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My team and I thought that by using our past choices, we would be able to have a maximised Shareholder Value than the other groups competing against us. However, our team found that we have fallen by 77 cents of Shareholder Value.


I thought past choices are effective as my team did a great job in the past. There were positive results where we stood second among all the twelve teams for the Practice round. When something has a positive result, people are likely to decide on a similar way, whether it is a similar situation or not. According to Hammond, Keeney & Raiffa (1998, p.3), for making past choices, 'it seems psychologically safer even though the choice only compounds the error’.


This relates to Hammond, Keeney & Raiffa’s (1998) reading on The Sunk Cost Trap. The sunk cost trap is a type of a deep-seated bias where teams make choices according to their past choices (Hammond, Keeney & Raiffa,1998). The previous choices become sunk costs, which are irrelevant to present decision makings on investment of time and money (Hammond, Keeney & Raiffa,1998).


In the future, I think past choices should be considered but not profoundly. My team might need to keep an eye on other teams and look out for the influences on sunk-cost biases in the decisions. I think this will give them time to think through thoroughly and try to make decisions wisely.


Reference:

Hammond, J. S., Keeney, R. L., & Raiffa, H. (1998). Harvard Business Review, 76(5), 1-8.

2 Comments

  1. Hello,

    I enjoyed reading your learning journal. It is clear that you have a strong understanding of the readings and have incorporated them well into your journal. One suggestion I have would be to go into your problem more in depth. Explaining theories and possibles ways to act on your problem (like Daudelins four stages) might help to create an even better journal. Overall, great job!

    Alea

  2. Hey Fatima 

    Great effort on the log and really unlucky about the SHV result! As a whole I can tell you understand the theories as you interrelated it well within your experience. However I believe this can be built upon. For next time I would say to try and delve even deeper into exploring the theories rather than touching upon it through a few sentences as it will further exemplify your knowledge on the theories. Other than that i would say a very good journal.

    Hope this helped!