Integrated Business Decisions PDF

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MODULE NAME (NBS- MC2X) Integrated Business Decisions
STUDENT ID NUMBER 100144422
WORD COUNT 2,196

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TABLE OF CONTENTS
INTRODUCTION....................................................................................................................... 25
REFLECTION ............................................................................................................................ 26
Decision-making process: the differences between expectation and reality ...................... 26
The effects of biases on problem solving process ................................................................. 27
Enforcement of team norms and Participative decision making style ............................... 28
Multicultural group: the difference in uncertainty orientation ......................................... 29
CONCLUSION ........................................................................................................................... 31
APPENDICES ............................................................................................................................. 32
REFERENCES ............................................................................................................................ 34

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INTRODUCTION
In the second semester, my teammates and I had a great opportunity to take part in a business
simulation called “Marketplace” which required us to make strategic and tactical decisions
concurrently as a new venture firm in a virtual world. Actually, our performance was not really
good (below the average cumulative balanced scorecard of the whole game). In this essay, I would
reflect on some problems which emerged during the game, then determine how our decisions were
made as well as how they should have been made to overcome the obstacles with respect to
relevant theories and frameworks in academic literature.
I will first start with my team’s decision making and problem solving approaches then move onto
two factors that mainly affected our effective decision making process: Team Norms and Cultural
differences. Finally, conclusions will be made from evaluation to summarize what I have learnt
and their application for my personal decision making in the future.

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REFLECTION
Decision-making process: the differences between expectation and reality
Decision making is a mental process by which a set of alternatives is identified and considered to
find out a logical choice, which will result in a desired outcome (De Janasz, Dowd and Schneider,
2012). As members of an executive team, my teammates and I had to make decisions every week
to compete with other firms in the same market. Our decision making process during the game
followed the rational model of decision-making (Zey, 1992) and had four main steps including
determining the problem, considering the feasible solutions, choosing the preferred solution and
monitoring the effectiveness. By employing this sequence, we expected that the decisions made
would be rational enough due to our ability to make sensible judgements, which is known as
“rationality” (Buchanan and Huczynski, 2013). Looking back, the underlying assumptions of
rational model turned out to fail to match up with reality. For instance, in the second quarter of the
game, we decided to target our products on Mercedes, Innovator and Workhorse because we
believed that they are much more profitable than other segments in the market. However, after
quarter 5, we did realize that it is impossible for us to gain the satisfaction of customers in all these
segments, especially Mercedes, due to our shortage of funds. The main cause was the limit of
bounded rationality (Todd and Gigerenzer, 2003) which represents our inability to understand the
difficulty of meeting the product requirements and weigh up the benefits of aiming at many
segments simultaneously against the costs. Clearly, it seems likely that rational model could not
work well in practice because it does not take the ways people actually make decisions into account
(Chai, 2001). Another example is our wrong financing strategy, which ended up preventing us
from increasing the production volume to meet the consumer demand. Specifically, each quarter,
we were allowed to borrow a given amount of money based on our financial performance of the
previous quarter. However, my teammates and I decided to not take out any bank loan to expand
our production capacity or invest in human resources because we were afraid that we cannot pay
back the borrowing at the end of the game. Consequently, in the last quarters, we were unable to
keep up with the dramatic increase in market demand, resulting in a high cost of lost sales.
Obviously, we employed “satisficing strategy” by choosing the very first and acceptable solution
based on our past experience, rather than reviewing all alternatives to find out the optimal choice
(Kahneman, 2003). Although this brought about simpler and faster decisions, the results showed
that using satisficing strategy with judgement short-cuts called “heuristics” may lead to low quality

