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Week 1 & Week 2: Summary
Lecture 3: Managing Group Decisions & Negotiations
In-Class Exercise: Team Discussion – Preparation for
Assignment 1
Bb Discussion Forum W3: Q & A
AD 715: Quantitative and Qualitative Decision-Making
Class 3 (09/17/2019)
Boston University MET AD715 © Dr. Zlatev, 2019
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C
D
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A
AGENDA
B
Boston University MET AD715 © Dr. Zlatev, 2019 2
Preparation for Class 3
Week
Date
Lectures & Topics Readings Discussion Topics Assignments &
Quizzes
Week 3, 9/17
Lecture 3 - Managing
Group Decisions and
Making Rational Decisions
in Negotiations
Bazerman, Ch.10, 11
e-Reserve
Robbins & Judge, Ch.9,
Ch. 14
Bb Discussion Forum
W3
In-Class Exercise – Team
Discussion &
Preparation for A1
Individual Work: Prepare a first draft of A1 by 9/23
and contribute with questions & suggestions
during our in-class discussion in Class 4 on 9/24,
2019
B
Boston University MET AD715 © Dr. Zlatev, 2019 3
Preparation for Class 3
D
C
C
APPLICATIONS
OF MANAGERIAL
DECISION
MAKING
LECTURE 3:
Managing Group Decision and Making
Rational Decisions in Negotiations
DECISION
ANALYSIS &
SUPPORT IN
BUSINESS
FOUNDATIONS
OF MDM
Conflict and Negotiation
• Conflict Process
• Conflict and Unit
Performance
• Negotiation
• The Negotiation Process
Making Rational Decisions
in Negotiations
• Decision-Analytic Approach
to Negotiations
• Claiming Values in
Negotiation
• Creating Value in
Negotiation
• The Tools of Value Creation
Defining and Classifying Groups
• Formal and Informal Groups
• Stages in Group Development
1. Forming
2. Storming
3. Norming
4. Performing
5. Adjourning
Group Properties
• Roles
• Norms
• Status
• Size
• Cohesiveness
• Diversity
Group Decision Making
• Debating Society, Groupthink,
Group Shift
• Group Decision-Making Techniques
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Defining & Classifying Groups
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Group: Two or more individuals, interacting and
interdependent, who have come together to
achieve particular objectives.
Formal Group: A designated work group defined by an
organization's structure.
Informal Group: A group that is neither formally structured nor
organizationally determined; such
a group appears in response to the need for social contact.
Why do people form groups? Individuals tend to identify
themselves socially as members of a
group for the following reasons:
• Similarity – group members have the same values, beliefs,
and/or demographic similarities
• Distinctiveness – group members share uncommon or rare
characteristics (e.g. demographic,
alma mater)
• Status – group members share non-economical qualities, such
as honor, prestige, and religion
• Uncertainty reduction – group membership helps some people
to understand who they are
and how they fit into the world
1-1
6
EXAMPLE:
Temporary Groups with Time-Constrained Deadlines
(Punctuated-Equilibrium Model)
FIVE-STAGE-GROUP-DEVELOPMENT MODEL
1. Forming; 2. Storming; 3. Norming; 4. Performing; 5.
Adjourning
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Defining & Classifying GroupsB 1-1
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Defining & Classifying GroupsB
Some temporary groups with time-constrained deadlines do not
follow the conventional five-stage model, but another model
with
a unique sequence of actions or inactions (see the figure below),
such as:
1. Initial meeting (A) where the group's direction and the
date for completion (B) have been set up;
2. This first phase of group activity is one of inertia;
3. A transition takes place exactly when the group has used
up half of its allotted time (=A+B)/2);
4. This transition initiates major changes;
5. A second phase of inertia follows the transition;
6. In preparation for the last meeting, the group is
demonstrating markedly accelerated activity.
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Group PropertiesB
Roles Norms Status Size Cohesiveness Diversity
Group members are often characterized as role players,
where a role is defined as a set of expected behavior
patterns attributed to someone occupying a given
position in a social unit (group).
Because each individual can play more than one role,
the others are trying to read her/his behavior and to
understand the role the person is currently playing (at
work, at home, in the church, in the sport club, and so
on).
Defining characteristics here are:
Role perceptions – an individual's view of how she/he is
supposed to act in a given situation
Role expectations – the way others believe a person
should act in a given situation
Role conflict – a situation in which an individual is
confronted by divergent role expectations
All groups have established norms – acceptable standards of
behavior within a
group that are shared by the group’s members. Norms can cover
different
aspects of group behavior, such as:
• performance norms – how to get the job done, levels of output
(per hour,
day, week), what level of delay/interruption is appropriate
• appearance norms – dress codes and other unspoken rules
• social arrangement norms – with whom to eat lunch, whether
to form or
not form friendships (on and off the job)
• resource allocation norms – assignment of difficult jobs,
distribution of
pay or equipment
The individual behavior of a group member can be demonstrated
with three
additional categories:
1. Conformity: the adjustment of one's behavior to align with
the norms of
the others
2. Reference group: important groups to which individuals
belong (or hope
to belong) and with whose norms individuals are likely to
conform
3. Deviant workplace behavior (antisocial behavior; workplace
incivility):
voluntary behavior that violates significant organizational
norms and, in
so doing, threatens the well-being of the organization or its
members
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Group PropertiesB
Roles Norms Status Size Cohesiveness Diversity
Status is a socially defined position or rank given to
groups or group members by others.
Status tends to derive from one of three sources (status
characteristics theory):
• the power a person wields over others
• a person's ability to contribute to the group's goals
and success
• individual personal characteristics
High-status individuals are often given more freedom to
deviate from norms than are other group members. They
are also better able to resist conformity pressures than
their lower-status peers and speak out more often,
criticize more, state more commands, and interrupt
others often.
The size of a group affects the group's overall behavior, but the
effect depends
on the dependent variables: smaller groups are faster at
completing tasks than
are larger ones; if the group is engaged in problem-solving,
large groups
consistently do better.
The effects of the size of a group on the overall group behavior
is often linked to
the tendency for individuals to expend less effort when working
collectively
than when working individually (also called social loafing).
There are several ways to prevent social loafing:
• set group goals, so the group has a common purpose to strive
toward;
• increase intergroup competition, which again focuses on the
shared
outcome;
• engage in peer evaluation so each person evaluates each other
person's
contribution;
• select members who have high motivation and prefer to work
in groups, and
• if possible, base group rewards in part on each member's
unique
contributions
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B
Roles Norms Status Size Cohesiveness Diversity
The final property of groups we consider is
diversity in the group's membership, the
degree to which members of the group are
similar to, or different from, one another.
