Unintended Consequences

 

As companies after company fail in the same industry, I wonder why some organizations continue to follow the same deadly path. In most cases, it starts with managers who do not think about the consequences of short term decisions over the long haul. Sadly, hasty decisions can impact not only the individual but others around them. Several famous individuals have been impacted by this reality.

For example, Vanessa Williams was one of these fallen Hollywood icons. In 1983, Williams became the first African-American woman to be crowned Miss America. However, her immediate success was short-lived due to a scandal.

Consequently, Williams was forced to relinquish her title; she probably didn’t think her youthful deed would come back and wreck her dreams. Yet, the consequences not only damaged Williams but her family, friends, and millions of her fans. In this session, we will examine the impacts of unintended consequences.

Have you ever wondered why some people never consider the aftermath of their bad choices? Many people fail to understand the consequences of their decisions. Nobel Prize author Albert Camus once noted, “Life is the sum of all your choices.” Some people rationalize that an apology or a pitiful stare will erase all of the damages. 

I hear it all the time: “I’m sorry. I didn’t mean for that to happen.” Instead of just chalking it up to immaturity or youthful ignorance, I just cannot make that case because we are often talking about adults, not children. These adults should know better, but they act without realizing the effect of their actions. In spite of all wise counsel, some people live to make poor decisions.

Fortunately, these circumstances can be traced back to a root cause. The Law of Unintended Consequences relate to any purposeful action that will generate unintended consequences. This law can be categorized into several areas: (a) a positive unexpected benefit called serendipity, (b) a negative effect which is contrary to the original intention, and (c) a potential source of problems which is commonly referred to as Murphy’s Law. Additionally, the outcomes are not limited to the results that were originally intended.

Here are some examples of how this law works. A new bridge is built to give a secluded community access to a nearby shopping mall. However, this action results in increased crime in the secluded neighborhood and decreased sales for the mall stores. No one anticipated these unforeseen problems.

Another example is a caring parent who smokes cigarettes around his family. One child gets asthma and eventually becomes a chain smoker as an adult. Another child obtains a phobia related to smokers. In retrospect, the caring parent would have done something different if he had anticipated the long-term consequences.

Likewise, many managers may make alternative decisions if they understand the Law of Unintended Consequences. Furthermore, today’s leaders can be proactive in their decision making by considering the long term ramifications of most decisions.

Like Murphy’s Law, some decisions may appear to afflict some people as if their lives are cursed. Unfortunately, making the right decision is a difficult process. No one will applaud your many good decisions; however, you will probably catch heat over the bad ones. As a matter of fact, some individuals continue to ride a merry ride of worsening consequences.

Yet, it is often their own lack of foresight that haunts them. Eleanor Roosevelt said, “Somehow we learn who we really are and then live with that decision.” Every person, regardless of their background or social standing, can benefit from good decision-making techniques. In this life, most people make decisions to the best of their abilities. When various things happen, especially bad ones, individuals must be ready to deal with them. Therefore, understanding unintended consequences can assist in helping make better decisions for the future.   

 How do organizations anticipate the consequences of their decisions?  Can managers learn to make better decisions?

 © 2010 by Daryl D. Green

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42 thoughts on “Unintended Consequences

  1. I think it really depends on how fast the decision should be made or how risk endured organizations are. For instance, if it isn’t urgent issue or not risky, the final decisions will be performed in normal decision making progress by forecasting and comparing the outcomes whether positive or negative. In this case, the organizations will forecast the expected or unexpected consequences based on previous experience and history just like Poka-yokes approach. However, if it is urgent or very risky, the most important thing would be how fast responds to or how less risky for the organization in terms of decisions. We can see this example in the recent BP’s oil spill incident. As a recent case study, Decision-Making within the Unified Command, indicated that “BP reveal a poorly managed response, a delay of the release of information about the spill’s worst-case scenario, and confusion about the severity of the spill. They offer a rare comprehensive look at decision-making in a crisis that is immediate, highly detailed and even harsh in its assessment.”
    And manages can learn to make better decisions but sometime they would have to pay very expensive experience costs just like BP does now.
    Resources
    http://views.washingtonpost.com/leadership/post_leadership/2010/10/who-needs-harvard-business-school.html
    http://www.oilspillcommission.gov/document/decision-making-within-unified-command

      • Since ethical behaviors add the value of organizations in the long run, management group shall consider public opinions before they make final decisions. Then organizations might be involved in political power game or taking advantage of media in order for them to save time. However, it would be temporary approach, so organizations should prove it to the public how much they invest their time, money and effort to resolve unintended consequences as quickly as possible. It could be internet survey or requesting for assistant from government or research examples internationally.
        Resource
        Fundamentals of Corporate Finance, Brealey, Myers, and Marcus, 2009

