COMPLEXITY AND CLEAVAGE: DUAL EXPLANATIONS OF STRATEGIC DECISION-MAKING [I]

This paper presents a framework for the comparative analysis of strategic decision-making processes. It draws together and integrates predominant but previously disparate theories of decision-making. Examples are given of how decision-making processes may be characterized and, hence, facilitate comparison across all types of strategic decisions. Explanation of why decision processes may differ is from two perspectives. First, the complexity of the topic may lead to particular characteristics of the decision process. Secondly, the cleavage of interests which a topic arouses may also lead to particular aspects of decision processes. We argue that each decision topic has varying levels of both complexity and cleavage and four examples of strategic decisions are analyzed on these dimensions. We identify four profiles of decision-making processes associated with varying levels of complexity and cleavage and we finally suggest that our model may explain and empirically demonstrate variations across a large number of diverse strategic decisions.     

熵权理想点法在高科技股票投资决策中的应用

将通常用于多指标投资决策的熵权理想点法引入证券市场,并与主观赋权法相结合,能较好地评判股票的相对投资价值。通过对高科技板块股票的市场表现进行实证分析,得到满意的结果。     

A multi-criteria approach to local tax planning

A city tax model based on the analytic hierarchy process is developed. This model allows city officials to explicitly take into account the existence of multiple decision criteria in selecting new tax options. Opinions from tax experts are used to relate tax plans to decision criteria. The paper explores the feasibility of applying commonly available decision tools to facilitate and improve decision making in local government.     

COMPLEXITY AND RANDOMNESS IN MATHEMATICS: PHILOSOPHICAL REFLECTIONS ON THE RELEVANCE FOR ECONOMIC MODELLING

Abstract Mathematics itself is a complex system. It exemplifies complexity at the level of structure, hierarchy and so on. There is also an interesting notion of complexity present in the meaning of mathematical ‘alphabets’. These are unique writing strategies of mathematics. Yet another marker of complexity lies in the process of applying mathematics to models. Using mathematics in modelling is a process of deciding what kinds of models to construct and what types of mathematics to use. Modelling can be seen as a decision‐making process where the scientists are the agents. However in choosing mathematical structures the scientist is not being optimally rational. In fact, fertile uses of mathematics in the sciences show a complicated use of mathematics that cannot be reduced to a method or to rational principles. This paper argues that the discourse of satisficing and bounded rationality well describes the process of choice and decision inherent in modelling.     

LINKING COGNITIVE, ORGANIZATIONAL AND POLITICAL FACTORS IN EXPLAINING STRATEGIC CHANGE

Much recent research on strategic decision-making and strategic change from many different perspectives challenges the view that decision outcomes are the product of rational choice. Allison's (1971) classification scheme is used to categorize recent strategic decision research within three different perspectives. Discussions of research on cognitive, organizational and political perspectives are followed by an integrative discussion showing how these three perspectives can be combined to deal with the full complexity of strategic decisions and the strategic change process.     

Methods for analyzing decision-making: a framework approach

In political science an eternal question concerns how decisions and policies arise. Modern society, characterized by more uncertainty and complexity than before, increases the challenge of providing valid answers. However, the general lack of methodological concern in several previous studies in this area stresses the need for elaborations of more suitable approaches. In this article we add a methodological perspective that deals with this very question. By reviewing and analyzing earlier research on how decision-making is reached, the overall ambition of this article is to create a framework that can lay the methodological foundation for further studies. Such a framework, which takes into account both the complexity of modern multi-governance societies and adds methodological perspectives of macro and micro standpoints as well as of causal mechanisms, can be used in future research to achieve richer pictures of how decision-making is carried out. In addition, we show how a certain technique of analysis is highly compatible to this framework and that jointly these features provide solutions for a better understanding of the complexity of modern decision-making. All in all, applying this strategy can be used to better systematize complex causal chains that reflect different analytical levels and thereby increase leverage on how to understand and explain the process of political decisions.     

Human resource metrics and decision support: A classification framework

Human resource information systems and analytics have transformed the delivery of HR services and the role of HR within organizations. In spite of the complexity of HR and the different roles HR plays, there has been limited research which helps inform the selection, application and use of HR metrics and analytics to the operational, managerial, and strategic levels that HR occupies. Therefore, the goal of this article is to provide a framework that describes the data needs, decision characteristics, and HR metrics to these different levels of HR activity and decision-making. We provide a number of research propositions and implications of the model. We finish the paper with a discussion of the implications that this framework has for how HR decisions are made, the types of data used in support of these decisions, and the metrics used.     

