The exercise, which accommodates a well-known experiment by experimental psychologist Thomas Gilovich, is intended to demonstrate both the ubiquity of analogy or associative thinking more generally and its particular possible hazards. The first focuses on a place that involves technically challenging and costly R&D and generation (e.g., Gulf of Mexico). In the second option, these prices are lower and returns are higher, but the firm has to deal with possibly tainted parties (e.g., Russia). Half the class is presented with a conventional, or "unbiased" difficulty.
The other half is presented with a problem identical to the conventional one except for a couple of differences which are not relevant to the problem's structure. These differences involve superficially similar clues that are associated with Enron. For instance, the place of the assembly in the impartial problem is Atlanta, but it's Houston, where Enron was headquartered, in the Enron difficulty; the name of the oil company is Fleet in the unbiased case, and Raptor (named after one of Enron's many special purpose entities) in the Enron case.
Pupils who are given the Enron problem often unconsciously connect the problem they face along with the Enron debacle, which induces them to favor the option that is challenging than do pupils who are given the impartial issue.
PUBLICATION DATE: April 04, 2011 PRODUCT #: 711512-PDF-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
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