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Rated: E · Article · Business · #1991869
Flawed decisions can lead to omnishambles. Are we making informed decisions?
When Jürgen Schrempp, CEO of Daimler-Benz, led the merger of Chrysler and Daimler against internal opposition, he did not know nine years later, his decision would force Daimler to virtually give Chrysler away in a private equity deal. Steve Russell, chief executive of Boots drugstore chain, launched a healthcare strategy to differentiate the stores from competitors, but it turned out to offer little profit potential and contributed to Russell’s early departure from the top job. These executives were highly qualified for their jobs, yet they made decisions that soon seemed clearly wrong, according to a Harvard Business Review article by Andrew Campbell, Jo Whitehead, and Sydney Finkelsteinan at HBR.org.

“From our analysis of these cases, we concluded that flawed decisions start with errors of judgment made by influential individuals,” the article continued. “Hence we needed to understand how these errors of judgment occur.”

“We depend primarily on two hardwired processes for decision making. Our brains assess what’s going on using pattern recognition, and we react to that information—or ignore it—because of emotional tags that are stored in our memories. Both of these processes are normally reliable … But in certain circumstances, both can let us down.”

Flawed decisions made from poor judgment can lead to chaos or the rippling effect of blunders, which often carry serious consequences. We know making right decisions is never easy, but sometimes we can observe some telltale signs of potential problematic consequences with the help of pattern recognition. Depending on how we react to the information we have at hand or ignore it because of emotional tags, we would eventually have to make our own decisions. Nevertheless, no single decision made is foolproof or guarantees success.

In the case of Daimler-Benz, Schrempp chose to go ahead with his decision despite internal opposition. Russell, in the case of Boots, made his decision without sufficient knowledge of the market.

Are we making decisions without considering the views of others? Have we studied enough to understand the needs of the market and the people around us to make informed decisions? Are we knowingly or subconsciously making wrong decisions because of emotional attachment?

Whether we have made the right or wrong decisions, we need to learn from our past and get on ahead. Take into consideration the feedback and views of others. Do a through research before assessing what’s going on and make informed decisions without emotional entanglements.
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