Samenvatting-LBDM - Leadership and
Behavioral Decision making Summary
,Samenvatting Leadership and behavioral decisionmaking
Overview of the BDM course module
Chapter 1: Misbehaving
• Online materials: BE brain map and background literature (September 30 th)
• Preparatory reading assignment for workshop 1 (September 30th)
• Workshop 1 (October 7th)
• Small group debating and reflection
• Playing the irrational card game
Chapter 2: The behavioral science of justice and morality
• Online materials and background literature (week Oct 5th-9th)
• Preparatory reading and video for workshop 2 (week Oct 5th-9th)
• Workshop 2 (October 14th)
• Small group debating and reflection
• Role play exercise – Organizational justice
• Short mock exam to get acquainted with answering multiple choice
1) Individual part (January):
• A set of multiple choice questions: classical correction for guessing (each question: 4
answer options, only 1 correct; + 1 for correct answer, -1/3 for wrong answer, 0 if left
unanswered)
• Some questions based on the behavioral decision-making course materials
• Some questions based on the leadership framework course materials
2) Group part (January):
• Co-evaluation of your group assignments: I attend your group presentations and will
evaluate based on the extent to which you integrated BDM materials in the
presentation.
CH1: MISBEHAVING Behavioral science’s impact on leadership and
organizational decision-making is premature
External framing: “People are at the heart of our company” (employer branding, customer
orientation)
Internal experience: Employees seldomly experience that they are at the heart of the
company because HR and general management theories and practices are often based on
outdated knowledge of human psychology
-”best practices” approach (we’ll learn that human behavior depends on the context)
People want to learn from what worked in certain organizations. They copy paste their
practices but they don’t realize that this always has success, it’s really dependent on the
context!
,-”one size fits all” (loss of potential, inadequate use of strengths, and diversity)
People are managed all in the same way, they’re getting the same incentives and there’s
not much taking into account or specific needs. They’re all treated the same, this makes us
lose a lot of potential. The benefit of accessing diversity in a certain way is not getting
embraced.
- Relying on incorrect assumptions about human behavior (dominance of neoclassical
economic theory)
Need for focus on leadership and decision-making from a behavioral scientific perspective
Designing more effective policies and higher quality human relationships
See Video link “What motivates us to work?”
Behavioral science has or at least the result of behavioral science has a major impact on
how organizations make decisions, but at this moment this is quite premature, surely if
you compare it to marketing management. It has been applied in a lot of these fields, but
the HRM field is really lacking behind.
It’s very remarkable that today’s companies emphasizes to the outside’s world, a lot of
employer branding and framing that customers come first. But if you look at the
experiences of the employers itself, they rarely feel this way. This is because it is based on
outdated human psychology.
Example of relevance to HR and general management: representativeness bias
Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a
student, she was deeply concerned with issues of discrimination and social justice, and also
participated in anti-nuclear demonstrations.
Which is more probable?
A. Linda is a bank teller.
B. Linda is a bank teller and is active in the feminist movement.
Most likely people will say that Linda is a bank teller and active in the feminist
movements. This might really fit the description of Linda but this is also a frame effect,
being active in the feminist movement is a sub category, only a few people are active in
this movement. This is an extra event and decreases the probability!
What is behavioral decision-making?
• Decision making based on insights from behavioral economics research
• Behavioral Economics (BE): Adding behavioral scientific insights (e.g., cognitive and
social psychology) to economic analysis in order to strengthen economics in its own
domain (e.g., effective policy-making)
, • Emerged about 40 years ago as a collaboration between Richard Thaler (financial
economist), Daniel Kahneman and Amos Tversky (two cognitive psychologists)
• Focus: Human judgment and decision-making under circumstances that involve risk
or uncertainty
Economics is busy with adding behavioral insides to design more effective policy making.
This policy making influences the behavioral of people in an aligned way with what the
policy intended.
The focus on behavioral decision-making is based on how people judge events,
perceptions about situations, etc. And importantly it does not consider decision-making
and judgement in objectively certain situations, but in situations which has a uncertain
level of risk.
Leading behavioral economists
Richard Thaler, Danny Kahneman, Dan Ariely, and Francesca Gino
Richard Thaler & Dannu Kahneman
They both got the Nobel price for economics.
Danny Kahneman
Has done a lot of work in popularizing behavioral economics and bringing the insides in a
really understandable way to a wider audience.
Francesca Gino
Behavioral ethics, also important new work on policy making and the way we design
policies in organizations.
