Sunday, April 15, 2007

Managerial Decision making

Critical managerial decision making is the key to superior performance at work.One has to refer to critical Data, past records and performance metrics and analysis before making decisions .Mc Kinsey study tries to assess the various factors which influence decision making at work. Executives often end up referring to wrong sources, which lacks scientific rigor and credentials in its finding, for arriving critical decisions. Just because one strategy works for a particular organization may not prove to be equally effective for other enterprises.

Unfortunately, many of the studies are deeply flawed and based on questionable data that can lead to erroneous conclusions. Worse, they give rise to the especially grievous notion that business success follows predictably from implementing a few key steps. In promoting this idea, authors obscure a more basic truth—namely, that in the business world success is the result of decisions made under conditions of uncertainty and shaped in part by factors outside our control. In the real world, given the flux of competitive dynamics, even seemingly good choices do not always lead to favorable outcomes.

The halo effect is especially damaging because it often compromises the quality of data used in research. Indeed, many studies of business performance—as well as some articles that have appeared in journals such as Harvard Business Review and The McKinsey Quarterly and in academic business journals—rely on data contaminated by the halo effect. These studies praise themselves for the vast amount of data they have accrued but overlook the fact that if the data aren’t valid, it really doesn’t matter how much was gathered or how sophisticated the analysis appears to be.

This reliance on questionable data, in turn, gives rise to a number of further errors in logic. Two delusions—of absolute performance and of lasting success—have particularly serious repercussions for business strategists.

It’s actually a real problem which many strategist face and typically too much of analysis may lead to complicated or erroneous conclusions if the context of the reference is not verified. Sometimes a single factor can be picked up as a major perceived thereat and instead of finding a meaningful and objective solution based on organizations own reality decisions may be unduly influenced by halo impressions.

No comments: