Special purpose acquisition companies, or SPACs, have been around in various forms for decades, but during the past two years they've taken off in the United States. In 2019, 59 were created, with $13 billion invested; in 2020, 247 were created, with $80 billion invested; and in the first quarter of 2021 alone, 295 were created, with $96 billion invested. In 2020, SPACs accounted for more than 50% of new publicly listed U.S. companies. SPACs are publicly traded corporations formed with the sole purpose of effecting a merger with a privately held business to enable it to go public. Compared with traditional IPOs, SPACs often offer targets higher valuations, greater speed to capital, lower fees, and fewer regulatory demands. Despite the investor euphoria, however, not all SPACs will find high-performing targets, and some will fail. Many investors will lose money. As an investment option they have improved dramatically, especially over the past year, but the market remains volatile. More changes are sure to come, which means that sponsors, investors, and targets must keep informed and vigilant. This article is not a blanket endorsement of SPACs. It is simply a guide for businesspeople considering a move into this rapidly evolving (and for many, unfamiliar) territory.

Rather than try to follow a set of simple rules ("Don't lie." "Don't cheat."), leaders and managers seeking to be more ethical should focus on creating the most value for society. This utilitarian view, Bazerman argues, blends philosophical thought with business school pragmatism and can inform a wide variety of managerial decisions in areas including hiring, negotiations, and even time management. Creating value requires that managers confront and overcome the cognitive barriers that prevent them from being as ethical as they would like to be. Just as we rely on System 1 (intuitive) and System 2 (deliberative) thinking, he says, we have parallel systems for ethical decision-making. He proposes strategies for engaging the deliberative one in order to make more-ethical choices. Managers who care about the value they create can influence others throughout the organization by means of the norms and decision-making environment they create.

Big tech companies such as Google and Booking.com are running tens of thousands of experiments annually, and other businesses are following their lead. Here's how to use experiments in your company to better evaluate customer offerings and policies, test new ideas and innovations, develop and refine decision frameworks, and establish reliable facts in uncertain conditions and ambiguous situations.

Managers often engage in risk-averse behavior, and economists, decision analysts, and managers treat risk aversion as a preference. In many cases, acting in a risk-averse manner is a mistake, but managers can correct this mistake with greater reflection. This article provides guidance on how individuals and organizations can move toward greater reflection and a more profitable aggregate portfolio of decisions. Inconsistency in risk preferences across decisions is a costly mistake for both individuals and for organizations.

Managerial, executive, and entrepreneurial success requires the ability to negotiate. The essential reading and recommended module plan will help readers become more effective negotiators by: 1) mastering a negotiation framework that will help them analyze, prepare for, and execute negotiations more systematically-and hence, more effectively-in a wide variety of contexts; 2) building a negotiation toolkit that consists of practical strategies for creating and capturing value in negotiation; and 3) learning how to create a negotiation environment that helps diagnose individual needs, and allows negotiators to identify techniques for mitigating weaknesses and leveraging their strengths. The supplemental reading addresses two additional topics: cross-cultural negotiations and gender issues in negotiation.

By embracing a vigilant mindset as a 'default state' and employing four tools-including 'asking lots of questions' and 'attending to artful dodges'-managers in any industry can develop a keen ability to notice unethical behaviour. The authors show that this is a critical step towards reducing both 'bounded ethicality' and 'bounded awareness' in today's organizations.

In legal disputes, contested insurance claims, and similarly adversarial negotiations, one party is likely to open with an inflated claim or a lowball offer. And if the other side's position is unreasonable, it may make little sense to be reasonable yourself. But if everyone routinely came to a dispute with a realistic starting position, the offers would be more or less aligned, and any negotiation that followed would most likely be relatively civil, speedy, and fair. How can a negotiator who wants to be fair from the start ensure that his or her counterpart will be reasonable as well? The authors propose the "final-offer arbitration" challenge, which leverages an approach first applied in labor negotiations in the 1960s. You can employ this tactic by opening with a demonstrably fair offer and then--if the other party is unreasonable--extending a challenge to take the competing offers to an arbitrator who must choose one or the other rather than a compromise between them (the usual outcome of conventional arbitration). The authors describe how AIG used the approach and how other companies can begin to adopt it.

