- 03 Oct 2007
- Research & Ideas
Dealing with the ‘Irrational’ Negotiator
"Negotiators who are quick to label the other party 'irrational' do so at great potential cost to themselves," say HBS professors Deepak Malhotra and Max H. Bazerman. Their new book, Negotiation Genius, combines expertise in psychology with practical examples to show how anyone can improve dealmaking skills. In this excerpt, Malhotra and Bazerman describe what to do when the other party's behavior does not make sense. Open for comment; 0 Comments.
- 01 Oct 2007
- Research & Ideas
Encouraging Dissent in Decision-Making
Our natural tendency to maintain silence and not rock the boat, a flaw at once personal and organizational, results in bad—sometimes deadly—decisions. Think New Coke, The Bay of Pigs, and the Columbia space shuttle disaster, for starters. Here's how leaders can encourage all points of view. Key concepts include: All organized human groups are susceptible to suppression of views deemed contentious or disruptive to an organization's foundational beliefs. Decisions are seldom better for silence, and overcoming that is a key task for the leader of any organization. Candor should be rewarded and incentives designed to encourage opposing points of view. An aware, open, and inquiring senior team is critical to sound decision-making. Closed for comment; 0 Comments.
- 06 Sep 2007
- Working Paper Summaries
Why We Aren’t as Ethical as We Think We Are: A Temporal Explanation
People commonly predict that they will behave more ethically in the future than they actually do. When evaluating past (un)ethical behavior, they also believe they behaved more ethically than they actually did. These misperceptions, both of prediction and of recollection, have important ramifications for the distinction between how ethical we think we are and how ethical we really are, as well as understanding how such misperceptions are perpetuated over time. This paper draws on recent research in psychology and decision-making to gain insight into these forces. It also provides recommendations for reducing them. Key concepts include: All individuals have an innate tendency to engage in self-deception around their own ethical behavior. Organizations worried about ethics violations should pay attention to understanding these psychological processes at the individual level rather than focus solely on the creation of formal training programs and education around ethics codes. Closed for comment; 0 Comments.
- 16 Jul 2007
- Research & Ideas
Understanding the ‘Want’ vs. ’Should’ Decision
Pizza or salad? Consumers use different approaches to buying things they want (pizza) versus items they should buy (salad). In their research on online grocery-buying habits and DVD rentals, Harvard Business School's Katy Milkman and Todd Rogers, along with Professor Max Bazerman, provide insights on the want-should conflict and the implications for managers in areas such as demand forecasting, consumer spending habits, and effective store layout. Key concepts include: People often behave as if they possess multiple selves with different, competing interests—the "want-self" versus the "should-self." The want-self demands instant gratification while the should-self looks to longer-term interest. Online grocery shoppers order healthier groceries when ordering for delivery in the distant future (i.e., 5 days from now) than when ordering for delivery tomorrow. Grocery stores that locate the produce section ("should" buy) near the entrance have this figured out. Online and catalogue retailers should anticipate that the further in advance of delivery an order is placed, the less a customer is likely to spend. Closed for comment; 0 Comments.
- 28 Jun 2007
- Working Paper Summaries
Film Rentals and Procrastination: A Study of Intertemporal Reversals in Preferences and Intrapersonal Conflict
Throughout our lives, we face many choices between activities we know we should do and those we want to do. Examples of such choices include whether or not to visit the gym, to smoke, to order a greasy pizza or a healthy salad for lunch, and to watch an action-packed blockbuster or a history documentary on Saturday night. Using data on consumption decisions over time from an Australian online DVD rental company, this paper investigates how and why individuals make systematically different decisions when their choices will take effect in the present versus the future. Key concepts include: The more "should watch" characteristics and the fewer "want to watch" characteristics a DVD has, the longer an individual will postpone watching that DVD. Companies that loan goods to consumers and are interested in predicting return times may be better able to forecast borrowing times based on the extent to which the items are "should" or "want" goods. Consumers may be better able to take steps that curb impulsive behavior. Closed for comment; 0 Comments.
