loren Eric Swanson: Decision Making in Harvard Business Review

Sunday, January 15, 2006

Decision Making in Harvard Business Review

This months Harvard Business Review is worth purchasing. It is devoted to decision making. I'll include a few quotations that I thought were interesting and thought-stimulating.

The contest between rationality and gut instinct pervades the research on decision making. You can find even mathematecians on both sides of the fence. One, Bleiase Pascal, argued: "The heart has its reasons of which reason knows nothing." Anotehr, Lewis Carroll, said: "Use your head." The right approach is to seek the insights of both. Thomas Stewart. p. 12

Decision implies the end of deliberration and the beginning of action. Charles H. Lundquist p. 33

In 1921, Frank Knight distinguished between risk, when the probability of an outcome is possible to calculate (or is knowable), and uncertainty, when the probability of an outcome is not possible to determine (or is unknowable)--a argumetn that rendered insurance attractive and entrepreneurship, in Knight's words, "tragic." p. 35

You dont have to be a neuroscientist to see how the emotional brain can badly distort judgment. Just ask any parent. Frm the toddler climbing the shelves to get candy to the teenager sneaking off for unprotected sex, kids have a dangerous shortage of common sense. their baad behavior often looks consciously defiant (and it sometimes is), but the real problem may be that their brains haven't yet developed the circuitry that judiciously balances risks and rewards to yield level-headed decisions. This is where the neuroscientists can offer special insight. The brain's frontal lobes, so critical to decision making, don't fully mature until after puberty. Until then, the neuronal wiring that connects the prefrontal cortx to the rest of the brain is still under construction. Meanwhile, the parts of the brain that incite impulsive behavior seem particularly primed in teenagers. For instance, Gregory Berns andd colleagues at Emory University foun that certain still-developing circuits in adolescents' brains become hyperactive when the kids experience pleasurable novel stimuli. An adolescent's brain is wired to favor immediate and surprising rewards, even when the teen knows full well that pursuing them maybe a bad idea. p. 46


Post a Comment

<< Home