make clear the terms of the commitment.

Managers need to be consistent at all levels.

Success of the contract largely dependent on the immediate manager.

To be effective, manager must put psychological contract in place that is satisfactory and leads to a commitment to ensure that employees’ individual contracts are fulfilled in mutually satisfactory way.

Employee selection processes can be critical and the “right” employees tend to interpret and act upon the contract appropriately.

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Main findings

Important to:

Strive to consistently implement the contract.

Establish clear boundaries, including articulate goals, interests and constraints.

Build flexibility into the contract so that no-one is surprised when the contract has to be re-negotiated.

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Organisational change management, in fact, any change within organisations involves many decisions and constantly balancing:

Strategic and operational goals

External and internal factors

Rational and non-rational/emotional responses

Reactive and proactive behaviours

Getting the best out of people, processes and systems for the future in the long-run

Reflection

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How is the knowledge on Psychological Contract going to impact your decision making, from either a managerial perspective or an organisational employee’s perspective?

MGMT20135: CRITICAL THINKING AND MANAGERIAL DECSION-MAKING

Week 8

Be prepared

To work in groups

To nominate someone from your group to stand up and explain your group’s findings

Share your findings with the rest of the class via a class-wide discussion

Get involved in a role play

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Kevin and the Call Centre

The facts about the Case:

Kevin:

Kevin is a new employee at a call centre. Kevin has been consistently late – 10 minutes on average and has just been 25 minutes late.

Today he is late because the babysitter’s father died, his children were slow getting ready for school and he got stuck in traffic. He couldn’t call as his mobile battery was flat.

Kevin is not fitting in with the other staff, who are younger and cliché (the don’t talk much to people who they don’t know).

Kevin has found it difficult to learn the computer system and no-one seems interested in training him.

Kevin is generally very conscientious and has a talent for dealing with difficult customers over the phone.

Kevin is a single dad and we do not know why he is bringing up his children by himself.

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Andrea the Call Centre Boss

Andrea:

Andrea knows she must discuss Kevin’s lateness with him as it is impacting on her and her staff’s ability to perform.

Andrea has been given lots of project work by her bosses and has not been able to personally train Kevin as she would normally, which meant the other staff have to train him.

She does not know no-one is seriously helping Kevin. She does know, however, that Kevin is brilliant dealing with difficult customers and does it better than anyone else.

Andrea knows that she will be short-staffed if Kevin leaves and is aware of the fact that she should act professionally when addressing Kevin’s lateness with him………

She doesn’t know if being tough will get her the results she needs in the first instance.

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The proposed meeting

When Kevin arrived over 30 minutes late and looking a little frazzled, Andrea asked Kevin to meet her in her office at 11 am to discuss some issues.

She isn’t smiling but she doesn’t look cross either. Kevin can’t read her expression at all……

Kevin looks a little nervous at the prospect of having a meeting with Andrea at 11 am.

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Role Play

In Groups of 3-4 people discuss the case study.

What do you think Andrea would say at the meeting and what do you think Kevin would say?

What would be the sorts of things a bad manager (the boss from hell) would say?

What would be the sorts of things a good manager (the sort we all want) would say?

Be prepared to role play a bad conversation and outcome, and then a good one.

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Learnings

What did we learn?

How can you translate your understanding of the Prospect Theory into better decisions?

How can you use the Psychological contract theory to make better managerial decisions?

How might your learnings be applied to the management of whole groups of people in an organisational change scenario?

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Aaa assessment 2/week-9 (part 1).ppt

Outline

  • Two frameworks for decision making
  • K-T methodology
  • Decision making process by Lau (2011)
  • Useful tools to assist the analysis:
  • SWOTs analysis
  • The Benjamin Franklin method
  • Risk analysis framework

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Kepner-Tregoe Methodology

It is also referred to as the Kepner-Tregoe Matrix, KT Method, and PSDM (Problem Solving and Decision Making).

  • Developed by social scientists Charles Kepner and Benjamin Tregoe.
  • This model provides four distinct phases for resolving problems:

Situation Appraisal

Problem analysis

Solution analysis

Potential problem analysis

  • This rational process helps:

Focus on getting it right at the start

Provides a common language

Repeatable and auditable

Builds commitment

Time and performance based

Data driven

Allows effective communication

allows execution and follow-up

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The Kepner-Tregoe approach is based on the premise that the end goal of any decision is to make the “best possible” choice–not the “perfect” choice. In other words, the decision maker must accept some risk. This model thus helps evaluate and mitigate the risks of our decision. It is comprised of 4 rational process areas:

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(SOURCE: Kepner, C. H., and Tregoe, B. B., (1981) The New Rational Manager, John Martin Publishing Ltd, London pp 12 – 27)

1. Kepner-Tregoe Situation Analysis

Timing (urgency)

Trend (growth)

Impact (consequences)

To clarify and prioritize situation, Plan issue resolution

2. Kepner-Tregoe Problem Analysis

Identity

Location

Timing

Magnitude

What

Is?

What

Is Not?

Distinction

Cause of

Distinction

Kepner-Tregoe Problem Analysis

What is?

What is not?

Distinction?

Possible

Cause?

K-T Decision Analysis

(Quantitative)

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3. Kepner-Tregoe Decision Analysis

Thinking patterns for making choices:

  • We appreciate the fact that a choice must be made
  • We consider the specific factors that must be satisfied if the choice is to succeed
  • We decide what kind of action will best satisfy these factors
  • We consider the risks may be attached to our final choice of action that could jeopardize its safety and success

Process:

  • The decision statement
  • The objectives/criteria for the decision
  • Classify objectives into MUSTs and WANTs
  • Alternatives
  • The consequences of the choice

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4. Kepner-Tregoe Potential Problem Analysis

  • Four basic activities:
  • 1. Identification of vulnerable areas – of an undertaking, project, operation, event, plan etc;
  • 2. Identification of specific potential problems – within the above vulnerable areas that could have sufficient negative consequences on the operation to merit taking action now;
  • 3. Identification of likely causes – of these potential problems and identification of actions to prevent them from occurring;
  • 4. Identification of contingent actions – that can be taken if preventive actions fail, or where no preventive action is possible

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  • Every action above will have a cost, in that it calls for an allocation of resources against some problematic future return.
  • Need to ask the following questions:

What could go wrong?

