Science, Technology and Business (STB)

Science, Technology and
Business (STB)
Roberto Battiti
People and needs
Need= something that is necessary for organisms to live a
healthy life.
It depends on the single individual and on the context.
 Natural needs/ social needs, ethical, aesthetical and religious
 Essential needs (primary) Discretionary needs (secondary)
 E.g. Cellular telephony
Needs are in a hierarchy (depending on available income,
tastes, preferences) even if dynamic and time-changing
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
…with important
individual differences!
Marketing
can change this picture!
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Motivation of people
Needs and the contribution of Maslow
Need: something that is necessary;
behavior to satisfy it
Meta-motivated people are driven by B-needs (Being Needs),
instead of deficiency needs (D-Needs).
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Experiments by Hawthorne
1927-1932 Western Electric’s
Hawthorne Works di Chicago
(Elton Mayo)
 Objective – increase
productivity of workers
 Hypothesis – positive
correlation between
illumination of environment
and worker productivity
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Experiments by Hawthorne
Experiment on two groups of workers
 Group A – experimenting better illumination
 Group B – non change in illumination (control group)
When illumination is varied…
 Productivity increases in both groups!
Motivation on work induced by the fact of being
«observed»
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Motivation of people
Power and Affiliation
What motivates people?
Success (achievement need)
Power (power need)
Affiliation (affiliation need)
The impact on the organization
High-achiever
Low-achiever
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Work and gratification
What gratifies you most in your work?
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
People and decisions
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Decision making
Decision making (decision from Latin decidere
"to decide, determine," literally "to cut off,"
from de- "off" and caedere "to cut") can be
regarded as the mental processes (cognitive
process) resulting in the selection of a course of
action among several alternative scenarios.
Every decision making process produces a final
choice.
ORG2005
10
Decisions by individuals
Complete rationality
Problems and objectives completely clear
How did you choose
your university
degree?
All info available immediately and for free
Consequences of choices completely known
Alternatives exist, are clear and comparable.
They can be evaluated simultaneously.
How did you choose
your partner?
Decision maker is homo oeconomicus: unique
and isolated
Choice is optimal choice for the decision maker,
in this egoistic choice
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Decisions by individuals
Complete rationality
Problems and objectives completely
clear
All info available immediately and for
free
Consequences of choices
completely known
Nobel Economics ‘78
Bounded rationality (Herbert Simon)
DM starts from initial expectations; then
refined by a first exploratory search
(imagine: fashion)
After first analysis, expectations modified
(budget, type of dress)
Alternatives exist, are clear and
comparable. They can be evaluated
simultaneously.
Evaluation in sequence of alternatives
(sequence depend on capability of
analysis); expectations modified (depending
on what he finds)
Decision maker is homo
oeconomicus: unique and isolated
Stop and choice when resources exhausted
(time finished, search too costly).
Choice is optimal choice for the
decision maker, in this egoistic
choice
Optimal choice is locally optimal,
“satisfycing”
Satisficing: "satisfy"= satisfaction e
"suffice" =sufficient.
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Two theories, two models of human people:
Human person
Homo oeconomicus
An abstraction:
Member of human societies: social
context modifies needs of individuals
 Autonomous (decisions
depend on individual)
Solidarity, loyalty and progress are
social values
 Egoist (satisfy own needs)
 Motivated by money
Economic activity is a mean, not an
end. Goal is to satisfy not only primary
needs needs but also social ethical,
etc.
 Evaluating everything with
absolute rationality (world
is certain, unlimited
computational capability)
Works according to bouned
rationality (world is uncertain, difficult
to comprehend, limited computational
capability)
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Decision processes by organizations
Q - Recall an episode in which you made a decision together
with one or several other persons. Describe the decision
making process. How was the decision making process
affected by the fact that several persons were deciding
together? In organizations, decisions are made by a
collective rather than a single individuals, so that decision
making processes are more complicated. The complication
arises from the possibility of disagreement among
influential members (such as managers) or factions within
the organization.
4 types of decision making processes are distinguished.
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Group decision making
• when individuals collectively make a choice from the
alternatives before them. This decision is no longer
attributable to any single individual who is a member of the
group. This is because all the individuals and social
influence contribute to the outcome. The decisions made
by groups are often different from those made by
individuals.
