Decision making and business modelling Assignment | Professional Writing Services

Need in-text citation. the specific requirements can be seen in the document. this is not an essay but it is an answer sheet, you should answer these two questions. For the second question,, you need answer the question after read this website page. two questions need seperate conclusions.

Decision making and business modeling

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Question 1.

  1. How can insights from behavioural economics and bounded rationality help us understand and address these hazy ethical issues?

Economic power and development profoundly affect the moral and ethical view of some issues, with every group of economies behaving and approaching ethical issues differently. The reasoning behind the issues highly affects economic designs and how models are chosen to suit a certain group of people. According to a survey on machine ethics, many of the moral principles guiding the decision of the drivers varies with country. In the survey, the way people approached the ethical issues on the driver’s decision making in a dangerous situation differed with the developmental and economic status of the country. This shows that, apart from the human view, the economy of a place highly affects the reasoning of the ethical issue and thus acting differently, against the expectations of the general society. According to the research results, respondents from the developed countries with strong institutions acting based on the law said they are less likely to avoid hitting pedestrians who lawlessly steps into the traffic.

The ideas from behavioural economics have helped develop ethical choices frameworks where people make choices that are believed to be rational, consistent, and self-interest. Most behavioural models suggest very different and richer assumptions that make the model’s predictions align very closely with the observed outcomes. This helps in explaining the behaviour patterns that are not easily compatible with the standardized approach. Behavioural economics establishes the way people respond to ethics under different dimensions. One of the main behavioural insights is bounded rationality. Whenever individuals are faced with a difficult issue or situation, they may make choices according to some rules which are viewed as optimal, but in a way can be listed as poor, or in a particular way may be of harm to the end victim. In every situation, the person is a fix to make a choice but tries to make a choice that favours him or her, and that from the other side of the coin becomes ethically incorrect. This highly affects economic responses depending on which side one is clinging on. In the car industry, the decision to save the driver and the passengers by hitting the pedestrian is an ethical choice for thedriver and the passengers, because that favours them and their interests. On the other side, the pedestrian would wish that the driver swerves the car away from hitting him or her. The pedestrian believes that the best choice and the most ethical choice is that it doesn’t harm him or her, but on the other side, the pedestrian’s choice leads to the death of the driver and the passengers.

Another economic, behavioural insight that affects ethics is social preferences and norms. The way a social circle views an issue becomes the social, ethical take. People take the beliefs and social values from their environment and practice them in determining the ethics of a certain condition. People bound by social preferences derive value from cooperation, fairness, or conformation to social norms. These insights highly affect ethics because, in socialism, people consider the effects of endorsing on the side of the ethical issue against others. The people in a social society will have limits of projecting harm on others even though it can be on their advantage, and even when the controls are only on their hands.According to research, people who are from strong government institutions like Finland and Japan choose to it anyone illegally crossing the roads than from countries from weaker institutions. The institutions highly influence the drivers’ choice because, in Finland, they are aware that they will not be counted wrong while in Nigeria, the institutions may count them wrong even when the pedestrians were wrong. Understanding these economic behaviours influences the way of solving the dilemmatic ethical issues. Different factors affect the economic, behavioural choices that determine the ethics of a social community or region.

  1. How should algorithms of self-driving cars be designed by carmakers and/or tech giants? In other words, what kinds of decisions should cars take in these hazy ethical situations (e.g. sacrificing the driver or two pedestrians)?

In making a driverless car, the carmakers should consider several things that can give considerations in terms of ethics. A driver in a car makes a swift judgment whenever approached by a very technical condition like that of a pedestrian crossing the road at a dangerous state that calls for the death of one: the driver or the pedestrian. On both situations, the manufacturing companies consider losing none, and that could be the optimum decision. Making sure that both the pedestrian and the driver is safe is the ethical concern of the company. This is a dilemmatic issue, in which one of the parties must die.

In coming up with algorithms of the self-driven cars, the carmakers should establish a consensus in social ethics by evaluating the situation in every country to ensure that they conform to the ethical standards of the particular regions. As noted, social preferences highly affect the choice of the products that a person or a group of people use. The preferences made on what is ethically correct may affect the choice of the car to use. Since every region has different takes on the ethical issues in stake, the carmakers need to consider customizing the driver algorithms to suit populations depending on their take over the issue.The algorithms are supposed to take cognitive behaviours of a driver, and they should also match with the social ethics of the regions and laws of the particular markets where the car company would wish to sell their cars. Just in the same way car companies come up with either right or left hand driving steering wheels depending on the rules and regulations of a country, the driverless cars should be customized in the same way.

