Management of Freakonomics

Deciding to explore other business dialogues, I had to satisfy my curiosity of a reading referenced to me by a fellow economist in my undergraduate studies. The first edition of the book, entitled Freakonomics, (Dubner, Levitt 2005) provides a redefined approach to how business persons and the general public view the modern world. I wanted to obtain a copy of something up-to-date, thus I ‘Googled’ the term and found the authors website: http://www.freakonomics.com/

Since my official blog specifically entertains concepts that pertain to management ideals, I decided to explore the website’s blog section for details. What I uncovered was a breadth of current events that deal with domestic and international occurrences, many that occupied by idle time. The article that really sparked my interest was titled, “Somali Pirates Practice Inventory Management,” and was written on March 16th, 2011.



Apparently, the Somalia Pirates have become more sophisticated in their illegal day-to-day business practices. In fact, a group of Somali pirates announced that “they’re cutting asking prices for hostages by 20 percent — to speed up the negotiation process, make room for more hostages and take in more cash…we want to free ships within a short period of time instead of keeping them for a long time and incurring more expenses in guarding them. We have to free them at a lower ransom so that we can hijack more ships.” http://www.freakonomics.com/2011/03/16/somali-pirates-practice-inventory-management/

This statement is rather bold, considering that the unidentified “spokes-pirate” is starting to apply modern business and economics aptitude into an otherwise psychological ordeal. Unlike ordeals that include kidnapping, hostages, or ransoms, the Somali pirates actually think that the western viewpoints of business will translate into large sums of money. I’m not sure where they obtained their education; however, I will say their ideas sound trivial, but more-or-less rather ludicrous!

Decision-Making Processes

For as long as I can remember, I’ve always utilized a less-than-common methodology involved with everyday decision-making processes. My close friends and family members all agree that I over analyze simple questions and everyday tasks that should take a split second to decide, but somehow turn into a “What if” fiasco.

I decided to research the decision making process and what the definition actually entailed. According to the book titled, Organizational Behavior: Emerging Knowledge and Practice for the Real World, decision making is defined as the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs (Von Glinow and McShane).

Typically, decisions are made by utilizing clear logic and applying the best available information to determine the best option at hand. Furthermore, our authors categorize the Decision-Making Process into one of 6 Rational Choice Options as follows (Von Glinow and McShane):



1. Identify the problem or opportunity; realize that some decisions may produce results that exceed and/or fail to meet current goals and expectations.

2. Chose the best decision process; determine whether you have enough information available or require the assistance of others to complete the desired process.

3. Develop alternative solutions; if necessary, search for the best solution or modify an existing strategy to help create the best outcome possible.

4. Chose the best alternative; field the possible alternatives with the best outcomes and make your decision based upon the highest utility.

5. Implement the selected alternative; this process is self-explanatory and should assume minimal, if any, problems to implement the alternative decision.

6. Evaluate decision outcomes; generally, the final step should involve information from predetermined benchmark metrics such that any final feedback is easily examined.

What I have realized over the past couple of years after completing my undergraduate and graduate studies is that the existence of too much information can be my problem. I have made mind-numbing efforts to better control my overactive brain stimulants; however, I should find an outlet to tap into this surprisingly beneficial attribute to increase my personal net worth. Or, better yet, provide assistance to others who would simply want additional alternatives to a common process that requires revamping.

Sources: Von Glinow, Mary Ann and Steven McShane. Organizational Behavior. New York, NY: McGraw-Hill Irwin, 2010, Pages 198-200.

The FISH! Philosophy

Based upon the presentations conducted by fellow classmates on March 30th, I was very motivated to conduct additional research on the FISH! Philosophy. However, I cannot put the cart before the horse, and I will provide a brief description of what the FISH! Philosophy entails.


So, what exactly is the FISH! Philosophy?

The FISH! Philosophy consists of four simple, interconnected practices:


• Be There is being emotionally present for people. It’s a powerful message of respect that improves communication and strengthens relationships.

• Play taps into your natural way of being creative, enthusiastic and having fun. Play is the spirit that drives the curious mind, as in “Let’s play with that idea!” It’s a mindset you can bring to everything you do.

• Make Their Day is finding simple ways to serve or delight people in a meaningful, memorable way. It’s about contributing to someone else’s life, not because you want something out of it, but because that’s the person you want to be.

• Choose Your Attitude means taking responsibility for how you respond to what life throws at you. Once you are aware that your choice impacts everyone around you, you can ask yourself, “Is my attitude helping my team or my customers? Is it helping me to be the person I want to be?”

Through The FISH! Philosophy, we build stronger relationships with the team members we work with, the customers we serve, the students we teach and the people we love. (FISH! Philosophy: What is FISH!)

Planning an overhaul, or merely shaking up habitual office place actions, is not an easy task for many individuals to adjust to. Simply betting on the fact that your team may feel a high level of resurgence in their career may be a reason to actually implement a program along the likes of FISH!. If your HR or Management Team is considering the idea of bringing FISH! to your organization, why not ponder the financial resources necessary to potentially improve outputs of an otherwise stagnate team?