ORGANIZATIONAL DECISION-MAKING AS HIERARCHICAL LEVELS OF DRAMA*

In conducting a longitudinal examination of eight long-term complex decision processes in two Fortune 500 heavy manufacturing companies the authors developed a six-level framework of decision complexity. The levels range from: (1) instantaneous decision choices to (2) decision actions (3) decision events (4) mini-decision processes (5) decision processes and (6) decision theatres. They vary in time, numbers of participants, and in the integrative effort required to formulate and implement them. Thus, one problem with the word ‘decision’is that it is used to mean many different things in organizational settings. Each lower level of ‘decision’was found to combine with ‘decisions’of the same level and to be embedded within higher levels, resulting in a nested hierarchy of simultaneously occurring processes.     

投资者决策行为与信息披露

本文认为对会计师而言,理解投资者如何作出决策(实证理论)以及应如何作出决策(规范理论)是相当重要的。通过对投资者决策行为的研究,可能有助于提高财务信息准确地描述真实经济事项的能力;有助于理解财务会计信息的数量、类型和形式如何影响投资者的判断或预测;有助于理解决策者准确地对其认知的环境作出反应的能力;有助于理解投资者如何解决决策的复杂性,以及不同的决策风格对信息利用方式的影响。     

Does the Capitalization of Development Costs Improve Analyst Forecast Accuracy? Evidence from the UK

It has been documented that investments in Research and Development (R&D) are associated with increased errors and inaccuracy in earnings forecasts made by financial analysts. These deficiencies have been generally attributed to information complexity and the uncertainty of the future benefits of R&D. This paper examines whether the capitalization of development costs can reduce analyst uncertainty about the future economic outcome of R&D investments, provide outsiders with a better matching of future R&D‐related revenues and costs, and therefore promote accuracy in analyst forecasts. UK data is used, because accounting rules in the United Kingdom permitted firms to conditionally capitalize development costs even before the introduction of the International Financial Reporting Standards. The choice to expense R&D rather than conditionally capitalize development costs is found to relate positively to signed analyst forecast errors. This finding is robust to controlling for the influence of other factors that may affect errors, as well as for the influence of R&D investments on forecast errors. The decision to capitalize versus expense is not observed to have a significant influence on analyst forecast revisions. The findings are interpreted as evidence that the choice to capitalize as opposed to expense may help to reduce deficiencies in analyst forecasts; hence, is informative for users of financial statements. Increased informativeness is expected to have repercussions for the effectiveness with which analysts produce earnings forecasts, and, as a result, market efficiency.     

Organizations undertaking complex projects in uncertain environments

Recent evidence suggests that firms’ environments are becoming more complex and uncertain. This paper investigates the relationship between the complexity of a firm’s activities, environmental uncertainty and organizational structure. We assume agents are arranged hierarchically, but decisions can be made at different levels. We model a firm’s activity set as a modified NK landscape. Via simulations, we find that centralized decision making generates a higher payoff in more complex and uncertain environments, and that a flatter structure is better for the organization with centralized decision making, provided the cost of information processing is low enough. Financial Support from Zengin Foundation for Studies on Economics and Finance is gratefully acknowledged.     

Accounting for heterogeneous returns in sequential schooling decisions

This paper presents a method for estimating returns to multiple schooling levels taking into account that returns may be heterogeneous among agents and that educational decisions are made sequentially. A sequential decision model explicitly considers that the level of education is the result of previous schooling choices and so, the variation of supply-side instruments over time will emerge as a source of identification of the desired parameters. A test for heterogeneity in returns from sequential schooling decisions is developed and expressions for Marginal Treatment Effects are obtained in this context. Returns are estimated and tested from cross-sectional data from a Spanish household survey that contains rich family background information and useful instruments. This methodology is used to analyze possible effects of the 1970 reform of the Spanish education system.     

基于风险感知的采购行为决策模型

从风险感知的角度,构建了采购决策的动态模型。首先,采购组织确定采购目标,而采购组织中的成员在环境、个体、组织、供应商、原材料等多种因素的影响下形成个体风险感知;其次,通过与采购组中的其他成员的信息交流,个体将修正自身的风险感知,并且个体通过其风险感知与风险承受能力比较得出个体采购决策,而个体采购决策综合加权最终形成群体决策。最后,群体决策绩效将在下一期中修正个体的认知偏差,从而进一步影响其采购决策。     

项目管理中的平衡决策研究

许多项目决策为多目标决策,涉及多种资源、多个行为主体以及受多种因素影响,大量的决策问题都表现为一种寻求各方均衡协调。本文研究了项目管理中需要进行平衡决策的一些情形,并论述了实现平衡决策的方法和应用平衡决策应当注意的问题。     