Culturally and demographically diverse groups
may perform better over time—if they can get
over their initial conflicts.
The impact of diversity on groups is mixed:
• It is difficult to be in a diverse group in the
short term;
• If members can weather their differences,
over time diversity may help them be more
open-minded and creative and to do
better;
• Even positive effects are unlikely to be
especially strong.
The degree to which group members are loyal to each other and
are
motivated to stay in the group is called cohesiveness.
The relationship between group cohesiveness, performance
norms, and
productivity is shown on the figure, below and can be explained
as follows:
• The relationship of
cohesiveness and productivity
depends on the performance-
related norms established by
the group.
• If performance-related norms
are high, a cohesive group will
be more productive.
Group Properties1-2
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B Group Decision Making Comparison of Group Versus
Individual Decision Making
Strengths of group decision making:
• Groups generate more complete information
and knowledge.
• They offer increased diversity of views.
• This opens up the opportunity for more
approaches and alternatives to be considered.
• The evidence indicates that a group will almost
always outperform even the best individual.
• Groups lead to increased acceptance of a
solution.
Weaknesses of group decision making:
• It is time consuming.
• There is pressure towards conformity in groups.
• A few members, or only one, can dominate
group discussion.
• Group decisions suffer from ambiguous
responsibility.
Effectiveness and Efficiency:
• Whether groups are more effective than individuals depends
on
the criteria you use.
• In terms of accuracy, group decisions will tend to be more
accurate.
• On the average, groups make better-quality decisions than
individuals.
• If decision effectiveness is defined in terms of speed,
individuals
are superior.
• If creativity is important, groups tend to be more effective
than
individuals.
• If effectiveness means the degree of acceptance the final
solution
achieves, groups are better.
• In terms of efficiency, groups almost always stack up as a
poor
second to the individual decision maker. The exceptions tend to
be
those instances where, to achieve comparable quantities of
diverse
input, the single decision maker must spend a great deal of time
reviewing files and talking to people.
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B Group Decision Making
Managing Group Decisions: Ideal Group Process
Teams, groups, or committees are excellent decision makers in
many ways and are increasingly used at all organizational
levels.
As anyone who has taken part in a group decision knows,
• teams make better decisions than individuals;
• but some of the absolute worst decisions are also made by
groups.
The quality of the outcomes of the group decision is directly
linked
to the organizational knowledge of how to structure and follow
up
the steps of the managerial decision-making process.
An ideal group process is illustrated in the Figure ‘Managing
Group
Decision (b)
The lesson from this illustration will be confirmed by anyone
who
has led a group:
‘good group processes do not emerge naturally, they must be
managed – and they must be managed well’ [Russo, J.E., &
Schoemaker, P. (2002)]
Managing Group Decisions: Three Possible Models
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B Group Decision Making
Managing Group Decisions: ‘Debating Society’
In groups representing the 'Debating Society' model:
• Discussions drone on and on without resolution or deep,
diverse conflicts occur that lead to a hostile impasse;
• The decision-making process forever expands;
• There is no closure and no action.
Managing Group Decisions: ‘Groupthink’
Groupthink is related to norms: the norm for consensus
overrides the realistic appraisal of alternative courses of
action.
As a result the group is convening too rapidly on the chosen
conclusion. The symptoms of groupthink include:
• Group members rationalize any resistance to the
assumptions they have made.
• Members apply direct pressures on those who
momentarily express doubts.
• Those members who hold differing points of view seek to
avoid deviating from group consensus by keeping silent.
• There appears to be an illusion of unanimity.
Minimizing groupthink is possible if managers:
• keep the group size less than 10 members;
• encourage group leaders to play an impartial role;
• appoint one group member to play the role of devil's
advocate;
• use exercises that stimulate active discussion of diverse
alternatives without threatening the group or intensifying
identity protection.
Another potential enemy of good group decision processes is
the so-called Groupshift (or Group Polarization).
Groupshift describes:
• a change between the group's decision and individual
decision that a member within the group would make;
• a shift that can be toward either conservatism or greater
risk—but generally is toward a more extreme version of the
group's original position.
Managing Group Decisions: ‘Groupshift’
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B Group Decision Making Group Decision-Making Techniques
An idea-generation process that
specifically encourages any and all
alternatives while withholding any
criticism of those alternatives.
• In a typical brainstorming
session, a half dozen to a dozen
people sit around a table;
• the group leader states the
problem in a clear manner, so
that all participants understand;
• The guidance, "Think the
unusual – nobody will criticize,"
encourages individuals to make
unconventional suggestions; all
ideas are recorded for later
discussion and analysis.
Interacting
Groups
Brainstorming
Groups
Nominal
Groups
Electronic
Meeting
Members interact with
each other face to face.
Individual members meet face to face to pool their
judgments in a systematic but independent fashion.
• Discussions or interpersonal communications
during the decision-making process are restricted.
• Group members are all physically present, but
members operate independently.
• A problem is presented to the group meeting by a
moderator (one of the group members).
• Before any discussion takes place, each member
independently writes down ideas related to the
problem.
• After this silent period, each member presents
one idea to the group. No discussion takes place
until all ideas have been presented and recorded.
• The group discusses the ideas for clarity and
evaluates them.
• Each group member silently and independently
puts the ideas in rank order. The idea with the
highest aggregate ranking determines the final
decision.
This is a computer-assisted group meeting,
where members interact on computers, allowing
for anonymity of comments and aggregation of
votes.
• The group meeting is organized in two
possible formats – face to face or online
(video conferencing).
• Technical requirements include individual
participant access to networked computers
with a pre-installed software application (i.e.,
Adobe Connect, Go To Meeting, Echo 360,
Skype).
• Issues are presented to the group members,
and they type their responses into their
computers.
• These individual but anonymous comments,
as well as aggregate votes, are displayed to
all.
• The level of qualification of the moderator
and the initial level of preparation for the
meeting are instrumental for group
effectiveness.
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B Group Decision Making Group Decision-Making
Techniques1-3
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Conflict & NegotiationB 2-1 The Conflict Process
Conflict a process that begins when one party perceives that
another party has negatively
affected (or is about to negatively affect), something that the
first party cares about.
Relationship conflict (i.e., conflict
between individuals in which
perceived differences in style,
background, or values are under
attack) will distract any group from
its productive work.
