Guidelines on QUIZ 2

For your reference, attached by the end of this guideline is the paper submitted by a group which
I find really good. You can take the answers in the paper as model answers.

Question 1. In a short essay, discuss the approaches of decision-making. (20 marks)

- Pls find the sample response for this question in the attached paper by the end of this guideline.

- You need to list and explain the four approaches of decision-making (it is still fine if you just
discuss three approaches: rationality, bounded rationality, intuitive decision making). The readers
need to get the essence of each approach from your discussion. You will get a full 20 marks, if in
your discussion you really clarify the assumptions/conditions of each approach.

Question 2. In a short essay, compare and contrast the approaches to make decisions. (20
marks)

- You will get a good mark if your response help the readers to distinguish between the approaches
by showing some similarity and difference among them. Again, you may want to refer to the
answer in the attached paper for a model answer.

CASE STUDY

A Great Place to Work

In line with Apple and Google, Tencent Holdings Limited, China’s leading internet service
portal, has become the world’s tenth most valuable public companies and is one of the largest
gaming companies in the world. Founded in 1998, the company is based in Shenzhen, China.
What began as just mobile-messaging service quickly turned into a platform for gaming, bills
payment, and money-market funds services. Its ubiquitous WeChat has more than 800 million
users. To continue increasing the Internet company’s business, founder, Ma Huateng,
understands that staffing is the key and that the employees must have a vested interest in its
success.
Huateng strives to provide open and comfortable atmosphere in the workplace, an ease of
communication with management, and recognition of individual accomplishments. At Tencent’s
monthly meetings, staff members ranging from senior management to trainee managers discuss
their latest projects. The decision-making process is not as formal as in other big conglomerates.
Extolled by Goldman Sachs and General Electric, the founder viewed that internal competition
between coworkers is a necessary driver of innovation. He wants the teams to run in parallel, as
no one knows which team will come out with a better product.
While moral satisfaction is important, to boost employee enthusiasm Tencent won’t
underestimate the importance of linking remuneration to performance. Employees receive cash
prizes as rewards for valuable results, such as redesigning an interface to new and significant
innovations. One manager remarked that an employee is gratified when they win something, no
matter how small and big the reward. Cash rewards have become part of the ingrained Tencent
culture. Along with it, an annual bonus, often paid prior to the Lunar New Year holiday, can be
higher than an employee’s yearly salary at Tencent. By becoming the company’s shareholders
alongside the company’s founders, profitor equity sharing is one of the most effective incentives.
In 2016, Tencent gave its 31,557 employees 300 shares each as part of the company’s
anniversary celebrations. This means that each Tencent employee received U.S. $8,000 worth of
shares.

Reference: Robbins, S. P.; & Coulter, M. (2018). Management, 14th ed. Pearson, UK.

Question 1. Use motivation theories to explain why what Ma Huateng does at Tencent is
effective in motivating his employees. (20 marks)

- You need to point out at least two motivation theories to explain how Tencent is effective at
motivating its employees. To get good marks, you need to understand the essence of each theories
and show how such essence is reflected in the way Mr. Huateng does (apply to his employees).
Theories that emphasize employee inclusion and empowerment such as theory Y are good
candidates.
Question 2. “Money is not a motivator”. Discuss this in case of Tencent. (20 marks)

Answer: This is an open question. You may want to discuss the two sides of money as a motivator
in two paragraphs:

+ Paragraph 1: it is not a motivator. By two-factor theory, money is a just a hygiene factor but not
an intrinsic factor that create job satisfaction. In combination with using money rewards, among
other motivators, for example, Tencent emphasize on encouraging employees to participate in
decision making (Theory Y).

+ Paragraph 2: Money is not a motivator all the time/ Money is a motivation in some cases.

Question 3. Is financial benefit a motivator to you? Why or why not? (20 marks)
Answer: This is an open question. Your mark depends on your ability to provide well-developed
arguments. Your position/opinion need to be supported with well-defined reasonings and evidence
(if applicable).
Tut 3 - Group 7 - Monday (7.20-9.10 am)
QUIZ 2
Question 1: In a short essay, discuss the approaches of decision-making.

Decision-making plays a crucial role in management. Rationality, bounded rationality,

intuition, and evidence-based management are the four approaches to how managers
make decisions.

