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Decision Making

The best book on decision making is The Art of DECISION MAKING: 7 Steps to Achieving More Effective Results, by John D. Arnold (NY: American Management Associates, 1978). I highly recommend that you read it.

Here are the 7 steps recommended by Arnold.

  1. DEFINE THE ISSUE

  2. STATE YOUR PURPOSE

  3. SET YOUR CRITERIA

  4. ESTABLISH YOUR PRIORITIES

  5. SEARCH FOR SOLUTIONS

  6. TEST ALTERNATIVES

  7. TROUBLESHOOT YOUR DECISION


The book provides appendixes at end for handy checklists to guide you in buying a car, buying a house, choosing a college, and drawing up a family budget.

"This book provides a systematic way of looking at problems and opportunities that will enable you to make better decisions. Once you understand the system, improving your decision-making skills is only a matter of practice" (ix-x).

[What follows are some excerpts. You will want to read at least the more complete notes in PDF format in WebCT. Even better, get the book and read it. -CG]


WHY YOU NEED A SYSTEMATIC APPROACH TO DECISION MAKING

"What you choose is what you are" (3).

"Considering all the practice we get in making decisions, you would expect that we would be good at making them: the more typing you do, the better typist you become. But the number of decisions you make has NOTHING to do with your skill at making them or the results you obtain. For the most part, decision making is an ignored art. We take lessons to learn tennis or golf, but we rely on our own devices to learn how to make decisions. It is assumed that decision making comes naturally, like learning to breathe. It does not" (3).

"Most of the "authorities" on successful living tell us that their particular specialty - religion, philosophy, sex, education, gamesmanship, or the latest psychological fad - holds the key to a successful life. But after you have taken their courses and read their books, you are left with the burden of having to make decisions about religion, philosophy, sex, education, gamesmanship, or the latest psychological fad. A SYSTEM FOR MAKING DECISIONS CAN BE THE KEY TO ALL THE OTHER KEYS" (4).

"Some of us tend to make snap decisions without appreciating the consequences. Getting the decision behind us becomes more important than making sure that the decision is a good one. We might just as well flip a coin. In fact, coin flipping is one of the commonest methods of decision making" (6).


FEELING AND THINKING

"… many of the books, articles, and business courses on decision making preach that "rational decision making" is the pinnacle we must all strive toward. We are told that when we enter the decision making arena we must check our emotions outside, lest we be swayed by sentiment and diverted from our goals.

"That's fine for a scientist conducting a laboratory experiment. But most of the decisions we make in life affect people, ourselves and others, and people by their very nature are beings who FEEL as well as THINK. A decision that reflects only logic may fail if those on whom its success depends reject it for emotional reasons. A decision we make for ourselves, no matter how logical, may not be right if it doesn't feel right… the most durable decisions are those that reflect both reason and emotion. IT IS STRIKING THE RIGHT BALANCE THAT IS CRUCIAL" (14).

POSITIVE THINKING

"Many Americans have been trained to worship at the shrine of positive thinking. Rooting for a third-rate team is called school spirit by the principal. Boasting that Podunk is the best town in the state is called boosting by the chamber of commerce. Believing in an obsolete product is called self-confidence by the sales manager. It is no wonder that anyone who looks an unpleasant truth in the face and calls it to public attention risks being branded a troublemaker. But in order to make good decisions we have to learn to look unpleasant truths in the face" (17).

INTUITION

"Another snare for the unwary decision maker is intuition. Intuition is defined as quick perception of a truth without conscious attention or reasoning" (19).

"I have always believed.. that what is called intuition is frequently based on emotion or knowledge that is not always recalled at the moment. Good poker players do not decide intuitively when to stay in the game and when to drop out. They calculate the odds and pick up all the signs of when their opponents are bluffing. The casual player may explain his luck in terms of intuition. But did he really guess that Charlie was bluffing when he stood pat? Or had he noticed that Charlie bites the corner of his mouth when he is bluffing?

The brain tends to pick up a great deal of information without knowing how it got there. Instead of blindly following your intuition when you have decision to make, you can use it constructively by asking yourself… questions [about what you knew or noticed unconsciously]… Get the answers to these questions out in the open and you will be on your way to making a good decision, one that you can justify to yourself and to others" (20).

COMMON SENSE

"Another pitfall for the decision maker is so-called common sense. Common sense usually produces decisions to do the obvious. You are sitting at a bar when you are approached by a man who resembles a gorilla.. He has been celebrating. "Buddy," he snorts, "that's my chair you are sitting in. You have five seconds to get out of it." You do not use the time to consider your civil rights or to reflect on the fact that his stomach is flabby while you have done 50 pushups this morning. Instead, you move over to the next chair. Common sense told you to" (20-21).

"But what if the decision you have to make has no obvious answer? How is common sense used or misused in making such a decision? A friend has asked you to be a partner in a fast-food franchise. Since you already have a job that meets the monthly mortgage payments and you have no experience in the food business, you politely reject the offer. It was only common sense, you say. But was it? Were you using common sense as an excuse for not thinking? Would it have been wiser to probe the feelings, thoughts, and experiences that comprise your common sense, just as you did with intuition? Perhaps if you had analyzed the offer on the basis of facts and feelings instead of common sense, you would be the owner of a successful fast-food franchise today" (21).

WHAT-IF

"Another snare for unwary decision makers is the what-if game. It can easily deceive people into believing they have done something extremely clever or foresighted. In its simplest form, a person sits down and tries to anticipate trouble by asking, "What if my kid, customer, boss, or competition does this or that? What should I do?"

"The what-if game can be helpful if its primary purpose is preventive rather than reactive. It enables planners to take steps to reduce the likelihood of an undesirable event occurring while drafting contingency plans to cope with the worst if preventive action is unsuccessful" (21).

LISTING PROS AND CONS

"Suppose you are in the market for a house. The one you are seriously considering is well constructed, but the price is higher than you wanted to go. Still, it is in a quiet neighborhood and its value will appreciate; but it is far from your work. Still, the architecture is beautiful and there is a big yard for the kids; but it needs another bedroom.

"You could go on juggling pros and cons like that forever, like a circus performer trying to keep a dozen plates spinning on the end of several long sticks. Just when he gets the ninth one spinning, he has to rush back to give the first another twirl. You get on this merry-go-round because you have no system for dealing with the list of pros and cons, for weighing their importance, and for making a decision you can have confidence in… If someone were to ask you to explain your decision to buy or not to buy the house, you could readily produce a laundry list of facts but not a conclusive justification" (22).

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