SBANC
Small Business Advancement National Center University of Central Arkansas — Conway Arkansas
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115H, College of Business - University of Central Arkansas - 201 Donaghey Ave. Conway, AR Issue: 809 - March 18th, 2014
Of The Week
“Being ignorant is not so much a shame, as being unwilling to learn.” -
Benjamin Franklin
Upcoming Conferences ICSB
Who: International Council for Small Business
When: June 11-14, 2014 Where: Dublin, Ireland
th
What: 59 Annual Conference
MIAC
MMA
Who: MIAC
When: October 9-11, 2014
What: Fifth Mustang International Academic Conference
Where: Nashville, TN
Who: Marketing Management Association.
When: September 17-19, 2014 Where: San Antonio, TX
What: Educator’s Conference
Who: ISTEC ISTEC
What: Technology Conference When: December 18-20, 2014
Where: Doha, Qatar
Announcements SBANC
The Small Business Advancement National Center aims at increasing your knowledge of small business and entrepreneurship. All questions and comments would be greatly appreciated.
CCSBE
The Canadian Council for Small Business and Entrepreneurship will be holding their Conference at St. Francis Xavier University in Antigonish, Nova Scotia from May 22-24, 2014.
SOBIE
ICSB
IETC
The Society of Business, Industry, and Economics will be holding their 16th Academic Conference at Sandestin Golf and Beach Resort in Destin, Florida from April 8-11, 2014. Case Study Competition & Workshop: The competition is open to any person who is a member of ECSB / ICSB or is attending the ICSB 2014 World Conference. The prize for the competition is €250. Deadline is April 30th, 2014.
The International Educational Technology Conference will be held in Chicago, USA from September 3-5, 2014.
Call for Papers HSGBI
Who: Healthcare Systems and Global Business Issues What: 8
EUMMAS
ICMS
GBRJ
th
Int’l Conference
When: June 23-25, 2014 Where: Lincolnshire, England Deadline: May 15, 2014
Who: European Marketing & Management Association
When: June 6-8, 2014
What: 2014 Conference
Deadline: April 1, 2014
Where: Sarajevo, Bosnia
Who: International Conference When: June 18-20, 2014 on Marketing Studies Where: Taipei, Taiwan What: 2014 Int’l Conference Deadline: April 1, 2014 Who: Global Business Research Journal nd
What: 2 Int’l Conference
When: July 11-13, 2014 Where: Chennai, India Deadline: April 5, 2014
Why do Managers Make Bad Decisions? Managers are faced with a relentless demand for decisions, fro solving minor problems to implementing major strategic changes.
Tip
of the Week
Even the best manager will make mistakes, but managers can increase their percentage of good
“Giving too much weight to the past can lead to poor forecasts and misguided decisions.”
decisions by understanding some of the factors
sions, statistics, or esti-
justify their past deci-
that cause people to make
mates act as an anchor to
sions, even if those deci-
bad ones. Most bad deci-
our subsequent thoughts
sions no longer seem val-
sions are errors in judg-
and judgments. Anchors
id. Consider managers
ment that originate in the
can be as simple as a ran-
who invest tremendous
human mind’s limited ca-
dom comment by a col-
time and energy into im-
pacity and in the natural
league or a statistic read in
proving the performance
biases managers display
a newspaper. Past events
of a problem employee
during decision making.
and trends also act as an-
whom they realize should
Awareness of the follow-
chors. For example, in
never have been hired in
ing six biases can help
business, managers fre-
the first place. Another ex-
managers make more en-
quently look at the previ-
ample is when a manger
lightened choices.
ous year’s sales when esti-
continues to pour money
Being Influenced by
mating sales for the com-
into a failing project, hop-
Initial Impressions.
ing year. Giving too much
ing to turn things around.
When considering de-
weight to the past can lead
One study of product de-
cisions, the mind often
to poor forecasts and mis-
velopment found that
gives disproportionate
guided decisions.
managers who initiate a
weight to the first infor-
Justifying Past Decisions.
new product are much
mation it receives.