  2. Organizations must take responsibility for their decisions both for the short-term and the long-term. Many decisions are not given adequate thought before being made. Good managers have the ability to think how their decisions will affect those below them and downstream. The fact is that people that are emotionally and rationally stable when making decisions tend to make better decisions and think clearly. According to Dr. Mark Jung-Beeman who did a study back in 2006; he found that in his study people who were in a good mood made better decisions that those in a bad mood. Those managers with a happy or positive attitude solved problems at a 20% higher capacity than those who had a bleak or bad attitude. I know that it takes more than a good attitude to make good decisions but it helps when your brain neurons work more effectively. Anxiety narrows your brain’s options for potential solutions. Thought I would take this from a different perspective than most will. We must learn when we are gravitating toward a wrong or a potentially bad decision. That takes experience and knowledge to make decisions in a way that you will benefit yourself and those who work with/under you.

    References:
    http://www.forbes.com/2009/02/09/better-decision-making-lifestyle-health_0209_decision_making.html

  3. I believe that managers can learn to make better decisions, but in order to do so they must have a process in which they understand what will happen from the decisions that they make. The best way to make better decisions is have a solid understanding of planning, because a plan can help aid decisions. In order to do so, managers must look at look at the goals for the plan, strategies to implement the plan, define objectives, assign tasks for individuals to complete the objectives, and understand what resources they have available (1). This may be easier said than done in most instances, because most decisions have to be made quickly in today’s society. With this being said, managers must be able to quickly devise a plan that they believe has the best possibility of having the least amount of negative consequences to their company. During the planning process managers can gain an understanding of possible consequences that will help them make better decisions in the long run.

    Resource:
    http://managementhelp.org/plan_dec/gen_plan/gen_plan.htm

  4. Managers overall tend to lack the knowledge in certain ares. It would benefit the overall business and mangers if they actually attended and learned how to deal with short and long term consequences before it’s too late. Many mangers live in the now not realizing that now and today are really setting the stone for the future. It is very important to be able to organize and plan ahead of time whether it’s a recession or not. It is a smarter to move on a managers part if he/she were able to disconnect themselves from outside influences and think on the inside. For example look for what a customer’s needs are versus what is best for the business, because in the end every business relies on its clientele. Watch for the future by slowly analyzing what is happening now. Take notes if possible and see what happens one month from today. Many managers wait until the last minute to figure a new strategy, and while moving aggressively seems to be smart it can cause long term damaging affects. By doing this managers would be able to begin eliminating possible disasters before they actually occur, helping the business continue on rather than having to sell out or go out of business.

    Reference:
    http://www.thinkingmanagers.com/management/management-decisions

  5. How do organizations anticipate the consequences of their decisions?

    According to Sociologist Robert Merton, there are 5 possible causes of unintended consequences. And each of these seems to be somewhat avoidable:

    # Ignorance – Hire a knowledgeable workforce. Learn from both your mistakes and the mistakes of others. Research and think before taking action

    # Error – Be precise in all calculations of a percieved solution. Dont assume that what worked in the past will always work again.

    # Immediate interest – think long term when making decisions. What might work today as a temporary solution may break tomorrow.

    # Basic values – know the values of your company and employees before making decisions. Does a company employ a certain ethic that it KNOWS will cause problems in the future but follows it anyway?

    # Self-defeating prophecy – In layman’s terms: don’t fix what isn’t broke. Irrational fear may cause people to try and fix problems that haven’t yet and may not occur.

    I think using all of the above as a guide, decision makers can best move forward. Even when keeping these causes in mind problems can arise, though. However, a manager can make a best effort decision and avoid the same mistakes made in the past with a little preparation.

    Reference:

    Merton, Robert K. (1938-10). “Social Structure and Anomie” American Sociological Review, Vol. 3, No. 5, (Oct., 1938), pp. 672-682

  6. Organizations can anticipate the consequences of their decisions by analyzing their historical consequences of similar decisions (looking at statistical data) or by looking at other organizations and consequences of their decisions. The very reason it is attractive to hire someone with commensurate experience is that you are bringing in a new history of decisions and consequences, failures and accomplishments wrapped up in one new person. Similarly, the whole notion of the consultant is to bring in the talent, knowledge and niche experience to your organization in order to solve problems. Managers can learn to make better decisions by first analyzing what usual decision making approach that they or their organization utilizes. Thomas H. Davenport (2010) in his paper titled, “How Organizations make Better Decisions,” researched 54 organizations with approaches ranging from utilizing data (analytics) to changes in business processes (i.e. developing committees to solve problems). After educating oneself and selecting decision making methodologies, a manager and organization can become more savvy about improving decision making skills, training decision makers, implementing new approaches and improving outcomes.

