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Decisions, decisions, decisions … Can an MBA help you make better decisions

Can an MBA help you make better decisions
  • Oct 12 2017


The legendary management consultant Peter Drucker said, “Whatever a manager does, he does through decision-making”.

Decisions are the starting point of everything that needs to be done – from approving projects and prioritising the overload of daily tasks to appointing people, cutting losses and restructuring companies.

But on what do you base your management decisions? Hard facts, intelligence and rational thinking, or gut feel? Do you assert your power to strive for efficiencies and a quick cycle time for decisions or do you go with collective reasoning to improve the quality of the decision? What about bias and the unconscious reasons for our decisions? What if your brain is hard-wired to always expect the worst or to avoid conflict? What about the patterns of wrong decision making handed down from one generation to the next or embedded in organisational culture?

One wrong decision can derail many things. It can be costly. It can require courage. It could lead to many hours of damage control when addressing unintended consequences or cause irreparable reputation damage.  So, no doubt, decision making comes with enormous responsibilities. Yet, as Daniel Kahnemann said, there is a lot of “randomness” in the decisions we make.

In a McKinsey study of more than 1 000 business investments showed that when companies worked to reduce the effects of bias, they raised their returns on investment by seven percentage points.

According to Martin Butler, head of the University of Stellenbosch Business School’s MBA, the environment in which decisions are taken has become more complex in terms of costs, clients, time and context. Also, the impact of our decisions is more visible than ever before as we increasingly make decisions known in the public domain and splatter them across social media.

Decision making has become a discipline in its own right, equipping managers with both quantitative and qualitative tools to make decisions and mitigate risk. That is why decision making is seen as both science and art, encapsulated in a strong dose of realism about the context and the maker of the decision.

Referring to the quantitative aspect of decision making, Butler says the information required to make decisions has increased exponentially. Managers now need to analyse larger and more diverse sets of data to make better decisions, which poses a challenge in itself. Typical tools include regression analysis, financial projections and simulations. This is increasingly combined with qualitative tools such as systems dynamic methods like causal feedback loops to search for those structural problems that often see us addressing symptoms instead of real problems, and to ensure better outcome-based decisions.

Butler says socially constructed problems are “notoriously difficult” to solve. This typically requires systems thinking where one needs to see the bigger picture and the influences that indirectly impact decisions, or variables impacted upon by our decisions that we did not consider in the first instance.

As Donella Meadows, author of Thinking in Systems (2008), put it: “The world is nonlinear. Trying to make it linear for our mathematical or administrative convenience is not usually a good idea even when feasible, and it is rarely feasible.”

The bottom line is that managers and leaders require contemporary decision-making skills to operate in a complex business environment where a well-grounded “Yes, go ahead” or “No, that is not feasible” will directly determine whether an organisation will continue to delight its customers, or not, and even exist in five or ten years’ time.

If you need advanced decision-making skills to grow your career, you will benefit from an MBA that focuses on the development of this very skill.​​

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