One of the most common biases in decision is known as framing. Executives frame their potential outcomes for their decisions. Framing bias occurs when people make a decision based on the way the information is presented, as opposed to just on the facts themselves. The same facts presented in two different ways can lead to people making different judgments or decisions.
When options are framed as potential for loss the prospect theory describes how managers may irrationally unwilling to incur loss. The idea behind loss aversion is an observed asymmetry between gains and loses. It is thought that the pain of losing is psychologically about twice as powerful as the pleasure of gaining. People are usually more likely to take risks when they know they will be losing something rather than gaining something.
In contrast to loss aversion, researchers have also observed that most decision makers are also risk takers. Individuals will most likely take a bigger/more irrational risk when the pay off is larger.
One example of being biased or ganged up on in the negotiations we participated in had to deal with the negotiation about the Jac36 model. All of the participants tended to not get along with VP of manufacturing. Because of this my group members and I were able to from coalitions against this person and have a biased feeling towards them because other people in the group had the same problems with them as I did. Unfortunately, the VP of manufacturing did not get what they wanted in this negotiation because no one was on their side.
Another example of someone falling victim would be the negotiation about the Newton School. My role as head master correlated well with the trustees (people who donate the money). The two of us formed coalitions against the faculty of the school because they wanted something different than us. Therefore, the faculty got the short end of the stick and had to stand up for themselves against two other parties.
Tuesday, April 16, 2019
Monday, April 15, 2019
Blog post 7
When watching the movie, "The Final Offer" I was able to witness a real life negotiation. A serious one at that. I thought this movie was confusing at some points and hard to keep up with who was who. I also thought that some of the negotiations seemed unfair. It was nice to see the tactics these men used in their negotiations and how they tied into the tactics we learned in class. Bob White was a huge part in this negotiation, and he used his negotiation skills to get where he wanted to be. He is a smart man and made sure to think his decisions over before jumping the gun and making a choice right away. I think Bob White did this because he knows that he has the opportunity to affect a lot of peoples lives positively or negatively depending on how this negotiation goes.
As far as fairness during the negotiations, I thought it was unfair that GM would not see Bob White's perspectives on how he wanted to reward the Canadian workers. They tried to convince Bob into taking a contract similar to the American one and having year end bonuses rather than increased pay. Bob White made a point that America and Canada are two different places, they are not combined and people want different things. I think Bob White was very faithful to his union even through the hard times they had. He was a good man who wanted peace throughout this negotiation and tried his hardest to eliminate a possible strike.
This negotiation allowed me to witness a real life negotiation about a very important topic. Although the movie was older and some what hard to keep up with, I was able to see how professionals perform when they are under an immense amount of pressure and stress.
As far as fairness during the negotiations, I thought it was unfair that GM would not see Bob White's perspectives on how he wanted to reward the Canadian workers. They tried to convince Bob into taking a contract similar to the American one and having year end bonuses rather than increased pay. Bob White made a point that America and Canada are two different places, they are not combined and people want different things. I think Bob White was very faithful to his union even through the hard times they had. He was a good man who wanted peace throughout this negotiation and tried his hardest to eliminate a possible strike.
This negotiation allowed me to witness a real life negotiation about a very important topic. Although the movie was older and some what hard to keep up with, I was able to see how professionals perform when they are under an immense amount of pressure and stress.
Monday, April 1, 2019
Blog post #6
I think power and persuasion played a big part in this past negotiation about the Jac 36 model. Each member had a different position which held different levels of power. For example, The VP of finance was a very powerful person in this situation. I think out of everyone the VP of finance was the person that everyone wanted to persuade with their own opinions. My position on the other hand was a lower power level position, I was the senior engineer of the company. I think my group members were able to respect my opinions in this negotiation because I made it clear to them that I worked with the company for 25 years and the president trusted me. The VP of finance was given a structural source of power because the president of the company was out and unable to attend the meeting.
As far as persuasion goes in this negotiation many of us used "The principal of liking". The only person that my role had a problem with in this negotiation was VP of manufacturing. At first we did not get along, so I was able to form coalitions with people who I did agree with/get along with in my group. Since my role, research and development, and VP of sales agreed on a few things we continued to negotiate and work together to come up with the best outcome for the company.
The principal of reciprocity was also brought into this situation. At first we all wanted to go with our own opinions and argued our reasoning. After a few talks we were able to accept one thing if we were reciprocated with the respect of doing something in our own favor too. For example, My group was set on doing the portable Jac 36 and discontinuing the old one all together. Since I was the senior engineer I felt that I needed to go to a summer engineering seminar so I could perform the best on our new Jac 36. I agreed to creating the new portable Jac if the company would pay for my seminar, which they did. This situation was a win-win.
Power and persuasion are two key aspects to have when negotiating. If someone has power they are more likely to be agreed with and respected for what they need to say. Also, if someone is able to be persuasive and they have the right information to back up their opinions they are able to win a negotiation without a doubt.
As far as persuasion goes in this negotiation many of us used "The principal of liking". The only person that my role had a problem with in this negotiation was VP of manufacturing. At first we did not get along, so I was able to form coalitions with people who I did agree with/get along with in my group. Since my role, research and development, and VP of sales agreed on a few things we continued to negotiate and work together to come up with the best outcome for the company.
The principal of reciprocity was also brought into this situation. At first we all wanted to go with our own opinions and argued our reasoning. After a few talks we were able to accept one thing if we were reciprocated with the respect of doing something in our own favor too. For example, My group was set on doing the portable Jac 36 and discontinuing the old one all together. Since I was the senior engineer I felt that I needed to go to a summer engineering seminar so I could perform the best on our new Jac 36. I agreed to creating the new portable Jac if the company would pay for my seminar, which they did. This situation was a win-win.
Power and persuasion are two key aspects to have when negotiating. If someone has power they are more likely to be agreed with and respected for what they need to say. Also, if someone is able to be persuasive and they have the right information to back up their opinions they are able to win a negotiation without a doubt.
Subscribe to:
Posts (Atom)