Handbook of Decision Analysis, 2nd Edition

2Decision‐Making Challenges

Two Perspectives on Decision‐Making

Nothing is more difficult, and therefore more precious, than to be able to decide.

—Napoleon, Maxims, 1804

Nothing good ever came from a management decision. Avoid making decisions whenever possible. They can only get you in trouble.

—Dogbert, Dogbert's Top Secret Management Handbook, 1996

CHAPTER MENU

• 2.1 Introduction
• 2.2 Human Decision‐Making
• 2.3 Decision‐Making Challenges
• 2.4 Organizational Decision Processes
  • 2.4.1 Culture
  • 2.4.2 Impact of Stakeholders
  • 2.4.3 Decision Level (Strategic, Tactical, Operational)
• 2.5 Credible Problem Domain Knowledge
  • 2.5.1 Dispersion of Knowledge
  • 2.5.2 Technical Knowledge – Essential for Credibility
  • 2.5.3 Business Knowledge – Essential for Success
  • 2.5.4 Role of Experts
  • 2.5.5 Limitations of Experts
• 2.6 Behavioral Decision‐Analysis Insights
  • 2.6.1 Decision Traps and Barriers
  • 2.6.2 Cognitive Biases
• 2.7 Two Anecdotes: Long‐Term Success and a Temporary Success of Supporting the Human Decision‐Making Process
• 2.8 Setting the Human Decision‐making Context for the Illustrative Example Problems
  • 2.8.1 TechnoMagic New Product Launch
  • 2.8.2 Geneptin Personalized Medicine
  • 2.8.3 Data Center Decision Problem
• 2.9 Summary
• Key Terms
• References

2.1 Introduction

In this chapter, we describe decision‐making challenges and introduce some reasons why decision analysis is valuable to decision‐makers, but also why decision analysis may be difficult to apply. The axioms of decision analysis ...