To manage and control conflicts, decision-makers have to
distinguish
between destructive conflict and productive conflict
COMPETITIVE DECISIONS
POOR CHOICES/DECISIONS
Moderate amounts of Task conflict (i.e., differences of opinion
about the task at hand and how it should completed) are
necessary and valuable if a group decision-making process is
going
to accomplish more than simple groupthink.
• Higher conflict teams have more thorough and creative
discussion of decisions, gain a richer understanding of the
issues, and develop a more cognitively complex prospective.
• In contrast low-conflict teams tend to overlook key issues or
simply avoid analyzing the downside risk of the consensus
option; their understanding of issues is often superficial or
one-sided; and they often make poor choices.
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Conflict & NegotiationB 2-1 The Conflict Process
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Conflict & NegotiationB 2-1 The Conflict Process
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Conflict & NegotiationB 2-1 Negotiation
Distributive Bargaining is negotiation
that seeks to divide up a fixed amount
of resources; a win-lose situation.
Negotiation (or bargaining) a process in which two or more
parties exchange goods or
services and attempt to agree on the exchange rate for them.
There are two general approaches to negotiation – Distributive
Bargaining and Integrative Bargaining
Integrative Bargaining is negotiation
that seeks one or more settlements that
can create a win-win solution
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Conflict & NegotiationB 2-1 Negotiation
THE NEGOTIATION PROCESS:
1. Preparing and Planning
Negotiation Strategy = BATNA = Best Alternative To
a Negotiated Agreement
Develop (i) your BATNA; (ii) the other site BATNA
2. Definition of Ground Rules
3. Clarification and Justification
4. Bargaining and Problem Solving
5. Closure and Implementation
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Conflict & NegotiationB 2-1 Negotiation
THE NEGOTIATION PROCESS:
1. Preparing and Planning
Negotiation Strategy = BATNA = Best Alternative To
a Negotiated Agreement
Develop (i) your BATNA; (ii) the other site BATNA
2. Definition of Ground Rules
3. Clarification and Justification
4. Bargaining and Problem Solving
5. Closure and Implementation
• Defining goals and objectives
• Assessing the other party's goals and objectives
• Developing a negotiation strategy, including
(i) your Best Alternative To a Negotiated Agreement (BATNA)
and
(ii) the other site's BATNA
• Predicting the settlement range
• Who will do the negotiating?
• Where will it take place?
• What time constrains, if any, will apply?
• To what issues will negotiation be limited?
• Will the negotiators follow a specific procedure if an impasse
is reached?
• Preparation and exchange (between the parties) of the initial
proposals
and demands.
• Based on the exchanged initial positions, both parties will
explain,
amplify, bolster, and justify their original demands.
• Both parties are informing and educating each other on the
issues, why
they are important, and how each party arrived at its initial
demands.
• Exchange of any documentation that helps each party to
support its
position.
• The actual give-and-take in trying to hash out an agreement.
• Both parties will undoubtedly need to make concessions.
• Formalizing the agreement.
• Development of procedures necessary for
implementing and monitoring the agreement
• Closure: a formal contract with specifics, or a
handshake.
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Conflict & NegotiationB 2-1 Effective Negotiation
Four factors influence how effectively individuals negotiate
Personality
Mood/emotion
Culture
Gender differences
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Making Rational Decisions in NegotiationsB 2-2
The learning how to think rationally in two-party negotiation is
based on
(i) the examination how individual biases and heuristics are
manifested in the
negotiation contest, and
(ii) the information on cognitive biases created by the
competitive environment
Expectations:
• to present a framework for thinking about two-party
negotiations
• to introduce prescriptive suggestions for improving decision
making within
this context
• to improve the quality of your outcomes as the focal
negotiator
• to improve the total outcomes for all parties
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Making Rational Decisions in NegotiationsB 2-2
The decision-analytic approach to negotiations is based on an
assessment of key sets
of information that will determine the structure of the
negotiation.
• Each party's alternative to a negotiated agreement
• Determining the point (called the reservation point, or
indifference point) at which
the negotiator is indifferent between a BATNA and impasse
• Determining when you would walk away from the bargaining
table and predicting
the same for the other party
• Each party's set of interests
• Identifying the difference between the opposite party's
positions (what they asked
for) and their underlying interests (the motives behind these
positions).
• The relative importance of each party's interest
• To be fully prepared to negotiate, you should know how
important each issue is to
you and have a sense of how important each issue is to your
counterpart
• The best agreements are reached by trading off relatively
unimportant issues for
more important ones
A Decision-Analytic Approach
to Negotiations
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Making Rational Decisions in NegotiationsB 2-2 Claiming
Value in Negotiation
The bargaining zone framework assumes that each party has
some reservation point below (or
above) which the negotiator would prefer impasse to settlement.
Reservation points are set at the value of the negotiator's
BATNA.
• The area where the two reservation points overlap is known as
a positive bargaining zone.
• When the reservation points of the two parties do not overlap,
a negative bargaining zone exists.
• At the point of agreement, when both parties choose a
settlement rather than impasse, their
actual reservation points overlap (this settlement point is one of
many points within the
bargaining zone).
One of the key skills of negotiation is to determine the other
party's reservation point and to aim for
resolution that is barely acceptable to the other party.
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Making Rational Decisions in NegotiationsB 2-2 Creating Value
in Negotiation
Through the process of identifying and adding issues, the
parties have the potential to create value, thereby increasing
the amount of total benefit available
In the process of value creation the two negotiating parties are
discussing the boundaries of a positive bargaining zone:
• by considering each other's interests (not just their stated
positions), and
• by trading off the issue that each party cared less about for the
issue that each party cared more about
Trading on issues to create value occurs whenever
negotiators run into differences with other parties
Creating value by betting on disagreement about
the future (contingent contracts)
The most common form of trade consists of one party making a
concession on one issues in return for a concession on a
different issue
from the other party (such as a lower price in exchange for
faster
payment or a larger quantity of goods). Factors used as trade
accelerators can be:
• differences in risk (risk-sharing strategies)
• differences in time preference – might arise from individual,
cultural,
or situational preferences among the parties
• complimentary skill differences between parties
• other differences (in tax status, accounting treatments,
liquidity, etc.)
There are several ways in which contingent contracts can
improve the outcomes of negotiations for both sides, such as:
• building on differences to create joint values
• helping manage biases
• diagnosing disingenuous parties
• establishing incentives for performance
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Making Rational Decisions in NegotiationsB 2-2 The Tools of
Value Creation
Below are six strategies for collecting that information. The list
begins with strategies
that work best when you trust the other party and continues with
strategies that help
create value when the partnership with the other side is
competitive or even hostile:
Strategy 1 Build trust and share information
Strategy 2 Ask questions
Strategy 3 Strategically disclose information
Strategy 4 Negotiate multiple issues simultaneously
Strategy 5 Make multiple offers simultaneously
Strategy 6 Search for post-settlement settlements
Parties are trying to create optimal value in negotiations but
they often lacked
key information about the other side's interests and positions.