To begin with rational decision making, it occurs when managers make consistent and
logical choices with specified constraints to maximize value. To be able to make rational
decisions, it is necessary to rely on the following factors: first, the decision maker would
be completely objective and logical; second, the situation confronted would be obvious
and unambiguous; third, the decision maker would have a clear and defined purpose in
mind, as well as a thorough understanding of all available options and consequences to
select the one that maximizes the possibility of reaching that goal. Next, a more realistic
approach to defining how managers make decisions is the concept of bounded rationality,
which states that managers make rational decisions, but are limited (bounded) by their
ability to analyze information. The decision maker will satisfy - choose the first
alternative encountered that satisfactorily solves the problem rather than maximize the
outcome of their decision by considering all alternatives and choosing the best. They are
being rational within the constraints of their information processing abilities. Besides, the
organization's culture, internal politics, power concerns, and a phenomena known as
escalation of commitment, an increased commitment to a previous decision despite
evidence that it may have been wrong, are all likely to influence decision-making. In
terms of intuitive decision making, it means the managers make decisions on the basis of
experience, feelings, accumulated judgment and can complement both rational and
bounded rational decision making. Finally, “the systematic use of the best available
evidence to improve management practice” can be called evidence-based management
(EBMgt). It contains four basic elements: first, the decision maker's competence and
judgment; second, external evidence that the decision maker evaluates; third, opinions,
preferences, and values of those who have a stake in the decision; and fourth, internal
factors such as context, circumstances, and organizational members.

To put it in a nutshell, four approaches of decision-making are effective tools to help

managers make the right decisions and in line with reality.
Question 2: In a short essay, compare and contrast the approaches to make
decisions.
There are four approaches to making decisions: Rationality, Bounded Rationality,
Intuition, and Evidence-Based Management (EBMgt). The decision-makers have to
consider the characteristics of each approach, then be able to compare and contrast them.

Firstly, rationality is about making decisions that are logical and consistent, focusing on
the maximum value in the future. Bounded rationality is the same as rationality - still
making rational decisions, but it is bounded by the ability of the decision-makers (their
ability to analyze information, the information about organizational culture, internal
politics, or escalation of commitment) - that means no more maximum value but
satisfice-solutions that are “good enough” to use for the organization. People can easily
understand that when some things suitable are found and used, other alternatives may not
need to be considered anymore. These two approaches are suitable for each situation,
however, there are differences between them. The maximize result made by rational
decision making is more suitable in the long term as it can bring the best solution with the
best result for the organization, while in contrast, the bounded rationality decision with
only “good enough” solutions can only be appropriate in the short term as in the future.
There will be a need for rational decision-making to better analyze all the information,
then giving the best decision to fulfill the need of the organization as the “good enough”
decision may lose its rationale after a period of time.
Secondly, there are differences between rationality and intuitive decision making. As
mentioned earlier, rational decision making is logical and consistent- made with the
process of analysis and reasoning, which are based on gathered information and facts,
whereas intuitive decision making is made based on one’s experience, judgments, and gut
feelings. Based on that, it can be considered that rationality can be expressed in words,
numbers, or symbols while intuition can not be expressed like that, as feelings and
emotions can not be easily shown out in words. Moreover, there is a difference in the
solutions made by these two approaches. The solutions made by rational decision making
are only by a conscious and rational search, while in the opposite, intuitive decision
making is also based on ethical values or cultures, past experiences, emotions, skills, etc.
of decision-makers- these can be the barrier to the most effective decision for the
organization. As a consequence, intuition is more “human” than rationality.

After comparing and contrasting rationality, bounded rationality, and intuition, it can be
pointed out that there are similarities and differences between bounded rationality and
intuition. The differences soon appear from contrasting it with rationality as bounded
rationality and rationality have the contrast in “bounded” characteristics. However, when
it comes to the final decision, the decision-makers can see the similarities of the
“bounded” in bounded rationality and intuitive decision making - they may all be barriers
to the maximum value in decision making.

Thirdly, compare and contrast EBMgt with other approaches, people can see that, when
making decisions with approaches EBMgt and rationality, the decision-makers need to
follow the best evidence or the facts- logic and consistent - these are things in common as
the best evidence needs to be logical enough to be available in use. Moreover, based on
the characteristics of EBMgt and bounded rationality, decision-makers can think about
using both approaches to reach the most effective decision. While EBMgt focuses on the
best available evidence, bounded rationality consists of the past experiences of a
decision-maker - escalation of commitment - evidence that has already existed from the
previous decision. The similarities are they are all evidence, the differences are the
characteristics of evidence that the two approaches bring to decision-makers.

To sum up, based on those similarities and differences of four approaches to make
decisions, decision-makers then can choose the best approaches to make the most
effective decision or combine one approach to others in advance to upgrade the quality of
decision making and create the balance in decisions which are most appropriate to solve
the problems.

CASE STUDY
Question 1: Use motivation theories to explain why what Ma Huateng does at
Tencent is effective in motivating his employees.
At Tencent, three theories of motivation are applied by Ma Huateng, which is practical to
motivate his employees to work. They are theory Y, Herzberg’s two-factor theory, and
Victor Vroom's expectancy theory.