• Group polarization is one example: groups tend to make
decisions that are more extreme than those of its
individual members
Individuals' desire to gain acceptance and be
perceived in a favorable way by their group
Think: groups of adolescent people in a car
15
Group decision making
• According to the idea of synergy, collective decisions
tend to be more effective than decisions made by a
single individual. However, there are also examples
where the decisions made by a group are flawed, such
as the Bay of Pigs Invasion, a case of Groupthink.
• Groupthink: Group members try to minimize conflict
and reach a consensus decision without critical
evaluation of alternative ideas or viewpoints, and by
isolating themselves from outside influences.
Parkinson's Law: The more amiability and esprit de corps there is among
the members of a policy-making ingroup, the greater the danger that independent
critical thinking will be replaced by groupthink, which is likely to result in irrational
and dehumanizing actions directed against outgroups.
16
Group discussion pitfalls
• Procrastination. The group postpones the decision rather than
studying the alternatives and discussing their relative merits.
• Bolstering. The group may quickly or arbitrarily formulate a
decision without thinking things through to completion. They then
bolster their decision by exaggerating the favorable consequences .
• Denying responsibility. The group delegates the decision to a
subcommittee or diffuses accountability.
• Muddling through. The group muddles through the issue by
considering only a very narrow range of alternatives that differ to
only a small degree from the existing choice.
• Satisficing. A combination of satisfy and suffice. Members accept
a low risk, easy solution instead of searching for the best solution.
• Trivializing the discussion. The group will avoid dealing with larger
issues by focusing on minor issues.
17
Group discussion pitfalls
Parkinson’s Law: A task will expand to fill the time available for its completion. (Ex:
Groups that plan to meet for an hour stay for the duration).
Law of triviality: The amount of time a group spends discussing an issue will be in
inverse proportion to the consequentiality of the issue (Ex: Committee discusses $20
million stadium fund for 3 minutes).
Sins of Commission: The misuse, or inappropriate use of information. These can
include: a) Belief perseverance b) Sunk cost bias: when a group remains committed to
a given plan of action solely because an investment has already been made c)
Hindsight bias: When group members falsely over-estimate how accurate their past
knowledge of a given outcome
Sins of Imprecision: Relying too heavily on heuristics, which over-simplify complex
decisions. These can include: a) Availability heuristic: when group members rely on
information that is readily available, in making a decision. b) Conjunctive bias: When
groups are not aware that the probability of one event occurring will always be
18
greater than the probability of two events occurring together. …
Four theories of group decision processes
1-Management science approach:
 Equivalent to rational choices by individual people
 Born durint World War II: statistical theories for urgent and
large-scale military problems
 Today:
 IT delivers quantitative data (business intelligence)
 Operations research: mathematical models to quantify relevant
variables and to develop alternative solutions
"Management science works best for decisions
when problems are analyzable."
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Group decision processes
2-The Carnegie model (Cyert, March, Simon):
This model is the organizational analog of the bounded rationality
approach at the individual level.
 Coalition forming (about objectives, bounded rationality,
reduction of ambiguity….)  political process
 Satisficing level for members of coalition  problemistic search
(= looking around for a quick solution in the immediate, local
environment, rather than trying to develop the optimal
solution) thus, solution is often chosen to "satisfice" (satisfy
+ suffice) rather than optimize
 Focus on problem identification
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Group decision processes
3-Model of incremental decision process
(Mintzberg McGill Montreal)
incremental decision process model emphasizes the
structured sequence of activities leading to the solution
to a problem. Major decisions are broken down in small
steps taking place in three major phases: the identification,
development, & selection phases.
 Focus on concrete solution of problems
 Decision deadlocks, decision loops
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl
Group decision processes:
4-The garbage can model (COHEN, MARCH E OLSEN)
to describe organizations characterized by organized anarchy
(= high uncertainty in both problem identification and problem solution), such as universi
disconnects problems, solutions and decision makers from each other
PARTICIPANTS
Decision power
of people
PROBLEMS
SOLUTIONS
Relevance
attributed to the
various problems
Perceived
validity of
solutions
CHOICE
OPPORTUNITIES
The garbage can model is appropriate to describe the chaotic filming of Casablanca
with Humphrey Bogart and Ingrid Bergman,
with its numerous changes in plot and last minute casting of actors.
DECISIONS TAKEN
Organizzazione aziendale. Mercati, gerarchie e convenzioni [G. Costa, P. Gubitta]
Copyright © 2004 - The McGraw-Hill Companies, srl