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A Beautiful Grind
Overcoming the Prisoner’s Dilemmaand globally suboptimal Nash equilibriain the pursuit of enterprise alignment
Dr. Michael AliMichael.ali@att.net
 
 
Enterprise Alignment: Real World Stories
•Divisions A, B, and C agree to standardize on a plant systems tool from Vendor X. Divisions Aand C agree to do the first implementation. Division B decides to wait. Partway intoimplementation, Division A loses confidence in Vendor X. The enterprise council agrees not tostandardize in the plant systems space. Division A reverts back to its in-house tool. Division C,further along in its implementation, cannot revert. Division C must now move forward withVendor X without the leverage associated with an enterprise initiative.
The sucker’s payoff.
•Group Vice-President in charge of 3 divisions A, B, and C, wants a common ordering system for customers of all 3 division’s products. The cost per division is high due to the level of integrationand change to business processes in addition to the software development costs. Division C doesa cost/benefit analysis and declines to join the initiative. Group Vice-President says declining isnot an option.
 Punishment for defecting greater than temptation to defect.
•Divisions A and B must start joint product development work with Division C, recently purchased by the parent company. Division C should therefore adopt the processes and tools used by A and B. However, the processes and tools used by Division C are superior to those in A andB, and are responsible for the superior performance of Division C. The benefits of Division Cdoing joint development with A&B do not completely cover the impact of making Division C lessefficient.
Temptation to defect is greater than the reward of cooperating 
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What do these stories have in common with the Prisoner’s Dilemma? 
 
 
The classical Prisoner’s Dilemma
Two suspects, you and your accomplice, are arrested by the police. The police have insufficient evidence for a conviction, and having separated theboth of you, visit each of you and offer the same deal: if you confess and your accomplice remains silent, he gets the full 10-year sentence and you go free.If he confesses and you remain silent, you get the full 10-year sentence and he goes free. If you both stay silent, all they can do is give you both 6 monthsfor a minor charge. If you both confess, you each get 6 years.
 
He goes free, youserve 10 yearsBoth serve 6 months
 You deny
Both serve 6 years
He confesses
He serves 10 years,you go free
He denies You confess
The temptation (T) to confess (go free) is greater than the reward (R) for denying (6months), which is better than the punishment (P) if you both confess (6 years), which isbetter than the sucker’s (S) payoff (10 years) : T > R > P > SRTPS
What will you do (strategy) and what will be the result (payoff) ? 
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