Nika’s CR #6

My essential question is what practices are in places at a successful workplace? I wanted to work in a professional environment to see how a company functioned. I was also very interested in neurology and psychology. So I wanted to focus on what is the psychology behind some practices of a company. The internship that I could find that answered a part of my question is in the HR department. My plan was to intern for three days a week at the office and for the other two days do various research on psychology relating to business. Because of the current situation, my internship was moved to my home and my computer, and my research was almost entirely cut out. My internship was split up into 6 weekly assignments. They dealt with everything from onboarding at a new company, feedback, personal development, setting goals, and integrating different cultures into one company. These were all larger practices that most companies use to promote a culture of learning, community. My task for most of these weekly assignments was to go back to the basics of these practices and see why they are being used in the first place and are they successful. One of the things that I often did is relate the practices to the natural world. For example, one week I looked at giving and receiving feedback. Biological systems operate on a mechanism of inputs and outputs, and each one is caused by and causes a certain event. A feedback loop is a biological occurrence wherein the output of a system amplifies the system, positive feedback, or inhibits the system, negative feedback. Feedback loops are important because they allow living organisms to maintain homeostasis, to adapt to their environments and basically stay alive. Now while that might not be that drastic in the business world, feedback is nonetheless important for the company to adapt to its surrounding and thrive. So that was just an example of what some of my weekly assignments looked like, but as I started going into the project I started noticing that even with all of these extremely well thought out practices that are backed by science, sometimes for some reason we still don’t respond to them in the way we should be. So I turned to behavioral economics. For some of you that might not know, behavioral economics is the study of psychology as it relates to the economic decision-making processes of individuals and institutions, and how those decisions vary from the traditional model of economics. Classic economics assumes that people are rational decision makers and will do whatever is in their best interest, but it ignores the fact that humans are emotional beings and are affected by their environment which often has them make decisions that aren’t in their best interest. We like to think very highly of human nature. We make the best and the smartest decisions, but behavioral economics argues differently. And I wanna do a quick little experiment with everyone, that I learned during my project. Look at these two tables. If I asked you which was longer, the vertical line on the left table or the horizontal line on the right table? Everyone agrees that it is the line on the left. But I can easily demonstrate your mistake. You can clearly see that the lines are exactly the same. But the interesting thing is when I take away the lines, you still see exactly what you saw before the lines. It is as if you haven’t learned anything. I’ll give you one more interesting example that I came upon. They gave a group of physicians a case study. They said, “Your patient is a 67-year-old farmer. He’s been suffering from right hip pain.” And then, they said to the physicians, “You decided a few weeks ago that all these medications aren’t working. So you refer the patient for hip replacement.” So the patient is on a path to have his hip replaced. Then they said to half of the physicians, “Yesterday, you reviewed the patient’s case, and you realized that you forgot to try one medication. You did not try ibuprofen. Do you pull the patient back and try ibuprofen? Or do you let him go and have hip replacement?” Most physicians in this case decided to pull the patient and try ibuprofen. To the other group of physicians, they said, “Yesterday when you reviewed the case, you discovered there were two medications you didn’t try out yet — ibuprofen and piroxicam.” You have two medications you didn’t try out yet. What do you do? You let him go, or you pull him back? And if you pull him back, do you try ibuprofen or piroxicam? Which one?” Now, look at this. This decision makes it as easy to let the patient continue with hip replacement as the first decision, but pulling him back, is now more complex. Because there are two decisions. What happens now? The majority of the physicians now choose to let the patient go for a hip replacement. So going back to my essential question, I would say yes I learned about practices that make a successful business. Practices that are based in science and all have some biological reason why they are proven to work. But what I didn’t expect to find is that no matter how prepared you are, how thought out your business process is, human nature will most likely win. So what businesses need to focus on is predicting the irrationality of their employees and their customers. In this way, they can alter the environment so that the employees and the customers make decisions that benefit their business. 

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