All 12 entries tagged Rdm

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April 23, 2012

Situational awareness and confirmation bias

biasSituational awareness is more than common sense. However, common sense and emotional intelligence can be vital parts of it. In other words, situational awareness can be simply defined as knowing what is going on in the surrounding environment. As we learned today, situational awareness can be affected by several factors and can result in errors.

One of the most interesting things though in this situational awareness, is the confirmation bias which means that you see what you expect to see and you pick up signals that can support the mental model you've already created, even though the signals may say the opposite. This kind of bias can happen to us any time and I am quite sure that we all have experienced it several times so far.

In fact, this happened to me recently when I submitted a PMA. I was working on it to finalise it for almost two days and after the submission I realised that something was missing. Of course my omission is 'harmful' only for me and the potential mark that the tutor will assign, but when this thing happens in real-life situations where the stakes are higher and human lives can be involved, confirmation bias can have fatal results unfortunately.

April 20, 2012

Making decisions on Asset Management

article_checklist.jpgFor managing assets appropriately, decision-making is vital in this process. First of all, not all things apply to all companies and suit their culture. Thus, even though a specific aspect of asset management might seems interesting and temting to address it, it should go under the discussion of its appropriateness for the company in question. Take for example the facilities management aspect. There is a huge list with things that companies need to address, but it doesn't automatically means that all these things are part of their day-to-day business. What is more, decision-making seems more relevant given the facet of several constraints, such as the budget and resources that each company has available for spending in each part of asset management.

You can picture this process like packing your things for a potential trip. It's for sure that you won't pack everything in the suitcase just for a 5 day trip! Either because you don't need a lot of things or because there are weight or space limitations. You have to be able to decide what to take with you and what to leave behind!

April 17, 2012

Wrong decisions

Iright & wrongn every PMA we all make decisions about what to write exactly. However, we are never 100% sure that we make the best decision and usually the feedforward and the marks can prove us right or wrong. In a recent PMA though I made up my mind to use a specific model to apply a change. When I made the decision I was pretty sure that it was appropriate and suitable for my case. Nevertheless, when I asked the tutor about it, it proved that I made the wrong decision. Luckily, there was still plenty of time to fix this 'mistake'.

Having that incident in mind, I was wondering what happens when companies face a similar case (not for PMAs of course!). If they make a decision which that particular time seemed to be the right one, but after a while they realize that was actully wrong, what happens next? Some situations are reversible but others not... And is there always enough time to make things right again?

April 02, 2012

Who's the decision–maker?

Reading a book, I came across the following phrase of John Atkinson, “If you don’t run your own life, someone else will”. And it is quite true! Our whole life is a decision-making procees, but the decision-maker may differ. In other words, most of the times we are the ones who make our own decisions and form our destiny. However, there are times that other people make the decision for us and we accept them.

This fact is also true at many companies. And I think that both cases prevail at the same rate. For example, usually the senior management team is the one who makes the decisions and the rest of employees have to follow. Other times, external issues and trends may determine the decisions of the company, leaving less flexibility and ownership for the final decision.

Thus, we can be in either case, the decision-maker or the decision-recipient. The question though is which one will you pick...?

March 17, 2012

Decision–making critique: is it possible?

In our PMA we are suppose to justify the reasons behind our team's choice of decision tools and then criticize it. As far as the first part is concerned, I found it quite easy, in terms of academically supporting the decisions of my team, although for a particular tool there was a shortage of references. What I find particularly difficult is the critique of the whole thing. How are you suppose to criticize your work? You can do it to a certain extent, but when you have devoted so many hours and days on this thing, how can you be objective in your critisism?

And that coincides with another blog that I read, talking about the decision making for every PMA. And actually this is true! All team members have ownership of the work we presented, some to a greater extent and some others to a lesser. Then how can you be sure that your critisism is based on robust decision-making process?

Thus, providing objective critisism to your work, even if you didn't like something seems really hard to me. And it's even harder when you had almost no objectives to what was presented...

March 15, 2012

Risk analysis & Decision making

risk1Working on my pma and exploring the decision making tools, I'm becoming more aware that many of the decisions that companies are facing are full of risks and uncertainty. In other words, either it is about programmed or not decisions, the uncertainty may always be prevalent resulting in different kinds of risks.

That is one more reason why probably companies use the decision tools. Not only to make a robust decision, but also to take the risks into consideration and see the potential outcome. I think that in our in-module work, although the risk was there as a variable (market conditions, development of successful prototype, etc.) in the decision process, we didn't pay that much attention to it. However, in real life, the uncertainty and the risks associated with it need always to be considered carefully.

