PlayStation
Chapter 13 – Decision Making
The A-Team
Anthony Mata
Alida Saar
Jacqueline Rios
Nursyairah Basri
Johanan Ramos
The Decision Making
Process and Its
Foundations
Sony PlayStation’s Network Outage
 April 17 - 19, 2011
o There was an external intrusion on Sony’s
PlayStation Network.
 April 20, 2011
o Sony shut down the network on
o Approximately 77 million accounts were stolen.
 April 26, 2011
o Sony finally notified its users about the problem.
 May 15, 2011
o The network began being brought back online.
 May 16, 2011
o Sony announced its plans to provide compensation
for its users.
Steps of Decision-Making
1) Recognize & define the problem or
opportunity.
2) Identify and analyze alternative courses
of action, and estimate their effects on
the problem.
3) Choose a preferred course of action.
4) Implement the preferred course of
action.
5) Evaluate the results and follow up as
necessary.
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 XBox 360 or Nintendo’s Wii.
Decision Environments
 Certain decision environments
o Exist when information is sufficient to predict
the results of each alternative in advance of
implementation
 Risk decision environments
o 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
Decision Environments
 Uncertain decision environments
o Exist when managers have so little information
on hand that they cannot even assign
probabilities to various alternatives and their
possible outcomes
o Organized anarchy: a firm or division of a
firm in transition characterized by rapid change
and lack of a legitimate hierarchy.
Types of Decisions
 Programmed decisions
o Involve routine problems that arise regularly
and can be addressed through standard
responses
 Non-programmed decisions
o Involve non-routine problems that require
solutions specifically tailored to the situation at
hand
 Associative choices
o decisions that can be loosely linked to nagging
continual problems but that are not specifically
developed to solve the problem
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 nonprogrammed decision.
Decision Making
Models
Decision Making Models
 Classical Decision Theory
o Classical decision theory views the decision
makers as acting in a world of complete
certainty
 Behavioral Decision Theory
o Behavioral decision theory views the decision
makers as acting only in terms of what they
perceive about a given situation.
Behavioral Decision
Maker
Classical Decision
Maker
Problem not clearly
defined
Clearly Defined Problem
Knowledge of all possible
alternatives and their
consequences
Choice of the “optimum”
alternative
Managerial Action
Cognitive
limitations
bounded
rationally
Knowledge is limited on
possible alternatives
and their consequences
Choice of a “satisfactory”
alternative
Managerial Action
Bounded Rationally?
 Being “bounded rationally” is a shorthand
term suggesting that while individuals are
reasoned and logical, humans have their
limits.
o Individuals interpret and make sense of things
within the context of their personal situations.
o They engage in decision making “within the
box” on a simplified view of a more complex
reality.
Effects of Being Bounded Rationally
 Classical decision making theory
o Does not give a full and accurate description of
how most decisions are made in organizations.
 Behavioral decision making theory
o Accepts the notion of bounded rationality and
suggests that people act only in terms of what
they perceive about a given situation.
 Satisficing
o Choosing the first alternative that appears to
give an acceptable or satisfactory resolution to
the problem.
The Third Decision Making Model
“The Garbage Can Model”
 Garbage Can Model
o 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.
o 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.
Information Technology in
Extended Decision Making
 Artificial Intelligence (AI)
o The study of how computers can be
programmed to think like the human brain.
o 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.
o AI applications have significantly aided in
proving his idea.
Which Model Should PlayStation Use?
 PlayStation is probably experiencing the
garbage can model.
o 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.
o The hacker dug into the network so deeply
that no human can figure out how it happened.
o PlayStation should focus on AI to help stop the
theft.
Intuition Judgment
and Creativity
Intuition
Intuition
o The ability to know or recognize quickly and
readily the possibilities of the situation of a
given situation.
o Intuition adds elements of personality and
spontaneity to decision making. As a result, it
offers the potential for creativity and
innovation.
Intuition
 Ways to Improve your Intuition
o Relax!
• Drop the problem for a while.
• Spend some quite time by yourself.
• Try to clear your mind.
 Use Common Mental Exercise
o Use Image to guide your thinking.
o Let ideas run freely without a specific goal.
Judgmental Heuristics
 Heuristics
o Simplified strategies or “rules of thumb” used to
make decisions.
 The Availability Heuristics
o Assessing a current event or situations based on
past events that are in our memory.
 Representative Heuristics
o Involves assessing the likelihood that events will
occur based on its similarity to one’s stereotypes of
similar occurrences.
Judgmental Heuristics
 The Anchoring and Adjustment Heuristics
o 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
o 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
o The decision maker overestimates the degree to which he or she could of
have predicted an event that has already taken place.
Creativity
 Creativity
o In decision making it involves the development
of unique and novel responses to problems
and opportunities.
o Creativity in crafting decision often determines
how well people and organizations do in
response to complex challenges.
Fostering Creativity Tips
1) Diversify teams to include members with
different backgrounds, training, and
perspectives.
2) Encourage analogical reasoning.
3) Stress periods of silent reflection.
4) Record all ideas so that the same ones
are not rediscovered.
5) Establish high expectations for creativity.
6) Develop physical space that encourages
fun, divergent ideas.
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.
Managing the
Decision Making
Process
Choosing Problems to Address
 Is the problem easy to deal with?
o 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.
o The fraud last month could possibly be the biggest
Internet security breach in history.
Examples of actions that can help PlayStation
solve the problem
 List some precautions for the customers.
o 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.
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.
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.
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.
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.