MANAGERIAL DECISION MAKING
Syllabus
EN
IT
Learning Objectives
LEARNING OUTCOMES: The educational objective of the course is to provide students with advanced skills to analyze and solve problems and improve decision-making processes in business contexts. This includes understanding the psychological foundations underlying decisions, as well as the concepts of bounded rationality, cognitive errors, heuristics, negotiation and problem solving tools. What are the key elements for effective decision-making in business management? What tools and techniques can help to solve problems and improve the quality of business decisions? How can managers mitigate the impact of cognitive biases and heuristics, while leveraging their potential benefits to foster an environment conducive to sound decision making?
KNOWLEDGE AND UNDERSTANDING: The course aims to provide students with in-depth knowledge of managerial decision-making, problem solving and negotiation processes through the transfer of advanced theoretical and empirical knowledge, integrated with analytical and operational tools. Particular emphasis is placed on understanding the psychological foundations of decisions, including bounded rationality, cognitive biases, heuristics, and behavioral strategy. Ample space within the course is dedicated to the study and discussion of business cases, enriched by seminars held by professionals.
APPLIED KNOWLEDGE AND UNDERSTANDING: At the end of the course students will have acquired an in-depth knowledge of the fundamental concepts of decision making and their application in managerial contexts. They will be equipped with a problem-solving mindset and practical tools to make better decisions and succeed in business contexts. This includes the ability to recognize and mitigate the effects of bounded rationality, cognitive errors and heuristics, and to understand when heuristics may be useful. Analytical skills are developed and assessed through the development and discussion in class of case studies and experiments, problem solving and negotiation activities.
MAKING JUDGMENTS: Interactive participation, classroom experiments, and seminars held by professionals will stimulate students' critical analysis and independent judgment skills. Students will be encouraged to collect and interpret relevant data through direct and in-depth involvement in the study of key issues related to managerial decision making, with a focus on identifying and solving business problems. The students' judgment will also be stimulated by carrying out projects required during the course, such as case study analyses.
COMMUNICATION SKILLS: Communication skills are developed and assessed through teacher-student interactions, group projects, class discussions on business cases and exams. The course emphasizes clear and effective communication of decision-making processes, including strategies and tools for addressing business problems and communicating, in public, recommendations for their solution.
LEARNING SKILLS: At the end of the course, students will have acquired the ability to critically address and resolve complex decision-making problems in managerial contexts. They will be able to integrate knowledge and manage complexity, make judgments with incomplete or limited information, and develop intentionally rational strategies.
KNOWLEDGE AND UNDERSTANDING: The course aims to provide students with in-depth knowledge of managerial decision-making, problem solving and negotiation processes through the transfer of advanced theoretical and empirical knowledge, integrated with analytical and operational tools. Particular emphasis is placed on understanding the psychological foundations of decisions, including bounded rationality, cognitive biases, heuristics, and behavioral strategy. Ample space within the course is dedicated to the study and discussion of business cases, enriched by seminars held by professionals.
APPLIED KNOWLEDGE AND UNDERSTANDING: At the end of the course students will have acquired an in-depth knowledge of the fundamental concepts of decision making and their application in managerial contexts. They will be equipped with a problem-solving mindset and practical tools to make better decisions and succeed in business contexts. This includes the ability to recognize and mitigate the effects of bounded rationality, cognitive errors and heuristics, and to understand when heuristics may be useful. Analytical skills are developed and assessed through the development and discussion in class of case studies and experiments, problem solving and negotiation activities.
MAKING JUDGMENTS: Interactive participation, classroom experiments, and seminars held by professionals will stimulate students' critical analysis and independent judgment skills. Students will be encouraged to collect and interpret relevant data through direct and in-depth involvement in the study of key issues related to managerial decision making, with a focus on identifying and solving business problems. The students' judgment will also be stimulated by carrying out projects required during the course, such as case study analyses.
COMMUNICATION SKILLS: Communication skills are developed and assessed through teacher-student interactions, group projects, class discussions on business cases and exams. The course emphasizes clear and effective communication of decision-making processes, including strategies and tools for addressing business problems and communicating, in public, recommendations for their solution.
