The following is a real piece of homework for my University’s Management and Organization tutorial. I thought it might be of interest to some of you.
Answer the following questions.
What is a good decision? Identify three or more specific criteria for evaluating the quality of a decision – criteria that would be helpful to decision makers, enabling them to know, at the time they make a decision and before the full consequences are known, that a given decision is a good one. No textbook answer required – do good thinking, and write down your thoughts.
Timing, tailoring and history. I believe these are the 3 basic criteria for evaluation and formulating a good decision. All three are usually present in a good decision, but neither one of them is an irreplaceable criteria; you can still make a good decision with 2, or even 1 of the above mentioned criteria. Allow me to explain.
Timing is of utmost importance in decision making. A right decision made at the wrong timing is a wrong decision. This criteria is most evident in the recent volatile stock markets. Everyone knows the basic rule of buying low and selling high. However, what separate amateur investors and professional investors is the knowledge of when to enter and exit the markets. Buying at low prices is the right decision, but buying at the wrong time will lead you into further losses. This holds true for either direction in the stock market. It can solely change the outcome of the decision. Thus, the timing of the decision is one of the key criteria of decision making.
Tailoring would be the second criteria. To fully grasp this criterion, we must first understand a fundamental truth: there are no trackbacks allowed in the matters of time. As such, there are no identical scenarios in this world. Each scenario is full unique and individualistic. Even if the assumption of Ceteris Paribus holds true for all the other factors, the time factor would have changed. Just like twins, they are similar, but never identical. You cannot have two “first time” experiences. Somethings clearly cannot be reverted. Since the same decisions can never guarantee identical success for similar problems, each scenario must be treated with its uniqueness in mind. There is never a one-size-fit-all decision making. All good decisions must be tailored to fit the situation faced; the perfect fit for Yao Ming would not be the perfect fit for me. Hence the absence of tailoring in a decision making can only result in absent minded decisions.
Last but not least, we have the last criteria of history. The history of the decisions would be the track record of its success. To implement a decision that has a previous history of multiple failures would be placing us at the losing end of probability. Although not definite, such decisions would probably yield the same outcomes of it predecessors. Remember that we have previously identified that timing and tailoring are essential in our decision making consideration, thus history cannot be the sole factor which a decision is based upon.
Perhaps I might have missed out the hidden 4th criteria. It could be considered the king amongst these criteria, but I choose to leave it out as this overall variable is highly indefinite as it is hard to place a measure onto this elusive criteria. This would be the intangible criterion of good human judgment. He who knows how to use and manipulates the 3 criteria to his advantage would be the final piece of the puzzle. In the hands of the incompetent, even the knowledge of these 3 criteria would not aid him in making any decision good.
In the end, the test of the decision-making is essentially the test of the leader.