Many managers fall into the
more likely continue fund-
These initial impres-
trap of making choices that
ing it despite evidence
“
that it is failing. People
don’t like to make mistakes, so they continue to support a flawed decision in an effort to
“People tend to give too much weight to supporting information and too little to information that conflicts with their established viewpoints.”
justify or correct the past. Seeing What You Want
ing the 2011 Japan earth-
gies. For example, General
to See.
quake and tsunami. TEPCO
motors stuck with its stra-
People frequently look
managers knew that sea-
tegic decision to offer a
for information that
water would destroy the
multitude of brands long
supports their existing
reactors, so they gave
after there was clear evi-
instinct or point of
greater weight to infor-
dence that trying to cover
view and avoid infor-
mation that supported their
the whole range of the au-
mation that contradicts
decision to delay its use,
to market was paving the
it. This bias affects
emphasizing that they were
way to disaster. The strat-
where managers look
“taking the safety of the
egy started to fray in the
for information, as well
whole planet into consider-
1970s with increased com-
as how they interpret
ation” in judging the appro-
petition from Japanese au-
the information they
priate timing to use sea-
tomobiles and spikes in oil
find. People tend to
water in the cool down ef-
prices. Yet, as late as Feb-
give too much weight
forts. Unfortunately, it took
ruary 2008, managers
to supporting infor-
an explosion at the plant to
were saying that talk abut
mation and too little to
convince managers that
killing brands was not a
information that con-
seawater was essential to
“thoughtful discussion.:
flicts with their estab-
control the overheating of
Only bankruptcy and
lished viewpoints. For
the reactors.
forced restructuring finally
Perpetuating the Status
pushed managers to cut
Quo.
GM’s brands fro eight
example, managers at Tokyo Electric Power Co. (TEPCO) have been accused of delaying for too long the decision to use seawater to cool nuclear reactors at Fu-
“
kushima Daiichi follow-
Managers may base deci-
down to four.
sions on what has worked
Being Influenced by emo-
in the past and fail to ex-
tions.
plore new options, dig for
If you’ve ever made a deci-
additional information, or
sion when you were angry,
investigate new technolo-
upset, or even ecstatically
happy, you might already know the danger of being influenced by emotions. A recent
“Most people overestimate their ability to predict uncertain outcomes. “
study of traders in London investment banks found that effective regulation of emotions was a characteristics of higher-performing traders. Lowerperforming traders were less effective in managing and modulating their emotional responses. Another finding is that doctors make less effective de-
when people make poor decisions under the influence of strong emotions, they tend to continue to make poor decisions because it becomes a part of the mind’s blueprint for how to behave. Managers make better decisions when they take emotions out of the decision making process.
cisions when they feel
Overconfidence.
emotions of like or dis-
Most people overestimate
like for a patient. If they
their ability to predict un-
like a patient, they are
certain outcomes. For ex-
less likely to prescribe
ample, when people are
a painful procedure. If
asked to define quantities
they feel dislike, they
about which they have little
may blame the patient
direct knowledge, they
Source:
for the condition and
overestimate their accura-
Understanding Management
provide less treatment.
cy. Similarly, many manag-
Unfortunately, some
ers have unrealistic expec-
managers let their
tations of their ability to un-
Richard L. Daft
emotions influence
derstand the risks and
Dorothy Marcic
their decisions on a
make the right choice.
Cengage Learning
regular basis. There is
“
some evidence that
9th Edition
Page 243-245 Copyright 2015
Feature Paper
SBANC Staff
An Entrepreneur Success Index That Predicts Survival. This paper was written by Harold O. Fried from Union College and Loren W. Tauer from Cornell University. The paper was presented at the 2013 United States Association for Small Business and Entrepreneurship Conference .
Executive Director Dr. Don B. Bradley III
Development Intern James Vire
Abstract
Development Intern
A measure of entrepreneur success is important to identify current and future successful ventures. We propose a single value index of entrepreneur success that ranges from one to zero, that accommodates multiple outputs, that is predicated on multiple inputs, and that mitigates the impact of outliers. The index is calculated for
Joshua Tucker
firms from the Kauffman Foundation Firm Survey 2004 through 2009. The average value of the index increases over time as firms either improve their performance or exit the data set from failure. Survival analysis shows that the index serves as a leading indicator of success. (Page 1)
Read Entire Paper Here
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