Introduction to Decision Making

Hands-on Class Project

Exercise: Applying Decision-Making Concepts

In this exercise, you will apply what you've learned about decision-making processes by analyzing three different scenarios. For each scenario, use relevant concepts from the course to explain the decision-making factors involved, and how different approaches might have influenced the outcome. This will allow you to explore the impact of unconscious biases, emotional influences, and cognitive traps on decision-making.

Scenario 1: The Bay of Pigs Invasion (1961)

Context: President John F. Kennedy faced a critical decision on whether to support an invasion of Cuba by exiled Cuban fighters attempting to overthrow Fidel Castro. This operation, initially planned under President Dwight D. Eisenhower, became Kennedy’s responsibility after he assumed office.

Task:

• Identify the cognitive, social, and emotional factors influencing Kennedy's decision.
• Analyze how groupthink and pressure from external forces (such as Cuban exiles and the CIA) may have played a role.
• Discuss how the sunk-cost effect and loss aversion might have impacted his decision-making.
• What could Kennedy have done differently using a more structured decision-making approach?

Scenario 2: NASA’s Challenger Disaster (1986)

Context: NASA decided to launch the Challenger Space Shuttle despite warnings from engineers about potential O-ring failure due to the cold temperatures. The decision to launch led to the shuttle’s destruction shortly after takeoff, resulting in the loss of seven crew members.

Task:

• Describe the key organizational and psychological factors that led to the launch decision.
• Evaluate the influence of time pressure and groupthink within the organization.
• Apply the concept of overconfidence bias and how it might have distorted risk assessment.
• What could NASA have done differently to prevent this disaster?

Scenario 3: Coca-Cola’s New Coke (1985)

Context: Coca-Cola launched a new formula for its flagship drink, New Coke, in an attempt to improve taste and regain market share against Pepsi. Despite conducting extensive taste tests, the decision to change the formula led to massive public backlash and the eventual return of the original Coca-Cola formula.

Task:

• Examine how the emotional attachment consumers had to the original formula might have impacted the decision.
• Analyze the role of the unconscious mind and short-term gains (such as immediate consumer taste preferences) influencing the decision to replace the original recipe.
• Discuss how the concept of cognitive biases, particularly status quo bias and confirmation bias, may have played a role in the failure of New Coke.
• What alternative decision-making process could Coca-Cola have used to anticipate consumer reactions more effectively?

Instructions:

1. For each scenario, apply decision-making concepts such as cognitive biases, emotions, groupthink, social pressures, and rational decision-making models.
2. Provide your analysis in a 2-3 paragraph explanation for each scenario.