A Structured Approach to Strategic Decisions

Abstract

Some management decisions are made without weighing quite so much information. But strategic decisions tend to involve the distillation of complexity into a single path forward. Given how unreliable human judgment is, all evaluations are susceptible to errors. These errors can stem from known cognitive biases - or they can be random errors, sometimes called "noise". Unreliability in judgment has long been recognized and studied, particularly in the context of decision-making about hiring. Here, Kahneman et al. describe the Mediating Assessments Protocol, a practical, broadly applicable approach to reducing errors in strategic decision-making.