TRUST
TRUST
TRUST
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Who are the stakeholders for Amazon: sellers &
customers
What activities need to be performed to create
and deliver the offerings to the customers?
How are the offerings to the customers created?
Why does the business model create values?
Task 1.2:
Preparation for A1
STEP 4: Writing the
managerial report
Jeff Bezos’ Sketch of Amazon’s “Flywheel Business Model”
Describe the business model of Amazon.com
as of the end of the case (spring 2017)
C In-Class Exercise
NOTE: To learn more about Flywheel Business Model, review
https://www.jimcollins.com/tools/How-does-your-flywheel-
turn.pdf
https://hbr.org/2018/11/replacing-the-sales-funnel-with-the-
sales-flywheel
https://amiusa.org/wp-content/uploads/2012/03/diagnostic-
tool1.pdf
https://www.jimcollins.com/tools/How-does-your-flywheel-
turn.pdf
https://hbr.org/2018/11/replacing-the-sales-funnel-with-the-
sales-flywheel
https://amiusa.org/wp-content/uploads/2012/03/diagnostic-
tool1.pdf
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The history of Jeff Bezos’ Sketch of Amazon’s “Flywheel
Business Model”
https://www.jimcollins.com/tools/How-does-your-flywheel-
turn.pdf
In 2001, Jim Collins presented to Jeff Bezos one of the key
findings
of his book Good to Great, “The Flywheel Effect” as follows:
1. Create a list of replicable successes your enterprise has
achieved.
Variations on an essential idea count as replicable successes.
2. Compile a list of failures and disappointments. This should
include
new initiatives and offerings by your enterprise that failed
outright or
fell far below expectations.
3. Compare the successes to the failures and ask, "What do
these
successes and failures tell us about the possible components of
our
flywheel, and what isn’t in our flywheel?“
4. Using the components you’ve identified, sketch the flywheel.
Where
does the flywheel start—what’s the top of the loop? What
follows
next? And next after that? Each component of the flywheel
should
feed into the next stage of the flywheel. Outline the path back to
the
top of the loop and be able to explain why this loop cycles back
upon
itself to accelerate momentum in your particular context.
5. Diagram the entire loop using four to six components. If you
have
more than six components, you’re making it too complicated;
consolidate and simplify the model to capture the essence of
your
flywheel.
6. Test the flywheel against your list of successes and failures.
Does your
empirical experience validate it? Tweak the diagram until you
can
explain your biggest replicable successes as outcomes arising
directly
from the flywheel and your biggest disappointments as failures
to
execute or adhere to the flywheel.
o The big winners are those who take a flywheel from ten turns
to a
billion turns rather than crank through ten turns, start over with
a new
flywheel, push it to ten turns, only then to divert energy to yet
another
new flywheel.
o When you reach a hundred turns on a flywheel, go for a
thousand turns,
then ten thousand, then a million, then ten million, and keep
going.
o Apply your creativity and discipline to each and every turn
with as much
intensity as when you cranked out your first turns on the
flywheel,
nonstop, relentlessly, ever building momentum.
Describe the business model of Amazon.com
as of the end of the case (spring 2017)
Task 1.2: C
https://www.jimcollins.com/tools/How-does-your-flywheel-
turn.pdf
30Boston University MET AD715 © Dr. Zlatev, 2019
The history of Jeff Bezos’ Sketch of Amazon’s “Flywheel
Business Model”
Bezos considered Amazon’s application of the flywheel concept
“the secret sauce”:
o Lower prices led to more customer visits.
o More customers increased the volume of sales and attracted
more commission-paying third-party sellers to the site.
o That allowed Amazon to get more out of fixed costs like the
fulfillment centers and the servers needed to run the website.
o This greater efficiency then enabled it to lower prices further.
o Feed any part of this flywheel, they reasoned, and it should
accelerate the loop.
o And so the flywheel would turn, building momentum.
o Push the flywheel; accelerate momentum.
o Then repeat, then again, and again, and again.
Brad Stone, The Everything Store: Jeff Bezos and the Age of
Amazon,
Back Bay Books, 2014, ISBN-10: 0316219282
Describe the business model of Amazon.com
as of the end of the case (spring 2017)
Task 1.2: C
31
Task 1.3:
Amazon Core Competence-Market Matrix
Source: Rothaermel, F.T. (2018) Strategic Management, 4e,
McGraw-Hill
(based on Hamel Y Prahalad, 1994)
Building new core competences to
protect and extend current market
position
Building new core competences to
protect and extend current market
position
Leveraging core competences to
improve current market position
Redeveloping and recombining
core competences to compete in
markets of the future
Existing New
N
e
w
E
x
is
ti
n
g
C
o
re
C
o
m
p
e
te
n
ce
Market
1 2
34
Using specific examples,
contribute to a discussion of
different ways that Amazon
is diversifying for each one
of the categories
1 2 3 4
Boston University MET AD715 © Dr. Zlatev, 2019
What is Amazon's core competency?
In-Class Team Exercise (Class 3)
1. Build teams (ca. 5 members per team)
2. Each team member: select one example per category
3. Internal team discussion: Amazon “Flywheel Business
Model” - examples
4. Internal team discussion: which example per category
to present and why?
