A PYRAMID OF DECISION APPROACHES

Under increasing Pressure to make better decisions in less time, manag ers often use the quickest and easiest decision-making method: going o n ''gut feel.'' But recent decision research shows that intuition is m uch less reliable than most people believe. Managers need to use more sophisticated methods. This article describes a series of increasingly accurate (and demanding) decision-making approaches. It starts with p urely intuitive choices, which are quickest and least accurate, and th en examines heuristic short-cuts and rules-of-thumb. It then discusses more demanding and reliable methods, such as bootstrapping and value analysis. This article then examines the strengths and weaknesses of e ach approach in terms of speed, accuracy, and justifiability, with ill ustrative applications to managerial practice. Finally, the authors of fer practical advice for managers on how the more sophisticated techni ques can be incorporated into the organization.