What can we do now to prevent it?

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4. Kepner-Tregoe Potential Problem Analysis

Exercise

Your CQUniversity Moodle access was suspended, and you have two assignments due in 5 hours. How can you solve this problem using K-T methodology?

Work with your classmates, conduct role play if necessary (e.g., conversation between you and the TaSac staff, etc)

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A good decision process—Lau (2011)

1. Think generally about how the decision should be made.

2. Do some research.

3. Come up with a list of options.

4. Evaluate their pros and cons and pick the best option.

5. Prepare for contingencies.

6. Monitor progress and learn from the results.

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Source: Lau, Joe YF. An introduction to critical thinking and creativity: Think more, think better. John Wiley & Sons, 2011.

Step 1. Think generally about how the decision should be made.

  • “A problem well stated is a problem half solved”

—the American philosopher and educator John Dewey

  • Here are some relevant questions to ask:
  • Can I delegate?
  • How much time should I spend thinking about this?
  • What is the central issue? Which is the most important decision?
  • Is there anything that might have a negative effect on my decision?

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Step 2: Do some research

  • For decision of a strategic nature, i.e., future directions of a person or organisation, good idea to use a SWOT analysis to assist decision.

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Exercise

  • Carry out a SWOT analysis for yourself to review your current situation— for example, about your job or studies.

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Step 3: Come up with a list of options

In making such a list, we should pay attention to the following points:

  • Feasibility and likelihood of success
  • Are the action plans realistic? Do any of them violate any given constraints? (cost, time, legality and so on)
  • Adequate choices
  • Think hard about whether they are genuine alternatives to choose from; having too many options to consider can be confusing
  • Exclusive vs. complementary alternatives Some plans exclude others. If you have a limited budget, buying a car means you cannot renovate your apartment. But some plans complement each other. You can improve a product by better marketing, providing discounts, and improving quality, all at the same time. So always see if you can combine good options.

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Step 4: Evaluate the options and pick the best one

  • What counts as “the best”?
  • One that maximizing expected utility
  • Each choice has a set of possible outcomes with different probabilities. We can calculate mathematically the “expected utility” of a choice, which roughly measures the net gain (or value) we are expected to get from that choice. Then we are supposed to pick the choice that has the highest expected utility.
  • Problem is in real life the probabilities and utilities are often difficult to determine.

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the Benjamin Franklin method

  • Franklin (1706-1790) was one of the Founding Fathers of the United States, a famous politician, businessman, printer, scientist, and inventor.
  • He suggested that many decisions are difficult because we do not have all the relevant information before us. One thing we can do is to write down the pros and cons of an option in two columns. Opposing reasons of equal weight can be “canceled out.”
  • We can then determine whether on balance there are more reasons in support of the option, and act accordingly:
  • Suppose you are looking for work and you have three options:
  • join a large stable company
  • or an exciting small internet startup.
  • Or maybe borrow money and setup your own business.

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  • We can then write out the pros and cons of each option in a table:

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the Benjamin Franklin method, an example

Please keep in mind

  • Evaluating the options require some care.
  • If you simply count the pros and cons, it might appear that option 1 is the best (4 pros minus 2 cons = 2 net pros), option 3 ranks second (3 pros and 3 cons), and option 2 is the worst.
  • the pros and cons can have different weights in the sense that some considerations are more important than others.
  • The “best” choice will depend on one’s values and risk tolerance, and might be different for different people (e.g., a fresh graduate versus a middle-aged man with family commitments)

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Using a score table

  • In some decisions, the criteria for the best choice can be specified by a list of criteria. In these situations, the Benjamin Franklin method can be applied more systematically using a score table:
  • The idea is to evaluate each option according to
  • the same set of criteria, assign a score, and then pick the option with the highest score.

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Benefits

  • The advantage of this method is that it helps us evaluate a large amount of information in a systematic way. The score assignment is of course subjective and cannot be absolutely accurate. But the systematic procedure makes the decision process very clear, and minimizes inconsistency and arbitrary judgment.

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Step 5: Prepare for contingencies

  • Murphy’s law says: If something can go wrong, it will.
  • Accidents happen despite our best planning.
  • Good planning helps you anticipate problems and minimize their damage.
  • What are some of the things you need to consider in contingency planning?

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Things to consider in contingency planning:

• Anticipate problems: List 10 bad things that might happen and think about

what to do in these cases. Think about the worst possible scenario.

• Strengthen the weakest link: The weakest link is the most vulnerable part

of a project and can most easily undermine the success of the whole. Many

projects also have at least one bottleneck somewhere, a place (or person!)

that has the largest effect on slowing down the whole project. Monitor such

places closely.

• Include a safety margin: Predictions about the future are notoriously inaccurate.

Have a flexible plan that tolerates inaccuracies in your predictions

and assumptions.

• Prepare a backup plan: In case the original one fails miserably.

Estimating task completion time: People are often too optimistic about the time it takes for them to complete a task.

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Risk analysis (ISO31000)

PROBABILITY OF OCCURRENCE

High

Low

Inconsequential

Very serious

You have to seriously deal with these to mitigate

CONSEQUENCES

Step 6: Monitor progress and learn from the results

  • A good decision process does not end with the moment the decision is made.
  • First, we need to monitor how the decision is implemented to see if any follow-up is needed.
  • More important, even when the whole project has been completed, we should review the process to see what we have done right or wrong, so that we can do better next time. E.g., investment decisions,

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  • “Those who refuse to learn from history are condemned to repeat it.“
  • philosopher George Santayana

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Reflection

  • Think about some of your major decisions in your personal life or in your work, including both good and bad decisions.
  • Are you able to identify what makes these decisions good or bad?
  • What can you learn from these cases?
  • Think about how the decisions were made and how the decision processes compare with the Benjamin Franklin method.