- 05 Jun 2007
- Working Paper Summaries
Leading and Creating Collaboration in Decentralized Organizations
No matter how a multi-divisional organization is designed, it will need to find effective ways for its units to spontaneously and responsively cross boundaries. This paper discusses 3 key barriers to collaboration and information-sharing within an organization, and offers 3 strategies to overcome them. Key concepts include: The first barrier is intergroup bias: the systematic tendency to treat one's own group or its members better than another group and its members. Company funding, access to markets, intellectual property rights, and other organizational assets are all potentially scarce resources over which groups may have to, or feel they have to, compete. Recommendation to counteract this barrier: Link group interests to overarching interests. The second barrier is group territoriality expressed through behavior and physical symbols that separate "us" from "them." Territoriality stems from a group's needs for identity, efficacy, and security. Recommendation: Frame collaboration as the solution to group needs. The third barrier consists of poor strategies that members of different organizational divisions use when they negotiate with each other. Errors include the belief in a "fixed pie" in negotiations, the failure to carefully consider the decision processes of one's negotiation partner, and the failure to recognize opportunities for negotiation in the first place. Recommendation: Enable and encourage effective negotiation skills. Closed for comment; 0 Comments.
- 15 May 2007
- Working Paper Summaries
I’ll Have the Ice Cream Soon and the Vegetables Later: Decreasing Impatience over Time in Online Grocery Orders
How do people’s preferences differ when they make choices for the near term versus the more distant future? Providing evidence from a field study of an online grocer, this research shows that people act as if they will be increasingly virtuous the further into the future they project. Researchers examined how the length of delay between when an online grocery order is completed and when it is delivered affects what consumers order. They find that consumers purchase more "should" (healthy) groceries such as vegetables and less "want" (unhealthy) groceries such as ice cream the greater the delay between order completion and order delivery. The results have implications for public policy, supply chain managers, and models of time discounting. Key concepts include: Consumers spend less and order a higher percentage of "should" items and a lower percentage of "want" items the further in advance of delivery they place a grocery order. Encouraging people to order their groceries up to 5 days in advance of consumption could influence the healthfulness of the foods that people consume. Similarly, asking students in schools to select their lunches up to a week in advance could considerably increase the healthfulness of the foods they elect to eat. Online and catalog retailers that offer a range of goods as well as different delivery options might be able to improve their demand forecasting by understanding these findings. Closed for comment; 0 Comments.
- 31 Jan 2007
- Working Paper Summaries
Behavioral Decision Research, Legislation, and Society: Three Cases
Insights about how people make decisions have enormous importance for society and public policy, yet often behavioral decision findings are overlooked or dismissed in favor of arguments based on sometimes-simplistic economic theory. This is particularly true in Washington, D.C., where Bazerman provided expert testimony in government cases on auditor bias, pharmaceutical company collusion, and big tobacco, respectively. His experiences highlight the barriers to the use of the most appropriate social science under the existing legal and legislative frameworks. In this article that is based on analysis and opinion, he tells what happened and reflects on the need for social sciences, in addition to economics, to be brought to the legal and policy-making domains. Key concepts include: Economic logic lies behind preventable disasters that range from accounting scandals to the many avoidable deaths resulting from the U.S. organ donation system. Creating wise policies in society means updating our understanding of unconscious or unintentional processes in decision making and recognizing how social science today is based on rigorous science. Economic logic plays an important role in the policy-making process, but it should not be used at the expense of other social science knowledge. A smoking gun is not necessary to show that an institution is set up to encourage wrongdoing. For behavior-decision reasons, organizations are likely to prefer a status quo. Too often, when it comes to public policy, the status quo either prevails or inappropriately influences future activity. Closed for comment; 0 Comments.
- 22 Dec 2006
- Working Paper Summaries
Future Lock-in: Or, I’ll Agree to Do the Right Thing...Next Week
Most of us believe that we should make certain choices—save more money or reduce gas consumption, for example—but we do not want to carry out these choices. In psychology this tension has been referred to as a "want/should" conflict. Rogers and Bazerman show through four experiments that people are more likely to choose what they believe they should choose when the choice will be implemented in the future rather than in the present, a tendency they call "future lock-in." They also discuss directions for future research and applications for public policy, an arena in which citizens are often asked to consider binding policies that trade short-term interests for long-term benefits. Key concepts include: Tension occurs between an individual's immediate self-interest and the interests of all others, including his or her own "future self." Individuals tend to think that their future selves will behave more virtuously than their present selves. Four studies demonstrated the future lock-in effect, which describes a person's increased willingness to choose and support a binding "should-choice" when it is to be implemented in the future rather than in the present. Policymakers could leverage the benefits of future lock-in by advocating for reforms that would be decided upon in the present, but go into effect in the future. Future lock-in would encourage citizens to more heavily weight a policy's abstract merits rather than its concrete costs. Closed for comment; 0 Comments.