To apply the theory Y, Huateng maximizes the motivation by giving the employees the
right to make decisions with managers in projects, self-direction within an open and
comfortable atmosphere in the workplace. Besides, close communication also helps to
create a good group relationship between managers and employees, hence, the workers
can like to work more.

In terms of two-factor theory, Huateng grants his employees recognition of specific

achievement. That is a motivator (intrinsic factor) that increases job satisfaction and
motivation in employees. It implies that the employees’ efforts are really perceived and
respected by their company, which accelerates them to be more powerful and dedicated to
fulfill their job.
According to expectancy theory, Huateng emphasizes the effectiveness of the
performance and reward linkage. If the employees at Tencent come up with impressive
outcomes, they will receive cash prizes as a reward, which promotes innovation, internal
competition, and the desire for victory to design superior products. Moreover, Tencent
gives annual bonuses on special occasions such as the Lunar New Year holiday and gives
its employees permission to be shareholders. With all the attractiveness of reward above,
it is likely to say that the employees will make tremendous efforts to work effectively and
gain more rewards.

To sum up, Huateng applies three theories of motivation at Tencent company to excite
employees to work and accomplish the common company’s goal, including theory Y,
Herzberg’s two-factor theory, and Expectancy theory.
Question 2: “Money is not a motivator”. Discuss this in the case of Tencent.

According to Herzberg’s theory, money or an employee’s salary is a hygiene factor. It is a

biological need because money is required for food, water, and shelter. Because of this
truth, money becomes a motivator for everyone. It will provide a brief burst of motivation
because we require it to survive, but only intrinsic or motivational factors can determine
job satisfaction or dissatisfaction.

However, in Tencent’s case, it has been shown that “Cash rewards have become part of
the ingrained Tencent culture”. Using money as a motivator has been applied at Tencent
for such a long time that it has become a company’s culture. In the case of Tencent,
expectancy theory which was proposed by Victor Vroom of Yale School of Management
in 1964 has been applied. This theory focuses on outcomes, and not on needs unlike
Maslow and Herzberg. Efforts of the employees at Tencent will lead to expected
performance and that performance will lead to reward. More specifically, Tencent
remunerated the employees cash prizes as a reward for valuable outcomes ( achieving
important goals such as changing an interface to accommodate new and major
improvements,etc.) or as an annual bonus which is commonly paid ahead of the Lunar
New Year holiday, etc. Besides cash, Tencent also considers shares that could be
converted into cash as the most effective incentive to encourage its shareholders.

In conclusion, based on Expectancy theory, money, in Tencent’s case, is an extremely

strong motivator which not only promotes the employees work their best and be more
responsible but also encourages their shareholders.

Question 3: Is financial benefit a motivator to you? Why or why not?

Motivation is the encouragement for doing something. There are short-term and
long-term motivators. The following part discusses whether financial benefit is a
motivator or not.

As in Maslow’s Hierarchy of Needs theory, needs were categorized as five levels,

including physiological, safety, social, esteem, and self-actualization needs. Financial
benefit would be recognized within the safety category because when we have money, we
will meet your living expenses, then we will feel secure. According to Maslow, if the
need is satisfied, it will no longer be a primary need, so we will move to the next level for
motivation. If we are managers and our employees are satisfied with financial reward, we
can boost their motivation by respecting them, empowering them with personal projects
which drive them to satisfy higher level needs. Therefore, in this situation, money itself
has been no longer a motivator because that need is fulfilled.

Besides, under Hertzberg’s Two-Factor theory, there are two types of factors that cause
job dissatisfaction and job satisfaction which are hygiene factors (extrinsic factors) and
motivators (intrinsic factors) respectively. If hygiene factors are either not present or not
sufficient, we will be dissatisfied. Although they are present, they in turn do not lead to
satisfaction. For example, when we have a favorable working environment, it does not
motivate us to increase job performance, but we feel comfortable when working, so no
dissatisfaction happens. In terms of money, if we get a raise for what we have done for
the job, it will not motivate us to work harder. While we do not get the raise that would
be worth for the amount of work we have done, we will be dissatisfied with our work
post. In particular, financial benefit is a hygiene factor. It serves as a biological need as
we use it for food, accommodation. It will give a short run of motivation because we need
it to survive, but only the intrinsic factors are able to determine job satisfaction or no
satisfaction.

In conclusion, financial benefit is just something used for sustaining life. Financial
benefit is a short-term motivator. When the need is satisfied, it no longer motivates us to
devote enthusiastically. However, financial reward is not considered as a long-term
motivator because it loses its power over time. Because when basic needs are met, we
will move to the next level of motivation, such as relationships, confidence, achievement,
problem-solving, etc.