NBA6630 Jay Russo

Managerial Decision Making Fall 2017

Course Syllabus

7 October 2017

Decision making is not an option -

in business or in life
Instructor: Jay Russo
443 Sage Hall
255-5440
E-mail: jer9@cornell.edu
Office hours: Monday, 3-4 pm; Thursday, 1-2 pm; and at other times by appointment

Class Time: 1:25 p.m.4:10 p.m. on Wednesdays

Place: B08 Sage Hall

Special Note: Personal emergencies will happen. Plans need to change. So please tell the instructor.
Should you feel emotionally overwhelmed or you believe that someone else is
emotionally overwhelmed, make the good decision to do something. At a minimum
call Gannett, 255-5155, and let their professionals know whats happening. In
addition, if you need accommodation, or you know someone who does need
accommodation, based on disabilities, please contact Student Disability Services, 254-
4545 (and sds_cu@cornell.edu).

Objectives

This course has one overarching objective, to make its participants better decision makers. A second
objective supports the first, to provide a framework for a good decision process -- because the closest
anyone can come to guaranteeing a good decision outcome is the use of a good decision process.

More specific objectives are:

To understand the critical role of framing, so that participants are able to structure their
decisions in the most useful ways(s) and to see how coworkers, competitors, and other
stakeholders view the same decision situation.

To identify typical shortcomings in intuitive judgment and provide methods for overcoming
these shortcomings.

To explore the nature of risk and uncertainty, how they influence decisions, and how they can
be managed more effectively.

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 To understand the roles both of personal values and goals and of organizational values in
dealing with conflicting objectives.

To convey the importance and skills of learning from experience, something that does not
naturally occur nearly as much as most people think it does. (Experience is inevitable;
learning is not.)

To address some of the challenges specific to decision making in groups and organizations
and to offer approaches to dealing with them successfully.

Format

The pedagogical strategy is application. In order to be learned now and retained later when it is
needed, decision making is best mastered through application. Class sessions will be devoted to
activities, cases, and exercises as well as lectures. The single, long meeting per week enables some
lecture and class discussion along with some combination of an activity, case or exercise. All of the
above are further linked to students via postings on the course website. Class participation forms part
of the evaluation of a students overall performance in the course.

Readings

The readings for this course consist of one book (Russo, J. Edward and Paul J.H. Schoemaker,
Winning Decisions, New York: Simon and Schuster, 2002), a packet of articles available for
purchase, and a list of completely optional background readings. Some optional readings are
available on-line whenever they could be reproduced without cost to the student. The others, if
desired, must be obtained by each student individually, presumably through the Cornell library
system, but also entailing no financial cost.

Required Work

There are two types of written work that may be submitted for grading, applications (300 points) and
quizzes (60 points).

1. Applications. There are 8 possible Applications (9 counting 1 new one) of which a maximum
of 6 may be completed for credit. If more than 6 are submitted, all are graded but only the 6
earning the most points count as satisfying the requirement.

1. Overconfidence in professionals
2. Framing of decisions
3. Multiple scenarios
4. Importance weighting
5. Value analysis
5.5 Needs Analysis (new, of unknown difficulty)
6. Group decision making: Survival exercise
7. Learning from experience
8. Into Thin Air

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 All applications are in the course packet, along with their respective grade sheets. Each is
worth 50 points. Applications1 and 6 must be completed in partnerships of two students, and
Application 3 requires 4 students. All other Applications must be completed individually.

Note that Applications deal with different course topics. One criterion that you might
consider when you choose among the eight (or nine) is the personal importance or appeal of
the topic. Different Applications also require different kinds of work, such as computer use,
data collection, interviews, and rigorous analysis or description. Again, students may want to
select Applications to take advantage of their current skills or to build new ones. Finally,
some Applications take more total time than others, yet all are worth 50 points. The equality
of points is essential if students are to have the flexibility to substitute one Application for
another. To even the workload, the more time-consuming Applications allow two or four
students to share the tasks. Needless to say, it will still be the case that a particular student
will work harder on one application than another, usually because of special knowledge or
skills and sometimes because of chance factors. The instructor asks students to understand
that for all of the above reasons, every application will not turn out to require the same effort.

2. Examinations. There are NO EXAMINATIONS in this course. However, there are nine brief
quizzes (about five minutes long) at the beginning of class. These are not announced in
advance. Each quiz is worth 10 points, but a total of only 60 points may be earned in this way.
The six highest quiz scores are counted toward the total of 60 points. The quizzes are
designed to encourage and reward completing the assigned reading. They should be easy if
the assigned reading has been completed. The questions asked are of the type either you
know it or you dont, so world knowledge and high verbal skills are unlikely to help much.

