Ariely states that in many different aspects of irrational behaviors, one can study them and predict outcomes on irrational decisions consumers make. This includes emotionally charged words or images that can make a person act in an emotional way without much thought. He uses examples in business like the word, “Free,” or “zero.” When consumers hear these words, their decisions are often based more on what they can gain, rather than what they lose. In knowledge management, using these words can encourage sales, but also can discourage gains if the company doesn’t realize any irrational behaviors they have. For improvement, Ariely says that people can be envious of others and states, “the more we have, the more we want.” Rather than focusing on a big picture, Ariely says we should focus on smaller circles around us that we can control, and work outward. Businesses can use this idea in their our knowledge management, through J-I-T or some other information collecting model to improve efficiency. Other topics Ariely mentions is the idea of procrastination. People will normally not meet goals in which they have designed for themselves, but will meet goals and deadlines if a superior authority sets them. Ariely calls this a tendency in which we lack self-control. Businesses can use this idea for organizational goals, which are included in a manager’s role. Clear, defined goals in an organization should be modeled by upper management.
Web “squared” technology, or Web 2.0, is the reboot of the era in the early 2000s when many dot.com industries failed. Web 2.0 is described as involving people and the internet as a new “collective mind” tool. It harnesses collective intelligence and participation as a tool for an application. There was a burst of new applications in Web 2.0 that achieved this. Facebook, Wikipedia, Flickr, iTunes, Blogging (what I’m doing now), YouTube, BitTorrent, and Google Adsense are just a few of these. The one I probably use the most is Wikipedia. This is a collective intelligence tool, in that it includes posts from many people on nearly anything you could ever want to search for. Users can add information on any person, place, or thing in an encyclopedia type format, and using this in conjunction with a PDA, like an iPhone, gives the user the feeling of having knowledge at one’s fingertips. There are also websites that post different news topics from all over the world as it happens. Also, there are applications paired with the news links that allow you to view a webcam at any place you wish to look. So, for instance, if a war was raging in a particular place, you would know about it from the live news posts, then you could look at that area via a live webcam. This also works with Facebook and weather. Weather.com now has the facebook feature below a forecast of your area, so that is severe weather is bearing down on you, you can also read live tweets and facebook posts of areas that are experiencing the weather just ahead of you. This is an incredibly valuable tool, because you are experiencing something that hasn’t even occurred at your location yet with an idea of how bad or not bad the weather will actually be.
Neural networks are beneficial when applied to business applications. They can be used to predict bankruptcy, predict costs, process documents, and forecast revenue. On http://www.nd.com/apps/business.html, different sample studies are shown using neural networking in business. One study was used to predict whether movies would flop at their openings by predicting the expected revenue range of the movie. Another was able to determine whether certain business ventures were a good idea by the neural network searching the internet and labeling businesses interesting or not interesting. 84.75% of the time the neural network averaged correctly. Another study predicted the bankruptcy averages of credit risks. This would help banks to assess bank lending decisions and profitability. Neurosolutions was correct in a three year range, 82% of the time. Another network predicted whether a community would support commercial gaming. This included legalization and probation of gaming activities. Neurosolutions was correct in 4 of 5 counties, or 82% of the time. Neural Solutions was able to predict expense costs on a construction project. This included labor, materials, and utilities costs over time. Neurosolutions was able to process images or documents electronically, where sometimes it would be difficult for the scanner or printer to recognize certain characters. Neurosolutions could also be used to group business data based on certain characteristics, solving the “clustering problem.” Neural networks use a SOM or self organizing map, to solve this problem which includes extracted certain features. This is useful in detecting fraud and credit risks also. Neurosolutions used what is called OCR, or optical scanning recognition, which allowed video feeds and images scanned to have all characters recognized. An example of this would be if a business wished to scan business cards into their PDAs or Outlook devices. This is possible through the optical scanning recognition. Neural networking technology has been applied in many different ways that supplement businesses and their success.
There are several applications of artificial intelligence used in different aspects of business operations. Computer Science, finance, hospitals, heavy industry, online and telephone customer services. These include interactive interpreters, graphical user interface, storage management, object oriented programming, and database programming. Online assistants assist in customers in stock trading. Clinical decision support systems aid hospitals in diagnosing symptoms. Hospitals can also use artificial intelligence to organize daily routine jobs for workers. Robotics aid in heavy industry to do jobs that are more dangerous to humans. Automated online assistants reduce costs for large companies by replacing representatives with a.i. to cope with mundane or commonly asked customer issues. A.I is used in aviation through flight simulators, programs used by air traffic controllers, mission management aids, and support systems for tactical decision making. Artificial intelligence in business operations held to ease decision making by reporting market patterns, statistics or fuzzy logic, and even taking on roles where a person could spend more valuable time elsewhere. Businesses also use expert systems in their operations. These systems combine software, computer equipment, and information to allow the A.I. to decide as a human would on topics. There is also decision support systems used: diagnosing, interpreting, predicting, and instruction.