Location choice for direct foreign investment in new hospitals in China by using ANP and TOPSIS

This study models location choices for foreign direct investments in new hospitals in China as an multi-criteria decision-making (MCDM) problem and designs develops a multidirectional relationship decision model combines the techniques of analytic network process (ANP) and technique for order performance based on similarity to the ideal solution (TOPSIS). This study discusses applying ANP to the relative weighting of multiple assessment criteria. The TOPSIS approach is employed to rank 15 counties without the Zhoushan of China’s Yangtze River Delta (YRD) region in terms of their overall performance under the decision model. To illustrate how the proposed approach is applied to the problem of selecting locations for new hospitals in China an empirical study of a real case is performed. This study demonstrates the effectiveness and feasibility of the proposed assessment procedure.     

A STUDY OF ORGANIZATIONAL 'FRAMEWORK' AND 'PROCESS' MODALITIES FOR THE IMPLEMENTATION OF BUSINESS-LEVEL STRATEGIC DECISIONS*

Organization framework and process are proposed as two modalities for implementing intended business-level strategic decisions. A model is developed in which the components of these two modalities are defined and related to the implementation of low cost and differentiation strategic decisions. The implementation of 57 decisions in integrated circuits, petroleum, and health care firms are used to test the research hypotheses. The findings suggest that implementation in these firms utilized both framework and process structural elements, but that a different implementation gestalt characterized each type of strategic decision. Implications for strategy implementation are discussed.     

A Conceptual Model of the Household's Housing Decision–Making Process: The Economic Perspective

At some stage in every household's family life cycle, the household is likely to make certain decisions with regard to its housing environment. Although the household's housing decisions essentially comprise the decision to move, and the selection of a new residence, the process from which these decisions are derived is very complex because varying circumstances could produce a multitude of different housing decisions. Due to the sheer complexity of the household's housing decision–making process, researchers have generally focused on individual decision–making stages rather than on the process as a whole. This paper therefore attempts to conceptualize the entire household housing decision–making process using theoretical concepts from the economic perspective, and then tests the conceptual model with empirical evidence drawn from the moving population within the multi–racial society in Singapore.     

An Empirical Test of Cognitive Style and Strategic Decision Outcomes*

abstract We examine how cognitive style, as measured by the MBTI, affects strategic decision outcomes. Executives participated in a simulated strategic decision making environment that allowed controlled collection of decision outcomes, including manager decisiveness, decision quality, and perceived effectiveness. We found that iNtuiting/Thinking managers used their intuition to make cognitive leaps based on objective information to craft more decisions of higher quality than other managers. In contrast, Sensing/Feeling types used time to seek socially acceptable decisions, which led to the lowest number of decisions and the lowest perceived effectiveness of all. We found no effect on decisiveness or perceived effectiveness based on a manager's preference for Perceiving or Judging. However, we found that others perceived Extraverted managers as being more effective than Introverted managers when, in fact, the Extraverts were no more decisive than Introverts. Thus, cognitive style influences actual decision outcomes as well as how others perceive one's decision performance.     

Open the box: A behavioural perspective on the reshoring decision-making and implementation process

In the realm of manufacturing location decisions, reshoring has increasingly attracted the attention of practitioners, policy makers and scholars. While many articles have analysed the drivers of reshoring decisions, the decision-making and implementation process still lacks empirical analyses. This paper addresses this gap with a grounded theory approach, in particular, through an iterative process going back and forth between the theoretical and empirical worlds. By analysing four cases from the textile-clothing-leather-footwear industry, we demonstrate that the process characteristics are affected by the behavioural features of the decision itself, such as rationality, complexity and anchoring. Our study highlights the relevance of the behavioural approach in reshoring decisions and provides evidence of many challenges that managers should be prepared to face. It further offers advice to policy makers, warning them about the dark side of reshoring and emphasizing their role in supporting companies to take structured rather than intuitive sub-optimal decisions.     

On economic evaluation of directional forecasts

It is commonly accepted that information is helpful if it can be exploited to improve a decision making process. In economics, decisions are often based on forecasts of the upward or downward movements of the variable of interest. We point out that directional forecasts can provide a useful framework for assessing the economic forecast value when loss functions (or success measures) are properly formulated to account for the realized signs and realized magnitudes of directional movements. We discuss a general approach to (directional) forecast evaluation which is based on the loss function proposed by Granger, Pesaran and Skouras. It is simple to implement and provides an economically interpretable loss/success functional framework. We show that, in addition, this loss function is more robust to outlying forecasts than traditional loss functions. As such, the measure of the directional forecast value is a readily available complement to the commonly used squared error loss criterion.