    Davenport, T. International Institute for Analytics, (2010). How organizations make better decisions Retrieved from http://www.sas.com/resources/asset/104403_0110.pdf

  7. I definitely believe that managers can learn to make better decisions, and agree that with a simple outline process, that can be accomplished. Difficult business decisions usually involve the following;

    -uncertainty; Many facts are unknown
    -complexity; consider the interrelated factors
    -high risk consequences; the decision made may have significant impact
    -Alternatives
    -interpersonal issues; hard to predict how other members will react

    Having a clearly defines strategy all most always leads to high quality results. In an article I found, the author defined a six step systematic approach to effective decision making.

    1. Create a constructive environment
    2. Generate good alternatives
    3. Explore these alternatives
    4. Choose the best alternative
    5. Check your decision
    6. Communicate your decision and take action

    This is just one of many examples of a strategy or plan to follow, but the key is to a plan that is readily implemented in order to have successful decision making by managers. Obliviously some decisions require swift action and can be more volatile, but have a pre- defined framework to follow saves times and will more often than not result in successful decision.

    Resource: http://www.mindtools.com/pages/article/newTED_00.htm

  8. Unintended Consequences

    Managers and decision makers can significantly reduce the severity of unintended consequences and make better decisions by either knowing the operations that surround them or surrounding themselves with people who do. The latter is more than likely the case in most situations. As proposed in earlier discussions, the exodus of the baby boomers could be leading to a less in depth knowledge of those operations they are leaving. This knowledge gained from generations of experience in particular trades has enabled firms to maintain operations with less risk of unwanted consequences. Using catholicism as an example, knowledge is passed on through tradition using what is known as catechism, the deposit of faith. This method of handing down knowledge in modernism is missed because of the negative connotation given to it by the nieve interpretation of tradition by a romanticized expression using old clothing and rituals. Tradition cannot be revived, once it is lost it must be relearned. Likened to skills passed on by a master-craftsman to an apprentice without the explicit knowledge of the teacher. (Henrikson 2001) We can then easily see that retaining this knowledge should be one objective to minimize risk. The second can be found in the utilization, amongst a diversified team, of certain tools like decision trees, fishbone diagrams, and TQMS checklist, to name a few, allowing a manager to bring risks, timing concerns, quality concerns, and opportunities to a visible platform.

    Resource
    Henrikson, Lars Bo. Knowledge Management and the Missing Tradition – On the Role of Tradition, Knowledge and Competencies in Industrial Production. Studies in Cultures, Organizations and Societies. 2001, Vol. 7, I 1, 81-104

  9. Managers get paid to make the best decision for the company as a whole. This decision must be strategically thought out and implemented. In the article, Integrating Risk Management and Strategic Planning the author speaks to strategic planning processes. She stated “ that during the strategic planning process, institutions of every kind – public and private; for profit and non-profit; small, medium, and large – define or refine their visions and missions, set strategic goals and objectives, identify strategies for achieving them, and determine how they will measure the success of their efforts and implement improvements “. With this strategic planning one must implement an Integrated Risk Management plan as a control measure in the process. Integrated Risk Management processes can be developed through committees, subcommittees, focus groups so that the plan can benefit from broad input. Training can be offered to the committee or groups charged with risk management to effectively design and implement the risk management component of the strategic plan. Strategic planning and risk management are ongoing activities that require a not-insignificant investment of time, energy, and resources.

    Francis K Achampong. Planning for Higher Education. Integrating Risk Management and Strategic Planning.Ann Arbor: Jan-Mar 2010. Vol. 38, Iss. 2; pg. 22, 6 pgs. Retrieved from Tusculum College Data Base.

  10. Organizations and managers anticipate consequences through forecasting and experience. When managers become efficient at forecasting they are able to predict the direction of their company with some certainty. However, no matter how tenured or how experienced a manager becomes the art of predicting consequences is not an exact science. Managers can become better at making decisions through experience and utilizing other resources and colleagues that have more experience. As Professor Green states in his book: “most people make decisions to the best of their abilities.” (1) Therefore, we must remember the decisions are just that.decisions. At the end of the day everyone makes them. Some are good, some are bad and some have no influence or value.

    References
    Green, Daryl. MD. Book Publishing for Professionals: Nine Proven Step to Gaining More Influence.

  11. Avoiding unintended consequences can be tough. As humans we generally seem to think in the short term and generally let emotion dictate our long term decisions.

    When making decisions, management must examine the effect of rapid growth even when dealing with an issue that is widely seen as positive, like healthcare. It may be hard to see how more healthcare could create a negative consequence but let’s examine this theory. According to Elliott S. Fisher, MD, recent explosion of medical treatments are diminishing the care of patients because there are more diagnoses to treat and more treatments to provide, physicians may be more likely to make mistakes and to be distracted from the issues of greatest concern to their patients.

