Webster Industry - Analysis of Carter and His Team Decison Making

There are many flaws in the process Carter and his group used for decision making. One of the most important of them was Carter's lack of understanding of the strategy of the Webster Industries. The financial results in second and third quarter show that by October 1975, the company was recovering from the downturn. If that was really the case, Carter could have requested an adjustment to the anchoring bias of 15% downsizing target and examined the list of criteria that Stevens laid out in light of sustained growth. Sustained growth requires right balance of people who are competent in their current job as well as people with potential. . Consequently the group should have avoided using criteria such as lack of future potential in competent people or seniority for downsizing. Stevens' suggestion for reviewing people's potential and seniority, put in an anchoring bias that could well have been avoided. Stevens also thought that people with seniority might choose to retire which indicated a representativeness bias on his part, while his somewhat indifferent attitude towards fairness was concerning. These aspects were clearly incongruent with the downsizing guidelines laid out Abe Webster

Carter, perhaps plagued by availability bias from his previous experiences with downsizing, gave too much control of the entire process to Stevens. Stevens' anchoring had huge effect on the entire process which Carter could have avoided by seeking advice from more than one person on Sunday to ponder over the issue at hand and including a larger group for discussions on Monday. In Particular, Carter should have approached Brown first with the proposal of demotion and asked him to provide help on downsizing strategy. Brown clearly had more experience than Stevens and would have been great resource to add value the discussion. At the same time, this would have helped with the moral and repo with Brown.

On a side note, Steven' idea of hiring 5 more competent people from other group and then reducing their group by 48 people may have setup an anchoring bias. Instead, the focus should have been on identifying as many capable people to execute the organization strategy.

Carter and his group deliberated on using PAS and audit systems for gauging the performance and potential. The audit system was too abbreviated and flawed in some aspects where employees were not aware of the evaluative function of the audit and there was no accountability on management front to give feedback to employees. Clearly, it created availability bias for Carter and team to base their perception on as audit data was available for 97% people. On the other hand, the PAS system was used by only 40% of the people. Although well designed in many ways, the PAS system was not structured to rank individuals. It was a tool designed for advancing employees with potential rather than weeding out the low performers, especially since it was not used