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MGT602
Business Decision Analytics
Owen Seamons
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Assessment 1
• Remember assessment 1 is due this week.
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Relevant Assessment 1 Models
• No use of Porter’s five forces, SWOT analysis,
forcefield analysis, etc.
• Such models have nothing to do with this
subject and cannot be “recycled” from a
student’s previous work. Under our Academic
Integrity policy, this is considered as “selfplagiarism”.
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Relevant Assessment 1 Models
• You need to use the material from MGT602 Modules 1 and 2.
This is stated in several parts of the Assessment Brief:
• “You are expected to utilise the literature provided in
Modules 1 and 2 …”
• ” … reflectively analyse your decision-making process using
only theories and concepts from the Business Decision
Analytics course (MGT602).”
• Or in the marking rubric of the Assessment: “Support your
argument with relevant contemporary literature including
major resources from within the relevant subject modules“
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Team Members
• Your Assessment 2 team members will be
allocated over the next week.
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Welcome Module Two of MGT 602
Module Two Covers:
• Use of bounded rationality in
decisions making
• Strengths and Weaknesses of the
rational processing model.
• Strengths and weaknesses in use of
the dual processing model
• Making sense of the neuro
mythology of Decision making
• Strengths and weaknesses in use of
the Naturalistic Decision model
(NDM)
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• Evaluate and use a range of
decision making tools
• Identify own decision-making styles
and contrast with others’ styles
• Determine levels of rationality and
intuition in own decisions
• Compare, contrast, critically
evaluate sources of data,
information and knowledge
• Identify key influencers on decisionmaking over differing contexts
LEARNING OBJECTIVES
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Cognitive Continuum Theory
(Hammond, 2000)
Using Cognitive Continuum Theory (Hammond, 2000),
managers can match their decision processing to the
demands of the task at hand. Where some tasks are more
structured, then an analytical approach can be taken but
where more unstructured then a more automatic mode is
called for. A mix of both modes can fit other task situations
An applied model allowing the appropriate mode, log,
intuition or a blend of the two modes to be applied to meet
the demands of the task https://youtu.be/3bxLx-FRooY **
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Logical-Intuitive Continuum of Decision
Making
Awareness of Cognitive Activity: High
Metaphors: Verbal, Quantitative
Speed of Cognitive Processing: Slow
Confidence in Judgements: High
Awareness of Cognitive Activity: Low
Metaphors: Pictorial, Qualitative
Speed of Cognitive Processing: High
Confidence in Judgements: Low
Logic Intuitive
Read and discuss the relevance of Cognitive Continuum Theory to 21st century workplaces :
Dhami, M.K & Thomson, M.E. (2012). On the Relevance of Cognitive Continuum Theory and
Quasi rationality for Understanding Management Judgement and Decision Making.
European Management Journal, 30, 316-326.
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Naturalistic Decision Making. Klein’s Recognition
Primed Decision Model (RPD)
• RPD, an applied model more concerned with how people
make decisions in workplaces rather than how students make
decisions in laboratories https://youtu.be/LINyLUq9onM
• Based on field research into working decisions made by
firefighters, intensive care nurses and airline crews
• RPD model makes use of expertise-based intuition in
situational analysis prior to decision making.
• Useful in unstructured situations, that are complex, uncertain
and unique to the decision maker. Situations that hold large
amounts of ambiguous data and cannot be addressed through
the use of logic or rational processing
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RPD Using Own Experience
• RPD model provides managers with an experience –based
intuitive approach with insights into how to make good use of
‘gut feel’ and when to use a dual analytical-intuitive approach
to information processing, decision making
• Model allows the decision maker to seek cues from novel data
which are in accord with earlier experience. Where
cues/experience are not congruent further searches are
required to construct narratives to overcome background
noise blocking interpretations
• Concepts are formed, redefined, and adjustments made in
mental maps to take account of situational differences
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Applying the RPD to Complex
Workplace Environments
• View the Lootok (2017) video on the RPD to gain an in-depth
understanding of the model
https://www.youtube.com/watch?v=_BIMU8zPcrM **
• After viewing the video address the following:
Identify the inherent advantages in use of the RPD
How might you apply the RPD usefully in your workplace?