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decisions and systematic errors (Tversky and Kahneman, 1974). With hindsight, we should have
applied Carnegie model which appraises a variety of constraints that decision-makers have to deal
with (Buelens et al., 2011) so that we can be aware of and try to overcome these difficulties, thus
making choices with the best possible outcomes.
The effects of biases on problem solving process
It can be said that my group had a high level of cohesiveness as we were likely to be in full
agreement with each other on most of things. However, this sometimes resulted in the so-called
“groupthink” problem which occurs when members in a group avoid raising their controversial
opinions just to maintain the group unanimity (Janis, 1982). Take myself as an example, when my
group members and I discussed on our financing choices, I did think that we should take advantage
of financial leverage rather than depend solely on the limited equity. However, I was so reluctant
to express my contradictory view because I did not want to question the thinking that was favored
by the majority of the group. Admittedly, groupthink negatively affected our problem solving
process, leading to poor financing decisions which in turn resulted in my group badly performing
this task. If I have a chance to play this game again, I will be more confident to act like a “Black
hat” member who raises doubts about the consensus among group members (De Bono, 1985).
Having a person whose role is to re-examine group views brings about different ideas for solving
problems, thus enhancing group effectiveness (Coutu, 2009). Also, the illusion of unanimity can
be reduced by periodic participation of trusted outsiders like teachers in our discussions who can
contribute expert opinions and challenge the views of group members (Nahavandi et al., 2015).
In fact, fear of change is another obstacle to our problem solving progress. Looking back at our
channel strategy, we should have closed the web center straight away when it showed decreasing
productivity from week to week instead of remaining with it until the end. The tendency to invest
more and more resources in a decision made despite of its past failure is named “escalation of
commitment” by Staw (1981). When doing so, we wanted to not only maintain our pre-established
procedure for sales channel management decisions but also avoid financial costs of abandonment
in the hope that the delayed benefits of web marketing will come soon (Ross and Staw, 1993). This
routine decision (Banerjee, 1995) actually did more harm than good, so next time, quantitative
decision tools like scenario modelling or decision tree would be used to produce adaptive decisions
that are more suitable for such situation (Mukherjee, 2005).

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Furthermore, our performance in this game was exacerbated by certain other decision biases. For
instance, when making projections about quarters’ demand and profit, “overconfidence bias”
caused us to subjectively believe that our judgements are more reliable than they objectively are,
resulting in impulsive decisions (Chira, Adams and Thornton, 2008). Although we did notice the
consequences of incorrect predictions and tried to avoid these errors in the following weeks, lots
of information and alternative outcomes were not considered carefully due to the effect of
“hindsight bias” (Biais and Weber, 2009). Being aware of the results after each week made us tend
to believe that everything happened was predictable, thus hindering our learning from the past
experience (Guilbault et al., 2004). Again, the independent feedback given by qualified outsiders
can provide critical evaluations of our decisions, thus alleviating the problems to some extent
(Stallard and Worthington, 1998).
Enforcement of team norms and Participative decision making style
At the Norming stage of team development process (Tuckman and Jensen, 1977), several team
norms including some shared actions and rules of engagement were set to regulate our team
members’ behavior (Kinge, 2012). In order to illuminate our group decision making, we developed
a norm of decision acceptance by which we could ensure that problems will be openly discussed,
and we only make decisions when the majority of group members vote for it. Admittedly, this
helped us to fasten our decision making process because by adopting this norm, we can have a
clearer course of action, which allowed us to anticipate each other’s behavior, thus responding
more quickly and appropriately (Feldman, 1984). Obviously, the enforcement of this team norms
represented the Participative decision making (or Group-aided decision making) style (Sagie and
Aycan, 2003) that we stuck to throughout the game play. On the one hand, this decision making
style enabled varied views and a greater pool of knowledge, thus providing a better insight for
making decisions (Hill, 1982). More importantly, getting involved in decision making process
helped each member understand the rationale behind a judgement, thus increasing our commitment
to group decisions (Kreitner, 2008). On the other hand, participative decision making might cause
some drawbacks to us. For example, it slowed down our process of making decisions on R&D
licensing because lots of time have been devoted to reaching an understanding between group
members (Lewis et al., 2006). Additionally, sometimes, group-aided decision style is a
contributing factor in groupthink or cognitive biases due to its high degree of group cohesiveness