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Summary

Use the following checklist to see if any mistakes have been made.

1. Is it clear what we have to decide? Which is the most important or urgent decision? Meetings or discussions can go on forever without any decision

being made. At some point we need to refocus on the main issue.

2. Are all the options realistic? Are there other options we should consider?

Many people rely on what they are most familiar with. Or they stop looking

for options when they think they have the right answer. Thinking creatively

and expanding our options can often lead to better alternatives.

3. Have we overlooked any good / bad consequences of an option?

Failure to identify the important consequences of an option can undermine the whole

decision process. Solution: more thinking, more research, more discussion.

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Summary

4. Is there any special criteria for the decision we should be aware of?

This part of the decision is often implicit. But sometimes there are special criteria the best option has to satisfy—for example, it has to be one that the boss will approve, it has to fall within a given timeframe and budget, it should minimize risk. Any such criteria should be made explicit.

5. Have the criteria been applied wrongly?

  • People can agree about the decision criteria and the options but still disagree about which is the best option.
  • Maybe someone picked the wrong option because she was careless. Or
  • maybe she misunderstood the nature of an option. But sometimes it is difficult to balance the pros and cons qualitatively. We cannot always resolve such disagreements. The best way to proceed is to lay out the differences as clearly as possible.

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Exercise

Imagine a country preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the facts given below are correct. If you have to choose either program A or B, which would it be?

• If program A is adopted, 200 people will be saved.

• If program B is adopted, there is a one-third probability that 600 people will be saved and a two-thirds probability that no people will be saved.

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Exercise

Have you made the choice? If so you may continue and consider programs C and D below. Again your task is to pick one out of the two. Which one would it be?

• If program C is adopted, 400 people will die.

• If program D is adopted, there is a one-third probability that nobody will die, and a two-thirds probability that 600 people will die.

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Thank you

Next week…

Typical problems in decision making

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The Kepner-Tregoe approach is based on the premise that the end goal of any decision is to make the “best possible” choice–not the “perfect” choice. In other words, the decision maker must accept some risk. This model thus helps evaluate and mitigate the risks of our decision. It is comprised of 4 rational process areas:

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Aaa assessment 2/week-9 (part 2).docx

The New Rational Manager

[The following extracts have been taken from Kepner, C. H., and Tregoe, B. B., (1981) The New Rational Manager, John Martin Publishing Ltd, London]

INTRODUCTION

In 1957 we were doing social science research with the RAND Corporation. In the course of our work, we witnessed a number of decisions in government agencies and in private industry that ranged in quality from questionable to catastrophic. Wondering how such poor decisions ever came to be made, we decided to look into their histories. We found that most of these decisions were bad because certain important pieces of available information had been ignored, discounted, or given insufficient attention. We concluded that the process of gathering and organizing information for decision making needed improvement. A more rational approach – one devised to collect and make the best use of all important formation – would be a vast improvement over the countless disorderly approaches we had observed.

RAND was not interested in our pursuing this line of inquiry, so we left the organization and set up our own company. Kepner-Tregoe and Associates consisted of two people with a few half-formed ideas and a pint-sized office in a garage. We studied the literature on decision making, or “problem solving” as it was termed in those days and found little that was helpful. We then went into the field to talk with and observe real managers at work – and we began to learn.

We found that “problem solving” was not a very useful term: There was no single mental process a manager could adopt to focus on all situations that might arise. In practice, the most effective managers we observed used variations of four distinct routines or patterns of thinking, in handling problems and decisions. In time we would refine and consolidate these routines into four rational processes for managing.

The first basic routine concerned organizational skills.

The best managers – that is, those considered by other managers as most effective and successful-approached the job of managing in an orderly way. They asked pertinent questions, quickly recognizing and isolating situations of current or potential importance for closer scrutiny. They set priorities quickly and accurately. They knew when and how to delegate authority while retaining an appropriate degree of control.

The less effective managers we observed did not have these organizational skills. They tended to name and rank priorities according to the crisis of the moment or to their superiors’ most recent directives. They were not sure of when to delegate activities or what degree of control to maintain once they had done so. Their lack of control was sometimes justified as “flexibility” and often defended as the antithesis of “rigidity.”

Even at this early point in our observations, we saw a definite correlation between the level of a manager’s organizational skills (including those needed to handle everyday details) and his or her accomplishment in the more visible activities of problem solving and decision making. The success of the play, more often than not, was dependent upon the setting of the stage.

The most effective managers were also the best investigators – a characteristic of their second basic routine. From the announcement of a problem until its resolution, they appeared to follow a clear formula in both the orderly sequence and the quality of their questions and actions. In fact, when something went wrong, without a ready explanation, these managers asked remarkably similar questions to determine whether available information was relevant or irrelevant, important or trivial, critical or marginally useful. Since the same information, in the hands of different but equally experienced and intelligent managers, might result in distinctly different results, it was evident that successful problem solving involved more than the availability of information. Equally critical was the quality of logic applied to that information.

A third basic routine concerned decision making – a process requiring a pattern of thinking totally unlike that used in problem solving. On the one hand a problem exists when something has gone wrong. To solve it we must understand why it has gone wrong. Only then can we take appropriate action. A decision is required, however, when we are faced with alternative courses of action. To make a good choice, we must understand all the factors that must be satisfied. In our field study, once we made this clear distinction between the two processes, we recognized why “problem solving” – describing “what the manager does” – had been such a misleading, catch-all term: It did not distinguish between problem solving and the very different process of decision making.