According to the research, respondents from North America and European countries showed a preference in hitting an elderly person than a youthful person. This shows that a driver in the United States will prefer swerving a car not to hit a youthful person than when crossed by an elderly person. This indicates that the algorithm for any car in the United States should take into consideration the factor of the victim’s age in the United States than other nations that have had no preference. By putting that into consideration, the buyers of the cars in the United States may feel “less” guilty in hitting an elderly person that it can be when a youthful person is hit. Regions with strong economies and institutions of law indicated to prefer hitting a person who illegally crosses their paths than the countries that have less active institutions.

On coming up with the algorithms, the companies should identify the key issues that determine the ethics across the globe. It is almost impossible to come up with cars suitable and secure for everyone. Audi, a German motor company, predicts that the driverless cars are safer and efficient compared to human-driven cars. The algorithms should ensure that in a dangerous stage that limits the cars from faulting traffic rules that can endanger the lives of the people and the pedestrians. Everyone is valuable, and thus the algorithms should protect every pedestrian, whether old, youthful, poor or rich. The algorithm should be constructed to ensure that – in the conditions that the car is on the right and the pedestrian is on the wrong, and the condition is uncontainable – does not swerve to endanger the lives of the ones aboard. According to the research, drivers avoided riding over multitudes than individuals. That can be put into consideration to ensure that whenever the car approaches multitudes, swings and acts to stop riding over the crown. These algorithms should thus be made considering the ethical constructs of the majority of the societies and laws across the globe.

Question 2

LAN Airlines is integrating different operations in a single business. The company has three different operations operating at the same time and serving different segments of customers that depend on the same types of facilities. The airline has a full-service international passenger airline, a cargo airline segment, and domestic flights (no-frills passenger model). This is one of the business companies that have broken the hardpan of integrating different business operations in a single type of business. Many countries find it hard to integrate different operations to suit different customer demands. A company like Lan may wish to or see the need to address the customer needs of different customer segments, using a particular business model for every segment. In order to beat competitors and equitably expand into newer markets while developing new and high-income streams, an integrated business model is required. Lan has managed to raise its yearly income and profits after adopting the leveraging strategy.

The airline operates the three streams of operations at a go. Starting with the international passenger carrier service, Lan competes with the other airline companies, moving passengers from one destination to another, and in full-time service. The company has frequent flights from and to major worldwide destinations with the passengers using the company’s hubs, and interconnections with other major airlines around the globe. In order to be able to compete with other major airlines in the full-time service for the international passenger carrier services, Lan has different passenger services in this segment. It has the coach and business classes with different levels ofhospitable services like meals, beverages, and entertainment in the coach class.These are services that are common in other airlines, sometimes being excellent and admirable that other airlines are operating singly as international passenger carriers. The passengers from the different destinations will board Lan flights just the same way they can board other flights and since the service quality almost the same and similar. Advancing the services has highly helped LAN Airlines in being at the same business level as other aviation companies, ferrying passengers internationally.

LAN Airlines is operating in the domestic markets, making sure that it is relevant both internationally and locally. To make sure that it serves everyone in the society, the Chilean airline introduced the no-frills flights that removed non-essential services in the planes, making them cheap and preferable for middle-income customers. The best way to reach a wide customer target is by attracting the different social classes into the same commodity, and differentiating the classes with the additional services that serve the interests of the top classes.LAN Airlines considered lowering the prices for the people of the middle-income class by removing the classy services that raise the cost of travel per flight. This is a strategy that makes the airline to be constantly used locally because most of the locals care about reaching their destinations and not the other fancy services. By removing these services, the airline also improved the passenger capacity hence attracting profits.

The cargo flights of LAN Airlines are key in projecting higher-income profits of the company. The cargo business is a premium service serving as the international passenger carriers. The company is trying to capture the international market on cargo transportation, focuses on transporting different varieties of goods with different sizes—the cargo flights transport asparagus, fresh flowers and perishable products, high-value-weight merchandise and small car parts. The flexibility in cargo types makes the company preferred by most of the business people. The cargo flights also operate on numerous routes, almost more than LAN’s competitors. The plane carries salmon fish from Chile, flowers from Ecuador, asparagus from Chile, electronics, perishables and small car parts from Europe and the United States.

