The most critical function of every executive team is to make decisions that benefit an organization in the long term. Most of us would imagine that the more domain experts there are in a particular group, the better: their collective knowledge of risks and opportunities in a particular industry will surely lead to effective long-term decision making. The authors show that this reasoning is flawed. They describe their research, which indicates that in certain circumstances, groups that are dominated by domain experts may exhibit three harmful tendencies that actually detract from effective decision making, including over-confidence and 'cognitive entrenchment'.
As the founder of a new "ethical" bank focused on environmental sustainability, Jay McGuane realizes that he has to come up with clear rules about how the board should make decisions on "values" grounds--and quickly. Already, the bank is facing loan approvals involving two hot-button issues. Without clear guidelines, the bank's directors may fall into bitter squabbling, which could lead to resignations, negative media attention, and a flight of investors. Expert commentary comes from Ken LaRoe, chairman and CEO of First Green Bank, and John Replogle, president and CEO of Seventh Generation.
As the founder of a new "ethical" bank focused on environmental sustainability, Jay McGuane realizes that he has to come up with clear rules about how the board should make decisions on "values" grounds--and quickly. Already, the bank is facing loan approvals involving two hot-button issues. Without clear guidelines, the bank's directors may fall into bitter squabbling, which could lead to resignations, negative media attention, and a flight of investors. Expert commentary comes from Ken LaRoe, chairman and CEO of First Green Bank, and John Replogle, president and CEO of Seventh Generation.
As the founder of a new "ethical" bank focused on environmental sustainability, Jay McGuane realizes that he has to come up with clear rules about how the board should make decisions on "values" grounds--and quickly. Already, the bank is facing loan approvals involving two hot-button issues. Without clear guidelines, the bank's directors may fall into bitter squabbling, which could lead to resignations, negative media attention, and a flight of investors. Expert commentary comes from Ken LaRoe, chairman and CEO of First Green Bank, and John Replogle, president and CEO of Seventh Generation.
First Green Bank is a bank start-up in the midst of the financial crisis which aims to promote sustainability while making money as a bank. The case presents an ethical dilemma as the bank considers a loan to an arms manufacturer.