March 10, 2012

Different use of decision tools

Based on yesterday's presentations of all teams, I was really surprised by the uniqueness of each one. We all had available the same data, but yet we approached the decisions differently and end up with different results. If we consider this fact, it's amazing, but completely understandable.

Although I do know that there wasn't a right or wrong answer in that particular task, I found myself wondering about the decision-making process that we all used. The most surprising thing for me though was that all teams were able to justify and 'defend' their choices and the use of the decision tools, despite the fact that each team had different things.

Therefore, when we will have to deal with a real situation and more complex decisions what should we do? As Jeff said reality is much more difficult and companies use softwares to deal with these choices. The fact is that people are the ones who put the data in the computer so that the decision can be made. But always the biases lurking and you can never be 100% sure that you made the best decision. If you believe that you are deluding yourself and thus, the rest of the company...

Decision making using game theory

prisonerMost people who have studied economics are familiar with game theory and the prisoner's dilemma, as a very well-known example of it. According to this example, the outcome of this decision is that both prisoners should not betray each other so that a win-win situation can exist and be sentenced for less years.

During the RDM module we didn't mention this way of making decisions although is not very difficult to understand. In the literature there are many articles that discuss this subject, where using game theory can help organisations make decisions. However, despite the very clear 'instructions' that game theory provides and especially when someone knows about this example, in fact people tend to make the wrong decision!And why is that? To my mind this happens so that anyone can protect itself, as most of us would do in a similar situation.

And a very illustrative situation of this can be seen at the 'Bank Job' (an English TV game show). At the final stage of it, the two remaining contestants have to decide about a great deal of money. Both of them are given two briefcases, one full of money and one full of newspapers. The two players then open slightly the briefcases so that they can know where the money are and then give each other whatever briefcase they think. In order to both win the money though, they have to give each other the briefcases with the money, otherwise if they give the newspapers the money goes to previous players who didn't make it to the final. What happened actually is that out of greediness probably both players gave each other the wrong briefcase. Thus, as we can see, although they knew what they should do, they actually did the wrong.

Therefore, imagine what happens in companies and situations that where a win-win outcome is absolutely achievable, but instead they fool themselves out of protection or whatever else reason.

March 08, 2012

Poor decision–making

Decision-making techniques can apply to almost every major as we all have understood so far. Usually companies are the places which decision-making tools are used widely. Having that in mind, let's think about the economic crisis that started a few years ago.

We all expected that companies, and basically people working on them, have an understanding of how to make decisions that benefit various aspects. However, what happened in reality is that these people probably used bad decision making and poor judgment. If we add the parameter of ethics, meaning if they made ethical or unethical decisions, and the different kind of biases we can find one source of that economic crisis.

I know that many of you might disagree with my thinking about the economic crisis, and if I take into account my experience in economics I'm pretty sure that I will come up with multiple reasons for the crisis. But, since we keep acquiring new knowledge in this masters, it is worth considering other variables as well. Thus, I believe that apart from economic reasons that led to the crisis, a substantial element lies in the way that people make decisions and the biases behind it.

March 07, 2012

How much robustness?

decisionUp to this point I think that most of us have a pretty good understanding of the decision tools. But the most you get into these tools the most confused you get with some of them. For example, my team has decided to use certain tools and every time we thought that we were done with the decision we were wrong. Thus, all the time we keep adding things and make alterations.

So, imagine yourself having a job that involves making decisions on a regular basis. How can you overcome these problems, given the fact that in companies usually the teams are comprised of more people than our teams? And how can make sure that you use the correct decision tools for each situation?

To my mind, the whole module is trying to teach us how to make robust decisions and aquire an understanding about decision-making. But most of us have came to the conclusion that a 'robust' decision is far from reality. The only thing you can do is to try to change your understanding in the first place, so that you are less biased when you dealing with decision-making. And next, you can try to use different methods in order to compare the outcomes and minimise the risk of highly biased decision-making.

May 2023

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Most recent comments

  • An interesting question, but do you really think that people really do a good job in general of unde… by Oritseweyinmi Barber on this entry
  • That's also the first time I hear about that. To create business excellence, innovative and creative… by Sophie Bellone on this entry
  • good point that got me really thinking Ilektra! I think like say for example, may be Waverider shoul… by Pinthida Thanatipanont on this entry
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