Problem 1-4 (15 minutes)
The type of cognitive bias revealed by this data is called self-enhancement bias. This bias occurs when people overstate their strengths and understate their weaknesses relative to others. This bias may cause managers to be overly-optimistic when making plans for the future. This bias might also cause managers to readily blame others if control data indicates unsatisfactory performance. It can also lead managers to make poor decisions because they believe their managerial prowess can overcome any potential obstacles revealed by an objective data analysis. Managers can help reduce the potential adverse consequences of self-enhancement bias by establishing a “devil’s advocate” team of independent managers that are charged with challenging proposed courses of action.
Problem 1-5 (20 minutes)
Some possible examples for each activity:
Planning activities:
- Estimating the advertising revenues for a future period.
- Scheduling the designated broadcast time slot for games, special programming, news shows, etc.
- Estimating total expenses for future periods including salaries of news desk anchors, play-by-play analysts, researchers, camera crew personnel, etc.
Directing and motivating activities:
- Scheduling news desk anchors for each day’s news broadcasts.
- Assigning camera crew employees to cover specific events (e.g., games, press conferences, etc.).
- Reviewing scripts used by news desk anchors for accuracy, clarity, etc.
- Providing performance incentives for news anchors based on viewership numbers.
Controlling activities:
- Contrasting the actual number of viewers for each show or game with its viewership projections.
- Comparing the actual costs of producing a broadcast of a sporting event (e.g., hockey game) to its budget.
- Comparing the advertising revenues earned from broadcasting a sporting event to the costs incurred to broadcast that event.
Decision-making activities:
- Determining which news anchor personnel to sign to contracts.
- Identifying and evaluating a new product line to complement the network’s offering, such as a sport popular in foreign markets but not covered in North America.
- Determining which specific games to broadcast in each sport carried by the network.
Problem 1-6 (20 minutes)
The purpose of this exercise is to present students with an opportunity to debate the ethicality of competing courses of action. Some students may argue that the ethical choice is to tell the truth when speaking with the professor from B.C. University. Other students may argue that it is okay to be untruthful with the professor from B.C. University because it serves a “greater good” from the standpoint of future Central Manitoba University students that will be able to avoid Dr. Smith.
The power of rationalization is a very important topic when discussing ethics and decision-making. When students are asked a generic question about the ethicality of breaking the law or lying, they quickly condemn these actions as unethical. However, when given specific contexts, such as the one presented in this problem, many students will rationalize unlawful or dishonest conduct. It is important to emphasize the long-term survival nature of ethical decision making. A culture of treating stakeholders, which includes other universities in this case, honestly and with integrity will provide the school with both the support of the community but also supports a culture that makes it an organization to which people want to belong.
Problem 1-7 (20 minutes)
1. Companies face numerous potential incentives to engage in greenwashing or overstatement of claims about being socially responsible. For example:
- Doing so can improve access to investment capital as some investors will only invest in companies that demonstrate good environmental and social performance.
- Doing so can have a positive impact on the company’s ability to attract and retain talent since some individuals will only work for companies with good environmental and social performance.
- Doing so can bolster sales since some customers will only purchase products or services from companies with good environmental and social performance.