Everyone is bound to make decisions every day. Should we buy product A or product B, should we make or buy the product, which strategy to use for marketing or learning, whom to recruit out of the available options are some decisions on the hand of decision makers of organizations. Different factors are taken into consideration to form organizational policies which become the gospels or route maps to achieve success. Making reasonable estimation to analyse situations and adopt a plan of action from the available alternatives. Analysing past events, experiences and results to make a rational path would sound reasonable. There are many instances where predictions from the past occurrences fail as they turn out to be traps of competitors. Different sessions on Decision Making Skills Training can be conducted to give clear and real time examples from managers.
Rational Thinking falls prey to biases, favouritisms and halo effects. The work of cognitive biases by Daniel Kahneman, a Nobel Prize winner in economics for his work on cognitive biases, points out in his article published in the Harvard Business Review that people following some theories as their favourites will ignore or reject contradictory evidence, place too much weight on one piece of data and make faulty comparisons to another business case that suits its bias.
Trial and error method of testing can be a negative result of rational analysis in some situations. Decisions are assumed to be correct only if they are subject to testing and scrutiny. Rational and scientific approach of decision-making is taken seriously. Decisions are influenced by peoples own values, as their implementation strategy may be influenced by what they believe. For example, one would believe that most businesses fail (and that would be true), as a result, never pursue success in business. This would not serve a person in pursuing his business idea if these were more like one of the exceptions.
R.J. Ormerod states in his recent article that one can do three things to manage the subjective nature of people when making decisions:
(1) Use a two-tiered approach with a small group of core people who set the standards that a larger group can implement with autonomy but within those standards; (2) Obtain a good knowledge base within the organization and (3) Make sure that people making decisions are the ones who are equally involved in carrying them out. and take into account a wide variety of views prior to setting the context (involving those responsible for taking the decision, those who have to implement it, those affected by it but are not involved, and those who can offer expertise on some aspect or other). For example, key management, sales, customers and other experts should be involved
Our past experiences create brain patterns that unconsciously steer our attention to things selectively. Two things may not occur in the same way as they have occurred in the past. For example, one might have thought in the past that online marketing and sales will not turn out to be successful as continuous efforts by different people to promote products online have failed. However, it may simply be that your brain pattern of expected failure limits all future efforts. These ideas can become Decision Making Tools for Managers who would think out of the box and try out different approaches to decision making.