5. In-Class presentation by two of the team members
Question 1 (first team member): Task 1.2
Question 2 (second team member): Task 1.3
-Class Exercise
Preparation for A1
STEP 4: Writing the
managerial report
Task 1.2:
Describe the business model of
Amazon.com as of the end of the
case (spring 2017) slides 28 --30
Bb Forum W3: Decision making on group level D
Select and review ONE of the suggested articles
Based on examples from one of the recommended articles
selected by you, the lecture notes, the text, and other
sources, discuss one or several of the themes:
Select and review one of the following articles:
HBR, The Overcommitted Organization, Mortensen M at al,
Sep-Oct 2017
HBR, Control the negotiation before it begins, Malhotra D.,
December 2015, pp. 67-72
HBR, Emotion and the art of negotiation, Brooks A, December
2015, pp. 57-64
Boston University MET AD715 © Dr. Zlatev, 2019 32

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  • 1. Week 1 & Week 2: Summary Lecture 3: Managing Group Decisions & Negotiations In-Class Exercise: Team Discussion – Preparation for Assignment 1 Bb Discussion Forum W3: Q & A AD 715: Quantitative and Qualitative Decision-Making Class 3 (09/17/2019) Boston University MET AD715 © Dr. Zlatev, 2019 B C D 1 A AGENDA B Boston University MET AD715 © Dr. Zlatev, 2019 2
  • 2. Preparation for Class 3 Week Date Lectures & Topics Readings Discussion Topics Assignments & Quizzes Week 3, 9/17 Lecture 3 - Managing Group Decisions and Making Rational Decisions in Negotiations Bazerman, Ch.10, 11 e-Reserve Robbins & Judge, Ch.9, Ch. 14 Bb Discussion Forum W3 In-Class Exercise – Team Discussion &
  • 3. Preparation for A1 Individual Work: Prepare a first draft of A1 by 9/23 and contribute with questions & suggestions during our in-class discussion in Class 4 on 9/24, 2019 B Boston University MET AD715 © Dr. Zlatev, 2019 3 Preparation for Class 3 D C C APPLICATIONS OF MANAGERIAL DECISION MAKING LECTURE 3: Managing Group Decision and Making Rational Decisions in Negotiations DECISION ANALYSIS &
  • 4. SUPPORT IN BUSINESS FOUNDATIONS OF MDM Conflict and Negotiation • Conflict Process • Conflict and Unit Performance • Negotiation • The Negotiation Process Making Rational Decisions in Negotiations • Decision-Analytic Approach to Negotiations • Claiming Values in Negotiation • Creating Value in Negotiation • The Tools of Value Creation Defining and Classifying Groups • Formal and Informal Groups • Stages in Group Development 1. Forming 2. Storming 3. Norming 4. Performing 5. Adjourning
  • 5. Group Properties • Roles • Norms • Status • Size • Cohesiveness • Diversity Group Decision Making • Debating Society, Groupthink, Group Shift • Group Decision-Making Techniques 4Boston University MET AD715 © Dr. Zlatev, 2019 B 1-1 1-2 1-3 2-1 2-2 5 Defining & Classifying Groups Boston University MET AD715 © Dr. Zlatev, 2019
  • 6. B Group: Two or more individuals, interacting and interdependent, who have come together to achieve particular objectives. Formal Group: A designated work group defined by an organization's structure. Informal Group: A group that is neither formally structured nor organizationally determined; such a group appears in response to the need for social contact. Why do people form groups? Individuals tend to identify themselves socially as members of a group for the following reasons: • Similarity – group members have the same values, beliefs, and/or demographic similarities • Distinctiveness – group members share uncommon or rare characteristics (e.g. demographic, alma mater) • Status – group members share non-economical qualities, such as honor, prestige, and religion • Uncertainty reduction – group membership helps some people to understand who they are and how they fit into the world 1-1 6
  • 7. EXAMPLE: Temporary Groups with Time-Constrained Deadlines (Punctuated-Equilibrium Model) FIVE-STAGE-GROUP-DEVELOPMENT MODEL 1. Forming; 2. Storming; 3. Norming; 4. Performing; 5. Adjourning Boston University MET AD715 © Dr. Zlatev, 2019 Defining & Classifying GroupsB 1-1 7 Defining & Classifying GroupsB Some temporary groups with time-constrained deadlines do not follow the conventional five-stage model, but another model with a unique sequence of actions or inactions (see the figure below), such as: 1. Initial meeting (A) where the group's direction and the date for completion (B) have been set up; 2. This first phase of group activity is one of inertia; 3. A transition takes place exactly when the group has used up half of its allotted time (=A+B)/2); 4. This transition initiates major changes; 5. A second phase of inertia follows the transition;
  • 8. 6. In preparation for the last meeting, the group is demonstrating markedly accelerated activity. 1-1 Boston University MET AD715 © Dr. Zlatev, 2019 8 Group PropertiesB Roles Norms Status Size Cohesiveness Diversity Group members are often characterized as role players, where a role is defined as a set of expected behavior patterns attributed to someone occupying a given position in a social unit (group). Because each individual can play more than one role, the others are trying to read her/his behavior and to understand the role the person is currently playing (at work, at home, in the church, in the sport club, and so on). Defining characteristics here are: Role perceptions – an individual's view of how she/he is supposed to act in a given situation Role expectations – the way others believe a person should act in a given situation Role conflict – a situation in which an individual is confronted by divergent role expectations All groups have established norms – acceptable standards of behavior within a
  • 9. group that are shared by the group’s members. Norms can cover different aspects of group behavior, such as: • performance norms – how to get the job done, levels of output (per hour, day, week), what level of delay/interruption is appropriate • appearance norms – dress codes and other unspoken rules • social arrangement norms – with whom to eat lunch, whether to form or not form friendships (on and off the job) • resource allocation norms – assignment of difficult jobs, distribution of pay or equipment The individual behavior of a group member can be demonstrated with three additional categories: 1. Conformity: the adjustment of one's behavior to align with the norms of the others 2. Reference group: important groups to which individuals belong (or hope to belong) and with whose norms individuals are likely to conform 3. Deviant workplace behavior (antisocial behavior; workplace incivility): voluntary behavior that violates significant organizational norms and, in so doing, threatens the well-being of the organization or its members
  • 10. 1-2 Boston University MET AD715 © Dr. Zlatev, 2019 9 Group PropertiesB Roles Norms Status Size Cohesiveness Diversity Status is a socially defined position or rank given to groups or group members by others. Status tends to derive from one of three sources (status characteristics theory): • the power a person wields over others • a person's ability to contribute to the group's goals and success • individual personal characteristics High-status individuals are often given more freedom to deviate from norms than are other group members. They are also better able to resist conformity pressures than their lower-status peers and speak out more often, criticize more, state more commands, and interrupt others often. The size of a group affects the group's overall behavior, but the effect depends on the dependent variables: smaller groups are faster at completing tasks than are larger ones; if the group is engaged in problem-solving,