LEARNING SKILLS: At the end of the course, students will have acquired the ability to critically address and resolve complex decision-making problems in managerial contexts. They will be able to integrate knowledge and manage complexity, make judgments with incomplete or limited information, and develop intentionally rational strategies.
Prerequisites
No specific prior knowledge is needed, despite it is preferrable that enrolled students in this course have already undertaken the General Management course. In fact, this course provides students with the basic managerial knowledge that can help them in learning Managerial Decison Making concepts in a faster and effective way.
Program
The objective of this course is to help you become a better decision maker. Every day, we make countless decisions, but due to time, computational, biological constraints and a lack of effective decision-making tools, we often delay crucial managerial choices or make them without thoroughly considering what truly matters for the organization and its stakeholders.
This engaging, hands-on course equips you with the knowledge on how we make decisions and how we can improve it via qualitative tools oriented to thoroughly analyze business problems and make sound decisions that involve multiple, often conflicting goals.
This will help the student to stand out in the business world as an excellent problem solver and decision maker.
The student will gain a deep understanding of bounded rationality, cognitive biases, heuristics, and problem solving tools enabling to effectively devise solutions to navigate these common challenges in managerial decision-making.
This course is NOT about formal mathematical decision models.
To reach its goal, the course is based on a mix of theory and practice, the latter in the form of projects and practice-oriented guest lectures delivered by expert decision-makers.
Key topics addressed:
- Typologies of decisions in complex organizations
- Understanding risk and uncertainty
- Psychological aspects of decision making: bounded rationality, cognitive biases, and heuristics
- Controlling decision quality
- Problem solving: cycle, phases, and problem statement
- Evaluating internal and external environments
- SWOT analysis and elaboration of solutions
- Creativity techniques: brainstorming, mental maps and lateral thinking
- Theoretical framework of negotiations: distinctive features, phases, structures, and tactics
- Effective negotiation strategies and reducing biases in negotiation
- Data-driven decision making and integration of artificial intelligence
- Executive personality demographics, traits and their impact on decision making
- Behavioral strategy and neurostrategy in decision making
This engaging, hands-on course equips you with the knowledge on how we make decisions and how we can improve it via qualitative tools oriented to thoroughly analyze business problems and make sound decisions that involve multiple, often conflicting goals.
This will help the student to stand out in the business world as an excellent problem solver and decision maker.
The student will gain a deep understanding of bounded rationality, cognitive biases, heuristics, and problem solving tools enabling to effectively devise solutions to navigate these common challenges in managerial decision-making.
This course is NOT about formal mathematical decision models.
To reach its goal, the course is based on a mix of theory and practice, the latter in the form of projects and practice-oriented guest lectures delivered by expert decision-makers.
Key topics addressed:
- Typologies of decisions in complex organizations
- Understanding risk and uncertainty
- Psychological aspects of decision making: bounded rationality, cognitive biases, and heuristics
- Controlling decision quality
- Problem solving: cycle, phases, and problem statement
- Evaluating internal and external environments
- SWOT analysis and elaboration of solutions
- Creativity techniques: brainstorming, mental maps and lateral thinking
- Theoretical framework of negotiations: distinctive features, phases, structures, and tactics
- Effective negotiation strategies and reducing biases in negotiation
- Data-driven decision making and integration of artificial intelligence
- Executive personality demographics, traits and their impact on decision making
- Behavioral strategy and neurostrategy in decision making
Books
Due to the novelty of the course topics and the cutting-edge teaching methods, this course is based on daily teaching notes and class materials.
Bibliography
Managerial Decision Making. Towards an Integrative Co-Evolutionary Framework. Journal of Management Development, Vol. 37, No. 5, 409-424.
Abatecola, G., Cristofaro, M. (2020). Hambrick and Mason’s “Upper Echelons Theory”: Evolution and Open Avenues. Journal of Management History, Vol. 26 No. 1, pp. 116-136.
