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Given the prestige of the authors involved, I think this book is very disappointing. Mostly a rambling collection of professorial articles that do not give the reader any concrete advice or business tools to work with.We all love Peter D. but this is not up to par with his standard level of brilliance.
Yes, these are obvious steps. In this instance, "advances [to date] in strategy" Readers will especially appreciate the provision of an executive summary that precedes each article. My own opinion is that all of the articles are first-rate. (John S. One of this volume's greatest benefits is derived from the fact that a variety of perspectives are provided by a number of different authorities on the same general subject.
Hammond, Ralph L. (Perrin Stryker) Comment: Even veteran managers are likely to be very unsystematic when dealing with problems and decisions, and their hit-or-miss methods often produce bad decisions based on erroneous conclusions. What are the hidden traps in decision making. No brief commentary such as this can do full justice to the rigor and substance of the eight articles.
Adelphia Communications, Arthur Andersen, Enron, Kmart, and Tyco) suggests the implications and consequences when decision-makers ignore one or more of these steps. For example, Peter Drucker suggests a sequence of six steps: classify the problem, define it, identify possible answers, determine which is "right" rather than acceptable, build into the decision the action(s) necessary to implement it, and then test the decision's validity and effectiveness. (Amitai Etzioni)Comment: Only fools make rigid decisions and decisions with no sense of overarching purpose, whereas the most able executives practice more humble decision making that offers the benefits of flexibility, caution, and the capacity to proceed with partial knowledge.What are the most common interpersonal barriers to decision making and how to overcome them. However, I think the core concepts remain sound and provide a valuable frame-of-reference for understanding the advances in decision making that have occurred during the last five years. They concentrate on what is most important.What is a rational method for making trade-offs. It remains for each reader to examine the list to identify which subjects are of greatest interest to her or him.
Hammond, Ralph L. Also of interest is the "About the Contributors" section that includes suggestions of other sources to consult. Much of the contextual material in this volume is out-of-date, given the fact that the eight articles originally appeared in the Harvard Business Review years ago (1965-2001). Keeney, and Howard Raiffa)Comment: Making wise trade-offs is one of the most important and difficult challenges in decision making. Needless to say, the more alternatives you are considering and the more objectives you're pursuing, the more trade-offs you'll need to make.Why is humility essential to effective decision-making.
(Chris Argyris)Comment: One of the most common observations in company studies is that executives lack awareness of their own behavioral patterns as well as the negative impact of their behavior on others.How to analyze the nature and extent of the given problem.
Here are questions that suggest key issues to which the authors of these articles respond: How to make and then measure an "effective" decision.
Keeney, and Howard Raiffa) Comment: Bad decisions can often be traced back to the way the decisions were made - the alternatives that were not clearly defined, the right information was not collected, and the costs and benefits were not accurately weighed.When to "trust your gut".
However, but the number of well-publicized bad decisions that have been made in recent years (e.g.
(Alden M.
They facilitate, indeed expedite frequent review of key points which - presumably - careful readers either underline or highlight.
(Peter Drucker) Comment: Effective executives do not make a great many decisions.
(John S.
Hayshi)Comment: Our emotions and feelings might not only be important in our intuitive ability to make good decisions but may actually be essential because they can help us to filter various options quickly.Those who share my high regard for this volume are urged to check out the recently published Harvard Business Review on Making Smarter Decisions as well as other titles in the Harvard Business Review Paperback Series such as those on Becoming a High-Performance Manager, Change, Corporate Strategy, Decision Making, Effective Communication, the Innovative Enterprise, Leadership, Leadership at the Top, and Measuring Corporate Performance.
Don't let the title mislead you, this book won't make decisions for you. I will however, give you the ability to make use of your most powerful business tool: a convincing guess. Many times I would stumble blindly through the veil of uncertainty, only to arrive on the otherside; lost, confused, naked, and too sore to sit down. But, now, after digesting these powerful articles, I can make my way through uncertain times; clothed in conviction and sitting on a soft pillow of apathy.
The way the human brain works can destroy the choice we make. In order to avoid the confirming-evidence trap, a decision maker can set up a clincher, let other people argue it, and listen people's advice.5.The framing trap happens at the beginning of the decision process. The truly unique events are rare and have to be treated individually. Although a good decision may be made under the decision-making process, sometimes the decision will still fail because of the mind of decision makers. To illustrate, the coupling in the pipe carrying steam or hot liquids, rather than the problem of production processing. In order to avoid this kind of carelessness, Peter F. The third group is a truly unique problem which happens out of exception. Therefore, before picking up the optimal solution, a decision maker has to deeply think about a question, "what are the objectives the decision has to reach." Clearly thinking about the boundary conditions will help decision makers identify all of the possible decisions which can satisfy the needs.4.Deciding what is right, rather than what is acceptable, in order to meet the boundary conditions.
Once the right principle has been developed, all manifestations of the same generic situation can be handled pragmatically by adjusting the rules to each specific case.2.Defining the problem. In addition, a better understanding of decision making can be broken down into six sequential steps according to Drucker (pp. It means before paying attention on making decision acceptable by the compromise, adaptations, and concessions, we have to let the solution fully satisfy the specifications. The second group is a unique problem for the individual institution. Above all, six steps of decision process are the stepping stones for decision making.
In business, for example, although it seems the decision that a manager predict how much product need to be produced by taking the former sales reports as a reference is reasonable, the old sales numbers become anchors because it may let a manager put too much attention on past event but not give enough weigh to other factors. Unlike truly unique events, the other two groups require a generic solution. 2-19)1.Classifying the problem in order to tell if it should be solved based on either principles or pragmatic concept. This kind of problems frequently happens. However, information should be built on the direct exposure to reality, rather on decision makers themselves. The first group is the generic problems; for example, in a manufacturing organization, it may happen the situation like total amount of products decreasing.
There are several questions that have to be answered before committing the decision, "Who has to know this decision.", "What action has to be taken.", "Who is to take it.", "What does the action have to be so that the people who have to do it can do it." From those questions, it is obviously that an appropriate person who carries out the decision must have enough capabilities of adjusting his/her behavior, habits or attitudes once a decision becomes effective.6.Testing the validity and effectiveness of the decision against the actual course of events. Being an effective manager requires being a good-decision maker too, having ability of using factual and quantitative information to analyze what is the most efficient decision to reach a well-defined objective. In order to put the suck cost away, a decision maker can listen other people's viewpoints and those people must to be those who did not experience the earlier decisions.4.The confirming-evidence trap makes people find out the information to support an existing predilection, rather than to conflict it. When it occurs, the decision goes wrong because a decision maker has already misstated the problem.6.The Estimating and Forecasting Traps have three minor traps,a.The overconfidence trap makes people overestimate the accuracy of the forecasts.b.The prudence trap causes people to be overcautious when people make decision under uncertain or risky situation.c.The recall ability trap leads people to give incorrect weigh to recent, dramatic events.The book rightly emphasizes the facts that a good decision not only relies on clearly defining the alternatives, collecting the correct information, and so on during the decision-making process, but also relate to the benefits and costs which are weighed accurately.
The feedback of decision action is the important information for a decision maker in order to realize the result of the decision model also for the future model building. However, it is the most important part of the whole decision process because sometimes the definition of the problem seems plausible but incomplete. Converting the decision into action is the most time-consuming steps in the decision-making process. A decision that does not satisfy the boundary condition is worse than the wrong definition of the problem. They require a rule, a policy, or a principle. The problem can be categorized in three groups. It is true that we will not know the decision is the most efficient or not if we put the decision into practice.
However, in the real-reality (as opposed to virtual reality, as a model), many decisions can be made under the highest-level conceptual understanding. The right compromise is like an old saying, "Half a loaf is better than no bread." In the contrast, the wrong compromise is like, "half a baby is worse than no baby at all." From this interesting description, it is easy to realize that deciding the right decision is more important than choosing the acceptable one.5.Building into the decision the action to carry it out. After classifying the problem is generic or unique, it is quite easy to define what the problem is about that we are dealing with. In order to make decisions rationally and objectively, a decision maker always have to keep in mind that the decision will be acted under the status quo and never consider status quo as the only alternative.3.The sunk-cost trap is another serious biases. Under this situation, it can lead to a poor forecast.2.The status-quo trap means people may have biases on the situation we feel comfortable with so that we will not choose other alternatives even they are better.
Making good decision by applied management science approach is the benefits that managers expect to learn combining with past experience to decide on what should be done. In the article, "The Hidden Traps in Decision Making, (pp. 143-67)" John Hammond, Ralph Keeney, and Howard Raiffa list nine psychological traps that may affect a way that a decision maker makes business decision.1.The anchoring trap makes people give inappropriate weigh to the first information we receive. Except the factors of individuals, the economic circumstances will influence the decision and its action too. As the right and wrong compromise, Peter F.
Drucker had an interesting description. At this stage, the product control or engineering group will look at what is going on in a production line. On the other hand, people will try to discount the opposing information. Drucker suggested all of the decision makers check this process, defining the problem, again and again against all the observable facts and discard a definition the moment it fails to encompass any of them.3.Specifying the answer to the problem to see if the decision is on the boundary conditions or not. However, if a decision maker does not know what will meet the boundary conditions, the manager cannot distinguish the difference between the right and wrong compromise.
People always believe that successfully past decision even though it does not work anymore at the present. Furthermore, the background, the experience of a decision maker will be one of the factors which affect the decision making.
The author (Peter Drucker) dispels the myths about the most effective decision makers being the ones that can think fast and manipulate a large number of variables in their heads. They are like text books or Ph.D papers except they are very practical. When I first saw this book at a bookstore, I didn't think much of it. The first chapter starts off with an impressive treatment of The Effective Decision. That topic is the focus of this book.There are hundreds of books on management, strategy, leadership, etc.
This book contains 8 short essays presenting different theories by people by Peter Drucker. The authors don't spend time painting a picture in detail and trying to get you excited. One of these critical topics is Decision Making. Instead he explains that the best decision makers are the ones who focus on impact instead of technique.
But I picked it up because of the Harvard Business Review name on the front cover. Since they are abstract in nature, one has to read them very slowly and read them with total concentration. It is impressive because of the wisdom packed into these few pages and the aptness of the title. He then systematically explains a simple process to follow to achieve the same results as the highly successful executives. If you read these books like you would read other books, you are likely to miss the point.
There are several books from the Harvard Business Review that follow this simple format - essays on critical topics by the leading minds in the field compiled into a short book of around 200 pages. I couldn't put it down once I started reading the first chapter and immediately purchased a few books in this series. These books and especially this one can be described in only one word - potent. These are some of my favorite management/business books but they are difficult to digest. The essay on interpersonal barriers was very familiar to me as I had experienced the situations described several times in my own career.The book is simple - it has no pictures, just some tables once in a while and some blank paper at the end of the book to takes notes. This book in particular is very unique as there aren't that many books dedicated to just Decision Making. but not many are purely dedicated to treating the subject of Decision Making from a theoretical and abstract perspective.
Enjoy learning from the masters. The book then moves on to topics dealing with how to make trade-offs, humble decision making (which is nothing but accepting that your first impressions may be wrong and be open to changing the direction of your thoughts as more information becomes available), interpersonal barriers, hidden traps, when to trust your gut, and analyzing problems. The size is small like a novel but very potent. They get straight to the point and finish it in less than 20 pages. Good luck.
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