3. Class Participation. Success in this course means becoming a better decision maker. That
goal cannot be achieved solely by mastering concepts (What is metaknowledge? What is
framing? How do peoples frames influence their metaknowledge?). Students must also
learn the skills of good decision making, like eliminating their own and others
overconfidence and being able to recognize the frames of others (and, more important, being
able to alter them, or recognize when this is not possible). Class discussion is an excellent
way to address skill building. Equally important, it enables the recognition and discussion of
applications of skills to real situations.

A maximum of 40 points is awarded for the quality of class participation, given that a
minimum of quantity has been achieved.

To facilitate participation in class, the course has a Discussion Board that can be accessed via
the course web page. Each student is invited to post to this electronic Discussion Board
examples of how the topic in the reading for an upcoming class can be applied to a real
management situation. These posted examples can take the form of a published article or
news report or a private story from the students own work experience. To be most valuable,
a posting is made at least 24 hours prior to class so that others may access and consider it in
preparation for class discussion. In addition to posts, each student is invited to comment on
posts made by others. That is, the Discussion Board enables a discussion, with the posted
example of one student elaborated or challenged by another student. The posted comments
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 must be made 3 hours prior to class. These posted examples and comments are by no means
the only basis for class participation, but they generate a foundation that is thought out in
advance. They also help to avoid any tendency to produce too high a ratio of words to ideas
or what is sometimes described as word salad.

Determination of Course Grade

The final course grade is based on a total of 400 points. Of this total, 60 points can only be earned
from the in-class quizzes, and another 40 points only from class participation. The other 300 are
earned by completing six Applications.

Extra Credit for Participation in Experiments

Participating in research studies is a valuable way to receive first-hand experience with research
methods and to support JGSM faculty and doctoral students in developing state-of-the-art
management thought, which ultimately is brought back into the classroom. A significant amount of
material covered in this class is based on empirical research conducted in this way. To support this
worthy goal, you can earn extra credit by participating in an academic research project, which usually
takes no longer than one hour. You can sign up for studies by requesting an account at:
http://johnson.sona-systems.com/. Once registered, this website provides all information regarding
on-going studies in which you can earn extra credit. You can accumulate a maximum of three extra
credits for three hours of participation, with each hour counting as 2 points. The number of points
earned will be added to your participation grade (which is capped at a total of 40 points). These extra
credit points may not be assigned to any other part of the course grade.

Academic Integrity

Each student in this course is expected to abide by the Cornell University Code of Academic
Integrity. Any work submitted by a student in this course for academic credit will be the students
own work or his or her fair share of a group project. See http://cuinfo.cornell.edu/aic.cfm for a more
in-depth description of the Code of Academic Integrity.

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Course Calendar and Assignments
Week Date
1 23 August
2 30 August
3 6 September
Topic Assignments
The Decision Process Read:
(1) Winning Decisions, Chapter 1 (pp. 1-15)
Optional:
(1) Ariely, Dan (2009). The End of Rational Economics,
Harvard Business Review, July-August, 78-84. (not available
via link; must be accessed personally and individually
through our library)
Overconfidence Read:
(1) Russo, J. Edward & Paul J.H. Schoemaker (2014).
"Overconfidence," Palgrave Encyclopedia of Strategic
Management.
(2) Winning Decisions: Chapter 2 (pp. 19-38).
Frames Read:
(1) Winning Decisions: Chapter 3 (pp. 39-59).
Complete by noon Friday, 8 September a set of Decision
Exercises that will be made available at a website to be
announced.
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Week Date Topic Assignments
4 13 September Frames - 2 Read:
(1) Fighton Case
(2) Iacobucci, Dawn (1996). The Quality Improvement
Customers Didnt Want, Harvard Business Review,
January-February, 4-15. [Only pages 4-8 are in the packet.
Pages 8-15 will be distributed in class. Do not consult these
latter pages before the case is discussed in class.]
(3) Study Questions for the Quality Improvement Case

Application 1 due at the start of class.

5 20 September Decision Frames Read:
(1) Winning Decisions: Interlude A (pp. 60-71).

6 27 September Industry Guest Speaker: Read: No required reading

Michael Taylor
Principal, SchellingPoint

7 4 October Scenario Thinking Read:

(1) Schoemaker, Paul J.H (2013) Scenario Planning,
Palgrave Encyclopedia of Strategic Management.

Optional:
(1) Schoemaker, Paul J.H. and V. Michael Mavaddat
(2001). Scenario Planning for Disruptive Technologies. In
George S. Day and Paul J.H. Schoemaker (Eds.), Wharton
on Managing Emerging Technologies, Wiley: New York,
206-241.
(2) Roxburgh, Charles (2009), The Use and Abuse of
Scenarios, McKinsey Quarterly, November.

