Selecting an Alternative in Decision Making

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Selecting an Alternative: Three Approaches

When selecting from among alternatives, managers can use three basic approaches: (1) experience. (2) Experimentation, and (3) research and analysis (Figure 6-1).

1. Experience

Reliance on past experience probably plays a larger part than it deserves in derision making. Experienced managers usually believe, often without realizing it, that the things they have successfully accomplished and the mistakes they have made furnish almost infallible guides to the future. This attitude is likely to be more pronounced the more experience a manager has had and the higher he or she has risen in an organization.

To some extent, experience is the best teacher. The very fact that managers have reached their position appears to justify their past decisions. Moreover, the process of thinking problems through, making decisions, and seeing programs succeed or fail does make for a degree of good judgment (at times bordering on intuition). Many people, however, do not learn from their errors, and there are managers who seem never to gain the seasoned judgment required by the modern enterprise.

Relying on past experience as a guide for future action can be dangerous. In the first place, most people do not recognize the underlying reasons for their mistakes or failures. In the second place, the lessons of experience may be entirely inapplicable to new problems. Good decisions must be evaluated against future events, while experience belongs to the past.

On the other hand, if a person carefully analyzes experience, rather than blindly following it, and if he or she distills from experience the fundamental reasons for success or failure, then experience can be useful as a basis for decision analysis. A successful program, a well-managed company, a profitable product promotion, or any other decision that turns out well may furnish useful data for such distillation. Just as scientists do not hesitate to build upon the research...
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