Abatecola, G., Cristofaro, M., Giannetti, F., Kask, J. (2022), How Can Biases Affect Entrepreneurial Decision Making? Toward a Behavioral Approach to Unicorns, International Entrepreneurship and Management Journal, Vol. 18, pp. 693–711.
Bazerman, M. H., & Moore, D. A. (2009). Judgment in managerial decision making (7th ed.).
Cristofaro, M. (Ed.) (2021). Emotion, Cognition, and Their Marvellous Interplay in Managerial Decision-Making. Cambridge Scholars Publishing, Newcastle upon Tyne
Cristofaro, M. (2020). “I feel and think, therefore I am”: An Affect-Cognitive Theory of management decisions. European Management Journal, Vol. 38 No. 2, pp. 344-355.
Cristofaro, M. (2019). The role of affect in management decisions: A systematic review. European Management Journal, Vol. 37, No. 1, 6-17.
Cristofaro, M. (2018). Processi cognitivi e decisioni aziendali. Evidenze di razionalità limitata. Aracne, Roma.
Cristofaro, M. (2017). Reducing Biases of Decision-Making Processes in Complex Organizations. Management Research Review, Vol. 40, No. 3, pp. 270-291.
Cristofaro, M. (2017). Herbert Simon’s Bounded Rationality: its Evolution in Management and Cross-feritilizing Contribution. Journal of Management History, Vol. 23, No. 2, pp. 170-190.
Cristofaro, M., Giannetti, F. (2021). Heuristics in Entrepreneurial Decisions: A Review, an Ecological Rationality Model, and a Research Agenda. Scandinavian Journal of Management, Vol. 37, No. 3, 101170.
Cristofaro, M., Giardino, P.L., Camilli, R., Hristov, I. (2023). Enhancing Sustainability Practices: A Framework to Mitigate Cognitive Biases for Medium Enterprise Performance Management. Journal of Management & Organization, 10.1017/jmo.2023.55.
Cristofaro, M., Giardino, P.L., Patricelli Malizia, A., Mastrogiorgio, A. (2022), “Affect and Cognition in Managerial Decision Making: A Systematic Literature Review of Neuroscience Evidence”, Frontiers in Psychology, 13, DOI: 10.3389/fpsyg.2022.762993.
Hammond, J. S., Keeney, R. L., & Raiffa, H. (1998). The hidden traps in decision making.
Harvard Business Review, 76, 47-58.
Kahneman, D. (2011). Thinking, fast and slow. New York: Farrar, Straus and Giroux.
Plous, S. (1993). The psychology of judgment and decision making. New York: McGraw-Hill.
Lovallo, D., Cristofaro, M., Flyvbjerg, B. (2023). Governing Large Projects: A Three-Stage Process to Get it Right. Academy of Management Perspectives, Vol. 37 No. 2, pp. 138-156.
Abatecola, G., Cristofaro, M. (2020). Hambrick and Mason’s “Upper Echelons Theory”: Evolution and Open Avenues. Journal of Management History, Vol. 26 No. 1, pp. 116-136.
Abatecola, G., Cristofaro, M., Giannetti, F., Kask, J. (2022), How Can Biases Affect Entrepreneurial Decision Making? Toward a Behavioral Approach to Unicorns, International Entrepreneurship and Management Journal, Vol. 18, pp. 693–711.
Bazerman, M. H., & Moore, D. A. (2009). Judgment in managerial decision making (7th ed.).
Cristofaro, M. (Ed.) (2021). Emotion, Cognition, and Their Marvellous Interplay in Managerial Decision-Making. Cambridge Scholars Publishing, Newcastle upon Tyne
Cristofaro, M. (2020). “I feel and think, therefore I am”: An Affect-Cognitive Theory of management decisions. European Management Journal, Vol. 38 No. 2, pp. 344-355.
Cristofaro, M. (2019). The role of affect in management decisions: A systematic review. European Management Journal, Vol. 37, No. 1, 6-17.
Cristofaro, M. (2018). Processi cognitivi e decisioni aziendali. Evidenze di razionalità limitata. Aracne, Roma.
Cristofaro, M. (2017). Reducing Biases of Decision-Making Processes in Complex Organizations. Management Research Review, Vol. 40, No. 3, pp. 270-291.