Application 2 due at the start of class.

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Week Date Topic Assignments
8 11 October Gathering Intelligence Read: (1) Winning Decisions: Chapters 4 & 5 (pp. 75-124).
Optional:
(1) Arkes, Hal R. (3013). The Consequences of the
Hindsight Bias in Medical Decision Masking, Psychological
Science, 22(5), 3560360.
Sherlock Room exercise due at the beginning of class. Each
student should prepare a brief description of the executive in
the Sherlock Room exercise. The simplest format is a list of
characteristics. This list will be used in class and does not
have to be submitted to the instructor.

9 18 October Coming to Conclusions and Value Read:

Analysis (1) Winning Decisions: Chapter 6 (pp. 133-158).
(2) Winning Decisions: Interlude B (pp. 125-129).
(3) The Case of the Combative CEO.
(4) Study Questions for the Case of the Combative CEO
Optional:
(1) Kahneman et al. (2016), Noise. Harvard Business
Review, October, 38-46.
(2) Brown, Rex (2009). Working with Policy Makers on
Their Choices: A Decision Consultant Reminisces,
Decision Analysis, 6 (1), 14-24.
(3) Campbell, Andrew and Jo Whitehead (2010). How to
test your decision-making instincts, McKinsey Quarterly,
May, 1-4.

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 (4) Hutson, Matthew (2017). Self-taught artificial
intelligence beats doctors at predicting heart attacks,
Science, 14 April. DOI: 10.1126/science.aal1058
(5) Kim, Jane (2008). Credit Scorers Find New Ways to
Judge You, Wall Street Journal, March 11, D1.

Application 3 due at the start of class.

10 25 October Group Decision Making1 Read:
(1) Winning Decisions: Chapter 7 (pp. 159-186).
Optional:
(1) Shiller, Robert J. (2008). Challenging the Crowd In
Whispers, Not Shouts, The New York Times, November 2,
BU.5.
(2) Sethi, Rajesh, Daniel C. Smith, and C. Whan Park
(2002). How to Kill a Teams Creativity, Harvard
Business Review, August, 16-17. (not available via link;
must be accessed personally in our library)

Application 4 due at the start of class

11 1 November Group Decision Making2 Read:
(1) Coutu, Diane (2009). Why Teams Dont Work,
Harvard Business Review, May, 99-105.
Optional:
(1) Burkus, David (2013). How Criticism Creates
Innovative Teams, Harvard Business Review Blog Network,
9:00 AM July 22, 2013.
(2)Chapter 11: Consensus Team Decision Making,
Strategic Leadership and Decision Making, National
Defense University, 2008.
Application 5 due at the start of class
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Week Date Topic Assignments
12 8 November Learning Read:
(1) Winning Decisions: Chapters 8 & 9 (pp. 197-238).
(2) Mains, Steven and Laura W. Geller (2008). Freeing
Ideas from Their Silos, Strategy+Business, 2/12/08
(3) Garvin, David A., Amy C. Edmondson, and Francesca
Gino (2008). Is Yours a Learning Organization? Harvard
Business Review, March 2008, 109-116.
Optional:
(1) Collison, Chris, and Geoff Parcell (2005) Learning after
doing, appeared in Knowledge Management, Vol. 5:1,
kmmagazine.com.
(2) Jena McGregor, William C. Symonds, Dean Foust, Diane
Brady, and Moira Herbst (2006). How Failure Breeds
Success, Business Week, Issue 3992, 42-52.
Application 5.5 due at the start of class

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Week Date Topic Assignments
13 15 November Decision and Organizations Read:
(1) Winning Decisions: Interlude C (pp. 187-199).
(2) Heath, Chip, Larrick, Richard P., and Klayman, Joshua
(1998). Cognitive repairs: How Organizational Practices
Can Compensate for Individual Shortcomings, Research in
Organizational Behavior, 20, 1-37. Read only pages 1-21.
(3) Lovallo, Dan and Daniel Kahneman (2003). Delusion of
Success: How Optimism Undermines Executives
Decisions, Harvard Business Review, July, 56-63.
Optional:
(1) Thaler, Richard H. (2012). Watching Behavior Before
Writing the Rules, New York Times, 8 July, Business
section, p. 4.
(2) How companies make good decisions, The McKinsey
Quarterly, Dec. 2008.
(3) Campbell, Andrew, Kunisch, Sven, and Muller-Stewens,
Gunter (2011). To Centralize or Not to Centralize? The
McKinsey Quarterly, June 1-6.
Application 6 due at the start of class.
14 22 November THANKSGIVING RECESS Application 7 due electronically by noon.
15 29 November Decision Styles Read: No required reading

Application 8 due at the start of class.

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