The economic crisis of 2008 2009 was a transformational event: it demonstrated that smart people aren't as smart as they and the public think. The crisis arose because a lot of highly educated people in high-impact positions political power brokers, business leaders, and large segments of the general public made a lot of bad decisions despite unprecedented access to data, highly sophisticated decision support systems, methodological advances in the decision sciences, and guidance from highly experienced experts. How could we get things so wrong? The answer, says J. Davidson Frame in Framing Decisions: Decision Making That Accounts for Irrationality, People, and Constraints, is that traditional processes do not account for the three critical immeasurable elements highlighted in the book's subtitle irrationality, people, and constraints. Frame argues that decision-makers need to move beyond their single-minded focus on rational and optimal solutions as preached by the traditional paradigm. They must accommodate a decision's social space and address the realities of dissimulation, incompetence, legacy, greed, peer pressure, and conflict.
In the final analysis, when making decisions of consequence, they should focus on people both as individuals and in groups. Framing Decisions offers a new approach to decision making that gets decision-makers to put people and social context at the heart of the decision process. It offers guidance on how to make decisions in a real world filled with real people seeking real solutions to their problems.
J. DAVIDSON FRAME is academic dean and cofounder of the University of Management and Technology (UMT) in Arlington, Virginia, one of the first fully online degree-conferring universities in the United States. Prior to joining the UMT faculty, he served as chairman of the Department of Management Science at George Washington University. Frame is the author of four prior books with Jossey-Bass, including the business bestseller Managing Projects in Organizations, Third Edition. He is a fellow of the Project Management Institute (PMI), where he received PMI's Outstanding Contribution Award and was named PMI's Person of the Year.
List of Figures xi Preface xiii 1 An Evolving Decision-Making Paradigm 1 The Traditional Paradigm 3 The Real World 5 Rethinking Decision Making 8 The Cognitive Challenge 15 Adjusting to the New Paradigm 16 Conclusion: It Isn t Easy Getting It Right 18 2 Decisions and Decision Making 21 Different Perspectives on Decision Making 25 Rational, Irrational, Nonrational Decisions 38 Dealing with Unknowns 42 3 The Social Context of Decision Making 47 The Social Context 49 The Social Space of Decision Making 51 Allison s Multiple Perspectives on Decision Making 52 The Link Between Stakeholder and Decision-Maker 55 The Implementation Challenge 56 Accommodating External Forces 57 Conclusion 58 4 The Organizational Dimension 61 Organizational Structure 62 Organizational Process 69 People in Organizations 71 Organizational Culture 72 Conclusion 85 5 The Moral Dimension 87 Broad Categories of Moral Failings 89 Moral Hazard 101 Principal-Agent Dilemma 107 Morality, Ethics, and Legality: They Are Diff erent 109 Last Word 111 6 People as Decision-Makers 115 Factors That Affect How Individuals Make Decisions 116 A Unique Perspective on Personality and Decision Making: Elliott Jaques, Human Capability, and Time Span of Discretion 135 Conclusion 138 7 The Wisdom and Foolishness of Crowds 141 Individual Versus Group Decision-Participation Spectrum 141 Making Decisions in Groups 148 Degrees of Consensus 150 Defining Consensus 150 Reaching a Decision 159 The Wisdom and Foolishness of Crowds 162 Honeybee Decision Making 173 8 The Biology of Decision Making 177 Brain Basics 178 The Lazy Brain 179 Visual Illusions: What You See Isn t What You Get 186 Examples of Visual Illusions 189 Brain Deception Beyond Visual Illusions 197 The Maturing Brain 200 Conclusion 207 9 Toward an Empirically Rooted Understanding of Decision Making 211 In the Beginning: Toward an Empirical View 213 Evidence of Unconscious Deliberation in Decision Making: Three Empirical Approaches 214 The Contribution of Empirical Research: Where Do We Stand? 228 Empirical Research on Decision Making in the Neurosciences 232 The Contribution of Neuropsychology Research: Where Do We Stand? 241 The Need for Research on Decisions of Consequence 242 10 Seven Lessons 247 Seven Lessons for Highly Effective Decision-Makers 248 Last Word 258 References 261 Acknowledgments 267 The Author 269 Index 271