    It is essential for manager’s to pursue all angles of every decision even when the outcome is historically positive by a wide majority of society.

    Source:
    http://jama.ama-assn.org/cgi/content/abstract/281/5/446

  12. Unintended consequences tend to emerge in complex situations because interdependent actions and reactions arise beyond our immediate field of view. Many are negative. However, on the flip side, it could have positive results. Managers should look at prevention versus resilience. Prevention is targeted at keeping negative unintended consequences from ever occurring. Resilient organizations, in contrast, are designed so that when and if unintended negative consequences arise, the organization can mount an effective response. The quandary is that in organizational design, processes that emphasize prevention often dominate, thus creating under-investment in the adaptive processes and skills that might create resilience. Anticipation and prevention can be effective when the sources of risk and failure are predictable. When they are not, however, investment in resilience is essential. I don’t believe you can be taught on how to make a good decision. You have to learn from experience and others experience and go from there. Managers also need trust in the organization and in the team. Trust to make the right decision and trust that they can help fix any negative consequences.

    Reference:
    http://www.iveybusinessjournal.com/article.asp?intArticle_ID=899

  13. It is all too often that we see organizations making terrible choices and go bankrupt because of such poor decision making. In today’s economy we have seen far greater examples of this than ever before where organizations have gone bankrupt over poor decision making. In the past we had examples like Exxon Mobil and today it is Lehman Brothers, Royal Bank of Scotland, Barclays and hundreds of other financial institutions. As a result of major bankruptcies seen in this recession, companies have played the blame game over and over again, from blaming the leaders at Wall Street to the government and its poor control over the companies. Regardless of who is blamed for the crisis we are in today, it is true that all of it happened because of the decisions someone made somewhere.

    Nevertheless there are always several ways we can look at one thing, in this case we can focus on hundreds of companies that made poor decisions and are failing today or look at those companies that made good ones and are profiting even in today’s recession. One example of a company that has made successful decisions since it came to existence is Pixar, producer of movies like Toy Story 3, Up and many other hits over the years. Pixar seems to have several factors which resulted in good decision making, some of them are:

    1. Managers give directors the control (even though managers like to be in control, Pixar fights it).
    2. Even though directors have autonomy, they get feedback from others.
    3. Pixar admits mistakes in other ways (example: Toy Story 2 was restarted in mid production).
    4. Pixar has an extensive education program at Pixar University, with more than 110 different courses.
    If all organizations adopt policies and attitudes like these at Pixar, managers around the world will certainly be making better decisions and lead their organizations into a brighter future than where they are headed towards now.

    Resources:
    http://blogs.hbr.org/davenport/2010/07/how_to_make_good_decisions_les.html

  14. We can look at the recent trend of bad decisions such as decisions to invest in subprime mortgage loans, or to hedge risk with credit swaps. Tenneco was a large conglomerate, but they chose poorly when buying businesses and now consist of only one auto parts business. General motors’ made bad decisions about which cars to bring to market, time Warner purchase of AOL and Yahoo selling itself to Microsoft were all bad decisions. All of these bad decisions may be attributed to the fact they are mostly made by one individual usually a senior executive who chooses the process employed, the information used, the logic relied on have been left up to them. Organizations must take decision making from being individual and idiosyncratic and help their manager make better decisions.
    Smart organizations can help their managers improve decision making in four steps: by identifying and prioritizing the decisions that must be made, examine the factors involved in each; designing roles, processes, systems, and behavior to improve decisions; and institutionalizing the new approach through training, refined data analysis, and outcome assessment
    http://www.tlainc.com/articl175.htm

  15. Decision making always accompany with a certain degree of risk or loss. It’s often incorporated with damage control and contingency plan just in case the decision or the plan goes wrong. Whose responsibility is that when the outcome turns out to be unexpectedly bad? It’s whoever made the final decision. If that’s true, why can we try a group decision making so that everyone who got involved with the decision making takes equal responsibility for the negative outcome? Also, unintended consequences can be foreseen and avoided if more people are involved to examine situations and try to make right decisions if time allows. The Japanese value consensus management. Different from top-down decision making, Japanese bottom-up decision making process relies on everyone desiring consensus. (1) Such example in the article as building a bridge should be a long-term planning and assessment that many people are involved with the decision-making. The quick decision making is the one when managers usually are tested for their knowledge, competency and leadership. (2) System 1 thinking refers to our intuitive system, which is typically fast, automatic, effortless, implicit, and emotional. Bazerman also suggests that “a key goal for managers should be identify situations in which they should move from the intuitively compelling System 1 thinking to the more logical System 2 “ which is slower, conscious, effortful, explicit, and logical. Yes, managers can be aware of the two systems and learn to make better decisions.

