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MG110: Judgement and Decision Making for Management

Professionals with at least 2 years of work experience in the area may wish to consider the Executive Summer School: Strategic Decision Making for Management|

Session: One
Prerequisites: None, although quantitative skills would be an advantage

Dr Barbara Fasolo
Dr Gilberto Montibeller

Decision making is a central aspect of virtually every management and business activity; important decisions are not only made by managers and entrepreneurs, but also by the consumers of their goods and services, and by their business rivals, partners and employees. The ability to understand how decisions are made, and to predict, guide and improve those decisions, will be an invaluable part of every manager’s toolbox. It is this ability that will be developed in this course. 

Some decisions are impossible to make analytically, for lack of time, data, computational ability, or awareness. These are situations that could put decision makers at risk of falling into systematic biases and errors. The first part of this course will raise your awareness about these ‘traps’ with a view to becoming a better intuitive decision maker. Other decisions are made with and require extensive thought and analysis, as the stakes are high, there are multiple conflicting objectives to balance, and many sources of uncertainty about the future. To these decisions we will devote the second half of the course, where you will learn how to structure decision problems, identify relevant objectives and make trade-offs among them when objectives are in conflict with one another, as well as, represent and analyse the main uncertainties and risks involved in a decision.

Questions that will be answered in this course include: how to choose in tough situations where stakes are high, and there are multiple conflicting objectives? How should we plan? Why do projects often take longer and cost more than planned? How can we deal with risks and uncertainties involved in a decision? How can we create options that are better than the ones originally available? How can we become better decision makers? In the lectures you will learn about cutting-edge research in decision-making and analysis, and then in class investigate how it can be applied to both business and personal life. Amongst the many topics considered will be: decision analysis, decision maker and consumer behaviour, decision making by groups and organisations, and evidence-based decision making. You will also learn how to use sound decision-making principles and simple decision-analytic tools to make better decisions.

The course requires active participation in classroom activities that bring to life the principles being discussed.

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Texts

M. Bazerman, Judgment in Managerial Decision Making.  New York: Wiley. 6th edition (2006).

Goodwin, P and Wright, G. (2009) Decision Analysis for Management Judgment. Chichester, Wiley, 4th Ed.

Hammond, Keeney and Raiffa, Smart Choices. Harvard Business School Press: Boston. (1999)

These texts are recommended for background reading, and as a resource. Throughout the course chapters and articles will be assigned and distributed electronically.

Lectures: 35 hours     Classes: 13 hours
Assessment: Class attendance, participation, assignments and two examinations

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LSE Summer School
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LSE Summer School