The Decision-Making Flaw of Powerful People

The decisions made by powerful people in business and other fields have far-reaching effects on their organizations and employees.

But this paper finds a link between having a sense of power and having a propensity to give short shrift to a crucial part of the decision-making process: listening to advice.

Power increases confidence, the paper’s authors say, which can lead to an excessive belief in one’s own judgment and ultimately to flawed decisions.

Previous research has shown that the quality of decision making declines when people stick too much with their own beliefs and discount too readily the advice of others; outside information helps “average out” the distortions that can result when people give a great deal of weight to their own opinions and first impressions.

This paper is among the first to examine whether power — defined as an individual’s “capacity to influence others, stemming in part from his or her control over resources, rewards, or punishments” — reduces or increases a person’s willingness to heed advice.

Using four experiments, including one in a real-world business setting, the researchers employed a form of 360-degree assessment to explore the relationship between power and openness to others’ input.

In all four studies, they found that powerful people were more likely than those with less power to disregard and mistrust outside perceptions and advice — and that men were more likely than women to disregard guidance from others.

The researchers further discovered that confidence was perceived by many as an important attribute of leadership.

They concluded therefore that many powerful people, over time, come to see taking advice as a sign of weakness, assuming that they should project total confidence in their views alone.

This, argue the researchers, can be a dangerous assumption.

Read more on this article: The Decision-Making Flaw in Powerful People

H1N1 Swine Flu: very weak viral strain

First genetic analysis of how well this virus transmits from person to person concludes that it spreads barely well enough to keep itself going.

The analysis also suggests the virus may have started circulating as long ago as January. But because there have been so few cases to analyse, the calculation is uncertain. It could have started more recently, or as far back as September.

Nicholas Grassly of Imperial College London and Andrew Rambaut of the University of Edinburgh, UK, have analysed the rate of spread. Their analysis is based on the small mutations that have accumulated in almost two dozen genetic sequences produced so far, from viruses collected from patients in Mexico and the US.

Freely available

In contrast to H5N1 bird flu, all the genetic sequences of this H1N1 are being posted on bulletin boards like GISAID, where scientists can access them and compare preliminary analyses.

The GISAID system was set up in 2006 by scientists who protested that H5N1 sequences were not being made freely available.

"The limited sampling so far gives rise to considerable uncertainty in the estimate," cautions Rambaut. But if the rate at which genes mutate is about the same for this virus as for other H1N1 viruses, the number of mutations that have accumulated so far suggests it has been circulating since January – or even September 2008.

Weak virus

If the new virus spreads from one infected person to the next at about the same speed as ordinary flu, that gives an idea of how many cases there may have been in that time. A mathematical model permits the calculation of an important variable called R₀ – the number of additional people infected, on average, by each case. If R₀ is less than one, an infection dies out.

Grassly also cautions that the estimate is very preliminary. But with the data available now, he gets an R₀ of 1.16 – enough for the virus to keep going, but only just.

This could be good news. In epidemiological theory, at least, the lower the R₀, the easier it may be to snuff the virus out by further hindering its spread.

But it may be too early for celebrations. The 1918 flu pandemic, caused by another H1N1 virus, started with a mild, early wave in spring and early summer. The flu lab at the Los Alamos National Laboratory in the US estimates that the R₀ of the 1918 virus in spring was only 1.45. That shot up, they estimate, to 3.75 when the virus began its lethal second wave the following autumn.

Much may now depend on how quickly the new H1N1 virus from swine adapts to people.

SWOT Analysis

SWOT Analysis is a well-known method for describing a business or business propositions in terms of those factors that can have the maximum impact. The business owner does this analysis in order to improve the current position of the business. The Strengths and Weaknesses of the business are considered to be the internal aspects of a business, such as the quality of the product or the managerial skills. Whereas the Opportunities and Threats are the external factors, like the development of a completely new market or the arrival of new competitors.

The strengths and weaknesses of a business can be found in the following:

Management sector: The over dependence of an employee on a manager or an owner is one of the major weaknesses in a business that often leads to the requirement of more managers. This area needs to be worked upon in order to reduce the expense of the organization and to improve the business.

The work force: The difficulty in finding skilled staff as well as the employee turnover has to be handled efficiently to help a business grow successfully.

Sales: The strength of sales, how dependent your sales are on external factors, and cyclical sales are some of the factors that affect the business.

Financial: The factors affecting the financial condition of your business determine its strengths and weaknesses. The major aspects related to finance are the flow of cash, time to collect on invoices, and the ease of obtaining loans.

Operations: Strengths and weaknesses are also determined by the internal efficiency as well as the speed of manufacture and delivery of goods.

Opportunities and threats are found in the following categories:

Threats posed by the new rivals in the market: A new entrant in the market, selling a similar product or service, is considered to be one of the greatest threats, as you might not have a patent that could put a brake on new competitors.

Bargaining power of suppliers: Suppliers can pose a major threat for the business as they might force you to take large deliveries. Many times they are also difficult to find, or the supply may not be available.

Customer influence: There are some businesses that rely on a handful of customers, which include a lot of late payers. In addition, many customers bargain for lower prices. In such cases, the business tends to either face the threat of loss of customers or of being unprofitable.

Substitution: People often get bored using a particular brand of product and tend to opt for a change. The market usually has a number of similar products of similar quality. So the major threat is that people might try a product other than yours, and eventually end up substituting your product with it.

You can use two methods to grade these strengths, weaknesses, opportunities or threats, namely, pictorial and numerical.

If you opt for the pictorial way, you need to first create four sectors on a writing pad, putting the titles Strengths, Weaknesses, Opportunities and Threats in each sector, and a large question mark in the center. Now place each of the SWOTs in each sector, with the most problematic factors being farthest away from the question mark, and the better factors closer to it. The closer the display is bunched towards the center of the grid, the better the shape of your business.

However, if you pick the numerical method of assessment, you need to rate each item from 1 to 5 according to how important each is to your business. In this rating, 5 is considered to be the most important. Besides, each factor should also be rated from A to E according to its impact on the business, where E would indicate the highest impact. Then, check how many Es and 5s you end up with. If there are bad factors then you need to change or work on them. And, if there are strengths and opportunities, then it is important to build upon those factors. This would help to boost your business.