- 31 Jul 2006
- Research & Ideas
When Not to Trust Your Gut
Most of us trust our intuition more than we should, especially when the pressure is on in negotiations. Professors Max Bazerman and Deepak Malhotra on negotiating more rationally. From Negotiation. Key concepts include: Too much trust in intuition can lead to irrational decisions. Employ "System 2" thinking to apply logic even in times of stress and indecision. In negotiations, schedule more time than you think you will need. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Maximizing Joint Gains: Transaction Utility Within and Between Groups
Win-win deals are more easily described than carried out. Earlier studies have shown that when people don't know the gender or social category of their negotiating partner, they are happy to make a profit even if their partner earns a greater profit. Four new studies looked at how gender or other social contexts influence the way people cut a deal. Key concepts include: Social category in context is key to negotiation. What we consider a good deal within our own social category may be a worse deal when we compare ourselves to members of a different social category. "Maximizing the pie" in negotiation may be more difficult across social category lines (e.g., countries, regions, etc.). Brokering win-win deals across national, cultural, and religious lines therefore requires special care. Closed for comment; 0 Comments.
- 30 Jan 2006
- Research & Ideas
Looking Behind Bad Decisions
In a recent HBS Working Paper, HBS professor Max Bazerman and colleagues explore how biases and human psychology impede policy-making efforts that could vastly improve people's lives. Closed for comment; 0 Comments.
- 27 Jun 2005
- Research & Ideas
The Potential Downside of Win-Win
You and your negotiating partner may reach a wonderful agreement for both parties, but have you forgotten people who aren't at the bargaining table, such as your consumers? HBS Professor Max H. Bazerman reflects in this article from Negotiation. Closed for comment; 0 Comments.
- 25 Oct 2004
- Research & Ideas
Planning for Surprises
A company doesn't need a crystal ball to see impending disasters. Harvard Business School professor Max H. Bazerman and INSEAD professor Michael D. Watkins explain how to foresee and avoid predictable surprises. Closed for comment; 0 Comments.
- 07 Apr 2003
- Research & Ideas
Three Steps for Crisis Prevention
Can you predict a business disaster? In this Harvard Business Review excerpt, professors Michael D. Watkins and Max H. Bazerman outline the keys for disaster prevention: recognition, prioritization, and mobilization. Closed for comment; 0 Comments.
- 09 Dec 2002
- Research & Ideas
Most Accountants Aren’t CrooksWhy Good Audits Go Bad
The Sarbanes-Oxley Act sets stiff penalties for auditors and executives who commit fraud. Problem is, says Harvard Business School professor Max H. Bazerman and his collaborators, most bad audits are the result of unconscious bias, not corruption. Here's a new look at how to audit the auditors. Closed for comment; 0 Comments.
- 17 Sep 2001
- Research & Ideas
Is There Help for the Big Ticket Buyer?
Buying a house, buying a car, investing for retirement. These are among the most important purchasing decisions people make. But who is there to advise them? HBS professor Max H. Bazerman has some ideas. Closed for comment; 0 Comments.
- 04 Sep 2001
- Research & Ideas
- 04 Sep 2001
- Research & Ideas
Is Government Just Stupid? How Bad Decisions Are Made
Why is it that politicos make such poor decisions? The authors of "You Can't Enlarge the Pie" suggest that government leaders could benefit from basic decision-making skills. Plus: Q&A with HBS professor Max Bazerman. Closed for comment; 0 Comments.
Harnessing Our Inner Angels and Demons: What We Have Learned About Want/Should Conflicts and How That Knowledge Can Help Us Reduce Short-Sighted Decision Making
Many of the most important problems facing the world today are exacerbated by myopic decision-making. Examples include climate change, under-saving for retirement, deficit spending, and obesity. As observed by Freud, contemporary psychologists and researchers, and entertainers, people everywhere struggle to choose between doing what they want to do and what they should do. This paper synthesizes 15 years of empirical explorations of this "want/should" conflict and discusses the most important applications of this work. The results of recent studies have the potential to help individuals and policymakers by arming them with insights about how to increase the chances that they and their constituents, respectively, will favor options that are in their best interest. Key concepts include: Knowledge of the want/should self could help individuals and policymakers learn how to design circumstances that steer people away from making impulsive, short-sighted decisions. Closed for comment; 0 Comments.