Home        About       Contact
22

Decision Theory

A body of knowledge, and related analytical techniques, for helping the owner to reach decisions about the assets, under conditions of uncertainty and risk.  

Once criteria are selected by the decision-maker, decision theory points to possible courses of action. 

  • Rational Comprehensiveness (“Ready, Aim, Aim…!”) – The decision maker tries to evaluate every possible course of action. This approach is a noble goal but unrealistic in the real world where time and money are limited. Rational comprehensiveness results in “paralysis through analysis” where the organization get stuck in: “Ready, aim, aim, aim, aim, aim… but no fire”. Sometimes people try to delay making decisions and use the argument that more information is required. Endless delays in decision making is a type of filibuster technique used by politicians to obstruct progress and has not place in a housing society.
  • Disjointed Incrementalism (“Ready, Fire, Aim!”) -  The decision-maker forges ahead quickly and makes decisions that are only marginally different from past practice. The incrementalist wants to be pragmatic and get things done. While it is good to get action and avoid unnecessary delays, this method is sometime criticized for failing to “look before your leap.  The organization should be careful to avoid finding itself having to address the unintended consequences that may arise from: “Ready, fire, aim!”.
  • Mixed Scanning (“Aim, Ready, Fire”) – The decision maker tries to find a compromise between rational comprehensiveness and disjointed incrementalism. Recognizing that within the world of infinite alternatives and chains of unintended consequences, only a narrow range of alternatives and consequences can be examined seriously. Mixed scanning is a realistic approach but generally results in “satisficing” rather than “optimizing”.  “Satisfactory” may feel inadequate when compared to “optimal” but it is good to consider the following quotation: “A good plan executed today is better than a perfect plan to be developed tomorrow”.
It is important for the organization to recognize that decision making is both an art and a science. Decisions should be recorded and revisited periodically to be retested against changes in circumstances and new awareness in the organization.


See also:


(c) Copyright Asset Insights, 2000-2016, All Rights Reserved. "Insight, foresight and oversight of assets".