Guidelines for submissions: You are expected to apply theories you have learned in class to discuss...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Guidelines for submissions: You are expected to apply theories you have learned in class to discuss and provide answers to case study questions. Write-ups should be within 2 pages and single spaced (12 times new roman) and submitted in Word or PDF. Case Study 2: Bounded Awareness: What you fail to see 家得宝 You can do it. We can help. CLOSED Home Depot, a Fortune 500 company serving do-it-yourselfers (DIYs)' has thrived in markets around the world, so executives figured it would be successful in China. In 2006 the company bought 12 stores and stocked them with tools and materials, and waited for profits to roll in. It didn't happen. After six years of effort, Home Depot shut its seven remaining stores, fired 850 Chinese workers, and reported an expected $160 million loss. The company failed in China because it overlooked a simple fact- China isn't a DIY market. Given how cheap labor is, most middle-class Chinese consumers contract out heir repairs. How could the company have missed this? Home Depot's experience in China is far from unusual. There are many examples of project disasters where critical information that in retrospect seems obvious was overlooked. An example of a case where information was known, but not acted upon, is the drug company Merck's delayed decision to withdraw its pain relief drug Vioxx from the market. Evidence of the drug's risks was reported in a medical journal in the year 2000, but Vioxx was still being sold in 2004. It's been estimated that by the time the drug was recalled it may have been associated with as many as 25,000 heart attacks and strokes. The delay in taking action cost Merck dearly-over $200 million has been awarded in claims. Why didn't Merck withdraw the drug sooner? The warning was available, but it was ignored Research shows there are significant bounds on people's ability to access information and successfully use it to make reasoned decisions. Max Bazerman and Dolly Chugh describe this phenomenon "bounded awareness". Bounded awareness is distinct from cognitive bias. Cognitive biases cause people to make irrational choices that produce undesired results. Bounded awareness, on the other hand, can cause even people using completely rational decision processes to make choices that produce undesired results. Bounded awareness is different from bounded rationality in that bounded awareness is about individual and organizations that do not 'see' readily accessible and perceivable information during the decision making process, while 'seeing' other equally-accessible and perceivable information and as a result, useful information remains out-of-focus for the decision-maker. Bounded awareness is a serious problem. Rather than make use of all information necessary to make an informed decision, people attend to only the limited set of data that is most directly in front of them and fail to seek out other data that is clearly needed. People, especially when overly focused, fail to recognize and detect changes to what should be obvious visual, auditory and other sensory data and routinely overlook information that can be crucial for decision making. If not countered, the various manifestations of bounded awareness described here can seriously degrade one's ability to make the right choices. Questions 1. How does bounded awareness affect decision making? 2. Why do you think bounded awareness occurs? You can discuss this in terms of individual, team or organizational levels. 3. What are or organizational design elements that you could recommend to help minimize dangers of bounded awareness? Guidelines for submissions: You are expected to apply theories you have learned in class to discuss and provide answers to case study questions. Write-ups should be within 2 pages and single spaced (12 times new roman) and submitted in Word or PDF. Case Study 2: Bounded Awareness: What you fail to see 家得宝 You can do it. We can help. CLOSED Home Depot, a Fortune 500 company serving do-it-yourselfers (DIYs)' has thrived in markets around the world, so executives figured it would be successful in China. In 2006 the company bought 12 stores and stocked them with tools and materials, and waited for profits to roll in. It didn't happen. After six years of effort, Home Depot shut its seven remaining stores, fired 850 Chinese workers, and reported an expected $160 million loss. The company failed in China because it overlooked a simple fact- China isn't a DIY market. Given how cheap labor is, most middle-class Chinese consumers contract out heir repairs. How could the company have missed this? Home Depot's experience in China is far from unusual. There are many examples of project disasters where critical information that in retrospect seems obvious was overlooked. An example of a case where information was known, but not acted upon, is the drug company Merck's delayed decision to withdraw its pain relief drug Vioxx from the market. Evidence of the drug's risks was reported in a medical journal in the year 2000, but Vioxx was still being sold in 2004. It's been estimated that by the time the drug was recalled it may have been associated with as many as 25,000 heart attacks and strokes. The delay in taking action cost Merck dearly-over $200 million has been awarded in claims. Why didn't Merck withdraw the drug sooner? The warning was available, but it was ignored Research shows there are significant bounds on people's ability to access information and successfully use it to make reasoned decisions. Max Bazerman and Dolly Chugh describe this phenomenon "bounded awareness". Bounded awareness is distinct from cognitive bias. Cognitive biases cause people to make irrational choices that produce undesired results. Bounded awareness, on the other hand, can cause even people using completely rational decision processes to make choices that produce undesired results. Bounded awareness is different from bounded rationality in that bounded awareness is about individual and organizations that do not 'see' readily accessible and perceivable information during the decision making process, while 'seeing' other equally-accessible and perceivable information and as a result, useful information remains out-of-focus for the decision-maker. Bounded awareness is a serious problem. Rather than make use of all information necessary to make an informed decision, people attend to only the limited set of data that is most directly in front of them and fail to seek out other data that is clearly needed. People, especially when overly focused, fail to recognize and detect changes to what should be obvious visual, auditory and other sensory data and routinely overlook information that can be crucial for decision making. If not countered, the various manifestations of bounded awareness described here can seriously degrade one's ability to make the right choices. Questions 1. How does bounded awareness affect decision making? 2. Why do you think bounded awareness occurs? You can discuss this in terms of individual, team or organizational levels. 3. What are or organizational design elements that you could recommend to help minimize dangers of bounded awareness?
