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My Multistage Decision-Making


I have reflected on my decision-making and found two recent examples of how I think about my decision-making processes. The first example involves me thinking “on the fly” or making quick decisions in a limited amount of time and sometimes with limited amounts of information. In no other area of behavioral decision theory is there a greater gap between how a class of decisions should be made and the rules of thumb that describe how they actually are made (Hoch, Kunreuther, & Gunther, 2001, p. 39). My quick decision making is flawed and if I had to average the gains I’ve made with this example, I would bet I’m at or below 50% of making the correct choice. Managers often rely on instinct rather than careful deliberation (Hoch, Kunreuther, & Gunther, 2001, p. 15). 
The second example is when I have carefully thought through and evaluated multiple avenues my decision-making could take me. In both examples, I’m aware of and concerned with making the correct or proper decision. However, during my reflection on this subject, I’ve realized how important it is not to rush making any decision, as the outcome of poor decision-making has numerous negative consequences. Decision making is essentially the process of accepting less of something to get more of something else (Hoch, Kunreuther, & Gunther, 2001, p. 20). People are constantly trading off attributes for other ones and it is simply an exercise is trying not to trade-off too much in the end.
As managers, we routinely face decisions that involve similar trade-offs between the short run and long run consequences of current actions – dilemmas that decision theorists term dynamic decision problems (Hoch, Kunreuther, & Gunther, 2001, p. 38). I don’t view my decision-making as a complex mathematical equation, however, internally I view my thoughts as a decision tree with multiple branches or turns that could result in several outcomes. Human beings process decisions differently, but in many ways, are very similar. This is a trait that everyone learns at some point, with some people learner faster than others. For example, before I started my secondary degree program at Embry-Riddle Aeronautical University (ERAU), I weighted the options between several schools. My decision was based on calculations that estimated cost, flexibility, length of time and institutional brand awareness. However, the aspects of decision-making (Hoch, Kunreuther, & Gunther, 2001) has become much more complex and I’ve come to realize that the importance lies in how we think about our choices. Although, I have improved my decision-making since the start of my ERAU experience and have increased my knowledge of the decision-making subject in just the first week of this new class, there is so much more to learn. Like the example of walking around the circle (Foundation of Critical Thinking, 2019), there are new techniques to learn that will provide me with additional growth opportunities. 
I would use optimal dynamic decision analysis to predict future decisions by XXX. The structure of optimal decisions reveal how everyday decisions can go wrong (Hoch, Kunreuther, & Gunther, 2001, p. 39). Frankly, I don’t see myself using math formulas as part of my optimal dynamic decision analysis to evaluate future decision-making, nor do I feel capable of using such a complex method of thinking. The mathematics that underlie the optimal solution to even the most simplistic multistage decision tasks are not easy and are likely beyond the ability (or certainly the patience) of most real decision makers (Hoch, Kunreuther, & Gunther, 2001, p. 57). In simpler terms, I need to use a balance of intuition, adjusted pattern matching, foresight, caution and feedback. 
The conclusions made by Hoch, S., Kunreuther, H., & Gunther, R. (2001) about intuition in decision-making are helpful for me because it reinforces the idea that as successful as I may have been in the past with my decision-making, it doesn’t mean that my streak of luck will continue. The temptation is to conclude that our intuitions will be sufficient for all dynamic decision problems, but we would be severely mistaken (Hoch, Kunreuther, & Gunther, 2001, p. 57). As Hoch, Kunreuther, & Gunther (2001) point out, a person should ask themselves several questions before they make a decision. Many of these questions relate to a person’s inability to have proper foresight, the use previous decision-making as a compass for future decision-making, the overuse of patterns and similarities, failing to err on the side of caution and a failure to learn from our mistakes (p. 59-60). Further, these conclusions offer me a new decision tree with a set of standard gate checks that will help me fully think about my decision-making before I reach my own conclusion to a problem.
As I reflect on my previous two examples, it will be important for me to remember there are methods in place to enhance my decisions. We need to be on guard against knee-jerk reactions (Hoch, Kunreuther, & Gunther, 2001, p. 60). For me, it results in not only walking around the circle (Foundation of Critical Thinking, 2019), but walking through the circle of decision-making strategies that will help me be a better leader.
References
Foundation of Critical Thinking. (2019). Retrieved from http://www.criticalthinking.org/pages/critical-thinking-where-to-begin/796

Hoch, S., Kunreuther, H., & Gunther, R. (2001). Wharton on making decisions. New York: Wiley.

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