This Reading argues that decision making is systematically flawed and introduces methods to improve decision-making effectiveness. The Essential Reading section covers the rational decision-making model and three important ideas that challenge it: Herbert Simon's concept of bounded rationality, Amos Tversky and Daniel Kahneman's work on heuristics and biases, and Keith Stanovich and Richard West's conceptualization of System 1 and System 2 thinking. The Reading then discusses seven common biases or heuristics, along with ways to mitigate them, and lists additional common biases to show the broad range of issues that can influence decision making. The authors also describe biases and additional decision-making challenges that are particular to groups. Finally, the Essential Reading draws on Richard Thaler and Cass Sunstein's concept of choice architecture to present a new framework for better decision making. The Reading includes two Supplemental Reading sections that deal with how motivation and emotion affect decisions, and how flawed decision-making processes can compromise ethics. The Reading also features two videos and one Interactive Illustration.

In this wide-ranging interview, one of the world's leading business psychologists describes the value of becoming a 'first-class Noticer'. Doing so, he argues, enables one to avoid the perils of 'inattentional blindness', 'motivated blindness' and 'bounded awareness'-all of which are pervasive in modern organizations, he says. He also defines 'leadership-driven noticing', why it is such a vital skill, and the ways in which it is absent on many corporate boards and in the auditing industry.

We'd like to think that no smart, upstanding manager would ever overlook or turn a blind eye to threats or wrongdoing that ultimately imperil his or her business. Yet it happens all the time. We fall prey to obstacles that obscure or drown out important signals that things are amiss. Becoming a "first-class noticer," says Max H. Bazerman, a professor at Harvard Business School, requires conscious effort to fight ambiguity, motivated blindness, conflicts of interest, the slippery slope, and efforts of others to mislead us. As a manager, you can develop your noticing skills by acknowledging responsibility when things go wrong rather than blaming external forces beyond your control. Bazerman also advises taking an outsider's view to challenge the status quo. Given the string of ethical failures of corporations around the world in recent years--from BP to GM to JPMorgan Chase--it's clear that leaders not only need to act more responsibly themselves but also must develop keen noticing skills in their employees and across their organizations.

People are often surprised to hear that most of us overestimate our ethicality at some point. Significant research indicates that we are unaware of the gap between how ethical we think we are and how ethical we truly are. The authors describe the related concepts of bounded awareness and bounded ethicality and discuss the implications of these states for organizations. They then provide three tools for improving our individual ethicality and outline several aspects of organizational life that must be examined more closely to reduce unethical behaviour on a group level, including addressing 'hidden but powerful informal values' and 'ethical sinkholes'.

Companies are spending a great deal of time and money to install codes of ethics, ethics training, compliance programs, and in-house watchdogs. If these efforts worked, the money would be well spent. But unethical behavior appears to be on the rise. The authors observe that even the best-intentioned executives may be unaware of their own or their employees' unethical behavior. Drawing from extensive research on cognitive biases, they offer five reasons for this blindness and suggest what to do about them: (1) Ill-conceived goals may actually encourage negative behavior. Brainstorm unintended consequences when devising them; (2) Motivated blindness makes us overlook unethical behavior when remaining ignorant is in our interest. Root out conflicts of interest; (3) Indirect blindness softens our assessment of unethical behavior when it's carried out by third parties. Take ownership of the implications when you outsource work; (4) The slippery slope mutes our awareness when unethical behavior develops gradually. Be alert for even trivial infractions and investigate them immediately; and (5) Overvaluing outcomes may lead us to give a pass to unethical behavior. Examine good outcomes to ensure they're not driven by unethical tactics.

