The Hindu Business Line : Adding new insight

Making better business decisions
Understanding and improving critical thinking and
problem-solving skills
By Steve W. Williams
Publishers: Response Books, New Delhi
Price: Rs 250

We make a great number of decisions every day in matters concerning ourselves and others close to us. All those decisions have favourable and/or adverse consequences, some trivial and others serious. Although all of us wish to make only good decisions and obtain optimal solutions to all our problems, many times we fail to get the best because of human limitations, including limited thinking abilities.

Generally all of us have difficulty in making decisions. The experience of the ill effects of the wrong decisions that have been made in the past and the fear of potential risks that can result from imperfect current decisions are the most common causes of difficulty. People who can boast of their wise decisions and claim credit for the same are, no doubt, fewer than those who regret the wrong decisions of their past.

When faced with the need to make many decisions at a time, we usually make spot decisions on routine matters of trivial consequences using common sense, and for others with potentially substantial impact we turn to scientific decision-making process. Knowledgeable people do it themselves, while others try to seek the help of persons with knowledge, analytical skills and experience. It is here that we realise the importance of the study and practice of the subject.

Although a lot of published literature is already available on decision-making, any amount of fresh, good literature on it is welcome, particularly with new insight. In that sense, the book under review is a welcome addition. Written by a highly learned and experienced author, the book deals with certain aspects of decision-making, which many other authors have not dealt with so precisely in a single book.

In this 169-page volume, the author first introduces us to rational decision process and bounded rationality, and then in the analytical text discusses three key concepts, namely, decision-maker's internal influences on decisions, understanding and improving critical thinking skills needed for making rational decisions, and understanding and improving creativity in decisions.

"Rational Decision Process" is a decision-making model, which stresses that all components of a decision should be thoroughly evaluated before arriving at the solution.

The difference between the conventional decision making process and rational decision process is that, while the former goes through time-honoured steps of identification of the problem, definition of criteria, generation and evaluation of alternatives, and implementation, the latter travels deeper through identification of the real problem, identification and appropriate weighting of all criteria that are relevant to the problem, generating and evaluating a list of alternative solutions after gaining full understanding of all consequences, determining the best suited one out of the listed alternatives, and implementation and follow up of the same to reach the optimal solution.

While striving to be fully rational to make the best decision, decision makers are often bonded by one or more of a set of limiting factors including lack of complete or fully accurate information, scarcity of time and resources, poor memory, and limitations of intelligence and perception. The behavioural scientist H.A. Simon has collectively named them "Bounded rationality". These limitations may compel us to sacrifice a part of the potential gains or to wilfully settle for something less than the best possible outcome.

"Internal factors" that influence the quality of decisions are the biological, emotional and psychological conditions of the decision makers. Energetic or tired physical conditions, emotions, impulsiveness, aggressive attitudes, judgmental biases, and our own perceptions of risks in regard to potential gains and losses do alter and distort our thinking ability, and influence our decisions. In Part I the author explains how these internal factors act on our decision-making, and helps us ward off their adverse influences through critical analysis.

"Critical thinking" is the key requirement for good quality decision. To think critically is to be open-minded toward new ideas and concepts, and at the same time be sceptical of all that we hear and believe, thus seeking to ascertain the truthfulness of evidences presented to us. We must test the trustworthiness and credibility of all the information presented to us, by considering the quality of the source. When we do critical thinking on a problem, we may come across simpler, more objective and more plausible alternatives, which lead to optimal solutions.

In the second part of the analytical text the author explores the elements of critical thinking and guides us to improve our critical thinking skills.

Part III is devoted to creativity and creative thinking that lead to innovative decision-making. According to organisational behaviourist T.M. Amabile, `creativity is the production of novel, valuable, relevant, and useful ideas'. And such ideas intelligently applied would lead to good decision-making. The decision makers' personal characteristics of `resources' comprising knowledge, expertise, and technical information; `techniques and skills', and `internal motivation' shall influence creativity

The concluding chapter entitled " Improving Our Decisions" sums up the discussions with emphasis on critical thinking and creative problem solving.

Although the title of the book attracts only businessmen, decision makers in all spheres of human activities will substantially benefit from this well-written thin volume.

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