ChartHouse Learning, the founders of the FISH! Philosophy, offer a vast array of services to help clients introduce and effectively use these powerful tools. In my current career as a Financial Analyst, my workplace could definitely utilize the assistance of the FISH! Philosophy to inspire or facilitate the motivation of several co-workers. Unfortunately, due to the bleak economic considerations, I feel that the recommendation to actually implement, much rather suggest the thought; will go by the way-side.

Sources: FISH! Philosophy: What is FISH! 3 April 2011. http://www.charthouse.com/content.aspx?nodeid=22610.

Basics About Employee Motivation (Including Steps You Can Take)

Beyond the obvious financial motivators, I wanted to delve into an employee motivator that could serve as a catalyst for success and personal growth that doesn’t include out-of-pocket expenses. After reading several articles based upon “Steps You Can Take to Improve Employee Motivation” I realized that breaking down the process to fundamental basics may be the best route. My method will include rather basic ideals commonly referred to the acronym “SMARTER” meaning that your goals are Specific; Measurable; Acceptable; Realistic; Timely; Extending of capabilities; and Rewarding to those involved. (McNamara, Carter. N.D)



In addition to the SMARTER acronym, I completed research for basic principles to help motivate employees that you not only work with, but also spend a majority of time with on a daily basis. I uncovered a few examples that will be examined further below.

I. Motivating Employees Starts with Motivating Yourself!

Ever notice that when it seems like you hate your job, it everyone else does too? Or my personal favorite, when you are stressed out, the same can be said for your co-workers? One must realize that enthusiastic actions are contagious. When someone is enthusiastic about their job, others will typically follow suit. This will often lead to a better overall awareness of taking care of yourself, personally and from a career perspective, with a clearer outlook on how others are doing their job, both in a positive and negative manner.

II. Place an Emphasis on Aligning Organizational Goals with Employee’s Goals.

As a manager, you should be excited when your employees are fired up about their work. But, are your employees focused on contributing to a task that is aligned to the goals of the organization? If not, you are essentially paying the employee to complete a project that results in no value added.

It is imperative that management teams who how to motivate employee’s specific to their goals, both individually and as an organization. Determining how to deliver these reports or expectations, from an organizational standpoint, is not necessarily easy. You, as the manager, may need to sit down and clearly identify the organizational and strategic goals set forth by executive management. To ensure that employees are receptive to your requests, ask for their inputs in the matter. This will demonstrate a value of empowerment and a feeling of self-worth that cannot be tracked in financial terms; rather, you should see a higher productivity level!


III. Understand What Motivates Each of Your Employees

The majority of managers realize that every person is unique and can be motivated by a breadth of different things. Whatever steps you take to support the motivation of your employees, they should first include finding out what it is that really motivates each of your employees. Ways to determine what really motivates your employees includes asking, listening, and finally observing them from day-to-day.

IV. Distinguish That Employee Motivation Is A Process – NOT A TASK.

The overall businesses environment and culture changes all the time, similar to a person’s diet. Granted, one can foresee that it is an enduring process to sustain an environment wherein employees can continuously motivate themselves and each other. By maintaining the repetitive nature of sustaining employee motivation as a habitual process, there is a strong likelihood that you will be much more fulfilled and motivated yourself.

V. Utilize A Set of Organizational Policies and Procedures To Support Employee Motivation.

A member of management cannot assume that simply building a strong interpersonal relationship with their employees will spawn teamwork and motivation. The intentions and thoughts of this process are appealing, but the nature of relationships can change without notice.

For example, consider a period where in your direct boss have a verbal scuffle about how to handle a decision. Your stress levels rise, work begins to pile up, and you may speak out in frustration. This could lead to a decrease in productivity and eventually loss of motivation at work.

Instead, reiterate the fact that you allow the employee’s valuable feedback and establish an Organizational Set of Policies and Procedures to help motivate employees and discourage the aforementioned scenario. By establishing this set of policies and procedures, employees will be aware of various systems and structures that will provide a clear understanding and equitable treatment for all persons associated. As an added incentive, management might want to consider the establishment of compensation and performance systems, in addition to the organizational policies and procedures, to better sustain employee motivation.

McNamara, C. (n.d.). Basics About Employee Motivation (Including Steps You Can Take). Retrieved March 15, 2011, from Authenticity Consulting, LLC: http://www.managementhelp.org/guiding/motivate/basics.htm#anchor160017

A Decade of Internet Usage Growth: 2000 - 2010

In conjunction with a separate presentation conducted on the "Growth of Social Media Outlets" I was curious to find out how many users Worldwide now have access to the Internet realm. Making reference to the attached table below, obtained from the following website at , I was a bit awestruck that nearly 29% of all individuals worldwide now have access to the internet! This number equates to approximately 1.97 Billion Internet Users based upon the June 2010 global population estimate of 6.85 Billion people.



