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Decision Making and Negotiation: Santi Novani, PHD Dr. Pri Hermawan

This document contains profiles of two individuals, Dr. Eng. Pri Hermawan and Santi Novani, PhD, who will be teaching a session on decision making and negotiation. Dr. Hermawan received his bachelor's, master's and doctorate degrees in electrical engineering, industrial engineering, and value and decision science respectively. His research interests include soft computing for social simulation and decision making. Santi Novani received her master's degree in industrial engineering and her PhD from Tokyo Institute of Technology. She has experience as a lecturer and researcher focused on decision making and strategic negotiation. Her research has been published in several international journals. The objective of the session is for participants to understand descriptive, normative

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35 views52 pages

Decision Making and Negotiation: Santi Novani, PHD Dr. Pri Hermawan

This document contains profiles of two individuals, Dr. Eng. Pri Hermawan and Santi Novani, PhD, who will be teaching a session on decision making and negotiation. Dr. Hermawan received his bachelor's, master's and doctorate degrees in electrical engineering, industrial engineering, and value and decision science respectively. His research interests include soft computing for social simulation and decision making. Santi Novani received her master's degree in industrial engineering and her PhD from Tokyo Institute of Technology. She has experience as a lecturer and researcher focused on decision making and strategic negotiation. Her research has been published in several international journals. The objective of the session is for participants to understand descriptive, normative

Uploaded by

nicasavio2725
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Decision Making and

Negotiation
MBA YP51B
Santi Novani, PhD
Dr. Pri Hermawan

Profile
Name: Dr.Eng. Pri Hermawan, S.T., M.T.
E-mail: [email protected]
Pri received his bachelor of engineering degree on Electrical
Telecommunication major from TELKOM Institute of Technology,
Bandung in 1998. He earned Master of Engineering from Department
of Industrial Engineering and Management, ITB in 2005. His master
thesis investigated an application of Adaptive Learning Model of
Hypergame on Competitive Signaling in business marketing
interaction. His Doctoral degree from Department of Value and
Decision Science, Tokyo Institute of Technology, Japan in 2009 with
dissertation on A Drama-theoretic Analysis of Dilemmas of
Negotiation and its Application is financially supported by
scholarship provided by MEXT: Ministry of Education, Culture, Sport,
Science and Technology (Monbukagakusho) Japan. His research
interest includes soft computing for social simulation and systems
science-based approach to decision making and negotiation.

Profile

Santi Novani, S.Si, MT, PhD


E-mail: [email protected]
Santi Novani, PhD joined the School of Business and
Management (SBM) - ITB as a full-time tutor in 2009 and as a full
time lecturer after she received a PhD from Tokyo Institute of
Technology, Japan in 2013. Her master engineering degree is from
Bandung Institute of Technology with a background Industrial
engineering and management. Her experience as a lecturer in
private university since 2000, as a research assistant and full time
tutor at decision making and strategic negotiation of research
interest group since 2005. There are some in several international
journals, such as Systems Research and Behavioral Science,
Journal of service science and management and International
journal of business and management. She presented several
papers at various international conferences in Tokyo, Sweden,
Canada, Bali and America, such as SRII Global institute and
Frontier of service Conference. Her research interests service

Objective
At the end of this session, participant
should be able to :
Understand the difference between
descriptive, normative and prescriptive
decision making
Experience the descriptive decision
making through game
Understand failure and pitfalls in
decision making
4

Lets warm up

Prepare your pen


Follow the
instruction
Have Fun!!

MAXIMUM 5 MINUTES

PART ONE

Please answer these questions as


quickly as possible
1. What is the easiest decision you
have made?
2. What is the most difficult decision
you have made?

