The first day of the decision making and negotiation workshop was good. We had good negotiation exercises and case studies and I thought it was quite helpful. Today we learnt about the 2 ways to make decisions; one in which we rely on the rules and methodology to make rules namely the normative way and the 2nd method, which is effortless and depends on intuition. I am an intuitive decision maker. I rely on my instincts in most instances. Our first case was the “Carter Racing” case. There were several reasons to run for the race but somehow it just did not feel right to run based on the low temperatures for the current day of running. In short, I felt like it was not the right day to run. I was in a team in which 3 of us felt that running for the day was not feasible and that we should just lay low and run on another day because the stakes were too high. We had an opposition from one of our group members; Maryam felt that we should take the risk. Our main issue was the non-availability of data at 40 degrees Fahrenheit. We resolved the issue by taking a majority vote and it was decided that we would not run. When the “Challenger Disaster” case (carter racing was a simulation of this disaster) results were announced, I knew that we had made the right decision and it was okay to rely on instincts. In this case, even though we did not have all the necessary information, it was important to ask for the right information. So the lesson from this was to ask the right questions and gain as much information as possible. Also, we had to keep in mind that our actions were irreversible and there was no coming back from a decision that we had made. This was a good learning exercise. In this situation, I learnt that taking quick decisions under pressure required both a rational and an intuitive approach. Also, there was a difference in opinion and many groups in the class decided to run. We had an analysis of why they did so and why we try to avoid a rational approach. After this, our professor had us answer a confidence quiz and she taught us how to overcome overconfidence. Some of the biases that we learnt about were:
•The Default Option And Its Power
•The Anchoring Bias
•The Availability Bias
•The Endowment Bias
•The Confirmation Bias
•The Overconfidence Bias.
I learnt that we should combine both the “Normative” and “Descriptive” way to form a “Prescriptive” way to make decisions. Asking questions and asking for the right information is essential in all cases. August 2nd, 2011
Yesterday we saw the difference between the “Normative” and “Descriptive” decision making processes and the various biases that hinder our decision making process. Today we summarized the concepts that we had learnt yesterday and also discussed on the various reasons for negotiating. Some of the reasons were power, not being happy with the current situation, profit and loss, possibility to agree on a common decision and priorities. We negotiate in our daily life and there are various types of negotiations. These are as follows: •Job Negotiations
•Real Estate Negotiations
•Negotiations with Difficult People in Difficult Situations. We also understood concepts like “Willingness to Pay/Willingness to Accept” or “Walkaway Price”, “Best Alternative to a Negotiated Agreement” (BATNA) and “Zone Of Possible Agreements” (ZOPA). We had a negotiation on the “Bentz – Smith” case. I think I learnt a lot from this case because this negotiation was a little tricky. I ultimately got a deal in which both the parties were happy. This had come at a cost and I had to take a little risk as I was the seller; I had to split the risk at 50% with the buyer. It was a win – win situation. In the debriefing session, I picked up some of the tactics involved in bargaining and negotiating. I...