  • 11. large groups consistently do better. The effects of the size of a group on the overall group behavior is often linked to the tendency for individuals to expend less effort when working collectively than when working individually (also called social loafing). There are several ways to prevent social loafing: • set group goals, so the group has a common purpose to strive toward; • increase intergroup competition, which again focuses on the shared outcome; • engage in peer evaluation so each person evaluates each other person's contribution; • select members who have high motivation and prefer to work in groups, and • if possible, base group rewards in part on each member's unique contributions 1-2 Boston University MET AD715 © Dr. Zlatev, 2019 10 B
  • 12. Roles Norms Status Size Cohesiveness Diversity The final property of groups we consider is diversity in the group's membership, the degree to which members of the group are similar to, or different from, one another. Culturally and demographically diverse groups may perform better over time—if they can get over their initial conflicts. The impact of diversity on groups is mixed: • It is difficult to be in a diverse group in the short term; • If members can weather their differences, over time diversity may help them be more open-minded and creative and to do better; • Even positive effects are unlikely to be especially strong. The degree to which group members are loyal to each other and are motivated to stay in the group is called cohesiveness. The relationship between group cohesiveness, performance norms, and productivity is shown on the figure, below and can be explained as follows: • The relationship of cohesiveness and productivity depends on the performance-
  • 13. related norms established by the group. • If performance-related norms are high, a cohesive group will be more productive. Group Properties1-2 Boston University MET AD715 © Dr. Zlatev, 2019 11 B Group Decision Making Comparison of Group Versus Individual Decision Making Strengths of group decision making: • Groups generate more complete information and knowledge. • They offer increased diversity of views. • This opens up the opportunity for more approaches and alternatives to be considered. • The evidence indicates that a group will almost always outperform even the best individual. • Groups lead to increased acceptance of a solution. Weaknesses of group decision making:
  • 14. • It is time consuming. • There is pressure towards conformity in groups. • A few members, or only one, can dominate group discussion. • Group decisions suffer from ambiguous responsibility. Effectiveness and Efficiency: • Whether groups are more effective than individuals depends on the criteria you use. • In terms of accuracy, group decisions will tend to be more accurate. • On the average, groups make better-quality decisions than individuals. • If decision effectiveness is defined in terms of speed, individuals are superior. • If creativity is important, groups tend to be more effective than individuals. • If effectiveness means the degree of acceptance the final solution achieves, groups are better. • In terms of efficiency, groups almost always stack up as a poor second to the individual decision maker. The exceptions tend to
  • 15. be those instances where, to achieve comparable quantities of diverse input, the single decision maker must spend a great deal of time reviewing files and talking to people. 1-3 Boston University MET AD715 © Dr. Zlatev, 2019 12 B Group Decision Making Managing Group Decisions: Ideal Group Process Teams, groups, or committees are excellent decision makers in many ways and are increasingly used at all organizational levels. As anyone who has taken part in a group decision knows, • teams make better decisions than individuals; • but some of the absolute worst decisions are also made by groups. The quality of the outcomes of the group decision is directly linked to the organizational knowledge of how to structure and follow up the steps of the managerial decision-making process. An ideal group process is illustrated in the Figure ‘Managing Group
  • 16. Decision (b) The lesson from this illustration will be confirmed by anyone who has led a group: ‘good group processes do not emerge naturally, they must be managed – and they must be managed well’ [Russo, J.E., & Schoemaker, P. (2002)] Managing Group Decisions: Three Possible Models 1-3 Boston University MET AD715 © Dr. Zlatev, 2019 13 B Group Decision Making Managing Group Decisions: ‘Debating Society’ In groups representing the 'Debating Society' model: • Discussions drone on and on without resolution or deep, diverse conflicts occur that lead to a hostile impasse; • The decision-making process forever expands; • There is no closure and no action. Managing Group Decisions: ‘Groupthink’ Groupthink is related to norms: the norm for consensus overrides the realistic appraisal of alternative courses of
  • 17. action. As a result the group is convening too rapidly on the chosen conclusion. The symptoms of groupthink include: • Group members rationalize any resistance to the assumptions they have made. • Members apply direct pressures on those who momentarily express doubts. • Those members who hold differing points of view seek to avoid deviating from group consensus by keeping silent. • There appears to be an illusion of unanimity. Minimizing groupthink is possible if managers: • keep the group size less than 10 members; • encourage group leaders to play an impartial role; • appoint one group member to play the role of devil's advocate; • use exercises that stimulate active discussion of diverse alternatives without threatening the group or intensifying identity protection. Another potential enemy of good group decision processes is the so-called Groupshift (or Group Polarization). Groupshift describes: • a change between the group's decision and individual decision that a member within the group would make; • a shift that can be toward either conservatism or greater risk—but generally is toward a more extreme version of the
  • 18. group's original position. Managing Group Decisions: ‘Groupshift’ 1-3 Boston University MET AD715 © Dr. Zlatev, 2019 14 B Group Decision Making Group Decision-Making Techniques An idea-generation process that specifically encourages any and all alternatives while withholding any criticism of those alternatives. • In a typical brainstorming session, a half dozen to a dozen people sit around a table; • the group leader states the problem in a clear manner, so that all participants understand; • The guidance, "Think the unusual – nobody will criticize," encourages individuals to make unconventional suggestions; all ideas are recorded for later discussion and analysis. Interacting Groups
  • 19. Brainstorming Groups Nominal Groups Electronic Meeting Members interact with each other face to face. Individual members meet face to face to pool their judgments in a systematic but independent fashion. • Discussions or interpersonal communications during the decision-making process are restricted. • Group members are all physically present, but members operate independently. • A problem is presented to the group meeting by a moderator (one of the group members). • Before any discussion takes place, each member independently writes down ideas related to the problem. • After this silent period, each member presents one idea to the group. No discussion takes place until all ideas have been presented and recorded. • The group discusses the ideas for clarity and evaluates them.