Expert Answer:
Answer rating: 100% (QA)
1 How does bounded awareness affect decisionmaking Bounded awareness is the inability to locate the need for the required information while considering other pieces of information which are not helpfu... View the full answer
Related Book For
Financial accounting
ISBN: 978-0136108863
8th Edition
Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas
Posted Date:
Students also viewed these general management questions
-
A Fortune 500 company that we shall call Heavy is a manufacturer of machinery and engines. This company is headquartered in a small city in the midwestern region of the United States. This companys...
-
You are expected to have the gift bags in Problem ready at 5 P.M. However, you need to personalize the items (monogrammed pens, note pads, literature from the printer, etc.). The lead time is 1 hour...
-
In the discussion forum, you are expected to participate often and engage in deep levels of discourse. Please post your initial response as early as possible and continue to participate throughout...
-
Advertising plays a major role in the ______________ stage of the product life cycle, and_______________ plays a major role in the maturity stage.
-
Trins Freight purchased a new shipping truck on August 1, 2008, for $27,000. The truck is estimated to last for six years and will then be sold, at which time it should be worth nothing. The company...
-
Classify the following accounts as real, personal or nominal: 1. Bank Account 2. Furniture Account 3. Salary Account 4. Cash Account 5. Rent Outstanding 6. Bank Overdraft 7. Capital Account 8. Sales...
-
Following is an audit working paper that documents an auditor's work for Sempier & Fiske, Inc.'s accrued property taxes payable for the year ended December 31, 1999. Sempier & Fiske is a first year...
-
Presented below is information related to Aaron Rodgers Corporation for the current year. Instructions Compute the ending inventory , assuming that (a) Gross profit is 45% of sales; (b) Gross profit...
-
What insights from neuroscience can inform the practice of mediation, particularly in terms of understanding the neurophysiological processes underlying empathy, perspective-taking, and negotiation...
-
King's Landing is a large amusement theme park located in Virginia. The park hires high school and college students to work during the summer months of May, June, July, August, and September. The...
-
Create the T accounts for the submitted transactions. Carlos Rodrguez started a business dedicated to construction. During the first month, the following transactions were carried out: February 1...
-
On November 1 2 , XYZ Corporation declared a total cash dividend of $ 4 5 , 0 0 0 for stockholders of record on November 2 0 and payable on December 1 . ( a ) Journalize the entries required on...
-
When purchasing books on amazon, customers are shown other books and it is mentioned that customer who purchased your book also purchased these. this is an example of what?
-
How can you improve your relationship with God? How does this resolution help keep faith?
-
Indicate in which section of the balance sheet each of the accounts would be classified. Put parentheses around the account used if it represents a contra account. If the account does not appear on...
-
How many hats must Anthony sell to break even if his supplier raises the price of the hats to $ 2 1 per hat?
-
Using research and learning from this course, analyze and integrate (not just copy or describe) Sloane's findings about Forever Homes Inc. in the accompanying case study, and outline realistic best...
-
A seasonal index may be less than one, equal to one, or greater than one. Explain what each of these values would mean.
-
Sponsor Corporation reports short-term investments on its balance sheet. Suppose a division of Sponsor completed the following short-term investment transactions during 2010: Requirement 1. Prepare...
-
Greentea Corporation earned net income of $95,000 during the year ended December 31, 2010. On December 15, Greentea declared the annual cash dividend on its 6% preferred stock (11,000 shares with...
-
West Sides Pizza bought a used Nissan delivery van on January 2, 2010, for $19,000. The van was expected to remain in service for four years (36,000 miles). At the end of its useful life, West Sides...
-
List eight essential properties that influence usability and effectiveness analysis models. Give brief description for each property.
-
Explain main disadvantages of starting analysis from scratch for each project.
-
What does a pattern representa complete system or a specific commonly occurring problem?
Study smarter with the SolutionInn App