Would you regard RPD as a fast or as a slow decision
making process?
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Game Theory
• https://youtu.be/MknV3t5QbUc ***
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The Neuro Myth Model
• Sperry developed this decision making model in the 1990’s. Model
based on individual preferences in information processing
operating according to brain hemispherical use
• Model suggested that more analytical ( digital processing) was a
function of the left brain hemisphere while more emotion-based (
analogue processing) was a function of the right brain hemisphere
• Strong belief in use of the split brain model led to an award of a
Nobel Prize to Sperry and a persistent belief in efficacy in use of
the model in processing, making decisions
• Recent research has contested the veracity of claims by those
who developed and promoted use of the model
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Testing the Neuro Myth
• Work by Lieberman (2007) informed
researchers of the role of an X-Based section of
the brain related to affect-based (emotional)
decision making and a C-based section related
to the making of more logical-analytical type
decisions https://youtu.be/NNhk3owF7RQ
• More recent research into neural geography has
further disputed claims made by the left-right
brain proponents
• Neuro scientists suggest references to left-right
differences should be avoided and discounted
as neuro mythology
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Neuro Myths
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• 1. Some of us are ‘left-brained’ and some are ‘right-brained,’ and
this helps explain differences in how we learn.
• FALSE. The left and right hemispheres of the brain work together.
There is not strong evidence that people’s learning differs in
important ways based on one hemisphere being more dominant
than the other.
• 2. Brain development has finished by the time children reach
puberty.
• FALSE. Brain development continues well into adolescence and
adulthood, especially the development of the frontal lobes, which
are important for decision-making.
• 3. Learning is due to the addition of new cells to the brain.
• FALSE. Learning arises from changes in the connections between
brain cells.
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• 4. Mental capacity is hereditary and cannot be changed by
environment or experience.
• FALSE. Mental abilities do have a genetic component, but they are
also heavily influenced by environmental factors, and rely on
adequate experience in order to develop.
• 5. We only use 10 percent of our brain.
• FALSE. A healthy person uses 100 percent of his or her brain.
• 6. When we sleep, the brain shuts down.
• FALSE. Patterns of brain activity shift when we go to sleep, but the
brain is active 24 hours a day, whether we are sleeping or awake.
• 7. Listening to classical music increases children’s reasoning ability.
• FALSE. There is little consistent evidence that classical music (the socalled “Mozart effect”) has an impact on children’s reasoning ability at
any age.
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Class Discussion Session
• View and discuss the video on left-right brain thinking:
• https://youtu.be/ZMSbDwpIyF4 **
• Sunk Cost Fallacy
https://www.youtube.com/watch?v=AFPgxIJHxsE
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Possible Later Assessment Elements
• Discuss the usefulness of the left-right, split brain
model for managers working in complex , uncertain
environments
• Read through the Akinici & Saddler Smith (2012)
paper. Pay particular attention to pp. 32-48 which
describes the development of thought informing
managers on best approaches to making decisions
across different situations
• Discuss the relative merits/weaknesses of the split
brain model in a 21st century workplace compared
with other models covered
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Possible Later Assessment Elements
• Read and discuss Gary Klein’s (2009) use of naturalistic
decision making in his use of the RPD Model
• Discuss Gallagher’s (2014) RDM Model
• Revise Akinici & Saddler Smith’s (2012) paper on the
development of theories on decision making (p6-9)
• Discuss the application of Simon’s Bounded Rationality
• Review, discuss Daniel Kahneman’s thinking fastthinking slow in System One-System Two thinking.
Identify the implications for errors, biases in use of
System One
• Review applications of the dual processing model
evident in Hammond’s cognitive Continuum Model
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Power and Leadership: An Influence Process
Fred C. Lunenburg
As outlined by (French & Raven, 1959)
• Power is the ability to influence others.
