Managerial Decison Making Assignment

Managerial Decision Making: Course Work Name: Course title: Professor: Institution: Date Due: Q1 Moore and Bazerman (1999) describe various ways through which contingent contracts improves on the outcomes of negotiations for both sides, four of these ways are outline below. a) Bets build on differences in creating a joint value: Bets could be quite helpful in short circuiting debates over the probability of future events that may be uncertain. In the case when involved parties agree to disagree, they will be able to establish a contingent contract that is based on those varying predictions. b) Bets assist in managing biases: Biases create strong barriers to agreements. However, contingent contracts enable the formation of agreements irrespective of people’s biases. Instead of requiring parties to be de-biased, contingent parties enable parties to bet on their own biased assumptions. c) Bets diagnose parties that are disingenuous. Contingent contracts are quite helpful in diagnosing false claims and bluffs by one of the negotiators. For instance, if one makes a particular claim and the other side asks for a guarantee that is costly to that claim, he or she may typically bluff off such a claim. This indicates that he or she was bluffing. It is interesting that one does not need to know the sincerity of the other party’s prediction when proposing a bet. This is because, if it is sincere, then it is to your advantage, but if he rejects it, then it might be a bluff. d) Bets are performance Incentives: Contingency contracts are also an incentive to the parties in performing at or above the specified levels. For instance, commission from sales is an effective contingent contract designed to enhance high sales performance. Q2. As a member of the mediation team concerning the advocates and opponents of embryonic stem cell research, I will employ the fixed pie concept in solving the impasse. The fixed pie concept is where bargaining leads to division of a fixed pi...