  • 20. • Each group member silently and independently puts the ideas in rank order. The idea with the highest aggregate ranking determines the final decision. This is a computer-assisted group meeting, where members interact on computers, allowing for anonymity of comments and aggregation of votes. • The group meeting is organized in two possible formats – face to face or online (video conferencing). • Technical requirements include individual participant access to networked computers with a pre-installed software application (i.e., Adobe Connect, Go To Meeting, Echo 360, Skype). • Issues are presented to the group members, and they type their responses into their computers. • These individual but anonymous comments, as well as aggregate votes, are displayed to all. • The level of qualification of the moderator and the initial level of preparation for the meeting are instrumental for group effectiveness. 1-3 Boston University MET AD715 © Dr. Zlatev, 2019
  • 21. 15 B Group Decision Making Group Decision-Making Techniques1-3 Boston University MET AD715 © Dr. Zlatev, 2019 16 Conflict & NegotiationB 2-1 The Conflict Process Conflict a process that begins when one party perceives that another party has negatively affected (or is about to negatively affect), something that the first party cares about. Relationship conflict (i.e., conflict between individuals in which perceived differences in style, background, or values are under attack) will distract any group from its productive work. To manage and control conflicts, decision-makers have to distinguish between destructive conflict and productive conflict COMPETITIVE DECISIONS POOR CHOICES/DECISIONS
  • 22. Moderate amounts of Task conflict (i.e., differences of opinion about the task at hand and how it should completed) are necessary and valuable if a group decision-making process is going to accomplish more than simple groupthink. • Higher conflict teams have more thorough and creative discussion of decisions, gain a richer understanding of the issues, and develop a more cognitively complex prospective. • In contrast low-conflict teams tend to overlook key issues or simply avoid analyzing the downside risk of the consensus option; their understanding of issues is often superficial or one-sided; and they often make poor choices. Boston University MET AD715 © Dr. Zlatev, 2019 17 Conflict & NegotiationB 2-1 The Conflict Process Boston University MET AD715 © Dr. Zlatev, 2019 18 Conflict & NegotiationB 2-1 The Conflict Process Boston University MET AD715 © Dr. Zlatev, 2019 19
  • 23. Conflict & NegotiationB 2-1 Negotiation Distributive Bargaining is negotiation that seeks to divide up a fixed amount of resources; a win-lose situation. Negotiation (or bargaining) a process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them. There are two general approaches to negotiation – Distributive Bargaining and Integrative Bargaining Integrative Bargaining is negotiation that seeks one or more settlements that can create a win-win solution Boston University MET AD715 © Dr. Zlatev, 2019 20 Conflict & NegotiationB 2-1 Negotiation THE NEGOTIATION PROCESS: 1. Preparing and Planning Negotiation Strategy = BATNA = Best Alternative To a Negotiated Agreement Develop (i) your BATNA; (ii) the other site BATNA 2. Definition of Ground Rules
  • 24. 3. Clarification and Justification 4. Bargaining and Problem Solving 5. Closure and Implementation Boston University MET AD715 © Dr. Zlatev, 2019 21 Conflict & NegotiationB 2-1 Negotiation THE NEGOTIATION PROCESS: 1. Preparing and Planning Negotiation Strategy = BATNA = Best Alternative To a Negotiated Agreement Develop (i) your BATNA; (ii) the other site BATNA 2. Definition of Ground Rules 3. Clarification and Justification 4. Bargaining and Problem Solving 5. Closure and Implementation • Defining goals and objectives • Assessing the other party's goals and objectives • Developing a negotiation strategy, including
  • 25. (i) your Best Alternative To a Negotiated Agreement (BATNA) and (ii) the other site's BATNA • Predicting the settlement range • Who will do the negotiating? • Where will it take place? • What time constrains, if any, will apply? • To what issues will negotiation be limited? • Will the negotiators follow a specific procedure if an impasse is reached? • Preparation and exchange (between the parties) of the initial proposals and demands. • Based on the exchanged initial positions, both parties will explain, amplify, bolster, and justify their original demands. • Both parties are informing and educating each other on the issues, why they are important, and how each party arrived at its initial demands. • Exchange of any documentation that helps each party to support its position. • The actual give-and-take in trying to hash out an agreement. • Both parties will undoubtedly need to make concessions. • Formalizing the agreement. • Development of procedures necessary for
  • 26. implementing and monitoring the agreement • Closure: a formal contract with specifics, or a handshake. Boston University MET AD715 © Dr. Zlatev, 2019 22 Conflict & NegotiationB 2-1 Effective Negotiation Four factors influence how effectively individuals negotiate Personality Mood/emotion Culture Gender differences Boston University MET AD715 © Dr. Zlatev, 2019 23 Making Rational Decisions in NegotiationsB 2-2 The learning how to think rationally in two-party negotiation is based on (i) the examination how individual biases and heuristics are manifested in the
  • 27. negotiation contest, and (ii) the information on cognitive biases created by the competitive environment Expectations: • to present a framework for thinking about two-party negotiations • to introduce prescriptive suggestions for improving decision making within this context • to improve the quality of your outcomes as the focal negotiator • to improve the total outcomes for all parties Boston University MET AD715 © Dr. Zlatev, 2019 24 Making Rational Decisions in NegotiationsB 2-2 The decision-analytic approach to negotiations is based on an assessment of key sets of information that will determine the structure of the negotiation. • Each party's alternative to a negotiated agreement • Determining the point (called the reservation point, or indifference point) at which the negotiator is indifferent between a BATNA and impasse • Determining when you would walk away from the bargaining
  • 28. table and predicting the same for the other party • Each party's set of interests • Identifying the difference between the opposite party's positions (what they asked for) and their underlying interests (the motives behind these positions). • The relative importance of each party's interest • To be fully prepared to negotiate, you should know how important each issue is to you and have a sense of how important each issue is to your counterpart • The best agreements are reached by trading off relatively unimportant issues for more important ones A Decision-Analytic Approach to Negotiations Boston University MET AD715 © Dr. Zlatev, 2019 25 Making Rational Decisions in NegotiationsB 2-2 Claiming Value in Negotiation The bargaining zone framework assumes that each party has some reservation point below (or above) which the negotiator would prefer impasse to settlement. Reservation points are set at the value of the negotiator's
  • 29. BATNA. • The area where the two reservation points overlap is known as a positive bargaining zone. • When the reservation points of the two parties do not overlap, a negative bargaining zone exists. • At the point of agreement, when both parties choose a settlement rather than impasse, their actual reservation points overlap (this settlement point is one of many points within the bargaining zone). One of the key skills of negotiation is to determine the other party's reservation point and to aim for resolution that is barely acceptable to the other party. Boston University MET AD715 © Dr. Zlatev, 2019 26 Making Rational Decisions in NegotiationsB 2-2 Creating Value in Negotiation Through the process of identifying and adding issues, the parties have the potential to create value, thereby increasing the amount of total benefit available In the process of value creation the two negotiating parties are discussing the boundaries of a positive bargaining zone: • by considering each other's interests (not just their stated positions), and • by trading off the issue that each party cared less about for the issue that each party cared more about