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Power
• Organisational Power
– Legitimate power: The power a person receives as a result of
his or her position in the formal hierarchy of an organization
– Reward power: Compliance achieved based on the ability to
distribute rewards that others view as valuable
– Coercive power: A power base dependent on fear
• Personal Power
– Expert power: Influence based on special skills or knowledge
– Referent power: Influence based on possession by an individual
of desirable resources or personal traits
• Examples? https://youtu.be/S4V2FlNR_h4 **
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Power Types
• The various sources of power should not be
thought of as completely separate from each
other.
• Leaders uses the sources of power together in
varying combinations depending on the
situation.
• Pfeffer, 1993
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Power Usage
• Legitimate power can be depended on initially, but continued
reliance on it may create dissatisfaction, resistance, and
frustration among employees; if legitimate power does not
coincide with expert power, there may be negative effects on
productivity; and dependence on legitimate power may lead
to only minimum compliance while increasing resistance.
• Reward power can directly influence the frequency of
employee-performance behaviours in the short run.
Prolonged use of reward power can lead to a dependent
relationship in which subordinates feel manipulated and
become dissatisfied.
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Power Usage
• Although coercive power may lead to temporary compliance by
subordinates, it produces the undesirable side effects of frustration,
fear, revenge, and alienation. This in turn may lead to poor
performance, dissatisfaction, and turnover.
• Expert power is closely related to a climate of trust. A leader’s
influence can be internalized by subordinates; that is, when a leader
uses expert power, attitudinal conformity and internalized
motivation on the part of subordinates will result. This in turn
requires less surveillance of employees by the leader than does
reward or coercive power.
• Referent power can lead to enthusiastic and unquestioning trust,
compliance, loyalty, and commitment from subordinates. Like expert
power, considerably less surveillance of employees is required.
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Empowerment
• A new concept of power, referred to as
“empowerment,” has become a major
strategy for improving work outcomes.
– (The Power Pyramid: How to Get Power by Giving It Away
by Tracy, 1990:)
• Real power, according to Tracy, flows from the
bottom up, rather than from the top down
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Empowerment
• Tell people what their responsibilities are.
• Give them authority equal to the responsibility assigned them.
• Set standards of excellence.
• Provide them with the needed training.
• Give them knowledge and information.
• Provide them with feedback on their performance.
• Recognize them for their achievements.
• Trust them.
• Give them permission to fail.
• Treat them with dignity and respect.
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Task: Discuss the use of Empowerment with your team member. Provide some
examples when you would these elements.
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Influence
https://youtu.be/li4mCDH0eUE *
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Influence:
– the capacity or power of persons or things to be a compelling force
on or produce effects on the actions, behaviour, opinions, etc., of
others.
© smallprint 32
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Types of Influence
• Rational persuasion: Using logical arguments and facts to
persuade another
• Inspirational appeals: Arousing enthusiasm by appealing to
one’s values and beliefs.
• Consultation: Asking for participation in decision making or
planning a change.
• Ingratiation: Getting someone to do what you want by
putting that person in a good mood or getting him or her to
like you.
• Personal appeals: Appealing to feelings of loyalty and
friendship before making a request
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Types of Influence
• Exchange: Promising some benefits in exchange for complying
with a request.
• Coalition tactics: Persuading by seeking the assistance of
others or by noting the support of others.
• Pressure tactics: Seeking compliance by using demands,
threats, or intimidation.
• Legitimising tactics: Pointing out one’s authority to make a
request or verifying that it is consistent with prevailing
organizational policies and practices.
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Power, influence and negotiation are
interrelated.
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Your turn
• Think of an influential person
• What personal criteria make that person
influential?
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Influential people are:
Listening
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A good listener hears what is said AND hears what is
meant.
Rapport
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‘Always get to know the other party. Never negotiate with a stranger.’
(Somers White)
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Science of Persuasion
• https://youtu.be/cFdCzN7RYbw **
• Influence at work, Cialdini, R. and Nartin, S.
7 behavioural styles:
› assertive
› autocratic
› democratic
› emotional
› logical
› negotiating
› persuasive
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