Faced with a new situation, a successful manager will create a decision framework specifically designed to meet
these circumstances. The difficulty arises from the fact that very few managers are fully aware of decision frameworks
they adopt. However, by reflecting on:
the limits set for a problem,
the reference points for defining success and failure and
the measuring instruments,
it is possible for a manager to understand his frameworks.
The key for better decision-making is the understanding of personal frameworks. (Russo & Schoemaker, 1994) For
example, many managers have learned how to better frame their competitors according to Michael Porter, expert in
strategy at Harvard Business School.
Companies tended to against other organizations offering similar products or
services. Michael Porter mentioned that this framework often lead companies to underestimate other competing
pressures exerted on benefits, as their suppliers that are perhaps too expensive, their customers that always want to pay
less and demand more and more, substitutes, potential competitors government, employees etc. Michael Porter asked
each entity to determine who are the real competitors. The oil sector, for example, should consider government as a
competitor, given that 80% of every euro from sold oil rests with it as various taxes. By understanding how
competition frame, managers are able to make rational decisions and become prepared to change the framework if
necessary.
In a complex and uncertain world, we can not expect that managers will always choose the best alternative
providing the most favorable results. But, we can expect to what a successful manager would do, so that:
the whole company will frame situations after a long reflection;
the organization dominant frameworks will be adequate;
complex decisions will be considered according to various alternative frameworks.
Several evidences have shown that people generally pay too much attention to their personal opinions. In business
environment, the excess of confidence often leads to wrong decisions, reducing margins of profit, layoffs and
bankruptcy. By his nature, man suffers from a tendency to favor informations that come to support his convictions and
to exclude inconvenient facts. This can negatively affect organizations, especially if we consider that an ambitious
search can often reveal dozens of indications to confirm a hypothesis, even if incorrect.
A successul manager has to be realistic when making a decision, but optimist when implementing it. Unfortunately,
few know how to move from realism to optimism at the right moment.