What really started to catch my interest was the growth rate of Internet usage from 2000 to present day (or as the Table suggests, June 2010). Concurrent to the final months of my high school tenure, wherein I graduated in 2001 from Shakopee HS in Minnesota, the total internet usage statistics were an estimated 361 Million users worldwide. Now fast forward time a mere decade to June 2010, and the number has compounded itself by almost 4.5 Times! A growth rate of nearly 445% is almost mind-numbing.

Furthermore, this quick observation of internet usage over the last 10-years has allowed me to see the entire spectrum of advancements in technology. The initial 56K dial-up modem has now transformed into an internet connection that is nearly 10 times faster on my handheld Smartphone. Even more, nearly 47% of all users who currently have a so-called Smartphone have access to the something that is still considerably 'unknown' in more than half of the worldwide populace. Unbelievable how technology has transformed our everyday actions!!

An in-depth analysis of perceptual thoughts and biases

Beyond the normal rant and raves of the week, I was intrigued by perceptual factors that are self-induced and often times unintentionally reactive behavior. All individuals, no matter the race, sex, age, or religion, have a personal bias based upon the world and experiences that surround our decision-making abilities every day. These perceptions and stereotypes can be categorized into one of four behaviors that include Halo Effect; Primacy Effect; Recency Effect; or False-Consensus Effect. I will identify each effect in-depth below.

The Halo Effect model occurs when someone develops an impression of another individual based upon a characteristic, whether physical, mental, emotional, that distorts and clouds our perception of that person. For example, if you work with another employee that generally stays late and works excessive hours, naturally you may consider that he or she is a “workhorse.” Conversely, you may recall a classmate that is consistently taking frequent smoke breaks. When they excuse themselves early from a group session, you may think they are leaving to smoke when really they were searching for a book.

The Primacy Effect switches gears and is categorized as our natural tendency to form an opinion of people on the basis of first impressions. For example, when you are granted an interview with a local employer, most individuals would want to “Dress for Success” and show up on time. If you are tardy or wear blue jeans and a t-shirt to your interview, the boss may think you are not prepared for the position. The problems with most first impressions, specifically the negative first impressions, are the difficult nature to change someone’s burned thought of you in their mind.

The Recency Effect is a situation where the most recent information stands frontline center of our immediate perceptions. This is a common situation specifically when you are approaching an annual performance review with your boss. If you recently lost a large acquisition for a highly reputable client, this could undoubtedly impact your boss’ thought perceptions and likelihood of receiving a raise even if you promoted an increase of sales in the prior 6-month time frame. The key here is rescheduling your plans and trying to revive your career...quickly!!

The False-Consensus Effect is a perceptual error where we overestimate the extent that others may have similarities, characteristics, and beliefs that are similar to our own. This is quite commonly referred to as “everyone else does it” to reinforce our self-concepts or habits that encourage continuation of those thoughts. I often relate this perception to excessive binge drinking in college because of the belief that most other students "were doing it" and approve of the partying phase. In reality, not every college student binge drinks, rather, a host of students may disapprove of the actions. Other examples include fashion trends or unethical behavior that includes intimidation or bullying.

Characteristics of a Natural Leader

In conjunction with a MBA Management class that I am currently enrolled in, I decided to expand upon what I felt were Characteristics that any Natural Leadership should uphold. This is by no means a mandatory skill-set, or a scientific study, of personal traits that Mr./Mrs. Manager should entail; rather, a suggestion of thoughts and theories that I have experienced through my post-undergraduate career as a Portfolio Manager and currently as a Senior Financial Analyst.


Here are the Top Ten Characteristics that I felt best kept employees, clients, and members of executive management at bay:

I. Motivating / Inspirational
II. Assertive
III. Integrity
IV. Personable
V. Encourages Open-Communication
VI. Visionary
VII. Responsible
VIII. Risk-Taker / Analytical
IX. Diplomatic / Political
X. Intelligent (both Book-Smarts and Common Sense)

This naturally brings about my next topic of discussion: What is the difference between an effective Manager and a Leader? I will try and answer that conundrum within the next paragraph but I must first point out the fact that not all managers are good leaders. There are instances wherein a manager is placed into an executive position based upon their experience, or are fortunate enough to have a direct line to individuals (i.e. Next of kin) who are members of executive management, or are simply filling a temporary void for the time being. I will, however, point out the fact that most leaders could make a great manager. Moreover, as mentioned previously, the managers who do not motivate, or empower their employees with one of the 'Top 10 Characteristics' listed above, may crumble in the adversarial ploys that accompany most leadership roles.

In my short lived, but rather highly accomplished, career to this point, I can state with certainty that I really enjoy a host of management figures that have taken me under their wing. Conversely, there are at least two individuals who I have had difficulties with, but at the end of the day let bygones be bygones for the overall success of the big picture. What I find quite appealing and mind-stimulating is analyzing my prior successes and failures and deciding what steps need to be taken to prevent the same mistakes from reappearing in future occurrences, sometimes defined as the reasoning for studying history.