Natural Disasters and the Decisions that Follow

Q1 Insurance companies in the state of Florida earned record profits in 2006, suggesting that Nationwides decision to cross off _or_ come in policies in light of the calm hurricane seasons (in Florida) in 2005-2007 may have follow the comp all potential revenue and customer heftywill. Do you think Rommels advert about making a sound business decision give notice (of)s any perceptual or decision-making biases? Why or why non? cocksureness bias is identified as the tendency to overestimate the prob superpower that ones nous in arriving at a decision in correct.Rommels inverted comma about making a sound business decision reveals an certitude decision-making biases. Anchoring bias is a tendency to fixate on initial information, and to accordingly fail to adjust adequately for subsequent information. His decision too disclose an anchoring bias as it is look like that Nationwide did not take into consideration some information that others did. Selective perception is selective ly interpreting what one sees on the basis of ones interests, background, experience and attitudes.Rommels quote does reveal selective perception biases since they followed their own interest which is, money. Q2 Review the section on common biases and misconduct in decision making. For companies such as Nationwide, American respiratory tracts, and JetBlue that must respond to natural events, which of these biases and errors argon relevant and why? The firstly error/bias that is relevant to Nationwide Insurance company is overconfidence bias since they believed too much in their own ability to plant good decision A sound decision.The min error/bias is anchoring bias as they used the early first received information for making a decision All other companies make a good revenue. The relevant error/bias regarding American Airline industry is overconfidence bias since they overestimated that their judgment in arriving at a decision is correct when Danny Burgin said snowstorms be e asier to predict. overconfidence bias is in any case relevant to JetBlue Airline as David Neeleman said Is our good will gone? No, it isnt and he believed too much in his ability to make a good decision.The second error/bias is regarding JetBlue Airline is Confirmation bias which is defined as The tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgment. An eggshell of this bias is when the CEO, David Neeleman said, Youre overdoing it, so go ask Delta what they did about it. Why dont you wicket them? . Q3 In each of the three cases discussed here, which organisational constraints were movers in the decisions that were made?Organisations can constraint decision markers, creating deviation from the rational model. The first organisational constraint that was a compute in the decisions that were made is Performance Evaluation since managers want their works to be evaluated well so that sometimes they make some decisi ons that are not comply with rational model, this constraint is related to Nationwide Insurance company. The second constraint is Historical Precedents which is relevant to American Airline industry, since choices that were made are largely a result of choices that were made over the years.The last 2 constraints are, System-Imposed time Constraint as they restricted their ability to gather or evaluate information, and Formal Regulation where due to organisational purposes, some policies restricts managers to make a decision, these constraints are relevant for both American Airline industry as well as JetBlue Airline. Q4 How do you think stack like Rommel, Burgin, and Neeleman factor ethics into their decisions? Do you think the welfare of policy owners and passengers enter into their decisions? hatful with high ethical standards are less likely to engage in unethical practices, even in organisations or situations in which there are strong pressures to conform. The first ethical th eory that arise in this case is Utilitarianism, where Rommel, Burgin and Neeleman did not seek to maximize good for the greatest number of people who were affected by their decisions. The second theory is right theory, as it appears that they also did not respect and protect the basic rights of individuals. Finally, according to the justice theory, Rommel, Burgin and Neeleman did not impose and enforce rules fairly and impartially when they made decisions.