Week 1

Welcome and Introduction

MNO2705C Leadership and Decision Making Under Uncertainty
Ningxin Wang

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Agenda
o Icebreaker: get to know each other, project team grouping
o Discussion: models of decision making
o Make a decisioin: a simulation exercise
o Course overview

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Teaching team

Instructor & facilitator TA

Ningxin Wang Phyllis Go (C1)

[email protected]
[email protected]
Darren Ng (C2)
Biz1 8-48 [email protected]

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Meet Your Team

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Get to know each other

8 minutes
Introduce and share about yourself
Come up with a team name

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Discussion

5 minutes
What are the essential steps of making good decisions?
(What’s your model of good decision-making?)

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Let’s Make a Decision
Carter Racing Simulation

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Should Carter Racing race at Pocono?

Leadership team: Investors:

Our volunteers The rest of class
• You’re at the helm of Carter • You have an interest in the
Racing Inc. success of the firm
• Make best use of the • You are responsible for
expertise among investors providing the best input
• You are responsible for possible to help the
making final decision leadership team make the
right decision

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Work the problem (30 minutes)
First 10 minutes
o Read the case and make your preliminary decision independently

Remaining 20 minutes
o Leadership team leads discussion with the investors and instructor
o Instructor can answer specific questions
o Leadership team makes final decision

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Temperature and Gasket Failure
 Payoff for Racing
Outcome Probability Revenues Expenses Expected value

Race: 50% 1,000 K [Goodstone] + 750 K

Finish top 5 (12/24) 500 K [Oil]
Race: 13% 500 K [Oil] + 65 K
Finish not top 5 (3/24)
Race: 29% 20 K[Engine] - 150 K
Not finish (blow engine) (7/24) 500K [Oil]
Race: 8% 500 K [Oil] + 40 K
Not finish (other) (2/24)

Net expected value for racing + 605 K

 Payoff for Not Racing
Outcome Probability Revenues Expenses Expected
value

Not race 100% 500 K [Oil] 25 K [Goodstone] + 482.5 K

7.5 K [entry]
Additional Information
Different presentations of data
 Gasket Failure Probabilities
Temperature Races with Number of Estimated
Range (F) Incidents Races Probability

< 60 3 3 100%

61-70 3 11 27%

71-80 1 9 11%

> 80 0 1 0%
 Payoff for Racing - REVISED
Outcome Probability Revenues Expenses Expected
value

Race: 0% 1,000 K [Goodstone] 0K

Finish top 5 500 K [Oil]

Race: 0% 500 K [Oil] 0K

Finish not top 5
Race: 100 % 20 K [engine] - 520 K
Not finish (Blow engine) 500 K [oil]
Race: 0% 500 K [Oil] 0K
Not finish (other)

Net expected value for racing - 520 K

 Payoff for Not Racing (unchanged)
Outcome Probability Revenues Expenses Expected
value

Not race 100% 500 K [Oil] 25 K [Goodstone] + 482.5 K

7.5 K [entry]
Parallel between Carter Racing and
the Challenger
• NASA budget pressure and time pressure were severe
• A strong record of successful launches
• Gasket failure data are the same as NASA O-Ring Data
• Flaws in the communication between engineers and decision makers:
▪ Focused on only temperatures of launches when problems occurred, but
no one at NASA or Morton Thiokol (the shuttle contractor) ask for
temperatures for launches when O-ring failure did NOT occur

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Challenges of decision making
• Time pressure: limited time to collect and process information
• Risk and uncertainty
o Incomplete and biased data: decision maker can estimate the probability
of certain outcomes based on historical data or past experiences;
sometimes, decision maker can’t even make reasonable probability
estimates due to a lack of data or incomplete data.
• Biases and heuristics (emotions and feelings; risk averse, risk seeking, confirmation
bias/motivated reasoning, sunk cost…)
• Social influences (influential opinions, group dynamics, managers rely on info
provided)
• Ethical issues (putting the driver under too much risk)
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Course roadmap
Ethical
Decision decision

Self-awareness & reflection

ethics making

Group processes

Leadership
Decision Biases and Biases and
biases heuristics I heuristics II

Decide in
Group Negotiated
group decisions decisions
contexts

Decision in Decision and

Design
Special Topics a complex personal
thinking well-being
world
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What this class is NOT?
• This class is NOT about uncertainty reduction/risk management
• This class is NOT skill-based (no check-list or universal formula of good decision
making)
• Decision making is NOT a matter of stable solutions but endless
openness and difficulty

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Course Overview

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Everything is on Canvas
• Find all teaching & learning materials on Canvas
o Complete required readings before class
o Recommended readings are optional, but you’re encouraged to
read them to deepen your understanding of lesson content
o Lesson slides uploaded after class
• Turn on notifications to receive class announcements via email
• Canvas guide & resources

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Assessments
Individual work
Participation and learning contribution 20%
Decision readiness assessment 30%

Collaborative work
Decision making for sustainability team project 50%

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Participation & Learning Contribution (20%)

• Quality over quantity

o Preparation (do the readings)
o Presence (avoid using cell phone or irrelevant apps)
o Participation (offer value-added comments)
o Professionalism (active listening; speak concisely - no
rambling)
o Be supportive and respectful
o Be brave!

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Decision Readiness Assessment (30%)

• Date/Time
o 26 March, 7-9pm (Wednesday, Week 10)
• Venue TBA
• Format TBA

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Decision Making for Sustainability Team
Project (50%)
• Topic selection
o Concerns/addresses issues related to sustainability
o Singapore-based, from the past 5 years (2020 onwards) or ongoing
o Involves aspects of uncertainty and risk

• Data collection
o Secondary data: information from credible news sources, journals,
organization’s website/handbook, etc.
o Primary data: company visits, in-depth interviews, surveys, focus groups, etc.

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Decision Making for Sustainability Team
Project (50%) cont.

• Graded components
o Written proposal (5%; 1-page, Week 6)
o Project presentation (35%; 15-min + 10-min Q&A, Weeks 12/13)
o Executive summary (10%; not exceeding 2 pages, same due date as
presentation slides)

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What is Sustainability?

Source: https://sustainability-success.com/three-pillars-
of-sustainability/
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Decision Making for Sustainability Team
Project (50%) cont.

• Preliminary topic selection

o Top choice, 2nd choice
o Submit through Canvas by Week 4 Friday

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Recap
• Introduction & team formation
• Challenges of decision making
• Course topics and requirements

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Next week
Ethical Decision Making
Complete assigned readings on Canvas

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