Research by esteemed academics has uncovered a wide variety of biases that plague decision makers on a regular basis. Thanks to them, we know that predictable errors lead people to commit sub-optimal acts on a regular basis, ranging from undersaving for retirement to engaging in needless conflict and accepting the wrong jobs. Unfortunately, we have yet to uncover systematic strategies to help people overcome these biases and behave more optimally. The authors get started on this path, focusing on strategies that can lead to better decisions, which involve leveraging the human tendency to default to 'Type 1' -- or automatic -- mental processing.

Without realizing it, managers delegate unethical behavior to people in their organizations on a regular basis. This occurs whenever someone tells their subordinates to 'do whatever it takes' to achieve production or sales goals, leaving open the possibility of aggressive or even unethical tactics; it happens when companies outsource production to offshore subcontractors that are inexpensive because they are less constrained by costly labor and environmental standards; and it happens when partners at accounting firms remind junior auditors about the importance of retaining a client that has inappropriate accounting practices. In these and countless other situations, people are motivated to overlook the problematic ethical implications of other people's behavior. The result: scandals that can cost trillions of dollars. The good news, say the authors, is that the evidence strongly supports the notion that most people value ethical decisions and behavior and strive to develop the habit of ethicality. Nevertheless, people still find themselves engaging in unethical behavior because of biases that influence their decisions-biases of which they may not be fully aware. Fighting human nature is no easy task, but the authors explain that leaders can and must make the structural changes necessary to reduce the harmful effects of our psychological and ethical limitations.

A two-party negotiation between an Agent representing a new author and an Editor at a large Publishing Firm. The exercise involves a 1-issue, zero-sum negotiation concerning the advance on royalties that the publisher will pay to the author.

A two-party negotiation between an Agent representing a new author and an Editor at a large Publishing Firm. The exercise involves a 1-issue, zero-sum negotiation concerning the advance on royalties that the publisher will pay to the author.

Negotiators often fail to achieve results because they channel too much effort into selling their own position and too little into understanding the other party's perspective. To get the best deal--or, sometimes, any deal at all--negotiators need to think like detectives, digging for information about why the other side wants what it does. This investigative approach entails a mind-set and a methodology, say Harvard Business School professors Malhotra and Bazerman. Inaccurate assumptions about the other side's motivations can lead negotiators to propose solutions to the wrong problems, needlessly give away value, or derail deals altogether. Consider, for example, the pharmaceutical company that deadlocked with a supplier over the issue of exclusivity in an ingredient purchase. Believing it was a ploy to raise the price, the drug maker upped its offer--unsuccessfully. In fact, the supplier was balking because a relative's company needed a small amount of the ingredient to make a local product. Once the real motivation surfaced, a compromise quickly followed. Understanding the other side's motives and goals is the first principle of investigative negotiation. The second is to figure out what constraints the other party faces. Often when your counterpart's behavior appears unreasonable, his hands are tied somehow, and you can reach agreement by helping overcome those limitations. The third is to view onerous demands as a window into what the other party prizes most--and use that information to create opportunities. The fourth is to look for common ground; even fierce competitors may have complementary interests that lead to creative agreements. Finally, if a deal appears lost, stay at the table and keep trying to learn more. Even if you don't win, you can gain insights into a customer's future needs, the interests of similar customers, or the strategies of competitors.

Today's business leaders regularly face complex ethical challenges that impact them, their businesses, and other stakeholders. Unfortunately, they often unconsciously make decisions using underlying principles that predispose them to biases and errors in judgment. By recognizing some of these challenges, they can learn to avoid 'ethical danger zones' and become more effective leaders. The authors explain that developing a framework to improve ethical decision making entails a focus on three key areas: quality, breadth, and honesty. By identifying and confronting the biases outlined herein, managers can make more rational and ethical decisions

Nobel Laureate Herbert Simon introduced the concept of 'bounded rationality' as "a behavioral model in which human rationality is very much bounded by the situation and by human computational powers. In this article, the authors propose that awareness can also be bounded, and that this occurs when people fail to see, seek, use or share highly relevant and readily-perceivable information during the decision-making process. They describe three types of bounded awareness: inattentional blindness, change blindness and focalism. As the authors show, the failure to recognize these psychological limitations poses an even greater danger than the limitations themselves.