answer from paragraph


276 PART 3 Planning

1. What are the steps in rational decision making?

2. What are two models of nonrational decision making?

3. What are four ethical questions a manager should ask when evaluating a proposed action to make a decision?

4. Competitors using analytics have what three key attributes?

5. What is Big Data?

6. Describe the four general decision-making styles.

7. How does artificial intelligence support human decision making?

8. Can you name the nine common decision-making biases?

9. What are the advantages and disadvantages of group decision making?

10. What are four group problem-solving techniques?

Understanding the Chapter: What Do I Know?

New York’s Subway System Is Crumbling With 472 stations, the New York City subway system is the largest in the world, with a long and rich history. The system was first established in 1904 in the borough of Manhattan, before expanding to Brooklyn, Queens, and the Bronx by 1915. The Metropolitan Transporta- tion Authority (MTA) oversees its 27 subway lines.183

Subway ridership had grown to 5.7 million daily pas- sengers in 2017, double the number two decades earlier. The level of service and quality, however, has not kept up. Tunnels and track routes are crumbling. Signal problems and equipment failures have doubled between 2007 and 2017, and the system has the worst on-time performance of any major rapid transit system in the world. These problems are not due to acts of nature like a flood. Rather, decades of poor decision making seems to be a key cause, according to The New York Times.184 Let’s take a closer look at what’s been plagu- ing the Empire State’s transit system.

THE BIG APPLE’S TRANSIT PROBLEM The derelict state of the New York City subway system is partly due to poor decision making by the MTA and other state-level government officials. Some decisions were made for political reasons or based on decision- making biases, and sometimes officials simply refused to make a decision at all. This type of governmental dysfunction is not out of the ordinary, but it is surpris- ing given the number of people who rely on the subway daily to get around.

Politics was the first problem with the city’s decision making. The MTA decided in 2008 to renovate stations by installing glass domes and mirrors. These cosmetic improvements were to be made in the home district of New York’s then Assembly speaker. The Times reported that the Assembly speaker demanded the project be

completed; otherwise, MTA’s budget would be vetoed. The project cost $1.4 billion (more than the annual budget of the entire Chicago rapid transit system).185 Not a penny was spent on signals or tracks, which are vital to keep the trains running safely and on time. The executive director of TransitCenter told amNewYork that there “has been sort of the lack of accountability in Albany and the continual depletion of resources from the MTA and misprioritization on cosmetics instead of the nuts and bolts of actually running the system reliably.”186

The MTA tried to minimize future political decision making by assembling an independent Transportation Reinvention Commission in 2014 to study the city’s deteriorating system. The Commission was made up of successful transportation leaders from all over the world. It provided seven strategies to rehabilitate the subway system, including capacity expansion, a dedi- cated transportation fund, and congestion pricing.187

You might imagine that the Commission’s findings then provided a starting point for the MTA’s future decisions. This was not the case. For example, the Commission diagnosed capacity expansion, not cos- metic remodeling, as a major problem for the subway system. Capacity expansion would allow the subway to continue to handle increased ridership in a safe, sus- tainable way.188 Instead of investing in capacity expan- sion, however, as NBC New York reported, the agency decided years after the Commission’s report to again invest in cosmetically remodeling dozens of stations, this time to the tune of $1 billion.189

The MTA’s choice to make cosmetic repairs wasn’t the only example of poor decision making. State lead- ership contributed to the problem as well. For exam- ple, the MTA owed Albany for expenses related to the subway system that the state had incurred. The agency could have been allowed to keep the money and invest

Management in Action

Individual and Group Decision Making CHAPTER 7 277

in its crumbling infrastructure, but state leaders instead ordered the MTA to bail out state-run ski resorts. The New York Daily News reported that in 2013 around $5 million was sent to the Olympic Regional Development Authority, which operates the state ski resorts.