MAXIMUM 20 MINUTES

PART TWO

1. Guess the Result !


a. 13 + 13 = ?
b. 200 25 = ?
c.17 x 24 = ?
9

2. Guess the Result !

8x6x2x7x4x1x3x5

10

3. Expression of What ?
A

11

4. Which one is longer ?

12

5. What do you think the answer is?

If it takes 5 machines 5 minutes to


make 5 widgets, how long would it
take 100 machines to make 100
widgets ?
100 minutes

OR

5 minutes
13

6. Which one is true ?


(a)
Adolf Hitler was born in 1892
(b)
Adolf Hitler was born in 1887

14

7. Guess the Result !

1 x 4 x 5 x 6 x 3 x 2 x 7x 8

15

16

8. Complete the Missing Part !

S__P

17

9. Finally
How confident are you with all the
answer?

______%
18

19

Review : Discuss the Questions


Question :
13 + 13 = ?
200 25 = ?
17 x 24 = ?
Which one is more difficult to answer?
Which one need more effort to calculate?
20

Review : Discuss the Questions


Question :
8x6x2x7x4x1x3x5
And
1 x 4 x 5 x 6 x 3 x 2 x 7x 8
Did you guest different result?
Which one did you guest have higher
result?
21

Review : Discuss the Questions


Question :

Is it difficult for you to guess the


expression of this woman?
Which one is more difficult to guess?
22

Review : Discuss the Questions


Question :

Even though you already now the length


of the line is equal, but your vision still
see line (a) is longer than line (b)
23

Review : Discuss the Questions


Question :
If it takes 5 machines 5 minutes to make 5
widgets, how long would it take 100 machines to
make 100 widgets ?
100 minutes
OR
5 minutes

What is your answer? Do you answer 100 minutes?


If yes, calculate again.
24

Review : Discuss the Questions


Question :
(a) Adolf Hitler was born in 1892
(b) Adolf Hitler was born in 1887
How many of you choose (a)? How many
of you choose (b)?
Both statement are false. What makes you
prefer to choose statement (a) is true?
25

Review : Discuss the Questions


Question :

S__P
How many of you write SOUP as the answer?
Is there anyone write different answer?
What makes you not think other answer i.e.
SHIP, SOAP, SLIP, SWAP, SEEP, SNIP, etc?
26

Review : Discuss the Questions


Question :

Radiation Therapy vs. Surgery

There are two different ways of presenting


the data: (a) the positive framing question
no. 2
Is there any different proportion of people
who choose radiation therapy and surgery?

27

Therefore, in the Decision Making what


we will learn is how to improve the not
optimal solution so our decision will be
closer to gain an optimal solution

28

Decision Making
Descriptive
What people actually do, or
have done
Prescriptive
What people should and can do
Normative
What people should do (in theory)
29

Because
System 1
(intuitive, automatic)

System 2
(Reflective, effortful)

Cannot be turn off

Cannot be main actor

Process Characteristics
Automatic
Effortless
Associative
Rapid, parallel
Process opaque
Skilled action

Controlled
Effortful
Deductive
Slow, serial
Self-aware
Rule application
30

Why decision making?


Management is concerned with
deciding to do or not to do
something, with planning, with
considering alternatives, with
monitoring performance, with
collaborating with other people or
achieving ends through others; it is
the process of taking decisions in
social system in the face of problems
which may not be self-generated
(Checkland, 1993).

Why decision making?

What to do vs How to do
What to do

How to do
Current
condition

Current
condition

Ideal
condition

Ideal
condition Controlling

Issues:
Issues:
1. Collect and analyze information to
Framing decision (Context)
set
1. What we want to achieve?
What alternatives available?
2. What criteria of the ideal
How to choose the best
condition?
alternative?
2. How to implement the best
alternative?
3. Are there problems that inhibit the

Why
In the actual decision making, people
have heuristics, bias, bounded
rationality and make mistakes

34

Because
System 1
(intuitive, automatic)

System 2
(Reflective, effortful)

Cannot be turn off

Cannot be main actor

Process Characteristics
Automatic
Effortless
Associative
Rapid, parallel
Process opaque
Skilled action

Controlled
Effortful
Deductive
Slow, serial
Self-aware
Rule application
35

What is intuition?
The process is dominated by
your subconscious mind.
The information is
processed in parallel rather
than sequentially.
You are more connected
with your emotions.