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as I mentioned earlier. All things considered, I do think that the strengths of participative decision
making still outweighed its shortcomings in this case. However, next time, I would employ the
diagnostic framework developed by Vroom and Jago (1988) that considers three main factors
affecting decision making process, including Decision quality, Subordinate commitment and Time
constraints to identify the most appropriate decision making style for the team in particular
circumstances (Appendix 1).
Multicultural group: the difference in uncertainty orientation
Actually, five members of my group are from 3 countries with different cultural backgrounds.
Although a diverse range of cultures provides my team with more collective knowledge and skills
(Lazear, 1999), there was a fact that diversity led to different patterns of feeling, thinking and
acting (Zhou and Rosini, 2015), which were seeds of some conflicts happened during our group
work. One of the most significant differences in national cultures was uncertainty avoidance,
which strongly affects our decision making process. Basically, uncertainty is defined as the
situation in which people have to make decisions with incomplete information of alternatives used
to predict potential outcomes (March and Simon, 1958). According to Hofstede (1986), uncertainty
orientation is the preference and attitude of a person towards changes and opportunities, which are
always ambiguous. During the simulation, we had to make lots of innovative decisions such as
investing in a new technology or running a new advertisement campaign that are very risky and
have no precedent (Buchanan and Huczynski, 2013). Accordingly, the difference in uncertainty
orientation of group members really impacted the way we made these risky decisions. For instance,
when deciding whether we should invest in “High resolution technology” or not, one member in
my group, who is from Thailand, was nervous about this unstructured situation and tried to avoid
by convincing us that this spending is not worthwhile. Conversely, other members, including me,
who are from Vietnam and China, strongly support the R&D investment. This, as a result, caused
a fierce disagreement within the group. Eventually, we still went for this investment because it was
favored by the majority of our group. The reactions of group members could be explained by
uncertainty avoidance indexes of the three countries as follow.

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Figure 1: Comparison of cultural dimensions between Vietnam, Thailand and China
Source: (Geert-hofstede.com, 2016)
Looking at the figure, we can see that the uncertainty scores of Vietnam and China are similar, at
30, much lower than that of Thailand. This means Vietnamese and Chinese people are supposed
to have a low preference for avoiding uncertainty, thus being more interested in accepting the
trade-off between risk and return.
Given the influence of uncertainty orientation on decision making, it is crucial for me to understand
the risk taking patterns of people when working in a mixed culture group in the future. An
awareness of uncertainty avoidance helps me to predict how much risk people are willing to take
on, thus producing a selection that is preferred by everyone (Karni, 2006). Consequently, this
results in a high degree of group decision acceptance, which facilitates a quicker and effective
decision making process, and help to avoid unexpected conflicts between my group members.

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CONCLUSION
This reflection mainly focuses on highlighting some key points in my group decision making
process, which might negatively or positively affect the outcomes. With hindsight, I realize that
the rational model that we employed during the game did not work well due to its limitations
presented above. Because of this, next time, the Carnegie model, which is a more reliable
framework, will be used when making decisions. Besides, biases that distorted our judgements are
pointed out along with several potential solutions, and bringing in trusted outsiders proves to be
the most effective way to reduce bias effects. Finally, team norms and uncertainty avoidance are
evaluated with respect of their impacts on decision making to help me know how to choose the
most appropriate decision making approach for a given situation.
Reflecting on what happened during my group work allows me to analyze and combine my
academic knowledge and professional practice; thus I can deepen my learning from past
experience and gain new understanding by reviewing events in different ways (Boud, Keogh and
Walker 1985). Therefore, I will definitely keep doing reflection because all learning potential will
be forgotten unless I reflect on what I have experienced (Gibbs, 1988).

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APPENDICES
Appendix 1
Figure 2: Vroom-Jago model
Table 1: Five different processes of decision making ranked based on the degree of
participation
Name Description
Autocratic 1(A1) The leader uses the available information to
make the decision
Autocratic 2 (A2) The leader asks team members for specific
information before making decision. Here the

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leader does not necessarily tell what the
information is needed for.
Consultative 1 (C1) The leader informs team members of what
he/she is doing and may individually ask
opinions, however, the group is not brought
together for discussion.
Consultative 2 (C2) The leader is responsible for making the
decision, however, he/she invites group
members to discuss the situation, hear other
perspectives, and solicit suggestions.
Group (G2) The team makes a decision together and come
to a final decision that everyone agrees on.

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