If the two processes had anything in common, it was that the more effective managers tended to ask the same kinds of questions in approaching and making decisions. They may have expressed themselves in individual ways, but the similarities were remarkable. Had they discovered these sequences because they were more capable managers? Or was their effectiveness a consequence of a natural tendency to think and act in these sequences? Whatever the answer may be, the result was an optimal sequence of questions and activities that led to better-than-average problem solving and decision making.

A fourth routine we observed protected the product of the manager’s actions. Once a problem had been solved or once a decision had been made, the effective manager went the extra mile to ensure that the problem would stay at bay, that the decision would remain successful. Precise techniques varied from one individual to another, but similarities in approach outnumbered differences. There was a clear-cut best way of troubleshooting the future, and it could be described step by step.

From our observations, we refined the best techniques and routines used by these successful managers into a body of four rational processes for effective management, and we began to teach what we had learned. We taught managers how to gather and use information for problem solving and decision making. To create learning vehicles, we used fictionalized accounts of actual events, problems, and decisions. For good reason the resulting cases had the ring of truth.

We invented the Apex Company, which was beset by perplexities, irritations, and disasters borrowed from companies we had visited. The first group of managers we trained worked through these cases, just as managers do in our programs today. They began by applying their own approaches for understanding, resolving, or reaching a recommendation about each test situation. Then the ideas of rational process were introduced, and the managers restudied the cases to determine how nearly their own techniques resembled Kepner-Tregoe techniques – the embodiment of thousands of hours of observing what worked best for successful managers. How did their own investigative techniques compare with these? Their approaches to decision making? Their methods for setting priorities? The comparisons went on to include all of the major, critical functions of managing.

Using our techniques, the managers we trained improved their use of information, enabling them to move directly to the resolution of their own problems and decisions. Groups of managers, similarly instructed, worked together more efficiently than ever because they had been given a common language and common approaches to use on shared tasks. The resultant savings could be measured and documented.

By this time we had a name for our program: we called it rational management. Today the vast majority of people who learn to use rational process are trained within their own organizations by line managers who have been prepared by Kepner-Tregoe. These Program Leaders introduce and maintain the ideas and methods we have described. They often function in addition as internal consultants to their own organizations, lending their expertise with rational processes.

The programs they teach have not changed much over the years because the elements of problem solving and decision making do not change. Only the situations change-the contents upon which a rational process is focused. Since it is the how that concerns us, not the what and why of a situation, any necessary modifications and alterations involve only the expansion of basic principles of the processes themselves. Despite increasing complexity and proliferation of information, the stability of the process continues to create its obvious benefits.

Commanding systematic techniques and specific lines of inquiry and activity, the effective manager is secure in knowing that all necessary questions are being asked, all critical information considered, and all bases covered. This consistency of approach means that one manager can study another’s Kepner-Tregoe analysis at any point in its formulation and pick up its thread immediately.

From this condition of security comes the freedom for the manager to work imaginatively and creatively in pursuit of the resolution, choice, or plan that is not only safe and correct, but perhaps unusual or outstanding as well.

. . .

Four Basic Patterns of Thinking

Teamwork can be managed into existence by teaching people to use consciously and cooperatively four basic patterns of thinking they already use unconsciously and individually. These four basic patterns of thinking are reflected in the four kinds of questions managers ask every day:

1. What’s Going On?

2. Why Did This Happen?

3. Which Course Of Action Should We Take?

4. What Lies Ahead?

What’s Going On? begs for clarification. It asks for a sorting out, a breaking down, a key to the map of current events, a means of achieving and maintaining control. It reflects the pattern of thinking that enables us to impose order where all had been disorder, uncertainty, or confusion. It enables us to establish priorities and decide when and how to take actions that make good sense and produce good results.

Why Did This Happen? indicates the need for cause and-effect thinking, the second basic pattern. It is the pattern that enables us to move from observing the effect of a problem to understanding its cause so that we can take appropriate actions to correct the problem or lessen its effects.

Which Course Of Action Should We Take? implies that some choice must be made. This third basic pattern of thinking enables us to decide on the course of action most likely to accomplish a particular goal.

What Lies Ahead? looks into the future. We use this fourth basic pattern of thinking when we attempt to assess the problem that might happen, the decision that might be necessary next month, next year, or in five years.

Four kinds of questions; four basic patterns of thinking. Of course people ask other questions and think in other patterns. Nevertheless, every productive activity that takes place within an organization is related to one of these four basic patterns.

Pattern 1: Assessing and Clarifying

The most important of the four basic patterns of thinking was the one that enables managers to assess, clarify, sort out, and impose order on a confusing situation. Humans could separate a complex situation into its components, decide what had to be done, and determine when, how, and by whom it would be done. They could set priorities and delegate tasks. This was an integral part of human adaptability-the condition that permits us to change based on an assessment of “what’s going on.”

Pattern 2: Cause and Effect

The second basic pattern of thinking-the one that permits us to relate an event to its outcome, a cause to its effect-gave early man the ability to assign meaning to what he observed. The earliest humans did not understand such natural events as birth, illness, and death, or the rising and setting of the sun. That understanding came much later through the accumulation, contemplation, and communication of observations about their world. It was the refinement of cause-and-effect thinking that enabled humans to move beyond mere reaction to their environment, to make use of the environment instead of being forever at its mercy.

Small children constantly ask, “But why?” They are exhibiting this basic thinking pattern: the desire to know why things are as they are and why they happen as they do. This desire is so basic that even an inaccurate explanation of a puzzling fact is preferable to none at all.

The thinking pattern we use to relate cause and effect is as basic and natural as the pattern we use to assess and clarify complex situations. Both enable us to survive, flourish, and maintain a true measure of control over our environment.

Pattern 3: Making Choices

The third basic pattern of thinking enables us to make reasoned choices. Productive, coherent action-as opposed to simple reaction to the event of the moment-depends on a sound basis for choice. The development of sophistication in the making of choices, along with goal setting and consideration of the consequences of one action as opposed to another.

