• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter III. Executive Judgment and the ... > Decision-Making and Judgment

Decision-Making and Judgment

Judgment and decision-making are important activities that continually engage the attention of academics and practitioners alike. The ability to form good judgments and make wise decisions is considered a successful attribute in almost every society (Arkes & Hammond, 1986). However, trying to understand and explain decisions made in organizations by both individuals and groups is a complex problem. Part of this problem is due to the unobservable or intangible nature of decision antecedents. The exact nature of these decision determinants varies but evidence suggests that the decision problem is based on the decision-makers’ goal and their understanding of the decision problem (Brehmer, 1986). Neither of these can be easily observed. What can be observed, however, is the relation between a description of the decision problem and the actual decision or consequences from a decision. These observable actions are based on assumptions about the decision-makers’ goal or their understanding of the decision problem (Hammond et al., 1980).

The assumption that is most often made is that of rationality. The rational view assumes that the decision-maker has a perfect understanding of the decision problem, which allows her to ’select the course of action which leads to [her] goal’ (Brehmer, 1986). However, the rational assumptions that have underpinned mechanistic approaches to firm strategy and strategic choice have increasingly been questioned for their simplistic assumptions that the world is stable and predictable. Although rational thinking is commonplace, this paradigm is suitable only when asked to explain very simple decision problems. The paradigm, more often than not, is at odds with observed behavior that is characterized by constantly changing firms and markets. Figure 1 illustrates this contextual difference.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint