A632.1.4.RB - Multistage Decision-Making

A632.1.4.RB - Multistage Decision-Making

Would using the decision making processes that are discussed in chapter 3 of Wharton on Making Decisions (Hoch, Kunreuther, & Gunther, 2001) improve my decision making?

Personally I would say no. There is more to decision making then the mathematics of it. Yeah there are the chances you would know the probabilities and/or values that help make up the equation taught in chapter 3 of Wharton on Making Decisions (Hoch, Kunreuther, & Gunther, 2001). But this equation does not account for the unknown or unpredictable values or situations.

What I find interesting and useful are the four questions that Hoch, Kunreuther, and Gunther (Hoch, Kunreuther, & Gunther, 2001) suggest managers should ask themselves when answering the question: Will I be making a mistake?
1. Am I being myopic?
2. How appropriate is the starting analogy I am using to solve a problem?
3. What are the penalties for making an error?
4. What am I learning from the feedback I am receiving?

I liked that the Wharton text introduced the concept of forward planning in our decision-making. We are prone to be temporally myopic and often, severely so.  Indeed, studies find that people generally can plan no further than just one step beyond the current decision (Hoch, Kunreuther, & Gunther, 2001).  As I considered my own decision-making abilities, based on the information available to me at the time of the problem, I may not be able to predict a positive future outcome or what affect my decision may have in the future.  Sadly, my myopia has blinded me on many occasions, and the effects of my decisions were unforgiving.  And there have been other instances when everything worked out just fine!  I am still seeking the “sweet spot” of knowing when my decision will be right at least 95% of the time.

Optimal dynamic decision analysis really is the best option for decision making because it does consider the present facts of the case but not at the neglect of future outcomes.  They are analyzed in relation to one another and their interconnectedness is always at the forefront.  Additionally, optimal results may even be the easiest to recognize.  With these thoughts in mind, I would like to utilize this method more frequently.  It will allow me to continue to be goal-oriented but not at the expense of inaction.  I'll know how my current choices align with future outcomes, and this will allow me to make better decisions in the present.

Works Cited

Hoch, S. J., Kunreuther, H. C., & Gunther, R. E. (2001). Making Decisions. Hoboken, NJ: John Wiley & Sons, Inc.

Myatt, m. (2012, march 28). 6 Tips for Making Better Decisions. Retrieved from Forbes: http://www.forbes.com/sites/mikemyatt/2012/03/28/6-tips-for-making-better-decisions/#380a778d9f54