Blog Assignment #2

Blog Assignment #2 (Due: Feb 3, 11:59 pm): Write and post a blog to discuss the implications of the video Systematic Irrationality for knowledge management. (I'm not sure why there are two different topics to discuss on the site. Maybe I missed something in class. I picked the 2nd blog topic as it is more recent.)

Systematic Irrationality, in the world of Knowledge Management, implies that with specific knowledge of a certain situation gives the person or entity that is affected a specific argument for making a situation better. Mr. Dan Ariely gives an example of when he was badly burned. His example showed that his suggestion to his nurses, during treatment, would have decreased his pain and made his recovery more pleasant. In his visual rich and drastically different illustrations, Mr. Ariely shows that our minds systematically and rationally think the same way based on what we see. While the reality may be that what we see is not exactly what we get. Given the opt-in / opt-out example, countries, who ask a question that would normally be overlooked in such a way that would be advantagious to them, get better results. The option, when getting your driver's license, that was successful was "Check this box if you don't want to donate your organs." The idea is that most people don't even pay attention when receiving their driver's license. Therefore, when reading data about how countries compare to each other in organ donor participation, it's easy to be convinced that the countries with a higher participation are either more thoughtful or have a giving heart. The fact is that given the knowledge of the sign-up system shows the real reason their percentages are higher.


With all of the examples given, it's clear that knowledge management in all situations gives a more clear view of information in it's true form. There are plenty of irrational views/spins put on data or situations, therefore having clear knowledge is imperative when making decisions, especially in the business world. Given the example of "free lunches": The idea is that people irrationally believe that there are actually free lunches provided to their children. The fact, or rational thing to think, is that nothing in this world is free. Someone has to pay for that item. Whether that item is paid for through taxes or fund-raisers, the item is in-fact not free.


Knowledge management is imperative in a business world as nothing is always as it seems. Final example. One would assume that Mark Zuckerberg is a multi-billionaire. In reality, Mark is not showing 10 figures in his bank account. His company is now valuated at $50 billion dollars. This does not mean he is sitting on $50b's. It means that if his company were liquidated today, he could expect that he would receive an offer for $50 billion dollars. Now, i'm not saying that Mark is not mega rich. I am just saying that the value of his business is not a liquid $50 billion. As a CFO or a CEO of a business, I don't necessarily want to know how much someone could give me today. I want to know if I have operating funds to continue my day-to-day business to continue to provide a product or service to my customers to continue to keep the perception that my business is actually worth that big figure.