The choice-making pattern gives rise to three major activities:

1. Determination of purpose (to what end the choice is being made).

2. Consideration of available options (how best to fulfill the purpose).

3. Assessment of the relative risks of available options (which action is likely to be safest or most productive).

When faced with a choice, we are likely to spend most of our time and thought on only one of these three activities. But whatever the balance, however complex the choice, these three factors determine the kinds of choices humans have always made and continue to make.

Pattern 4: Anticipating the Future

The fourth basic pattern of thinking enables us to look into the future to see the good and bad it may hold. Future-oriented thinking was made possible largely by the superior development of cause-and-effect thinking (the second basic pattern described above). Humans learned to apply their knowledge of cause-and-effect relationships: of what had happened, and why, to what could happen and what the future might hold. Humans have learned to take actions in the present against the possible and probable negative events of the future.

Although preventive action is as old as the human race, the thinking pattern that produces this action is less successful than our other patterns. Unfortunately, the future carries less urgency than the present. Every day we face the unfulfilled potential of this fourth basic pattern of thinking: the ability to plan ahead, to take action today against the negative events of tomorrow.

Basic Patterns of Thinking in the Organisational Context

Kepner-Tregoe has developed four basic rational processes for using and sharing information about organizational concerns. These processes are systematic procedures for making the best possible use of the four patterns of thinking. This is why the Kepner-Tregoe processes are universally applicable regardless of cultural setting, regardless of the content against which they are applied. Whether managers are Japanese, Canadian, or Brazilian, they are all equipped – as a result of common human experiences – with identical, unchangeable patterns of thinking. It is only content that changes.

Situation Appraisal

The rational process based on the first thinking pattern is called Situation Appraisal. It deals with the question “What’s going on?” and with assessing and clarifying situations, sorting things out, breaking down complex situations into manageable components, and maintaining control of events.

When a management situation occurs, the available information is usually a confusion of the relevant and the irrelevant, the important and the inconsequential. Before anything reasonable or productive can be done, the confused situation must be sorted out so that its components can be seen in perspective. Priorities must be set and actions delegated. There must be some means of keeping track of information as old situations are resolved and new ones take their place.

Situation Appraisal is designed to identify problems to be solved, decisions to be made, and future events to be analyzed and planned. Therefore, we must understand the rational processes applicable to these areas before studying the techniques and procedures of Situation Appraisal itself. For this reason Situation Appraisal is presented in Chapter Seven, following the explanation of the three remaining rational processes: Problem Analysis, Decision Analysis, and Potential Problem Analysis.

Problem Analysis

The second rational process, called Problem Analysis, is based on the cause-and-effect thinking pattern. It enables us to accurately identify, describe, analyze, and resolve a situation in which something has gone wrong without explanation. It gives us a methodical means to extract essential information from a troublesome situation and set aside irrelevant, confusing information.

Decision Analysis

The third rational process, based on the choice-making pattern of thinking, is called Decision Analysis. Using this process, we can stand back from a decision situation and evaluate its three components. We can analyze the reasons for making the decision and examine its purpose. We can analyze the available options for achieving that purpose. We can analyze the relative risks of each alternative. From this balanced picture of the situation, we can then make the wisest and safest choice-the one that has emerged after careful consideration of all the factors.

Potential Problem Analysis

The fourth rational process is based on our concern with future events with what might be and what could happen. We call it Potential Problem Analysis. A potential problem exists when we can foresee possible trouble in a given situation. No one knows for sure that trouble will develop, but no one can guarantee that it will not. This process uses what we know or can safely assume in order to avoid possible negative consequences in the future. It is based on the idea that thinking and acting beforehand to prevent a problem is more efficient than solving a problem that has been allowed to develop. This rational process enables an organization to take an active hand in shaping its future.

Thinking Pattern Rational Process
Assessing and Clarifying: What’s going on? Situation Appraisal
Relating Cause and Effect: Why did this happen? Problem Analysis
Making Choices: Which course of action should we take? Decision Analysis
Anticipating the Future: What lies ahead? Potential Problem(s) Uncertainty Analysis

The Rise, Fall, and Rise Again of Teamwork

All humans have the inherent capacity to think in terms of Situation Appraisal, Problem Analysis, Decision Analysis, and Potential Problem Analysis. These processes are basic and natural. Unfortunately, they cannot be put to work automatically, used equally well by all humans, or used on a shared basis. Why should this be so?

Every person has a personal, idiosyncratic way of understanding, handling, and communicating such things as cause-and-effect relationships and choice-making. Some people develop better ways than others. Some may be only moderately skilled in, say, cause-and-effect thinking but exceptionally good at communicating their conclusions. (They may be more successful than others who are more skilled but less communicative.) The way a person thinks can be deduced only by observing that person’s behaviour and paying careful attention to his or her conclusions. What information was used and how it was used remain invisible. “I don’t see how you could arrive at that” is our ordinary way of expressing the fact that thinking is an inside job.

So we have a two-fold need, complicated by the fact that we are often unaware even of our own thinking patterns. The actual level of skill in thinking-about problems, decisions, and all other organizational concerns-needs to be as high as it can be. That level of skill rises when people have grasped the techniques of rational processes and have learned to apply their basic thinking patterns to management concerns. That’s the easy part. It is more difficult for people to learn to think together. How can we achieve teamwork in an activity as individual and internal as thinking?

Teamwork in the use of patterns of thinking does not just happen. As discussed earlier, it must be contrived, consciously planned, or unconsciously fostered through the closeness and visibility of the team members. A group may become a team of sorts simply by working together on a particular task for a long enough time. They may come to understand each other’s roles in a common task. They may come to appreciate each other’s ways of thinking and learn to accommodate to individual idiosyncrasies in the way information is used. Although a workable set of effective and appropriate compromises may emerge from this context, this group is not yet the full-scale, multipurpose team that can truly share in the thinking process.

