PlayStation Chapter 13 – Decision Making

1. PlayStationChapter 13 – Decision Making The A-Team Anthony Mata Alida Saar Jacqueline Rios NursyairahBasri Johanan Ramos

2. The Decision Making Process and Its Foundations

3. Sony PlayStation’s Network Outage • April 17 - 19, 2011 • There was an external intrusion on Sony’s PlayStation Network. • April 20, 2011 • Sony shut down the network on • Approximately 77 million accounts were stolen. • April 26, 2011 • Sony finally notified its users about the problem. • May 15, 2011 • The network began being brought back online. • May 16, 2011 • Sony announced its plans to provide compensation for its users.

4. Steps of Decision-Making • Recognize & define the problem or opportunity. • Identify and analyze alternative courses of action, and estimate their effects on the problem. • Choose a preferred course of action. • Implement the preferred course of action. • Evaluate the results and follow up as necessary.

5. Results of Sony’s Decision Making • Sony PlayStation demonstrated poor decision-making techniques. • The reported cost of the network outage was $171 million. • Risk a loss of loyal users who switch to other competitors such as Microsoft’s X-Box 360 or Nintendo’s Wii.

6. Decision Environments • Certain decision environments • Exist when information is sufficient to predict the results of each alternative in advance of implementation • Risk decision environments • Exist when decision makers lack complete certainty regarding the outcomes of various courses of action, but they are aware of the probabilities associated with their occurrence

7. Decision Environments • Uncertain decision environments • Exist when managers have so little information on hand that they cannot even assign probabilities to various alternatives and their possible outcomes • Organized anarchy: a firm or division of a firm in transition characterized by rapid change and lack of a legitimate hierarchy.

8. Types of Decisions • Programmed decisions • Involve routine problems that arise regularly and can be addressed through standard responses • Non-programmed decisions • Involve non-routine problems that require solutions specifically tailored to the situation at hand • Associative choices • decisions that can be loosely linked to nagging continual problems but that are not specifically developed to solve the problem

9. How does this apply to PlayStation? • The decision environment that PlayStation is facing is that of a risk decision environment. • The type of decision PlayStation needs to make regarding this issue is a non-programmed decision.

10. Decision Making Models

11. Decision Making Models • Classical Decision Theory • Classical decision theory views the decision makers as acting in a world of complete certainty • Behavioral Decision Theory • Behavioral decision theory views the decision makers as acting only in terms of what they perceive about a given situation.

12. Classical Decision Maker Clearly Defined Problem Knowledge of all possible alternatives and their consequences Choice of the “optimum” alternative Managerial Action Behavioral Decision Maker Problem not clearly defined Knowledge is limited on possible alternatives and their consequences Choice of a “satisfactory” alternative Managerial Action Cognitive limitationsbounded rationally

13. Bounded Rationally? • Being “bounded rationally” is a shorthand term suggesting that while individuals are reasoned and logical, humans have their limits. • Individuals interpret and make sense of things within the context of their personal situations. • They engage in decision making “within the box” on a simplified view of a more complex reality.

14. Effects of Being Bounded Rationally • Classical decision making theory • Does not give a full and accurate description of how most decisions are made in organizations. • Behavioral decision making theory • Accepts the notion of bounded rationality and suggests that people act only in terms of what they perceive about a given situation. • Satisficing • Choosing the first alternative that appears to give an acceptable or satisfactory resolution to the problem.

15. The Third Decision Making Model“The Garbage Can Model” • Garbage Can Model • Views the main components of the choice process – problems, solutions, participants, and the choice situations – as all mixed up together in the garbage can of the organization. • When the setting is dynamic, the technology is changing, demands are conflicting, or the goals are unclear, things can get mixed up. • Many problems go unsolved • All organizations have chronic, persistent deficiencies that never seem to get much better because decision makers cannot agree on opinions on proper solutions.

16. Information Technology in Extended Decision Making • Artificial Intelligence (AI) • The study of how computers can be programmed to think like the human brain. • Will allow computers to displace many decision makers • In the 1960’s, Herbert Simon was convinced that computers would someday be more intelligent than humans. • AI applications have significantly aided in proving his idea.

17. Which Model Should PlayStation Use? • PlayStation is probably experiencing the garbage can model. • The problem is severe and there are so many different types of solutions. • Because the PlayStation Network’s dilemma is computer based, artificial intelligence may benefit them greatly. • The hacker dug into the network so deeply that no human can figure out how it happened. • PlayStation should focus on AI to help stop the theft.