Cristofaro, M. (2017). Herbert Simon’s Bounded Rationality: its Evolution in Management and Cross-feritilizing Contribution. Journal of Management History, Vol. 23, No. 2, pp. 170-190.
Cristofaro, M., Giannetti, F. (2021). Heuristics in Entrepreneurial Decisions: A Review, an Ecological Rationality Model, and a Research Agenda. Scandinavian Journal of Management, Vol. 37, No. 3, 101170.
Cristofaro, M., Giardino, P.L., Camilli, R., Hristov, I. (2023). Enhancing Sustainability Practices: A Framework to Mitigate Cognitive Biases for Medium Enterprise Performance Management. Journal of Management & Organization, 10.1017/jmo.2023.55.
Cristofaro, M., Giardino, P.L., Patricelli Malizia, A., Mastrogiorgio, A. (2022), “Affect and Cognition in Managerial Decision Making: A Systematic Literature Review of Neuroscience Evidence”, Frontiers in Psychology, 13, DOI: 10.3389/fpsyg.2022.762993.
Hammond, J. S., Keeney, R. L., & Raiffa, H. (1998). The hidden traps in decision making.
Harvard Business Review, 76, 47-58.
Kahneman, D. (2011). Thinking, fast and slow. New York: Farrar, Straus and Giroux.
Plous, S. (1993). The psychology of judgment and decision making. New York: McGraw-Hill.
Lovallo, D., Cristofaro, M., Flyvbjerg, B. (2023). Governing Large Projects: A Three-Stage Process to Get it Right. Academy of Management Perspectives, Vol. 37 No. 2, pp. 138-156.
Teaching methods
The teaching activity, in coherence with the learning objectives of the course, responds to a theoretical-practical approach that combines lectures, thematic seminars, and discussion of business cases in the classroom.
Seminars are an integral part of the educational objectives of the course. They further and effectively develop the student’s ability to understand and apply the solution, through a direct approach, to specific business management problems; this ability necessarily requires a solid base of general and specific theoretical knowledge.
During the lectures, the business case discussions and the thematic seminars, students are encouraged by the professor to ask questions and express doubts and their critical point of view by highlighting the theoretical concepts and tools used for their arguments, starting from those learned during the course.
Moreover, teaching is strongly based on class participation.
Active discussion is a very important part of the learning process in the course and is also part of what will make the course interesting for you and your fellow students. You will be evaluated on the quality of your contributions and insights. Quality comments possess one or more of the following properties:
- Offer a different and unique, but relevant, perspective
- Contribute to moving the discussion and analysis forward
- Build on other students' comments
- Transcend the "I feel" syndrome (That is, they include some evidence, argumentation,
or recognition and demonstrate some reflective thinking)
- Provide a real-life example of a course concept
But, also:
Cold Calls. I will cold call, that is, call on students to answer questions without prior notification.
Seminars are an integral part of the educational objectives of the course. They further and effectively develop the student’s ability to understand and apply the solution, through a direct approach, to specific business management problems; this ability necessarily requires a solid base of general and specific theoretical knowledge.
During the lectures, the business case discussions and the thematic seminars, students are encouraged by the professor to ask questions and express doubts and their critical point of view by highlighting the theoretical concepts and tools used for their arguments, starting from those learned during the course.
Moreover, teaching is strongly based on class participation.
Active discussion is a very important part of the learning process in the course and is also part of what will make the course interesting for you and your fellow students. You will be evaluated on the quality of your contributions and insights. Quality comments possess one or more of the following properties:
- Offer a different and unique, but relevant, perspective
- Contribute to moving the discussion and analysis forward
- Build on other students' comments
- Transcend the "I feel" syndrome (That is, they include some evidence, argumentation,
or recognition and demonstrate some reflective thinking)
- Provide a real-life example of a course concept
But, also:
Cold Calls. I will cold call, that is, call on students to answer questions without prior notification.
Exam Rules
The exam is composed of a written test. Extra points can be gained through project works and they will be added to the mark assigned at the end of the written test.