    References
    (1) Brunger, S. & Kim, Y (1997). Effect of Japanese Investment in a Small American Community. Location: Nova Science Publishers, Inc.
    (2) Bazerman, M. & Moore, D. (2009). Judgment in Managerial Decision Making. Location: John Wiley & Sons, Inc.

  16. Ideally, managers would be able to remain objective in all situations and make good decisions to lead their organizations. However, managers are human and subconsciously make biased decisions which could lead to negative results. According to an article in the Wall Street Journal, managers are prompted to make bad decisions because of:

    1. Relying too heavily on historical information

    2. Being led by self interest on a subconscious level

    3. Making prejudgments without considering all the facts

    4. Allowing attachments to people, places, and things to affect decision making

    The above stated actions can lead to hasty decision making. Ideally, managers would create in-depth strategic responses for possible situations and put those plans into action as needed. However, a good manger knows that they must be able to respond to the unknowns planning for 60% and allowing 40% for the unexpected. Effective managers are the ones who know that, “People need to recognize that we are biased in every single situation. There’s no such thing as objectivity.” The role of an effective manager is not only being able to respond to the given, it is also knowing the underlying issues that affect their decision making and attempting to curb those issues so that they don’t cloud their judgment.

    White, E. (14 February 2009) Why Good Managers Make Bad Decisions. The Wall Street Journal. Retrieved from: http://online.wsj.com/article/SB123438338010974235.html

  17. All decisions are made of the bases of timing, when timing is taken into consideration it can make the difference from the ability to work around your decisions and being stuck in a hole unable to gain your employees trust ever again. Steps taken that make it possible for organizations to anticipate the consequences of their actions, the same can be used to make the best decisions. 3 main steps can be taken in the process that will enable the manager to evaluate outcomes and make the best decision for the organization. The first is Realizing Your Values this process is critical in decision making and gives management the the ability to look at the needs and goals of the organization before any big decisions are made. secondly a decision tree can be made of the problem, this will help in setting apart the diffrent options you have in the decison making process and helps a manager decipher which decision goes along with the values of the organization. The third step is to do a Pareto Analysis, this is knowing when and what to change. If managers learn for sure the cause of a problem they are able to solve it and predict an effective outcome. there are other avenues that can be taken to make good decisions but they all go along with the basci understading these 3 hold, setting objectives, evaluating options and making a timely effective decision on the understanding of organizational goals.

    References:
    Making good decisions
    http://www.mindtools.com/pages/main/newMN_TED.htm

  18. Bad management is the result of inexperience and conformity. When faced with a decision, managers often retort to using the ancient tactic of, ‘what has worked before will work again.’ Managers are often entrusted with authority to make decisions but like a president, the manager must have a support group that will aid him accordinly and disrupt a pattern of personal bias/greed that may be clouding his judgement as he enters the decision process.

    In correlation to Cleveland’s post, the bad decisions stem from a psychological standpoint. Self-interests and unwarranted attachments are at the root of the problem. Managers often fail to see the whole picture because their eyes are only fixed on the frame. In his book, ‘Why Executives Fail’, auther Sydney Finkelstein, blames the bad decision of Yahoo’s Jerry Yang on said attachments – holding out on a better deal by Microsoft that never accumulated, Jerry cost his fellow shareholders billions of dollars – Jerry was so fixated on a company he built that he was unable to embrace change and succumbed to his personal bias. Meanwhile, Microsoft’s Steve Ballmer, understood that not only he but his company was better off by not accepting the deal. Kudos to Ballmer for making a level-headed decision.

    Reference:
    Finkelstein, Sydney. Why Executives Fail.
    http://www.businessweek.com/managing/content/nov2008/ca20081114_461475.htm

  19. Detailed analysis is important in the decision making process for organizations. This most times gives them the necessary information to anticipate the consequences of that decision. But before the consequences are anticipated, managers must come to a final decision. Some managers have problems when making good decisions with some of them reasons being: analysis paralysis; fear of failure; fear of success; fear of ridicule; and others. Then we ask how can these managers learn to make good decisions? One known effective solution for this is to have the manager focus on how the decision affects the goal (The Manager, 2008). What is the goal? If your company is a for-profit entity, then the goal is simple: make money for the owners. When you weigh every decision against this goal, the choices become easy. Does doing “A” take me closer to the goal? If so, then do “A;” if not, then don’t (The Manager, 2008). I believe this is the most successful method as it doesn’t deviate from the company’s best interest.

