RONALD

RONALD

1. 4. REFORMULATION

   • Managers
     • adopt a strategy of “small wins” in order to build momentum
     • make steady progress toward achieving the overall objective.
   • Disadvantages
     • They miss the opportunity and the necessity for more radical changes.

2. 2. IMITATION

   • Being different does not mean that a firm refuses to learn from others.
   • Business leaders
     • Emulate the strategies and practices of other highly successful firms
     • Find someone who has already solved a complex problem
     • may feel safe imitating their rivals
   • Disadvantages
     • It doesn't let to develop and preserve unique sources of competitive advantage.
     • Leaders are not going out on a limb with a novel business strategy
     • It will not produce a unique and defensible strategic position

3. 1. REASONING BY ANALOGY

   • Business leaders
     • draw analogies with past experiences when faced with a complex problem.
     • draw comparisons to similar situations or circumstances from their past or the history of other organizations
     • deduce certain lessons from those experiences
   • Analogies uses
     • when decision-makers do not have access to complete information
     • when decision-makers do not have the time or ability to conduct a comprehensive analysis of alternatives
     • diagnose a complex situation very quickly
     • identify a manageable set of options for serious consideration.
   • Disadvantages
     • most analogies are imperfect
     • No two situations are identical
     • Decision-makers often ignore critical differences.
     • Business leaders often draw imperfect analogies

4. 7. EXPERIMENTATION

   • Managers
     • avoid making a big bet
     • stage a small test
     • gather feedback
     • adjust their strategy based upon what they have learned.
     • could decide to
       • make a much bolder move
       • abandon the project
     • need to be aware of the sunk-cost effect
       • This should not be relevant to current choices.
       • can make it particularly difficult for decision-makers to abandon unsuccessful experiments.
   • reduce uncertainty and gather new information about customers and markets.

5. 6. RIGOROUS DEBATE

   • management teams
     • Stimulate a rigorous debate among all members
       • can clarify and refine people’s ideas
       • enhance shared understanding of complex problems
       • Healthy debate
         • encourages the generation of multiple alternatives
         • ensures that teams will critically evaluate each option
         • enables managers to separate facts from assumptions
   • Disadvantages
     • many debates result in a stalemate between opposing camps within management teams.
     • Subgroups retrench into rigid opposing positions and cannot resolve their differences.
     • difficult to build commitment
     • diminishes the likelihood that team members will want to co-operate
   • techniques for managing conflict effectively
     • discouraging the use of inflammatory language
     • asking people to argue several different sides of an issue
     • shifting people out of their traditional roles
     • requiring teams to revisit key facts and assumptions when an impasse is reached.

6. 5. DEFERENCE TO EXPERTS

   • Top teams
     • bring in outsiders who can offer knowledge and experience that is unavailable within the firm
     • do not make good decisions when they defer to experts
     • may converge prematurely on a suboptimal alternative
   • Experts
     • have relevant expertise on a particular issue.
     • have credibility
     • command respect from others
     • play an important role
     • bring to bear a rich accumulation of experiences
     • can draw inferences,
     • can develop hypotheses
     • can pose challenging questions
     • recognize patterns over time and across situations

7. 3. RULES OF THUMB

   • Managers
     • Cope with ambiguity and complexity by adopting a rule of thumb, or heuristic, to simplify a complicated decision
       • reduce the amount of information
       • shorten the time required to analyze a complex problem
     • Cope with ambiguity and to make sound judgments in an efficient manner
     • do not conduct a thorough statistical analysis to assess the likelihood that a particular event will take place in the future.
   • Disadvantages
     • They do not apply equally well to all situations
     • They can lead to systematic biases in judgment
     • Vivid experiences and recent events usually come to mind very quickly and have undue influence on people’s decision-making.
     • people fail to recognize their drawbacks and limitations.