Reference no: EM131567710

Faulty Decision Making Is a Cause of the Deepwater Horizon Disaster

1. Which model of decision making is represented in this case?

A nonrational model of decision making is clearly represented in this case. Nonrational models are based upon the assumption that decision making is uncertain, complete information is not possessed by decision makers, and it is not easy for managers to make ideal decisions (Kreitner&Kinicki, 2013, p.333). It is clear that all three of these assumptions are present in this case. Further, I would say that the garbage can model of decision making is represented in this case.

According to the garbage can model, decisions are the result of a complex interaction between four independent streams of events: problems, solutions, participants, and choice opportunities (Kreitner&Kinicki, 2013, p.333-334). The garbage can model assumes that decision making does not follow an orderly series of steps (p. 334). Attractive solutions can get paired with whatever problems exist at a given point in time or people get assigned to tasks because their workload is low at that moment (p. 334). This case did not follow any series of steps. It fact, the decision-making efforts were extremely unorganized.

The individuals involved in the decision-making process in this case did not have complete information. Emotions were not left out of the decision-making process as several disagreements occurred. It is very obvious that all possible alternatives were not honestly and accurately evaluated. Time and resources were by no means abundant and accessible. In fact, the situation became worse with every second that passed. The individuals involved were not willing to implement and support the decisions of others. The two firms were at odds with each other throughout the decision-making process.

2. To what extent did decision making biases impact the decisions made in this case? Identify the specific biases that were present. Is BP's and Transocean's approach more characteristic of the rational, normative, or garbage can models of decision making? Discussion your rationale.

Decision making biases impacted the decisions made in this case to a great extent. The specific biases that were present include representativeness heuristic, overconfidence bias, hindsight bias, and escalation of commitment bias. The representativeness heuristic is used when people estimate the probability of an event occurring (Kreitner&Kinicki, 2013, p.336). The overconfidence bias relates to an individual's tendency to be over-confident about estimates and/or forecasts (p. 336). The hindsight bias occurs when knowledge of an outcome influences an individual's belief about the probability that he or she could have predicted the outcome earlier (p. 336). Lastly, the escalation of commitment bias refers to the tendency to stick to an ineffective course of action when it is unlikely that the bad situation can be reversed (p. 337).

Representativeness heuristic was present in that BP and Transocean underestimated the probability of an oil spill (Kreitner&Kinicki, 2013, p.336, 361-362). Overconfidence bias was definitely the primary downfall in this case. BP and Transocean were extremely over-confident in the rig and the well (p. 336, 361-362). The hindsight bias became present after the oil spill occurred and the two firms began looking back at all of the signs they should have picked up on (p. 336, 361-362). The escalation of commitment bias was also present in this case due to the fact that the decision makers decided to continue working despite all of the warnings that arose suggesting an ineffective course leading to a bad situation (p. 337, 361-362).

BP and Transocean's approach is more characteristic of the garbage can model of decision making.

4. What do you think are the key causes of the disaster?

In addition to the decision making biases and the lack evidence based decision making (EBDM) previously addressed, it is likely that intuition was used too much by the individuals involved in the deep horizon explosion. Affected by personal emotions and long time expertise and experience. it may not be true to treat individuals as a team. Sometimes they look at the data and the situation is biased, based on own experience to make the decision, sometimes the error is inevitable. When too much insist on their own ideas, without listening to the opinion of others. At the same time there will be a dispute, if not a good solution to this problem. After that the decision is emotional and irrational. The consequences will be very serious.

5. What are the key takeaways from this case? Explain.

The key take away from this assignment are :The realization that non-rational decision making makes it hard for people to make informed choices by assuming that the decision making does not have relevant sufficient data and that decision making is uncertain.The other important takeaway is the relation between non rational decision making and the garbage can decision model that does not follow an sequence of events to arrive at applicable solutions.The four independent events that are critical when using garbage can model include :solutions ,participants ,problems and choice opportunities.Decisions made without complete information tend to be misleading