LAN has been able to thrive in the business of the integrated three operations due to some advantages over other airlines. The airlines have been making maximum use of physical assets like planes. The airline cargo planes can be interchangeably used for passengers, making use of the planes while the rest of airlines lie on the parking lots waiting for the passenger trips. The company has also reduced the break-even load factor (BELF) through a combination of the cargo and passenger flights hence flying where other airlines cannot. The number of passengers and the amount of cargo needed by the flight to break is lower compared to when it is operating on a single entity hence reducing the BELF. The company has diversified its revenues through the transportation of passengers and cargo. LAN Airlines continue travelling through the routes across the globe, gaining profits even when the demand is low. When the other airline companies pull down their operations during financial recessions, LAN continues to operate because the flights are doubly used. The LAN Airlines have been expanding routes, limiting their competitors from entering into their new markets, and creating a virtuous circle. More routes create additional value for customers enabling the company to charge premium prices. This creates an opportunity for the company to generate higher revenue that can be used to support more routes to become a one-stop-shop for cargo.

In conclusion, LAN Airline has embraced the different strategies in integrating the three operations and competing in the existing markets. The company has low prices, increased routes of travel, reduced the break-even load factor and interchangeably using the assets to serve the three operations. These strategies have made the company thrive, even when the market is down. Increased income from the operations resulting from the strategies is used to expand the routes, leveraging the company’s income.

Decision Making and Business Modelling
2019/2020 Masters Programmes
When a driver slams on the brakes to avoid hitting a pedestrian, a moral decision has been made that shifts risk from the pedestrian to the people in the car. Self-driving cars might soon have to make ethical judgements like this on their own, based on algorithms that will be designed by tech giants and carmakers, such as Alphabet, Tesla and Toyota.
For example, if an accident is inevitable, should the car hit 2 old men or 1 child? Should it hit a woman or a man? Should it sacrifice the driver to save 2 pedestrians?
A study published in Nature stumbled on an ethical paradox about self-driving cars: “in surveys, people said that they wanted an autonomous vehicle to protect pedestrians even if it meant sacrificing its passengers — but also that they wouldn’t buy self-driving vehicles programmed to act this way”
Based on the lectures and readings of this module, answer the following questions:
a) How can insights from behavioural economics and bounded rationality help us understand and address these hazy ethical issues?
b) How should algorithms of self-driving cars be designed by carmakers and/or tech giants? In other words, what kinds of decisions should cars take in these hazy ethical situations (e.g. sacrificing the driver or 2 pedestrians)?
(50 marks)
QUESTION 2: Revisit the case study of Lan Airlines (article titled ‘When One Business Model isn’t Enough’). It shows how Lan has thrived by integrating 3 different operations at the same time: a full-service international passenger airline, an air-cargo, and a no-frills passenger model for domestic flights.
Decision Making and Business Modelling 2019/2020 Masters Programmes
© 2020
Page 2
Durham University Business School
Describe, with your own words, how Lan has successfully integrated different business models, with a special focus on how it captures and delivers value to different market segments.
(50 marks)
Overall word limit, 2500 words maximum.
The word count should:
 Include all the text, including title, preface, introduction, in-text citations, quotations, footnotes and any other item not specifically excluded below.
 Exclude diagrams, tables (including tables/lists of contents and figures), equations, executive summary/abstract, acknowledgements, declaration, bibliography/list of references and appendices. However, it is not appropriate to use diagrams or tables merely as a way of circumventing the word limit. If a student uses a table or figure as a means of presenting his/her own words, then this is included in the word count.
Examiners will stop reading once the word limit has been reached, and work beyond this point will not be assessed. Checks of word counts will be carried out on submitted work, including any assignments or dissertations/business projects that appear to be clearly over-length. Checks may take place manually and/or with the aid of the word count provided via an electronic submission. Where a student has intentionally misrepresented their word count, the School may treat this as an offence under Section IV of the General Regulations of the University. Extreme cases may be viewed as dishonest practice under Section IV, 5 (a) (x) of the General Regulations.
Very occasionally it may be appropriate to present, in an appendix, material which does not properly belong in the main body of the assessment but which some students wish to provide for the sake of completeness. Any appendices will not have a role in the assessment – examiners are under no obligation to read appendices and they do not form part of the word count. Material that students wish to be assessed should always be included in the main body of the text.
Decision Making and Business Modelling 2019/2020 Masters Programmes
© 2020
Page 3
Durham University Business School
Performance in the summative assessment for this module is judged against the following criteria:
 Relevance to question
 Organisation, structure and presentation
 Depth of understanding
 Analysis and discussion
 Use of sources and referencing
 Overall conclusions
Students should use the template on DUO for their assignments.
The word count should include all the text (plus endnotes and footnotes), but exclude diagrams, tables, bibliography, references and appendices. Guidance on referencing can be found in your Assessment handbook under ‘Things you Need to Know’ on DUO.
The assignment which you submit on-line should INCLUDE all appendices.
Students suspected of plagiarism, either of published work or work from unpublished sources, including the work of other students, or of collusion will be dealt with according to Business School and University guidelines.
Your assignment will be put through the plagiarism detection service.

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