Behavioral Decision making Summary
,Samenvatting Leadership and behavioral decisionmaking
Overview of the BDM course module
Chapter 1: Misbehaving
• Online materials: BE brain map and background literature (September 30 th)
• Preparatory reading assignment for workshop 1 (September 30th)
• Workshop 1 (October 7th)
• Small group debating and reflection
• Playing the irrational card game
Chapter 2: The behavioral science of justice and morality
• Online materials and background literature (week Oct 5th-9th)
• Preparatory reading and video for workshop 2 (week Oct 5th-9th)
• Workshop 2 (October 14th)
• Small group debating and reflection
• Role play exercise – Organizational justice
• Short mock exam to get acquainted with answering multiple choice
1) Individual part (January):
• A set of multiple choice questions: classical correction for guessing (each question: 4
answer options, only 1 correct; + 1 for correct answer, -1/3 for wrong answer, 0 if left
unanswered)
• Some questions based on the behavioral decision-making course materials
• Some questions based on the leadership framework course materials
2) Group part (January):
• Co-evaluation of your group assignments: I attend your group presentations and will
evaluate based on the extent to which you integrated BDM materials in the
presentation.
CH1: MISBEHAVING Behavioral science’s impact on leadership and
organizational decision-making is premature
External framing: “People are at the heart of our company” (employer branding, customer
orientation)
Internal experience: Employees seldomly experience that they are at the heart of the
company because HR and general management theories and practices are often based on
outdated knowledge of human psychology
-”best practices” approach (we’ll learn that human behavior depends on the context)
People want to learn from what worked in certain organizations. They copy paste their
practices but they don’t realize that this always has success, it’s really dependent on the
context!
,-”one size fits all” (loss of potential, inadequate use of strengths, and diversity)
People are managed all in the same way, they’re getting the same incentives and there’s
not much taking into account or specific needs. They’re all treated the same, this makes us
lose a lot of potential. The benefit of accessing diversity in a certain way is not getting
embraced.
- Relying on incorrect assumptions about human behavior (dominance of neoclassical
economic theory)
Need for focus on leadership and decision-making from a behavioral scientific perspective
Designing more effective policies and higher quality human relationships
See Video link “What motivates us to work?”
Behavioral science has or at least the result of behavioral science has a major impact on
how organizations make decisions, but at this moment this is quite premature, surely if
you compare it to marketing management. It has been applied in a lot of these fields, but
the HRM field is really lacking behind.
It’s very remarkable that today’s companies emphasizes to the outside’s world, a lot of
employer branding and framing that customers come first. But if you look at the
experiences of the employers itself, they rarely feel this way. This is because it is based on
outdated human psychology.
Example of relevance to HR and general management: representativeness bias
Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a
student, she was deeply concerned with issues of discrimination and social justice, and also
participated in anti-nuclear demonstrations.
Which is more probable?
A. Linda is a bank teller.
B. Linda is a bank teller and is active in the feminist movement.
Most likely people will say that Linda is a bank teller and active in the feminist
movements. This might really fit the description of Linda but this is also a frame effect,
being active in the feminist movement is a sub category, only a few people are active in
this movement. This is an extra event and decreases the probability!
What is behavioral decision-making?
• Decision making based on insights from behavioral economics research
• Behavioral Economics (BE): Adding behavioral scientific insights (e.g., cognitive and
social psychology) to economic analysis in order to strengthen economics in its own
domain (e.g., effective policy-making)
, • Emerged about 40 years ago as a collaboration between Richard Thaler (financial
economist), Daniel Kahneman and Amos Tversky (two cognitive psychologists)
• Focus: Human judgment and decision-making under circumstances that involve risk
or uncertainty
Economics is busy with adding behavioral insides to design more effective policy making.
This policy making influences the behavioral of people in an aligned way with what the
policy intended.
The focus on behavioral decision-making is based on how people judge events,
perceptions about situations, etc. And importantly it does not consider decision-making
and judgement in objectively certain situations, but in situations which has a uncertain
level of risk.
Leading behavioral economists
Richard Thaler, Danny Kahneman, Dan Ariely, and Francesca Gino
Richard Thaler & Dannu Kahneman
They both got the Nobel price for economics.
Danny Kahneman
Has done a lot of work in popularizing behavioral economics and bringing the insides in a
really understandable way to a wider audience.
Francesca Gino
Behavioral ethics, also important new work on policy making and the way we design
policies in organizations.