(SOURCE: Kepner, C. H., and Tregoe, B. B., (1981) The New Rational Manager, John Martin Publishing Ltd, London pp 12 – 27)

Problem Analysis

Problems can be categorised into two types:

1. Current deviation from expected performance;

2. Performance has failed to meet expectations

Problem Analysis Process

Problem Analysis can be structured into the following major categories:

1. Defining the problem – developing the deviation statement;

2. Describing the problem in four dimensions: (a) Identity – what it is that we are trying to explain; (b) Location – where we observe it; (c) Timing – when it occurs; and (d) Magnitude – how serious; how extensive is it

3. Obtaining key information in the above four dimensions to generate possible causes;

4. Testing the most probable cause;

5. Verification of the true cause

Develop a basis for comparison between what the problem “ IS ” and could be but “ IS NOT ”. Highlight what is distinctive about the comparison between what the problem “ IS ” and could be but “ IS NOT ”. Finally, determine whether the distinction suggests a change in performance (refer to handout example for details).

To test the probable cause we ask the following question:

If this is the true cause of the problem, how well does it explain each dimension in the specification?

The true cause MUST explain each and every aspect of the identified deviation, since the true cause created the exact effect specified.

To verify the true cause we must prove that the cause did produce the observed effect. Verification is a separate step taken to prove a cause and effect relationship. This can be achieved by:

1. Asking additional questions;

2. Setting up an experiment;

3. Obtaining additional information;

4. Taking additional action

Refer to example attached for details.

Problem Analysis is not a Panacea

The above process may result in failure. The two most common causes of process failure are:

1. Insufficient identification of key distinctions and changes related to the “IS” data in the specification

2. Allowing assumptions, and therefore bias, to distort judgement during the testing step. The greater the number of assumptions the less chance there is that it will survive verification.

Thinking Patterns for Making Choices – Decision Making

1. Choices must be made

2. Specific factors must be satisfied if choices are to succeed

3. We decide what kind of action will best satisfy these factors

4. We consider what risks our final choice of action may impede success

Elements of a Good Choice:

1. Making “good” choices depends on three elements:

2. The “quality” of our definition of specific factors that must be satisfied;

3. The “quality” of our evaluation of the choices available;

4. The “quality” of our understanding of what the choices produce (good or bad)

The Purpose of Decision Analysis is to:

1. Identify what needs to be done;

2. Develop the specific criteria for its accomplishment;

3. Evaluate the available choices relative to the above criteria;

4. Identify the risks involved

The Objective:

A good decision can only be made in the context of “what it is that needs to be accomplished”. No other choice is any better than its ability to do the job that has to be done.

Types of Decisions to be made:

1. Yes/No decisions – Change or continue as before

2. Accept/Reject a course of action

3. Making complex decisions among choices

4. Is this proposed alternative good enough to adopt?

Decision Making Process

Decisions must be made by all organisations and actions must be taken. People find it hard to think together about choices they must make. They don’t agree on where to start or how to proceed. As a result they may overlook important information, fail to consult the proper people, and make mistakes.

Lacking commonly accepted, unbiased procedures, decision making becomes a shoving contest among those with differing points of view. The individual(s) with the most power prevail.

When people are provided with a common approach to decision making, they can indeed work as a team. Differing positions are more successfully reconciled because the process of decision making is less biased. Inevitably, the quality of decision making improves.

Elements of Making a Good Choice

Making good choices depends on three elements:

1. The quality of our definition of specific factors that must be satisfied;

2. The quality of our evaluation of the available choices, and;

3. The quality of our understanding of what those choices can produce

To achieve the above, the following framework can be utilised:

Carefully establish and agree on the relevant “decision statement”. Split objectives (selection criteria) into two categories: (1) what must be achieved to guarantee a successful decision (mandatory objectives), and; (2) all other objectives judged on their relative performance against desirable objectives. Desirable objectives provide a sense of how the various identified choices perform relative to each other.

The final step in Decision Analysis is the search for possible adverse consequences of all identified choices that are available. We must thoroughly explore and evaluate the possible adverse consequences of any alternative before we make a final decision.

Decision Analysis is a methodical systematic process where a good decision is one that will work. Refer to example attached for details.

Potential Problem Analysis – Uncertainty

Four basic activities:

1. Identification of vulnerable areas – of an undertaking, project, operation, event, plan etc;

2. Identification of specific potential problems – within the above vulnerable areas that could have sufficient negative consequences on the operation to merit taking action now;

3. Identification of likely causes – of these potential problems and identification of actions to prevent them from occurring;

4. Identification of contingent actions – that can be taken if preventive actions fail, or where no preventive action is possible

Every action above will have a cost, in that it calls for an allocation of resources against some problematic future return.

Need to ask the following questions:

1. What could go wrong?

2. What can we do now to prevent it?

(SOURCE: Kepner, C. H., and Tregoe, B. B., (1981) The New Rational Manager, John Martin Publishing Ltd, London)

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Identifying a Cause:
To identify a cause for a problem we ask: How could this distinction or change (Columns 5 & 6) produce the deviation as described in
the Deviation Statement? The objective is to include all possible causes as it maintains objectivity and reduces conflict and disagreement in explaining the problem. We continue asking questions for each possible cause identified to test for the most probable cause.
We do this by asking: If this is the true cause of the problem, then how does it explain each dimension in the specification?
The true cause of the problem MUST, by definition, fit ALL the details recorded IE:
a) a new, thinner, square-corned gasket
b) put on filter #1, 3 days ago during the monthly maintenance check
Verification of True Cause:
It is not always possible to identify a true cause of a problem beyond a doubt. The only way to verify a true cause is test it. Unfortunately, we cannot always be able to test a potential true cause. Verifying a true cause usually consists of obtaining additional
information and taking additional action and or asking additional questions.
In the above case we can take additional action by replacing the # 1 filter square-cornered gasket with the same gasket on units 2 – 5.
or putting the old gasket back on the # 1 filter to verify whether the true cause is the new thinner square-cornered gasket.
Process Failure:
The above Problem Analysis process may still fail. The two major reasons for not being able to solve a problem are:
(a) not being able to identify sufficient key distinctions and/or changes to the IS data.
(b) failure to maintain objectivity by allowing assumptions to distort judgement during the testing step. The greater the number of
assumptions the less chance the most probable cause will survive verification.