  • 30. Trading on issues to create value occurs whenever negotiators run into differences with other parties Creating value by betting on disagreement about the future (contingent contracts) The most common form of trade consists of one party making a concession on one issues in return for a concession on a different issue from the other party (such as a lower price in exchange for faster payment or a larger quantity of goods). Factors used as trade accelerators can be: • differences in risk (risk-sharing strategies) • differences in time preference – might arise from individual, cultural, or situational preferences among the parties • complimentary skill differences between parties • other differences (in tax status, accounting treatments, liquidity, etc.) There are several ways in which contingent contracts can improve the outcomes of negotiations for both sides, such as: • building on differences to create joint values • helping manage biases • diagnosing disingenuous parties • establishing incentives for performance Boston University MET AD715 © Dr. Zlatev, 2019 27
  • 31. Making Rational Decisions in NegotiationsB 2-2 The Tools of Value Creation Below are six strategies for collecting that information. The list begins with strategies that work best when you trust the other party and continues with strategies that help create value when the partnership with the other side is competitive or even hostile: Strategy 1 Build trust and share information Strategy 2 Ask questions Strategy 3 Strategically disclose information Strategy 4 Negotiate multiple issues simultaneously Strategy 5 Make multiple offers simultaneously Strategy 6 Search for post-settlement settlements Parties are trying to create optimal value in negotiations but they often lacked key information about the other side's interests and positions. TRUST TRUST TRUST Boston University MET AD715 © Dr. Zlatev, 2019
  • 32. 28Boston University MET AD715 © Dr. Zlatev, 2019 Who are the stakeholders for Amazon: sellers & customers What activities need to be performed to create and deliver the offerings to the customers? How are the offerings to the customers created? Why does the business model create values? Task 1.2: Preparation for A1 STEP 4: Writing the managerial report Jeff Bezos’ Sketch of Amazon’s “Flywheel Business Model” Describe the business model of Amazon.com as of the end of the case (spring 2017) C In-Class Exercise NOTE: To learn more about Flywheel Business Model, review https://www.jimcollins.com/tools/How-does-your-flywheel- turn.pdf https://hbr.org/2018/11/replacing-the-sales-funnel-with-the- sales-flywheel https://amiusa.org/wp-content/uploads/2012/03/diagnostic- tool1.pdf
  • 33. https://www.jimcollins.com/tools/How-does-your-flywheel- turn.pdf https://hbr.org/2018/11/replacing-the-sales-funnel-with-the- sales-flywheel https://amiusa.org/wp-content/uploads/2012/03/diagnostic- tool1.pdf 29Boston University MET AD715 © Dr. Zlatev, 2019 The history of Jeff Bezos’ Sketch of Amazon’s “Flywheel Business Model” https://www.jimcollins.com/tools/How-does-your-flywheel- turn.pdf In 2001, Jim Collins presented to Jeff Bezos one of the key findings of his book Good to Great, “The Flywheel Effect” as follows: 1. Create a list of replicable successes your enterprise has achieved. Variations on an essential idea count as replicable successes. 2. Compile a list of failures and disappointments. This should include new initiatives and offerings by your enterprise that failed outright or fell far below expectations. 3. Compare the successes to the failures and ask, "What do these successes and failures tell us about the possible components of our flywheel, and what isn’t in our flywheel?“
  • 34. 4. Using the components you’ve identified, sketch the flywheel. Where does the flywheel start—what’s the top of the loop? What follows next? And next after that? Each component of the flywheel should feed into the next stage of the flywheel. Outline the path back to the top of the loop and be able to explain why this loop cycles back upon itself to accelerate momentum in your particular context. 5. Diagram the entire loop using four to six components. If you have more than six components, you’re making it too complicated; consolidate and simplify the model to capture the essence of your flywheel. 6. Test the flywheel against your list of successes and failures. Does your empirical experience validate it? Tweak the diagram until you can explain your biggest replicable successes as outcomes arising directly from the flywheel and your biggest disappointments as failures to execute or adhere to the flywheel. o The big winners are those who take a flywheel from ten turns to a billion turns rather than crank through ten turns, start over with a new flywheel, push it to ten turns, only then to divert energy to yet another
  • 35. new flywheel. o When you reach a hundred turns on a flywheel, go for a thousand turns, then ten thousand, then a million, then ten million, and keep going. o Apply your creativity and discipline to each and every turn with as much intensity as when you cranked out your first turns on the flywheel, nonstop, relentlessly, ever building momentum. Describe the business model of Amazon.com as of the end of the case (spring 2017) Task 1.2: C https://www.jimcollins.com/tools/How-does-your-flywheel- turn.pdf 30Boston University MET AD715 © Dr. Zlatev, 2019 The history of Jeff Bezos’ Sketch of Amazon’s “Flywheel Business Model” Bezos considered Amazon’s application of the flywheel concept “the secret sauce”: o Lower prices led to more customer visits. o More customers increased the volume of sales and attracted more commission-paying third-party sellers to the site. o That allowed Amazon to get more out of fixed costs like the
  • 36. fulfillment centers and the servers needed to run the website. o This greater efficiency then enabled it to lower prices further. o Feed any part of this flywheel, they reasoned, and it should accelerate the loop. o And so the flywheel would turn, building momentum. o Push the flywheel; accelerate momentum. o Then repeat, then again, and again, and again. Brad Stone, The Everything Store: Jeff Bezos and the Age of Amazon, Back Bay Books, 2014, ISBN-10: 0316219282 Describe the business model of Amazon.com as of the end of the case (spring 2017) Task 1.2: C 31 Task 1.3: Amazon Core Competence-Market Matrix Source: Rothaermel, F.T. (2018) Strategic Management, 4e, McGraw-Hill (based on Hamel Y Prahalad, 1994) Building new core competences to protect and extend current market position Building new core competences to protect and extend current market
  • 37. position Leveraging core competences to improve current market position Redeveloping and recombining core competences to compete in markets of the future Existing New N e w E x is ti n g C o re C o m p
  • 38. e te n ce Market 1 2 34 Using specific examples, contribute to a discussion of different ways that Amazon is diversifying for each one of the categories 1 2 3 4 Boston University MET AD715 © Dr. Zlatev, 2019 What is Amazon's core competency? In-Class Team Exercise (Class 3) 1. Build teams (ca. 5 members per team) 2. Each team member: select one example per category 3. Internal team discussion: Amazon “Flywheel Business Model” - examples 4. Internal team discussion: which example per category to present and why? 5. In-Class presentation by two of the team members
  • 39. Question 1 (first team member): Task 1.2 Question 2 (second team member): Task 1.3 -Class Exercise Preparation for A1 STEP 4: Writing the managerial report Task 1.2: Describe the business model of Amazon.com as of the end of the case (spring 2017) slides 28 --30 Bb Forum W3: Decision making on group level D Select and review ONE of the suggested articles Based on examples from one of the recommended articles selected by you, the lecture notes, the text, and other sources, discuss one or several of the themes: Select and review one of the following articles: HBR, The Overcommitted Organization, Mortensen M at al, Sep-Oct 2017
  • 40. HBR, Control the negotiation before it begins, Malhotra D., December 2015, pp. 67-72 HBR, Emotion and the art of negotiation, Brooks A, December 2015, pp. 57-64 Boston University MET AD715 © Dr. Zlatev, 2019 32