    Reference:
    Management Decision Making – How Do Managers Make Decisions?
    http://askthemanager.com/2008/10/management-decision-making-how-do-managers-make-decisions/

  20. In business, unintended consequences are represented, in large part, as risk. Risk represent an occurrence that is beyond what the firm expects. How a firm responds to risk, as represented by unexpected occurrences, is of interest to me. These events are learning experiences through which a firm, industry, and economy can grow through. But how does a firm respond to negative unexpected events? One strategy used by businesses is explored in the film, The Corporation. The use of externalities by firms is usually in the form of a cost incurred by a party who did not agree to the action causing the cost. The party is usually a government or consumers.

    Consider, if you will, the Exxon Valdez oil crisis. The spill caused untold ecological damage, the scale of which cannot be measured. They were at first fined a certain relatively large amount. This cost was eventually appealed back and forth until it was whittled down to a miniscule amount in comparison. From 2.5 billion dollars to 508 million. Since the firm only suffered minimally, the lessons that could have been learned never took. The result was a BP alone with other countless oil spills around the world.

    http://en.wikipedia.org/wiki/Externality

    http://business.timesonline.co.uk/tol/business/law/article4212940.ece

  21. Organizations are open systems in that they affect and are affected by the environment beyond their boundaries. For these systems to be effective you need some kind of knowledge management. Organizations anticipate the consequences of their decisions by planning their strategy. Any manager should have the ability to make decision by thinking about workers and company policies. Managers don’t want to take any decisions which are going against the company at the same time they want to make sure the workers are happy. Before you became a manager the company should know your ability to make decisions because you are going to be a key for the organization success

  22. The fact remains and will always remain, we do not know what the future holds for us, our families, our jobs, and neither do companies. So, what do we do to prepare ourselves for the unintended consequences, disasters, troubles, and hard times in both our personal and professional life? I think Albert Einstein put it best with this quote,
    “The release of atom power has changed everything except our way of thinking the solution to this problem lies in the heart of mankind. If only I had known, I should have become a watchmaker.” Albert Einstein (1879 – 1955)
    Business owners, CEO’s and management do not know the type of consequences their decisions will bring, however, they can hire individuals to run scenario and/ or probability programs to help shed some light on the possible outcomes or hurdles the company could be facing. Another great way to understand what consequences one may be facings after making decisions is to review their past decisions and choices, as well as individuals that have faced or dealt with the same circumstances. My mother has told me all my life “what ever you decide today, is what you must live with tomorrow.” It is for this one statement that I will set and make out a list of pros and cons before making any major decisions. I think that more businesses need to follow the advice of my mother, it has helped me tremendously over the years.

    References:
    Gaiam Life. 2010. Article – Stream of Consciousness. Retrieved on November 11, 2010 from the internet at http://www.blog.gaiam.com/quotes/topics

  23. For an organization to anticipate the consequences of its decisions, it has to consider the ethics and moral behavior of the people making the decisions. If an organization sets forth ethical guidelines to be followed by management and employees, the decisions being made will most likely return good consequences and reduce the number of ramifications. Often enough, the pressures of decision-making can become stressful and trying to any manager. It is essential that managers allocate a reasonable amount of time to the decision-making process (Scott & McManus, 2010). Allowing there to be time for decision-making, managers are able to formulate decisions supporting the organization’s ethical values and can reduce the risk of making a bad decision, which generates negative outcomes. Managers are more likely to take risks, carelessly consider outcomes, and make poor decisions when they are under time pressure (Scott & McManus, 2010). Managers can learn to make good decisions by giving themselves time to decide what is best for the organization and by following the organization’s ethical guidelines. The organization can then have confidence that the decisions being made are positive, effective and appropriate.

    Scott, L. &, McManus, J. (2010). Under pressure. Management Services, 54(3), 29-34.

  24. Decision-making is a crucial part of any good business. Managers can be trained and can learn to make better decisions. Many people struggle when it comes to making decisions due to fear of failure, lack of a structured approach, procrastinating, and lack of clarity. However, there are 6 steps to better decision making. (1)Define the problem. Be absolutely clear on the problem you are trying to reach a decision on and write it out in a sentence. (2) Assess the implications. All decisions have implications for the peers, team, superiors or family depending on the decision. (3)Explore different perspectives where you get different lenses through which you look at the problem. (4)Get clear on your ideal outcome and use it to inform your choices.(5)Weigh up the pros and cons and consider the advantages and disadvantages of each of the options open to you (6)Decide and act. Commit to a choice or a course of action and start to make it happen.

