Syllabus For:

Management and Organizations 471
Individual and Competitive Decision Making
Fall 2003

Course Description

We all make decisions, all the time. Some of them are not particularly important, but others are. Imagine how much better your life would be if all of your important decisions were as good as they realistically could be. Although this is an unattainable goal, we can all learn to improve our decision making. And if we improve by even a small amount, we will be better off and so will many other people. That is what this course is about: making your decisions better so that you and everyone else can benefit.

As your career grows, your decisions will become more and more important. Many of them will entail considerable risk. Many will also involve potential competition. We have designed this course to give you the opportunity to make a variety of risky, competitive, and difficult decisions - in a safe context - so that you can learn, first hand, (1) how you make decisions and (2) how you can make them better. My goal in the course is to open your eyes both to yourself and to a variety of methods than will allow you to improve your decision making, a lot. All this comes from the enormous amount of research in the last few years about how people make decisions and how they can make their decisions better.

This course combines two previous mini-courses, the above titled 471 and the previously offered 917, Making Risky Decisions. We are currently in the process of renaming the course

Risky and Competitive Decision Making

This new title is a more accurate description of the content of the course. We will touch on all kinds of decisions - financial, person, and professional - with a primary emphasis on how we can make these decisions more effectively. Each class will be a combination of exercises, discussions, and analysis. By asking you to make many decisions, we will try to highlight some of the underlying tendencies that many people - including you and me - often display. This way we can build a deep understanding of the decision process while we sharpen our analytical skills.

There will be individual and group assignments in this course. The individual assignments will be four short analyses and critiques of actual decisions, either your own or those that are reported in the media. The group assignments will also be an analysis and critique of an actual decision, this time of a major organizational decision. The group assignment will be embodied in a group report and a presentation during the last class.

Your individual assignments should be a maximum of two typed pages in length. (Format should be Times Roman, 12 point font, 1.5 line spacing, 1 inch margins.) They should describe a decision that you have made in the past that did not go well or a decision that has been reported in the press that also did not go well. You should then analyze and critique the decision using the material that we have covered in class and show how, in retrospect, the decision might have improved markedly. I expect pointed, insightful analyses that are both deep and comprehensive.

You should also form a group with 3 or 4 other members of the class. (Ideal group size is 4 people.) Your group assignment will be to select a current organizational decision - one that has appeared in the press sometime since January 2000 - and analyze it in depth. Your report should tell the story of the company, its decision, the background leading up to the decision, and what occurred following the initial decision. In addition to the story, you should present an analysis of the decision and how it could have been improved, either in the decision or the implementation phase, or both. In other words, you are blessed with the opportunity to use hindsight to identify how a company did well or went wrong with an important, risk-laden decision. As you can imagine, reports that include complicated, important decisions with astute, incisive analysis are preferred over reports that review mundane, unimportant decisions with pedestrian analysis.

There will be several assignments in this course. Most importantly, you will analyze your own decision making, both retrospectively and prospectively. Thus, you will analyze, in depth, a big decision in your past and one in your upcoming future. A third assignment will entail the analysis of a major organizational decision, using information from various media sources. We will also have case analyses, a series of exercises, etc.

Your personal decision making analyses will constitute the primary written assignments in the class. In the first of these two reports, you will describe a previous, large stakes decision that you made and use the concepts provided in the text and in our classroom activities to analyze that decision. Decisions that did not go particularly well are usually better candidate for analysis than decisions that did go well. This report should be between 5 and 10 pages in length (double spaced, Times Roman 12-point font with 1 inch margins all around) and is due on October 31.

The second of your two reports will describe a future, hopefully imminent large stakes decision. Once again, you should use the concepts provided in the text and in our classroom activities to pre-analyze that decision. It should be of similar length to your first self-decision-analysis and is due on December 5.

For your final assignment, you and the members of your group (4 is a good target number for group size) will select a large organization whose history is easily accessible. Enron and Anderson are two easy examples. Your work should tell the story of the company, its recent critical decisions, the background leading up to these decisions, and what occurred following these decisions. In addition to the story, you should analyze the decisions and how they could have been improved, either in the decision or the implementation phase, or both. In other words, you are blessed with the opportunity to use hindsight to identify how a company did well or went wrong with their important, risk-laden decisions. Your output will be a presentation during our last class, with a submission of the bullet points that you used in your presentation. As you can imagine, reports that include complicated, important decisions with astute, incisive analysis are preferred over reports that review mundane, unimportant decisions with pedestrian analysis.

The text for the course will be my recent book:

The Art of High-Stakes Decision-Making Tough Calls in a Speed-Driven World
J. Keith Murnighan and John C. Mowen, New York: John Wiley & Sons, 2001

In the reading assignments, we will refer to the text as M&M on Decision Making.
There will also be additional readings in the course packet.

PLEASE DO NOT READ THE READING ASSIGNMENTS (OTHER THAN THE FIRST ONE) BEFORE CLASS. INSTEAD, YOU SHOULD READ THEM AFTER THE ASSOCIATED CLASS. That way you can come to class fresh and ready for new experiences. You can also see how your natural tendencies influence your decisions. You can read about the issues afterwards, when analysis and discussion can have more impact.

You will also notice that we will be engaged in a card-game exercise on Nov. 18th. In advance, we will provide you with information about the card games, i.e., rules, strategies, etc. Class that day will begin early, at 8 a.m., so that we can complete the exercise in one sitting. (As a result, there will be no class the following Tuesday, November 25th.) This particular class will be devoted to playing the card games to see who does best. As with many activities, your performance will be a function of both skill and good fortune. In addition, those who do well will win real money, depending on their performance. We will describe how the payoffs will work well in advance.

As this is a professional school, I expect that you will all act professionally in this class. Thus, I expect that you will attend each class, on time, and notify me in advance if you must miss a class. If you think of our meetings as work meetings and part of your job, you'll have an idea of what I expect.

The Honor Code

The Kellogg Honor Code is applicable in this class. The complete text of the Honor Code is available on the Honor Code website:
http://www.kellogg.nwu.edu/student/gma/honor/index.htm

The Honor Code is enforced at Kellogg and violations are subject to disciplinary sanctions. Honor Code issues seldom arise because of Kellogg's culture. I truly hope that such issues will not arise in this class.

The discussion in this syllabus of the Honor Code, while intended to be as comprehensive as possible, may not cover all applications of the Honor Code. If you believe something is unclear or has been omitted, please let me know.

Here are some of the highlights of the honor code as they relate to this class: 

• Write-ups must be your original work. You may not use materials containing solutions or partial solutions to the assignment (including solutions prepared by current and former Kellogg students). If your analysis contains information from outside sources, then you must properly cite the sources.
• 
  The Honor Code and the rules in this syllabus are also applicable to any exchange or visiting student. I expect you to have signed the Honor Code before the first class. If you haven't done this yet, please do so immediately by contacting the Student Affairs Office.