18. Intuition Judgment and Creativity

19. Intuition • Intuition • The ability to know or recognize quickly and readily the possibilities of the situation of a given situation. • Intuition adds elements of personality and spontaneity to decision making. As a result, it offers the potential for creativity and innovation.

20. Intuition • Ways to Improve your Intuition • Relax! • Drop the problem for a while. • Spend some quite time by yourself. • Try to clear your mind. • Use Common Mental Exercise • Use Image to guide your thinking. • Let ideas run freely without a specific goal.

21. Judgmental Heuristics • Heuristics • Simplified strategies or “rules of thumb” used to make decisions. • The Availability Heuristics • Assessing a current event or situations based on past events that are in our memory. • Representative Heuristics • Involves assessing the likelihood that events will occur based on its similarity to one’s stereotypes of similar occurrences.

22. Judgmental Heuristics • The Anchoring and Adjustment Heuristics • Involving assessing an event by taking an initial value from historical precedent or and outside source and then incrementally adjusting this value to make current assessments. • Confirmation Trap • Where by the decision maker seeks confirmation for what is already thought to be true and neglects opportunities to acknowledge or find disconfirming information. • Hindsight Trap • The decision maker overestimates the degree to which he or she could of have predicted an event that has already taken place.

23. Creativity • Creativity • In decision making it involves the development of unique and novel responses to problems and opportunities. • Creativity in crafting decision often determines how well people and organizations do in response to complex challenges.

24. Fostering Creativity Tips • Diversify teams to include members with different backgrounds, training, and perspectives. • Encourage analogical reasoning. • Stress periods of silent reflection. • Record all ideas so that the same ones are not rediscovered. • Establish high expectations for creativity. • Develop physical space that encourages fun, divergent ideas.

25. How does this apply to PlayStation? • Use of intuition vs. systematic approach to solve the problem? • PlayStation might be bias and fallen in Confirmation trap. • PlayStation has come up with creative solutions to make up for the hack. Rewards include 2 free games in the first 31 days PlayStation online is back, and one year of free Identification Protection.

26. Managing the Decision Making Process

27. Choosing Problems to Address • Is the problem easy to deal with? • Small and less-significant problems should not get the same time and attention as bigger ones. Putting problems in rank order leaves the less significant for last. • Sony knows how - but not who - hacked into its PlayStation Network. • The fraud last month could possibly be the biggest Internet security breach in history.

28. Examples of actions that can help PlayStation solve the problem • List some precautions for the customers. • emails, telephone , postal mail scams, encourage to be vigilant, put fraud alert, change user name or password if use PS network accounts. • Provide theft protection offer for PS network customers. • PlayStation Network users should be provided with financial data security services, including free access to credit reporting services, for two years, the costs of which should be borne by Sony,” wrote Blumenthal, a former Connecticut attorney general.

29. Is This My Decision To Make? • Many problems can be handled by other persons. • These should be delegated to people who are best prepared to deal with them; ideally, they should be delegated to people whose work they most affect.

30. Is this a solvable problem within the context of the organization? • The astute decision maker recognizes the difference between the problems that realistically can be solved and those that are simply not solvable for all practical purposes. • Example problems with the hackers: • To minimize the activity hackers are quite hard, that is why they have to upgrade the security software.

31. Deciding Who Should Participate • Group decision: are made by all members of the group • Mistakes: In light of the recent PSN hack attack that took Sony's servers down for more than three weeks, CEO Howard Stringer seems a little caught off-guard that his company was helping gamers out with a free service which then got hacked. • Example: • The Tokyo-based company has hired a security firm to conduct a complete investigation into the intrusion and is rebuilding the system to offer more protection, Seybold said in the blog posting. • Sony has initially resumed a subset of the full PlayStation Network and Qriocity services. Back online are: online gaming, playback of already rented video, "Music Unlimited" online audio streaming, access to third-party services like Netflix and Hulu, PlayStation Home and friends features such as chat. • Sony worked with the U.S.-based security firm Debix to set up the identity theft protection program, called AllClear ID PLUS, for people worried about security "following the criminal cyber attack on the network," the May 25 blog post says.

32. Conclusion • “Man is born to live and not to prepare to live” Boris Pasternak • You have the power of decision to make a change. Don’t complain about something, make the decision that this situation is no longer acceptable to you and decide to change it. Then and only then will it change. The power of change is within each and every one of us, whatever background we may be from. • Committing to a decision actually brings clarity which will in turn will enlighten your path to success. Practice making decisions, the more you make the better you will get at it and you will realise that you actually are in control of your life not the other way around. You will look forward to challenges and see them as opportunities. Life will not always give you the perfect conditions to achieve your goals but if are committed to your dream you will find a way of using the cards you are dealt.