Nudge Theory: Executive Courses in Behavioral Science

Nudge Theory: Executive Courses in Behavioral Science

Every organization can benefit from a richer understanding of human behavior

Behavioral science, at its core, is the attempt to understand how and why people do what they do. Every organization can benefit from a richer understanding of human behavior, according to business school academics, which have created executive education programs to help business leaders reap the benefits of ‘nudge theory’.

“Be it optimizing messaging to consumers, structuring the nature of team work within an organization, or even carefully thinking through how best to provide health insurance options to employees, behavioral science has the potential to be highly informative,” says Jeff Galak, associate professor of marketing at the Tepper School of Business.

At the end of the day, he says if decision makers understand the complexity that is human behavior they can better serve all of their stakeholders. Both Carnegie Mellon University’s Dietrich College of Humanities and Social Sciences and the Tepper School of Business teach the Behavioral Economics and the Science of Decision-Making course.  

Participants will get a crash course in all things behavioral economics and social science — including learning foundational principles that they can build on in their own personal and professional lives. The goal is to come away from this program with enough knowledge to take action immediately to improve organizational objectives.

A few other business schools offer executive programs in behavioral science, including University College London’s School of Management. The UCL Executive Program in Behavioral Science is a seven-day executive education course, which goes beyond buying choices and equips participants with the tools and models needed to improve business strategy and enhance the consumer experience.

Elsewhere, the month-long Client Psychology executive program at Wharton business school draws on psychological, behavioral finance and human sciences to help participants understand the biases and perceptions that shape client decision-making and financial wellbeing.

Galak says behavioral science has the potential to create social impact and improve outcomes in domains such as healthcare, recycling habits, savings decisions, and many other important areas that society cares deeply about. “If, through a deep understanding of behavioral science, people can be made to make better healthcare decisions, conserve the planet, and save for an uncertain future, there is great social benefit to be had,” he adds.

Navigating ethical concerns

There are also ethical concerns that “nudging” can be used to manipulate people to their detriment as well as their benefit. “Like any tool, there is room for virtue and there is room for abuse,” says the professor. “Any organization that implements insights from behavioral science should do so with an ethical lens. At the end of the day, behavioral science aims to understand how and why people do what they do, but it is up to individuals and organizations to use that knowledge for good.”

For instance, research from the Bear Center at the University of Toronto has shown that behavioral science can be used to encourage people to save more for retirement, to engage in healthy behaviors like exercise and adherence to medication and dietary regimen as well as compliance with advice for flu shots.

“Behavioral science cannot only improve the design of products and processes, but it can also make interactions with stakeholders more efficient and more human,” says Dilip Soman, Canada research chair in behavioral science and economics at Toronto’s Rotman School of Management.

He says that companies often end up designing products and to meet the needs of “econs” (fictitious people that are extremely rational, efficient processors of information, not distracted, forward-looking and acting in their own best interest). In fact, their real stakeholders come with all of the associated human fallibilities, like impatience and emotion.  

“A good understanding of behavioral science will allow organizations to better design for the human and not the econ,” says Soman. “This is obviously important because all of our stakeholders are fundamentally human. Organizations spend a lot of effort, money, and energy trying to be compliant with the law, but as we say in our work and in our executive programs, it might help them immensely to be compliant with human behavior.”

Rotman runs the Behavioral Economics at Work executive education course. Rather than simply focusing on collating findings, the program encourages participants to use the scientific principles, think through ways in which they can develop an intervention to test, collect data and iterate, and eventually refine the intervention for success in their particular context.

“An intervention or a nudge that worked for somebody else in some other part of the world might not necessarily translate to success,” Soman says. “Therefore, it is extremely important for practitioners to a avoid simply going to the ‘nudge store’ in order to borrow tricks that have been developed by other people, but rather to develop a scientific approach to thinking through how they can design their own interventions.”

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Related Business Schools

Carnegie Mellon - Tepper

UCL

Wharton

Toronto - Rotman

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