Q-06: Explain 4 types of decision-making biases/errors. Provide proper rationale for your answers.

Answer:

Rational Decision Making :

Ford’s team looked beyond the American consumer market for ideas on how to rebrand themselves and
create a new product (insert Ferrari & the 24 Hours of Le Mans). Most companies succeed with
innovation with they look outside of their own industry and direct competitors for fresh ideas in other
industries altogether.

Bounded Rationality:

In racing, understanding aerodynamic resistance is key. The better a car cuts through the air, the less
power and fuel is required. Optimizing aerodynamics can also prevent undesired lift forces, increasing
stability at high speeds. To test the aerodynamics of the GT40 prototype, the original Ford engineers put
a large, heavy computer with attached sensors into the car. The Shelby team ripped out the computer
and instead taped strings over the surface of the car, then observed the exterior of the car to see how
air traveled over and around the vehicle.

Intuition Decision Making:

In the movie, Ford’s decision to continue the Shelby program after some initial setbacks passes
through “15 middle managers.” This is powerfully visualized by a red folder circulating back and
forth around Ford’s headquarters. It’s described as a ‘hidden factory’ of many inefficient steps in a
process that go unnoticed. Matt Damon delivers a brilliant compelling message about the corporate
red folder at Ford. He means that you could not win the race by a committee.

Overconfidence Bias : In the film, Leo Beebe is never a fan of Shelby or Miles and takes
whatever opportunities he has to actively sabotage their chances of winning. Beebe's idea to
have Miles slow down during the 1966 race at Le Mans so that the Ford cars could finish in a
tie, which ultimately led to Miles losing the race, however accidentally.
8: Implement concepts of Group Properties i.e., Roles, Norms, Status, Size, Cohesiveness, Diversity to
the movie assigned to you.

In order to accomplish its goals and maintain its norms, a group must differentiate the work
activities of its members. One or more members assume leadership positions, others carry out
the major work of the group, and still others serve in support roles. This specialization of
activities is commonly referred to as role differentiation. More specifically, a work role is an
expected behavior pattern assigned or attributed to a particular position in the organization. It
defines individual responsibilities on behalf of the group.

It has been suggested that within organizational settings, work roles can be divided into three
types on the basis of the nature of the activities that encompass the role. 6 These are:

1. Task-oriented roles. These roles focus on task-related activities aimed at achieving group
performance goals.
2. Relations-oriented roles. These roles emphasize the further development of the group,
including building group cohesiveness and consensus, preserving group harmony,
looking after group member welfare, and so forth.
3. Self-oriented roles. These roles emphasize the specific needs and goals of individual
members, often at the expense of the group.

In this Movie the shellby is known as group leader who developed a racing car for Ford. The
group members often perform several of these roles simultaneously. A group leader, for
example, must focus group attention on task performance while at the same time preserving
group harmony and cohesiveness. So success of ken miles in le mans race was because of his
group leader shellby and his group who supported ken miles in difficult circumstances when leo
beebe the director of ford was trying to force shellby to follow his command and to bring three
ford racers in le mans at same position which was not in favour of ken miles and shellby who
developed a car which was better than other ford racing cars. All these roles was performed by
shellby who performed tasks oriented role in which he focused on making fastest car for le
mans race against Ferrari by his team effort. As shellby was an entrepreneur who develop
racing cars so ford worked with shellby in this program. At the same time ford also lost their
interest when they lost race which dropped their interest working further with shellby. But how
shellby said to henry ford II that you could not win race by the committee if you want to beat
enzo Ferrari. He also said that that ken miles is the best racer if he could no win so all shellby
corporation will be yours. Shellby confidence on his team shows that he have good relations
with his team and his clients. Shellby was helping Ken miles to win the race because he was not
financially strong so this is called self-oriented roles.
Characteristics of Work Group Norms. A work group norm may be defined as a standard that is
shared by group members and regulates member behavior within an organization against
producing too much or too little, against getting too close to the supervisor, again. We see
similar examples in the workplace. There may be a norm of being late for work, and so forth.

Work group norms may be characterized by at least five factors:15

1. Norms summarize and simplify group influence processes. They denote the processes by
which groups regulate and regularize member behavior.
2. Norms apply only to behavior, not to private thoughts and feelings. Although norms
may be based on thoughts and feelings, they cannot govern them. That is, private
acceptance of group norms is unnecessary—only public compliance is needed.
3. Norms are generally developed only for behaviors that are viewed as important by most
group members.
4. Norms usually develop gradually, but the process can be quickened if members wish.
Norms usually are developed by group members as the need arises, such as when a
situation occurs that requires new ground rules for members in order to protect group
integrity.
5. All norms do not apply to all members. Some norms, for example, apply only to young
initiates (such as getting the coffee), whereas others are based on seniority, sex, race, or
economic class.

In this movie we can see the norms that the leo beebe was not having good behavior
with shellby and ken miles because he wants that henry ford II should listen to him and
follow his strategy for le Man race not of shellby because all he wants to take credit of
winning the race.

Status:
In this movie the company who have rivalry are Ford and Ferrari and both are famous car racing
companies. Both company cars are used for status symbols. They are corporate companies who work in
professional environment. (White Collar).

Size :

The size of Ford is big because it manufacture consumer cars to luxury cars so they have batch
production. The Ferrari manufactures only luxury cars and they have batch production but mostly they
are known for hand craft manufactures of car engines and their accessories. Ford produces 4.2 million
cars per year whereas Ferrari only produce 8400 cars per year so it shows that size of ford motor is big in
terms of production and revenue and Ferrari revenue is less than Ford.
Group Cohesiveness

A fifth characteristic of work groups is group cohesiveness. We have all come in contact with
groups whose members feel a high degree of camaraderie, group spirit, and unity. In these
groups, individuals seem to be concerned about the welfare of other group members as well as
that of the group as a whole. There is a feeling of “us against them” that creates a closeness
among them. This phenomenon is called group cohesiveness. More specifically, group
cohesiveness may be defined as the extent to which individual members of a group are
motivated to remain in the group. According to Shaw, “Members of highly cohesive groups are
more energetic in group activities, they are less likely to be absent from group meetings, they
are happy when the group succeeds and sad when it fails, etc., whereas members of less
cohesive groups are less concerned about the group’s activities.” 24

In this Movie shellby group cohesiveness is high and they have unity, group spirit and mutual
bonding between group members through which they won le Mans race when ken miles lost
his brakes and the his team installed new brakes for him and during starting of race his door
was not closing and his engineer Eddie closed the door by hammer so it shows that team was
having unity and had hunger to win le Man race.

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