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Wharton on Making Decisions

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Wharton on Making Decisions

Wiley,

15 min read
10 take-aways
Text available

What's inside?

If you’ve been making decisions based on guts, glory and a coin toss, the latest scholarship offers some stronger strategies.

Editorial Rating

8

Qualities

  • Innovative

Recommendation

Stephen J. Hoch and Howard C. Kunreuther present a series of articles about making decisions written by professors at the Wharton School of Business at the University of Pennsylvania. The articles describe how decisions are made using an ideal scenario, and then offer practical suggestions on how to make better business decisions. The book is designed to help top executives and managers use the latest methods of analysis and reasoning in decision making. Some may find this approach overly academic - in that many of the research findings are based on social laboratory experiments, statistical analysis and modeling - but if you’ve been making decisions based on guts, glory and a coin toss, the latest scholarship does offer some stronger strategies. getAbstract found several in this solid book that will be of great help to managers dealing with employees, executives formulating strategy and finance or compliance officers weighing corporate risks.

Summary

The Complex Web of Decision Making

To make better decisions, become proactive by reshaping your decision-making process to be completely conscious. Become more aware of how you make decisions. Draw on deliberate insights about how people make decisions and how to make better ones.

There are four levels of decision making:

  • Individual - A person’s decisions are often influenced by emotions, intuitions and a focus on the present versus consequences in the future.
  • Manager - Making decisions as a manager, you may be more concerned with using models to facilitate making decisions, particularly complex decisions.
  • Negotiations - This includes decisions made in various interactions with multiple parties.
  • Societal - Decisions that are made on the societal level affect choices about such issues as environmental protection and health-care coverage.

These different levels of decision making can contribute to the success or failure of an organization. For example, examine the failure of the Barings Bank. Nick Leeson, the manager of the bank’s Singapore office, made...

About the Authors

Stephen J. Hoch is a professor of marketing at the Wharton School, University of Pennsylvania. He previously taught at the University of Chicago Howard C. Kunreuther is a professor of decision sciences and public policy and management, as well as co-director of the Risk Management and Decision Process Center at the Wharton School. Robert E. Gunther was the coordinating writer for Wharton on Dynamic Competitive Strategy and Wharton on Managing Emerging Technologies.

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