Week 4 Handout for Students

MGX5680 Week 4 Handout Page 1

MGX5680 SEMESTER 1, 2015

WEEK 4 HANDOUT FOR STUDENTS

To be read in conjunction with Week 3 Lecture Slides

Contact details:

Chief Examiner / Lecturer / Tutor : Dr. Robyn Cochrane [email protected] Mail Box 21, Level 7, Building N, Caulfield Campus +61 9905 9974 (business hours)

Action items for Week 4:

1. Students to download the following learning resources located in the Week 4 tab and/or in the folder labelled Assessment information in the Unit Guide tab:

a. Week 4 Lecture Slides b. Readings for Week 4 c. Assessment documents:

i. Task 1_Guide for writing a critical review/annotated bibliography ii. Task 1_Sample formatted template

iii. Task 1_Sample basic annotated bibs on Week 2 readings iv. How to write an annotated bibliography/critical review powerpoint presentation v. Quick guide to APA referencing

vi. Active reading and writing guide vii. Task3_ Reflective Writing Instructions

viii. Assessment rubrics for all assessment tasks 2. Students will need regular access to the prescribed textbook hard copy format or e-text is suitable for this Unit.

Bazerman, M.H. & Moore, D.A. (2013) Judgment in Managerial Decision Making (8th ed). Wiley, USA.

Discussion/reflection questions from the Week 4 Lecture Slides: Slide 12: There is a range of slang, labels and jargon surrounding overconfidence used in general conversations

and the workplace. On your own or with a partner, identify some words or labels commonly used when someone shows signs of overconfidence (overprecision, overestimation or overplacement).

Slide 18: Do these descriptions of overconfidence sound familiar? On your own or with a partner, identify examples of overconfidence in your workplace (real or fictitious). What workplace problems can be caused by overconfidence?

Preparation recommended for Week 5:

Topic: Common biases Review the Week 5 readings Submit the critical review (Assessment Task 1) Commence the essay and review the resources (Assessment Task 2) Continue with reflective writing (Assessment Task 3)


Activities from the Week 4 Lecture Slides: Slide 13: Overconfidence a self-check: answers are 1513, 191, 206, 10,543, and 9,500,000. On occasions, we are more confident than we deserve to be regarding the accuracy of our own knowledge. Slide 21: How susceptible are you to overconfidence? Click hyperlink and complete online quiz. See appendix 1 self-evaluation handout

Slide 22: Reducing and managing overconfidence What actions can we take to reduce overconfidence in managerial problem solving and decision making in

our workplaces?


What if we do not reduce overconfidence in managerial problem solving and decision making in our workplaces?


How can we use our knowledge of overconfidence to build a business case to secure increased resources for our team/project?

Explanatory or additional content to consider for selected Week 3 Lecture slides:

After Slide 21 (new content) Insights from the Week 4 readings. Libby and Rennekamp (2012): Using an abstract experiment involving 47 MBA students from a university in

the USA and survey of 109 experienced financial managers, the authors examine the relationships between self-serving internal attributions and stable individual trait overconfidence (dispositional optimism and miscalibration) with confidence in improved future performance and commitment to issue forecasts. The authors conclude at least one additional factor in the decision to provide forecasts may be the managerial overconfidence that results when positive past performance leads managers to engage in self-servicing attribution to explain their positive performance. In turn, this self-serving attribution can lead managers to be too confident that future performance will improve evidence of overconfidence in managerial decision making is widespread.

Helzer and Dunning (2012): examine self and peer predictions to determine why peer predictions tend to exhibit significantly more accuracy, particularly when it comes to optimistic bias. The authors propose that people are prone to an agency bias giving greater weight to agentic aspects of their character in self-predictions than they do in predictions involving other people. For others, they give heavier weight to the persons past behaviour as an indicator of future action and achievement because the past is often an accurate prologue to the present thus avoiding the overoptimism seen in self-predictions. Study 1: Survey data - 42 undergraduate students in the USA - focussing on predicting exam performance. Study 2: two waves of 131 participants in two mid-level large lecture psychology classes which resulted in 103 sets of yoked pairs. Study 3: laboratory study of 121 students in psychology courses involving two replicated studies focusing on information giving and wanting and peer prediction with full information. Findings: Participants predictions reflected far more than on their target score than their past performance score and participants valued the target score for self-prediction more than they did for peer prediction. Peer predictions were as closely related to actual performance as self-predictions. Peer- and self-predictions were too optimistic relative to actual performance with self-predictions proving significantly more optimistic than peer predictions. Self- and peer-predictions given full information displayed virtually identical relationships to actual performance; however, self-predictions were more optimistic compared with peer predictions. Although people had insight about how best to predict their peers, they failed to apply that insight to forecasting themselves feedback fails to lead people toward either better performance or more accurate self-insight. Instead, people seem to choose to dwell in blissful ignorance of their incompetence.


So what practical implications: Ask how would someone else expect me to perform? If someone else had the same performance record and

goals as I do, how would I expect them to perform? Stick to actuarial predictions, ignore the target of prediction altogether. Taking the average of past

performance and allowing for a reasonable margin of error will result in accurate predictions much of the time

Ask another person to predict ones own future behaviour in some cases, the wisdom from close others or from professionals can be absolutely necessary for guiding people toward an acknowledgement of their past behaviour and toward tempering their overly agentic predictions.

Be mindful of when self-predictions are most likely to be flawed, relative to peer prediction and reality.


APPENDIX 1 How susceptible are you to overconfidence self-evaluation some questions to reflect upon

Work locus of control: The questions presented in Table 1 below capture respondents feelings of internality and externality regarding their

beliefs about work in general.

Table 1: Work locus of control

Strongly

disagree

Disagree

Slightly

disagree

Neither

agree or

disagree

Slightly

agree

Agree Strongly

agree

Total

*People can pretty much

accomplish whatever they set out

to in their jobs

*If you know what you want out of

a job, you can find a job that gives

it to you

Getting the job you want is mostly

a matter of luck

Promotions are usually a matter of

good fortune

*Promotions are given to people

who perform well on the job

It takes a lot of luck to be an

outstanding person when

performing a job

*People who perform their jobs

well generally get rewarded

The main difference between

people who make a lot of money

and people who make a little

money is luck

Note: *denotes negatively-worded statement

Self-efficacy: The questions presented in Table 2 capture respondents feelings of self-belief and how respondents see themselves in coping

with the difficulties and demands of their work as well as able to achieve work goals and ability to handle whatever comes their way.

Table 2: Self efficacy

At work

Not at

all

true

Mostly

untrue

Slightly

untrue

Slightly

true

Mostly

true

Completely

true

I remain calm when facing difficulties in

my job because I can rely on my

abilities

when I am confronted with a problem

in my job, I can usually find several

solutions

I can usually handle whatever comes

my way in my job

my past experiences in my job have

prepared me well for my occupational

future

I meet the goals I set for myself in my

job

I feel prepared for most of the

demands in my job

Documents

Week 4 Handout for Students