How does intuition work?

When do we need intuitive


DM?
Expedient decision making and rapid response
are required. The circumstances leave you no
time to go through complete rational analysis.
Fast paced change. The factors on which you
base your analysis change rapidly.
The problem is poorly structured.
The factors and rules that you need to take into
account are hard to articulate in an unambiguous
way.
You have to deal with ambiguous, incomplete, or
conflicting information.
There is no precedent.

What is heuristic?
A 'heuristic is a method to help
solve a problem, commonly
informal.
It is particularly used for a
method that often rapidly leads
to a solution that is usually
reasonably close to the best
possible answer.
Heuristics are "rules of thumb",
educated guesses, intuitive

Heuristic
Heuristics can sometimes provide good
estimation but also can lead to the
systematically biased judgment.
Tversky and Kahneman identified three
main heuristics :
1. Availability Heuristics
2. Representativeness Heuristics
3. Anchoring
and
Adjustment
Heuristics

Availability Heuristics (1)


Available
heuristics :
Judge the probability
of the occurrence of
events by how easily
these events are
brought to mind
Example
Statistically,
travel
by air plane is still
saver
than

Availability Heuristics (2)


Manager assess the frequency, probability, or
likely causes of an event by the degree to
which instances or occurrences of that event
are readily available in memory

Biases Associated with


Availability Heuristics (1)
1. Ease of recall
probability

is

not

associated

with

i.e. People believe that motorcycle accidents cause more


deaths than stomach cancer in United Stated. This believes
occur because car accidents get more exposure from media
than stomach cancer

2. Ease of imagination
probability

is

not

related

to

i.e. Civil engineer in charge of construction project may find it


easy to imagine all the circumstances that could lead to the
delay of project such as strikes, adverse weather condition,
interruption in the supply of material and equipment,
geological problem. The result could be a gross overestimate
of the risk of the project overrunning the deadline.

Biases Associated with


Availability Heuristics (2)
3. Illusory correlation
i.e. celebrity experienced divorced, then people
usually correlate married celebrity with divorce.

All people with beard correlate with terrorist

Representativeness
Heuristics
Manager assess the likelihood of an
events occurrence by the similarity of
that occurrence to their stereotypes of
similar occurrences.

Anchoring and Adjustment


Judgment is widely used to make estimates
of values. Often these estimates start with
an initial value which is then adjusted to
obtain the final estimate.
The initial value, or starting point, may be
suggested from historical precedent,
from the way in which a problem is
presented, or from random information
Unfortunately, the adjustment from these
initial values is often insufficient

Therefore, in the Decision Making what


we will learn is how to improve the not
optimal solution
so our decision will be closer to gain an
optimal solution
How to be closer to gain an optimal
solution?
47

Decision Making
Descriptive
What people actually do, or
have done
Prescriptive
What people should and can do
Normative
What people should do (in theory)
48

Rational/Ideal/Normat
ive
Decision Making

Decision
Approaches

Assumptions:

1. Perfectly define the


problem
2. Identify all criteria
3. Accurately weigh all
criteria according to
their preference
4. Know all relevant
alternatives
5. Accurately asses
each alternative
based on each
criterion
6. Accurately calculate
and choose the
alternative with the
highest perceived
value
Optimal
solution

Close to

Actual/Descriptive
Decision Making

GAP
Bounded
Rational

Prescriptive
Intuition
Systematic Model
of Decision
Process
Biases
Guidances to be
more rational
Need to
Improve

Not
optimal
solution
49

Rational Decision Making

The rational decision making process relies mostly on logic and quantita

THANK YOU

51

Example
Input Video :
The Monkey Business Illusion
The Door Study
Movie Perception Test (2 movies)

52

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