    Reference:
    Brodie, Duncan. 6 Steps to better decision making.
    http://ezinearticles.com/?6-Steps-to-Better-Decision-Making&id=817450

  25. It seems to me that the most adequate way for managers to stem the negative effects of unintended consequences would be to simply research and thoroughly analyze all situations and problems before coming to a decision. On the operations side, tools such as the Decision Tree or mapping out a flowchart could help to reduce unforeseen issues. When speaking of employer to employee interaction, however, peer response and being fully educated in dealing with people and their reactions could be the best ways to approach a situation. When a decision is made, employees are going to react to it; an employer should have already completed the ground work of getting to know their colleagues, thus aiding them during the results of the decision’s outcome.

    McNamara, Carter. Basic Guidelines to Problem Solving and Decision Making. Retrieved from http://managementhelp.org/prsn_prd/prb_bsc.htm

  26. In a recent article in The Futurist Dr. Stan Shapiro discusses five common pitfalls in critical decision making.

    1. Unique Situations-have no learning curve and caution must be used. Scenario planning might be helpful in planning.

    2. Data Deficit-important decisions are often made with little to no information.

    3. Emotional Denial-we sometimes choose to ignore the possible negative outcome of a decision and only consider the positive potential outcomes.

    4. Gambling on probabilities-relying on the probability of one outcome and not considering other outcome possibilities is gambling.

    5. Positive reinforcement-if you have made a decision based upon a gamble in the past and won you might make another decision based upon this outcome to reinforce the option of taking additional risk. (Shapiro, 2010)

    I believe mangers can learn to make better decision. Sometimes bad decisions and their consequences might be a result of simply not thinking through a decision and hastily making a decision without the proper knowledge.

    References
    Shapiro, S. (2010). Decision Making Under Pressure. Futurist, 44(1), 42-44. Retrieved from Business Source Premier database.

  27. It is nearly impossible to foresee every possible outcome a decision may have, especially when innovation is increasing and therefore new decisions are being made without having historical information on the matter. Organizations can anticipate the consequences of their decision by utilizing the thoughts of others. If they share their possible decision with a group of employees, specifically ones who would most likely be affected, they might receive several new outcomes that the management level did not foresee. It is also good to use others in a global sense through research to see if others in the corporate world have had to make similar decisions and what their outcomes were, or potential outcomes. The old saying “Two heads are better than one” stands true when it comes to foreseeing consequences in decision-making.

    Reference: http://www.citehr.com/6704-10-steps-decision-making.html#axzz15pMFk1iH

  28. In order to make sound business decisions, managers need to look at the strategies and tactics used by successful companies in the past. This can be difficult when you are an innovator, and no precedent is available. MindTools.com suggests using a six step systematic approach to decision making. The first involves evaluating the problem and making certain you have a reliable team and/or information to use. In the next two steps, evaluate and explore all plausible alternatives. Fourth, choose your best alternative after discussing and exploring all of your options. After you have selected your best alternative, it is imperative you evaluate and weight all possible outcomes. Finally, implement and communicate your decision. I suggest a seventh step where managers review and measure the performance of the decision. Hopefully through the use of this systematic process, managers can avoid harmful unintended consequences.

    References:
    Introduction to decision making techniques. MindTools.com. Retrieved November 21, 2010, from http://www.mindtools.com/pages/article/newTED_00.htm

  29. Under ordinary circumstances, when people are dealing with white and black issues, I do not believe that there is a viable excuse for poor decisions. Every reasonable and prudent person has the God given cognizant ability to discern what is and is not appropriate. However, issues that lie within a gray area are a little more complex, as they lack clarity or precedent. In these instances, it is important to be well informed and err on the side of caution, after carefully weighing the understood risks.

    Therefore, it can be said that organizations can forecast the potential repercussions of certain actions by utilizing commonsense in collaboration with a sound knowledge of the industry in question. Managers can learn to make better decisions by acquiring an intricate understanding of the intended and accepted functions of their businesses, and their roles in fulfilling them. There is no secret to be discovered here, and the only science of this matter lies in the propaganda typically deployed to unravel or conceal flawed reasoning.

    References
    Byrne, J. (2007). INSIDE SMART DECISIONS. BusinessWeek, (4059), 70-71. Retrieved from the Business Source Premier database.

  30. Unintended Consequences are often more lasting and harder to anticipate than intended consequences. Organizational and strategic leaders should spend a good deal of energy considering possible unintended consequences of their actions. As others have stated this does depend on the individual, such as experience, and education of the manager. If the manager is prepared and has thought through decisions then many crisis can be avoided. The key is to try to figure out the effects today’s decision will have on years to come. A manager wants to be remembered as of what he did and not of what he did not or fail to do.

    Army Field Manual FM 22-100 (the U.S. Army Leadership Field Manual): retrieved from http://books.google.com/books

  31. Decision making is a difficult task. Organizations must anticipate the consequences of their decisions by relying on their judgment, evaluating past decisions, and establishing objectives as a guideline for managers. Managers can learn to make better decisions by working in teams to strategically plan and problem-solve.