Example 3:

Source: Thompson Jnr, A.A. and Strickland, A.J. (2001) Crafting and Executing Strategy – Text and Readings, 12th ed., McGraw-Hill Irwin, p142.

Does Distinction

DimensionsSpecifying QuestionsPerformance DeviationLogical ComparisonWhat is Distinctive About ..Suggest a Change?

IDENTIFY

WHAT unit has theIS No. 1 FilterCOULD BE but IS NOTNo. 1 Filter has a square gasketSquare-corned gasket is

malfunction?Nos. 2 – 5Filters 2 -5 have rounded gasketsa new type, installed for

1st time 3 days ago at

WHAT is the malfunction?IS leaking oil(None)monthly Mntce check.

LOCATION

WHERE is the malfunctionIS observed at NorthwestCOULD BE but IS NOT Location of No 1 filter is nearestNothing. Location and

observed (geographically)?of filter houseObserved at other filterto feedwater pump, exposing the level have been the

locations.filter to high levels of vibrationsame for years.

compared to filters 2 – 5.

WHERE on the unit is theIS observed at the cleanoutCOULD BE but IS NOTThe cleanout hatch is opened &Nothing. Filter has been

malfunction observed?hatchobserved at valves, pipes,refastened daily at every shiftcleaned on every shift

locking mechanismfor years.

TIMING

WHEN was the malfunctionIS first observed 3 days agoCOULD BE but IS NOTThere was a mthly Mince checkNew type, of Sq. gasket

first observed?observed before 3 daysjust prior to start of shift 3 daysinstalled for 1st time 3

ago.ago.days ago.

WHEN has it been observed IS observed continually, allCOULD BE but IS NOTOil flows thru the unit underNothing.

since?shiftsobserved when unit is notpressure only when filter in use.

in use.

WHEN in the operating cycleIS first observed as soon asCOULD BE but IS NOTFirst time oil comes into filterNothing

of the unit is the malfunctionoil goes into filter at start offirst observed at a time under pressure.

first observed?shiftlater in the shift

MAGNITUDE

WHAT is the extent of theIS 5 – 10 litres of oil leakedCOULD BE but IS NOT5 – 10 litres of oil leaked per shift

malfunction?per shiftless than 5 or more thanwhen compared to < 5 litres or

10 litres per shift> 10 litres

HOW MANY units are affected?IS no. 1 filter onlyCOULD BE but IS NOTNo additional information notN/A

filters 2 – 5already noted above.

HOW MUCH of any one unit isN/AN/AN/A

affected?

SOURCE: Kepner, C.H., and Tregoe, B.B., (1981) The New Rational Manager, John Martin Publishing Ltd, London. (pp 44, 48-49, 51).

PROBLEM ANALYSIS – EXAMPLE

Deviation Statement: No. 1 Filter Leaking Oil

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PROBLEM ANALYSIS – EXAMPLE
Deviation Statement: No. 1 Filter Leaking Oil
Does Distinction
Dimensions Specifying Questions Performance Deviation Logical Comparison What is Distinctive About .. Suggest a Change?
IDENTIFY WHAT unit has the IS No. 1 Filter COULD BE but IS NOT No. 1 Filter has a square gasket Square-corned gasket is
malfunction? Nos. 2 – 5 Filters 2 -5 have rounded gaskets a new type, installed for
1st time 3 days ago at
WHAT is the malfunction? IS leaking oil (None) monthly Mntce check.
LOCATION WHERE is the malfunction IS observed at Northwest COULD BE but IS NOT Location of No 1 filter is nearest Nothing. Location and
observed (geographically)? of filter house Observed at other filter to feedwater pump, exposing the level have been the
locations. filter to high levels of vibration same for years.
compared to filters 2 – 5.
WHERE on the unit is the IS observed at the cleanout COULD BE but IS NOT The cleanout hatch is opened & Nothing. Filter has been
malfunction observed? hatch observed at valves, pipes, refastened daily at every shift cleaned on every shift
locking mechanism for years.
TIMING WHEN was the malfunction IS first observed 3 days ago COULD BE but IS NOT There was a mthly Mince check New type, of Sq. gasket
first observed? observed before 3 days just prior to start of shift 3 days installed for 1st time 3
ago. ago. days ago.
WHEN has it been observed IS observed continually, all COULD BE but IS NOT Oil flows thru the unit under Nothing.
since? shifts observed when unit is not pressure only when filter in use.
in use.
WHEN in the operating cycle IS first observed as soon as COULD BE but IS NOT First time oil comes into filter Nothing
of the unit is the malfunction oil goes into filter at start of first observed at a time under pressure.
first observed? shift later in the shift
MAGNITUDE WHAT is the extent of the IS 5 – 10 litres of oil leaked COULD BE but IS NOT 5 – 10 litres of oil leaked per shift
malfunction? per shift less than 5 or more than when compared to < 5 litres or
10 litres per shift > 10 litres
HOW MANY units are affected? IS no. 1 filter only COULD BE but IS NOT No additional information not N/A
filters 2 – 5 already noted above.
HOW MUCH of any one unit is N/A N/A N/A
affected?
SOURCE: Kepner, C.H., and Tregoe, B.B., (1981) The New Rational Manager, John Martin Publishing Ltd, London. (pp 44, 48-49, 51).
Identifying a Cause:
To identify a cause for a problem we ask: How could this distinction or change (Columns 5 & 6) produce the deviation as described in
the Deviation Statement? The objective is to include all possible causes as it maintains objectivity and reduces conflict and disagreement
in explaining the problem. We continue asking questions for each possible cause identified to test for the most probable cause.
We do this by asking: If this is the true cause of the problem, then how does it explain each dimension in the specification?
The true cause of the problem MUST, by definition, fit ALL the details recorded IE:
a) a new, thinner, square-corned gasket
b) put on filter No. one 3 days ago during the monthly maintenance check
Verification of True Cause:
It is not always possible to identify a true cause of a problem beyond a doubt. The only way to verify a true cause is test it. Unfortunately,
we cannot always be able to test a potential true cause. Verifying a true cause usually consists of obtaining additional information and
taking additional action and or asking additional questions .
In the above case we can take additional action by replacing the no. 1 filter square-cornered gasket with the same gasket on units 2 – 5.
or putting the old gasket back on the number 1 filter to verify whether the true cause is the new thinner square-cornered gasket.
Process Failure:
The above Problem Analysis process may still fail. The two major reasons for not being able to solve a problem are:
(a) not being able to identify sufficient key distinctions and/or changes to the IS data.
(b) failure to maintain objectivity by allowing assumptions to distort judgement during the testing step. The greater the number of
assumptions the less chance the most probable cause will survive verification.