The final mark, composed from the result of the written test plus the projects extra points (if any), is expressed in thirtieths.
The written test must be performed via a student's personal computer within the classroom and it is based on:
- 2 open-ended questions: 7.5 points maximum for each according to the comprehensiveness of the answer.
- 15 closed-ended questions: 1 point for each if you correctly respond, 0 for a wrong or not given answer.
The exam lasts 40 minutes. When receiving the test in any given call, the student has the initial 10 minutes to withdraw; in this case, the test is considered as “not performed”.
Projects:
Extrapoints are assigned only if 4 group assignments are delivered.
Each project receives a rating from 0 to 1.
The exam assesses the overall preparation by the student in accordance with the Dublin descriptors, as follows: acquired knowledge (quantity and quality) in relation to the topics of the programme and consequentiality of reasoning; ability to apply such knowledge and to make connections among the different parts of the programme, including also the acquired knowledge from other similar courses; analytical ability, synthesis, and autonomy of judgement; communication skills of the student (language properties, clarity of presentation, and appropriate use of terminology, specific to the course).
The final mark of the exam is expressed out of thirty and will be obtained through the following grading system:
Fail: important deficiencies in the knowledge and understanding of the topics; limited analytical and synthesis skills; frequent generalisations and limited critical and judgemental abilities; the topics are set out inconsistently and with inappropriate language.
18-21: the student has acquired the basic concepts of the discipline and has an analytical capacity that emerges only with the help of the teacher; the way of speaking and the language used are on the whole correct.
22-25: the student has acquired the basic concepts of the discipline in a discreet way; knows how to orient him/herself among the various topics covered; and has an autonomous analysis capacity knowing how to express using the correct language.
26-29: the student has a well-structured knowledge base; he/she is able to independently rework the knowledge acquired in the context of the choice of conventional and unconventional materials according to the application; the way of speaking and the technical language are correct.
30 and 30 cum laude: the student has a comprehensive and thorough knowledge base. The cultural references are rich and up-to-date, which are expressed with brilliance and properties of technical language.
The final mark, composed from the result of the written test plus the projects extra points (if any), is expressed in thirtieths.
The written test must be performed via a student's personal computer within the classroom and it is based on:
- 2 open-ended questions: 7.5 points maximum for each according to the comprehensiveness of the answer.
- 15 closed-ended questions: 1 point for each if you correctly respond, 0 for a wrong or not given answer.
The exam lasts 40 minutes. When receiving the test in any given call, the student has the initial 10 minutes to withdraw; in this case, the test is considered as “not performed”.
Projects:
Extrapoints are assigned only if 4 group assignments are delivered.
Each project receives a rating from 0 to 1.
The exam assesses the overall preparation by the student in accordance with the Dublin descriptors, as follows: acquired knowledge (quantity and quality) in relation to the topics of the programme and consequentiality of reasoning; ability to apply such knowledge and to make connections among the different parts of the programme, including also the acquired knowledge from other similar courses; analytical ability, synthesis, and autonomy of judgement; communication skills of the student (language properties, clarity of presentation, and appropriate use of terminology, specific to the course).
The final mark of the exam is expressed out of thirty and will be obtained through the following grading system:
Fail: important deficiencies in the knowledge and understanding of the topics; limited analytical and synthesis skills; frequent generalisations and limited critical and judgemental abilities; the topics are set out inconsistently and with inappropriate language.
18-21: the student has acquired the basic concepts of the discipline and has an analytical capacity that emerges only with the help of the teacher; the way of speaking and the language used are on the whole correct.
22-25: the student has acquired the basic concepts of the discipline in a discreet way; knows how to orient him/herself among the various topics covered; and has an autonomous analysis capacity knowing how to express using the correct language.
26-29: the student has a well-structured knowledge base; he/she is able to independently rework the knowledge acquired in the context of the choice of conventional and unconventional materials according to the application; the way of speaking and the technical language are correct.
30 and 30 cum laude: the student has a comprehensive and thorough knowledge base. The cultural references are rich and up-to-date, which are expressed with brilliance and properties of technical language.