    Often times, organizations will depend on their own intuition and ethics in determining the consequences of their decisions. Furthermore, weighing the pros and cons of past decisions assists in anticipating future challenges. Lastly, organizations must establish objectives for the managers to follow.

    It is essential that managers learn to make better, effective decisions. Working in groups can help develop ideas and improve decision making. This will also put into action good decision making techniques.

  32. “In many organizations, decisions are left up to individuals and the process for making them receives little if any scrutiny [1]”. Socio-emotional components of decision making are what make the choices that occur infrequently and that may have significant impact on an organization’s future performance so challenging. These decisions are a part of a dynamic process that occurs over time and move through multiple levels of organizations. Unintended consequences result when the quality and implementation of decisions are poor. To avoid some unintended consequences, assumptions should be tested and creativity encouraged. Companies should create a culture where wrongdoing is challenged. If companies are having difficulty reaching a high level of commitment to the chosen course of action and a strong, shared understanding for the benefits of the decision, then the decision should be revisited for alternate solutions. According to Davenport, organizations can help managers make better decisions through these four steps: 1) identifying and prioritizing the decisions that must be made; 2) examining the factors involved in each; 3) designing roles, processes, systems and behaviors to improve decisions; and 4) institutionalizing the new approach through training, refined data analysis, and outcome assessment.

    [1] Thomas H. Davenport, Havard Business Review Make Better Decisions http://www.hbr.org

  33. Organizations anticipate the consequences of their decisions through several different structures. Companies will develop annual strategic plans to outline the company goals and objectives for the following fiscal year. Companies will also develop long term strategy reports that are usually two or three year strategy. One of the most important strategies companies adopt for anticipated consequences is the development and implementation of a risk management program. “Risk management is the identification, assessment, and prioritization of followed by coordinated and economical application of resources to minimize, monitors, and control the probability and/or impact of unfortunate events.”(1) On attribute that is commonly contributed to a company’s risk management process is a “lessons learned” documents. These are recordings of past experiences of projects that a used to help facilitate future projects and eliminate process issues. These assist in managers making better decisions.
    (1) Risk management (2010). In Wikipedia. Retrieved November 23, 2010

  34. The The Law of Unintended Consequences has far more reaching consequences than just business. This can lead to a major incident between nations. Countries such as Iran continue to press the issue, trying to get the results they want. This in no way means they will get the expected outcome. Nations can continue production of materials that can and will lead to serious harm to everyone. Iran’s continued nuclear program effects the world. This is a miss-management from the top down. Leaders can often become disillusioned with the response. They may think that nothing negative will happen. In business, this can be a loss of clients and a downturn in public opinion. For nations, this can lead to a violent outcome for their very people. A move in an already bad position can lead to the failure of both nations and corporations. This is very important to remember no matter the situation.

    http://www.amconmag.com/blog/2010/02/01/the-law-of-unintended-consequences/

  35. Bruce McQuain wrote of the Law of Unintended Consequences directed towards the UAW’s leadership’s recent foray into partial GM ownership and sudden penny pinching ways as “You could also entitle it “meet the new boss, same as the old boss”. What I’m talking about is a recent meeting between UAW bosses and GM workers.” “Actively working with the auto companies? They are part owners now of the auto companies – they’re “management” for heaven sake.”

    Did the government who handed the UAW a stake in GM or the union who was anti-management since inception consider how their sudden change of heart would upset and turn off the workers they had been working ‘for’? Now the Union has a direct stake in the prosperity of the auto maker. Not just running on worker’s dues, but now a stake as an owner.

    My point with this reference is this: Simply thinking ahead and fleshing out the costs might be the answer. Consider decisions in business just as a chess player considers moves on the game board.

    Irony and the law of unintended consequences visit the UAW.
    Bruce McQuain
    August 17, 2010
    http://www.qando.net/?p=9250

  36. As a firm grows it must make many decisions concerning investment into projects. To analyze these decisions many firms utilize different tools to in order to select the projects that the firm would undertake. These tools attempt to compare all of the potential consequences of their investment, both positive and negative (Brealey, 2010). These consequences are generally the intended consequences however they do include some element of risk of unintended consequences occurring, in this case generally the possibility that actual consequences are not the consequences that they expect. The end goal would be a rate that would become a guide to accept or decline a project when compared to the firm’s standards on risk and expected return (Brealey, 2010).

    Brealey, Richard A., Myers, Stewart C., and Marcus, Alan J. (2007). Fundamentals of Corporate Finance. (pp. 204-225). New York: McGraw Hill/Irwin

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