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Decision Statement:

Options:

CRITERIA/OBJECTIVES

SubstantiationDecisionSubstantiationDecisionSubstantiationDecisionSubstantiationDecision

No.

Mandatory Criteria:

Yes – meets Govt ReqYes – meets Govt’s reqYes – meets Govt’s reqYes – meets Govt’s req

A

EEO Reportingmore detail using GRSYESmore detail using ReportYESmore detail using ReportYESStd reportYES

WriterWriter

B

Report WriterYes – all reports areStd reports using ReportYESStd reports use ReportNo Report Writer

printed using Report WriterYESWriterWriter for on-call reportsYESNO

C

Capture/reportYes – as many as we wantYes-can generate as manyYes – unlimitedYes – unlimited

salary & job historyusing CEHYESas we want into systemYESYESYES

No.

Desirable Criteria:

WeightSubstantiationScore/TotalSubstantiationScore/TotalSubstantiationScore/TotalSubstantiationScore/Total

1

Implementation 610Yes – 6 monthsYes – 6 mths (they say)Yes – 4 months

mths from Start9/908/8010/100

2

DBM Based9Yes – with called sub-Yes – called sub-routinesYes – no called sub-

routines required9/81& conversion to B67008/72routines required10/90

3

OSHA Reporting8Required Govt reportingRequired Govt ReportingRequired Govt Reporting

most flexible10/808/649/72

4

Risk Neutral NPV >0 7NPV > 0NPV > 0NPV > 0

Volatility 27%10/70Volatility 32%8/56Volatility 35%5/35

5

Eliminate multiple5Yes – min. no. forms & cust.Yes – min. no. of forms &Yes – Min. no. of forms

formsDes. Document10/50Std. document8/409/45

6

Security 5Will do what is necessary toNo security on Data File.P/W security in Report

solve problem. Also p/wMust do ourselvesWriter

security in Report Writer10/305/157/21

Total401327363

% of Total Max Score91.13%74.32%82.50%

Adverse Consequences:

Rumour: Company may sell out within 3High Turnover of Employees: KeyLimited No. of experienced personnel

yrs, causing severe disruption ofpeople with greatest knowledgeCompany C may not be able to meet

service.of our accont leave Company B.our future needs

Probability: MediumProbability: MediumProbability: Low

Impact: HighImpact: MediumImpact: Medium

DECISION ANALYSIS – Example

Company ACompany BCompany C

“Select the Best Personnel Information System for our Organisation”

Company D

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DECISION ANALYSIS – Example
Decision Statement: “Select the Best Personnel Information System for our Organisation”
Options: Company A Company B Company C Company D
CRITERIA/OBJECTIVES Substantiation Decision Substantiation Decision Substantiation Decision Substantiation Decision
No. Mandatory Criteria:
Yes – meets Govt Req Yes – meets Govt’s req Yes – meets Govt’s req Yes – meets Govt’s req
A EEO Reporting more detail using GRS YES more detail using Report YES more detail using Report YES Std report YES
Writer Writer
B Report Writer Yes – all reports are Std reports using Report YES Std reports use Report No Report Writer
printed using Report Writer YES Writer Writer for on-call reports YES NO
C Capture/report Yes – as many as we want Yes-can generate as many Yes – unlimited Yes – unlimited
salary & job history using CEH YES as we want into system YES YES YES
No. Desirable Criteria: Weight Substantiation Score/Total Substantiation Score/Total Substantiation Score/Total Substantiation Score/Total
1 Implementation 6 10 Yes – 6 months Yes – 6 mths (they say) Yes – 4 months
mths from Start 9/90 8/80 10/100
2 DBM Based 9 Yes – with called sub- Yes – called sub-routines Yes – no called sub-
routines required 9/81 & conversion to B6700 8/72 routines required 10/90
3 OSHA Reporting 8 Required Govt reporting Required Govt Reporting Required Govt Reporting
most flexible 10/80 8/64 9/72
4 Risk Neutral NPV >0 7 NPV > 0 NPV > 0 NPV > 0
Volatility 27% 10/70 Volatility 32% 8/56 Volatility 35% 5/35
5 Eliminate multiple 5 Yes – min. no. forms & cust. Yes – min. no. of forms & Yes – Min. no. of forms
forms Des. Document 10/50 Std. document 8/40 9/45
6 Security 5 Will do what is necessary to No security on Data File. P/W security in Report
solve problem. Also p/w Must do ourselves Writer
security in Report Writer 10/30 5/15 7/21
Total 401 327 363
% of Total Max Score 91.13% 74.32% 82.50%
Adverse Consequences: Rumour: Company may sell out within 3 High Turnover of Employees: Key Limited No. of experienced personnel
yrs, causing severe disruption of people with greatest knowledge Company C may not be able to meet
service. of our accont leave Company B. our future needs
Probability: Medium Probability: Medium Probability: Low
Impact: High Impact: Medium Impact: Medium

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