Strategic Decision Making

Good decision making is crucial to good management and successful strategic planning. Sadly the decision making capabilities within organisations are often poor. Using a fascinating and very readable combination of psychological theory, pencil-and-paper thought problems, and material from contemporary media, George Wright demonstrates why high-profile strategic disasters occur and how to prevent your own organisation from making similar mistakes. Case studies include Marks & Spencer, Dyson, Baring's Bank and the Millennium Dome.Gute Entscheidungsfindung ist eine wesentliche Voraussetzung für gutes Management und erfolgreiche Strategieplanung. Doch leider sind die Fähigkeiten zur Entscheidungsfindung in Unternehmen häufig unzureichend ausgebildet. Autor George Wright demonstriert hier, warum es zu katastrophalen Strategiefehlern kommt und wie man sie vermeiden kann. "Strategic Decision Making" ist eine faszinierende Mischung aus psychologischer Theorie, praktischen Denkaufgaben und aktuellem Material aus den Medien. Mit zahlreichen Fallstudien, wie z.B. von Marks & Spencer, Dyson, der Barings Bank und dem Millennium Dome. "Strategic Decision Making" gehört zur neuen 'Fast Track'-Reihe und ist ein praktischer Leitfaden mit bewährten Tipps und Ratschlägen, für eine gute strategische Entscheidungsfindung. Lesen Sie hier alles über die besten Methoden und praxiserprobte Verfahren.

Series Foreword by Digby Jones ix

About the author xi

Preface xiii

Acknowledgements xv

1 Challenging Routines 1

Success formulas 3

Frames of reference 4

2 Decision Making in Management Teams 15

Groupthink 17

Alleviating groupthink 25

3 Overcoming Overconfidence 29

Overconfidence 30

Confirmation bias 32

Hindsight bias 33

Expert predictions 33

Alleviating overconfidence 39

4 How to Think with Scenarios 43

Scenario planning 44

Scenario construction: the extreme World method 45

Using scenarios in decision making 49

Scenario construction: the driving-forces method 55

The benefits of scenario planning 62

5 Dealing with Decision Dilemmas 73

Avoiding difficult decisions 74

Case study of a management team facing a decision dilemma 76

Dealing with psychological reactions to difficult decisions 80

6 Expectation and Decision Making 85

Decision trees 86

Blame culture and risk taking 93

7 How to Make Trade-offs 105

Simplifying choices can result in poor decisions 106

Making trade offs 113

8 Harnessing the Minds of Managers 121

Strategy development 122

A technique for the facilitation of strategic thinking 123

The role of the facilitator 124

Lessons from this book 126

Notes 131

Appendix A 137

Appendix B 138

Appendix C 139

Index 141

"..this series has much to commend it..." (Modern Management, February 2002)

"…a fascinating and readable combination of psychological theory, paper and pencil thought problems and quotations from contemporary media…" (Productivity Digest, May 2002)

George Wright has held Faculty positions at LBS and Leeds Business School, and is currently at Strathclyde Graduate School of Business, where he consults to major blue-chip clients such as Philips and IBM. He has conducted extensive research into the role of judgement in forecasting and decision making, with particular emphasis on the simplification strategies of managers which lead to poor decisions.
He has published both academic and trade books on forecasting and decision making, and contributed to various journals within the field. He founded the Journal of Behavioral Decision Making with Wiley in 1988 and is Associate Editor of the Wiley journal Journal of Forecasting and the journal International Journal of Forecasting. * Why are large organisations, including household names, sometimes accused of 'losing the plot' in their business strategy?

* Why do organisations fail to exploit new opportunities such as that presented by Dyson's innovative vacuum cleaner design?

* Why were funds poured into the UK Dome and the City of London Taurus computer project when it was clear that 'good money' was following 'bad'?
The answers will surprise you. Using psychological theory, paper and pencil 'thought problems', and well-chosen quotations from newspaper articles written at the time, the book demonstrates and explains the causes of these 'strategic blunders'. It also shows how to recognise and avoid your own organisation making the same mistakes.

Providing clear guidance with a number of tried and tested methods and techniques, the author shows how organisational decision making can be improved by avoiding delaying tactics and a 'blame culture' and how scenario planning can be used to overcome management overconfidence in predicting the future.