When selecting from among alternatives, managers can use three basic approaches: (1) experience, (2) experimentation, and (3) research and analysis (Figure 6-1).
• Experience: Reliance on part experience probably plays a larger part than it deserves in decision making. Experienced managers usually believe, often without realizing it, that the things they have successfully accomplished and the mistakes they have made furnish almost infallible guides to the future.
To some extent, experience is the best teacher. The very east that managers have reached their position appears to justify their past decisions.
Relying on past experience as a guide for future action can be dangerous. In the first place, most people do not recognize the underlying reasons for their mistakes or failures. In the second place, the lessons of experience may be entirely inapplicale to new problems. Good decisions must be evaluted against future events, while experience belongs to the past.
• Experimentation: An obvious way to decide among alternatives is to try one of them and see what happens.
Figure 6-1 Bases for selecting from among alternative courses of action
Reliance on the past>How to select from among alternatives>Choice made
Research and analysis
On the other hand, if a person carefully analyzes experience, rather than blindly following it, and if he or she distills from experience the fundamental reasons for success or failure, them experience can be useful as a basis for decision analysis.
• Experimentation is often used in scientific inquiry. People often argue that it should be employeed more often in managing and that the only way a manager can make sure plans are right-especially in view of the intangible factors-is to try the various alternatives and see which is best.
The experimental technique is likely to be the most expensive of all techniques, especially if a program requires heavy expenditures of capital and personnel and if the firm cannot afford to vigorously attempt several alternatives.
On the other hand, there are many decisions that cannot be made until the best course of action be ascertained by experiment.
Experimentation is used in other ways. A firm may test a new product in a certain market before expanding its sale nationwide.
• Research and Analysis: One of the most effective techniques for selecting from alternatives when major decisions are involved is research and analysis. This approach means solving a problem by first comprehending it.
Solving a planning problem requires breaking it into its component parts and studying the various quantitative and qualitative factors.
A major step in the research-and-analysis approach is to develop a model stimulating the problem. Thus, architects often make models of buildings in the form of extensive blueprints or three-dimensional renditions.
Fundamentals of Management : Planning [BBA 2305]