The knowledge spiral model depicts how people display and convert knowledge from tacit to explicit. The knowledge spiral model includes many cognitive skills, such as beliefs, intuition, and images. Tacit is the vast reservoir of knowledge a person has that is not necessarily expressed. Explicit knowledge is the face-forward expression of the knowledge transmitted to others. In an organization, tacit and explicit knowledge is transferred into four ways: socialization, internalization, externalization, and combination. An example of how the knowledge spiral model works in an organizational setting would include how managers and workers interact with each other and with customers. In the pharmacy, a highly organized setting, the pharmacists and pharmacy technicians hold vast amounts of tacit knowledge in relation to drug information, dosages, insurance, and medical prognoses. This knowledge must be transferred in small amounts to a patient on a regular basis. Socialization accomplishes this, when tacit knowledge from one must be given to a customer’s reservoir of tacit knowledge. When a pharmacist explains drug side effects to a customer, this would be an example of socialization. Externalization occurs when a pharmacist must take his/her tacit knowledge and simplify it for a customer. When a pharmacist explains how a drug works by replacing large, medical vocabulary with common words or explaining a doctor’s diagnosis to a patient would be an example of externalization. Combination occurs when a new guideline or procedure is communicated in the pharmacy through an email from health organizations or form management. How a pharmacy tech reads this new procedure and processes it to learn and practice the new procedure or guideline is an example of combination. Internalization occurs when a new employee must learn the system of taking, reading and filling prescriptions. Only by learning through observed simulation can the employee best convert the knowledge into explicit knowledge from the group/organization.
Technology and its increasing disregard for national and ethnic boundaries is an important factor driving Globalization 3.0. Because communication is not a time issue and learning languages quickly using detailed, quick programs such as Rosetta Stone, people from any area of the globe can communicate readily with anyone connected to the internet. Access to the internet has also been increased and used in countries where it would have been previously thought impossible to connect. Another factor driving globalization is the continued practice of businesses to specialize their production industry, it is now possible for a business to transfer one job overseas, while that jobs connects to another job somewhere else. This creates an increase in efficiency by handing jobs over to people wherever that job would be completed most effectively with the lowest cost. Implications for today’s college students include the fact they will have to constantly keep up with the knowledge and innovations that change frequently with technology, for two reasons: they will have to able to compete on a wider, more global market now that that market includes other students from all over the world. Secondly, to be proficient in the industry, knowledge will have to be constantly updated. College students today may even have to learn more languages and be able to speak them fluently rather than relying on knowing English only. Knowling another language may also be necessary if a job a student is seeking happens to be in a foreign country. If the company needs an employee there, a U.S. college student vying for that position will have to be ready to leave their cultural comfort zone. European students would be more accustomed to these, because they typically travel across many countries. In the U.S., we are more accustomed to staying in one country based on our size and location.
The law of increasing returns exists when a company owns a product that cannot be changed on the whole, even if it means that change would allow the product to work more efficiently. Because that product’s customers are accustomed to the way the product was developed in the first place, they are not likely to want innovation or change. For businesses, this product would be a cash cow product, because the longer it has been around, the more loyal customers the product will have. This creates a steady flow in demand. For a company, this concept is very important, because it must focus on keeping already established customers content. The company will pull in the same numbers as before, but any changes could slow demand for the product. On the other hand, in order to spur any slowing demand, innovation is neccesary to update the product. This is tricky to not lose existing customers. Examples of companies where the concept of increasing returns is important is the operating system Windows. Windows 95, Windows 98, Windows 98 SE, Windows ME, Windows 2000, Windows XP, Windows Vista.
Windows XP and Vista are examples of a product changing that caused controversy among existing customers. Many customers preferred the graphical user interface the way it had been, but changes made some existing customers dissatisfied. The law of increasing returns however, states that people will always be looking for their operating system to look like Windows, and so Windows will not experience an extensive drop in demand unless something very drastic occurs with the company or industry. Another example of the law of increasing returns working in business is the petroleum industry. Because people will always need fuel for their cars, BP and Shell are brands that will always have loyal customers. Though the Gulf oil spill gave negative press to BP, time allows customers to eventually forget and return.