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21 - From Decision Analysis to the Decision Organization

Published online by Cambridge University Press:  05 June 2012

David Matheson
Affiliation:
SmartOrg, Inc.
James E. Matheson
Affiliation:
SmartOrg, Inc., and Department of Management Science and Engineering, Stanford University
Ralph F. Miles Jr.
Affiliation:
California Institute of Technology
Detlof von Winterfeldt
Affiliation:
University of Southern California
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Summary

ABSTRACT. Decision analysis has been successfully cast as an intervention to pull together the right team of people to formulate and solve the decision maker's problem by building economic models of the situation, assessing the crucial uncertainties, and determining the risk and return of each alternative. For large one-of-kind problems this method works well. Many organizations claim that they have made millions using it. Yet, in spite of its accomplishments, this model has had limited sustained success. Decision analysts often find themselves relegated to disempowered staff, delighted when the executive occasionally calls on them. With a few important exceptions, internal Decision Analysis groups have generally failed to withstand the test of time. We document and explore the ongoing shift from interventional decision analysis to the decision organization, an embedded ecology of actors and patterns of behavior that needs to be guided to produce a sustainable pattern of good decisions. Enabled by the stunning increase in computing power and connectivity, organizational decision analysts need to use the old tools in new and more productive ways and to guide the organizational decision ecology toward sustainable profitability and growth. What will it mean to be a professional decision analyst in the twenty-first century?

Decision Analysis was originally framed as an intervention to assist major organizations in making large, one-of-a-kind decisions (Howard 1966; Raiffa 1968; Howard and Matheson 1983). In its earliest form, it focused on decision makers who already realized they were facing difficult choices and wanted a more rational way to reach them.

Type
Chapter
Information
Advances in Decision Analysis
From Foundations to Applications
, pp. 419 - 450
Publisher: Cambridge University Press
Print publication year: 2007

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