Lawmakers and transportation advocates ques- tioned the decision to bail out ski resorts when the sub- way system urgently needed attention. A state senator told the Daily News, “The MTA needs more money, not less. It’s having enough trouble funding its own needs. I don’t see why we’d be sending MTA resources to ski slopes.” The MTA does not oversee state-run ski resorts, but it sent the money anyway.190 The agency’s board hired a law firm to investigate the decision. It was found to be legal, but the board still labeled it as inappropriate.191

IT’S IN THE DATA! Why all these poor decisions? One reason is that lead- ers may not have been utilizing data to support their actions. For example, the MTA’s sloppy data collec- tion prevented it from adopting congestion pricing, a strategy of increasing fares during times of peak rider- ship (similar to Uber’s “surge pricing”). Supporters of congestion pricing told CBS News that this scheme would address gridlock and raise money for mass tran- sit. Skeptics of congestion pricing included Bill de Blasio, New York City’s mayor. De Blasio believed congestion pricing in general was a burden on middle class and low-income commuters.192 These conflicting views, coupled with a lack of evidence to support an ideal solution, may have led to indecision on fare price increases.

All these issues have made the subway situation so bad that New York’s governor declared a “state of emergency” for the system in 2017.193 Riders also made declarations of their own. A group of them ral- lied at the State Capitol in Albany in 2018. The protes- tors, representing subway riders, told amNewYork they were “desperate for change” and that state legislators could not leave Albany without approving new fund- ing for the system.194 New Yorkers’ patience had reached its end.

A NEW DECISION MAKER ENTERS THE PICTURE Andy Byford became head of the New York City Transit Authority (NYCTA) in January 2018. The NYCTA is the division of the MTA that oversees the New York City subway and bus systems. Byford came from the Toronto transit system, where he executed a five-year modernization plan. The plan significantly improved the subway system, and Toronto earned “outstanding public transit system of the year” in 2017. A Toronto transit activist told the Guardian that

upon his arrival in Canada, Byford had been “looking for, in the short term, quick wins.” Byford understood that a reputation for indecisiveness doesn’t bode well for a new leader. “That’s the basic thing any new manager does: they come in and want to be seen as doing something . . . ” said the activist.195 The ques- tion is whether Byford can duplicate Toronto’s suc- cess with the New York City’s subway system, which is four times bigger than Toronto’s.196

Byford doesn’t just make decisions for the sake of expediency in pursuit of quick wins. He first wants to study the New York subway system by riding it to work every day. He believes this experience will garner useful feedback from commuters and MTA employ- ees. Byford cultivated this hands-on style in Toronto, where he once spent hours navigating the subway in a wheelchair with a member of the system’s accessibil- ity forum. This experience provided him useful insights about the challenges faced by those who have a mobility impairment. Gathering first-hand informa- tion meant he could make more informed decisions to their benefit.197

The new NYCTA chief’s style seems to be making an impact at the MTA as well. His influence stems from serving on the 2014 MTA Transportation Reinvention Commission. In that role, Byford was able to help convince the agency to halt the $1 billion mod- ernization project it had slated for summer 2018 because it did not address urgent needs. Not everyone is in agreement with halting the project, though, includ- ing the MTA chairman. He argues that fresh paint, bet- ter lighting, and working MetroCard machines are more about safety, not luxury.198

Byford doesn’t seem to be a fan of cosmetic make- overs. He told The Wall Street Journal that, “We’ve got to get the basics right, day in, day out.” These basics include service reliability. Byford plans to shake up the agency’s workforce, processes, and infrastructure in a new plan to be released in late 2018. The plan will not be centered solely on his views though. Byford wants to engage city board members in the process as well. This way, even if they don’t agree with his plans in the end, they won’t feel shut out of the process.199

Byford must effectively balance time and discussion if he wants to get past the indecisiveness of his prede- cessors. The Journal reports that it could take up to 40 years to modernize the subway’s signal system. Byford wants to speed the process up, but not at any cost. For example, an MTA spokesman mentioned in 2018 that wireless technology might speed up modernization efforts. Byford was cautious though. “I would need to be convinced that an alternative is viable because we don’t have the time to waste going down a blind alley,” he says.200

Will Byford’s decision-making style put the subway system back on track?

  • PART 3 Planning
    • CHAPTER SEVEN Individual and Group Decision Making: How Managers Make Things Happen
      • Understanding the Chapter: What Do I Know?
      • Management in Action