CEPMLP Internet Journal

The Art of Decision Making: Mirrors of Imagination, Masks of Fate
by Helga Drummond
Wiley, New York
ISBN 0-471-49718-5, 288 pages, index.

My own doctoral thesis (Juristische Folgenorientierung, Athenaeum 1979) dealt with formal decision theory and its possible use in legal argument. I took a positive, though cautious view then. A much later (and hopefully more mature) work of mine criticized much of the instrumental concepts underlying the often illusionary quest for "effectiveness" in international law (Austrian Review of International & Comparative Law, Vol. 4, p. 164, 1999 - preliminary version on cepmlp internet journal at www.cepmlp.org/journal). For these reasons, I was particularly interested in a book that in a way challenges some of the main premises of formal, rational decision-making as they are now practiced in virtually all organizations in the Western world. Drummond's critique resembles much of my own criticism made in 1999, though her critical examination of formal decision-making is more refined and based on a much more extensive use of case studies of decisions that went wrong and modern psychology than my own work; it is also written in a much more lively and entertaining way.

The "Science of Decision-making" has been developed as a more formal discipline over the last 30 years. It consists in systematically identifying possible strategies to achieve given objectives; assigning values and probabilities to various (positive and negative) outcomes and then choosing the "optimal" strategy, normally in terms of the valuation of its outcome and a quantitatively formulated attitude towards risk, i.e. the probability of positive or negative outcomes. Modern decision theory underlies cost-benefit analysis and similar decision models. It is "instrumental" in so far as it assumes a given objective, constraints and valuation and seeks to achieve such objective - maximizing a value under constraints and uncertainty - by implementing strategies. It is a method that now underlies and informs most formal decision-making in organization; it is formally taught at business schools, developed into very sophisticated models in often mathematically oriented economics departments. It reflects the Western tradition of utilitarian and instrumental rational prescriptive thinking about decisions - from Nicolo Macchiavelli to Carl von Clausewitz and Jeremy Bentham. In its simpler forms, it is now the standard way decisions have to be made, and in particular justified, in almost any institutional context: The pros, cons and risks.

This book is not about this "science" of formal decision-making. The author suggests that formal decision-making is rarely really about "making a decision", i.e. a structured way of reaching a clear determination about a future course of action, but rather a way of rationalizing decisions which have already been made through inertia, prejudice, warped perception, entrapment by habit or institutional or cultural myopia and lethargy, institutional consensus or spontaneous emotional or group-dynamic influenced preference ("we rationalize what we see to fit our expectations"). Helga Drummond wishes to lift the veil of pretend-rationalism camouflaging "real" decision-making and uncover the way decisions are made in reality; this includes a questioning of the concept of a formal, explicit decision which only emerges when there is enough consciousness, conflict and pressure for a proper decision. She uses as case studies a number of situations where something has gone evidently wrong - aircraft and other accidents; business and military disasters, large and small. These stories, with a comment drawing out the author's insights, illustrate the book and make it both readable and enjoyable. Her main interest is to demonstrate and illustrate by anecdote followed by interpretation that we rarely make systematic and formal decisions, but we - and in particular large organizations - get carried by culture, perception, consensus into particular courses of action rather blindly - whatever the pretense at scientific decision-making. "Things happen often without decisions - and decisions are often made without that things happen".

In essence, she applies basic principles of the theory of knowledge - epistemology: We - organizations - see situations, problems and decision or strategic challenges not as they are (which is as a rule difficult if not impossible to fathom) but as they are wished, as perception is imposed by organizational culture, prejudice and corporate power structures. Individuals, organizations and cultures develop images and "myths", i.e. a simplified way of perceiving the world; control over such myth-making is an essential element of power. Significant portions of reality are left out of such myths which are then seen as proper (though always incorrect and incomplete) representations of reality. Climate change and much of environmental ideology currently seems to rely largely on such myth-making - which then leads to decisions and investment which can not be else but dubious. Decision itself as a conscious identification and selection of alternative courses of action happens rarely, and usually only if an issue is controversial, as most important ways to take action is to let current events just go on or do what everybody expects, consciously or unconsciously, should be done. The social and cultural cohesiveness of particular views of reality leads organizations to behave in ways that no longer correspond to its objective position and interest in the world, hence organizational demise and obsolescence. The memorable illustration is the case of Facit, the maker of the world's best mechanic calculators at one time which lost out as its corporate culture and obsession with perfection of mechanical calculators did not let it see that mechanical calculators were a soon to be extinct species of the bureaucratic world. In organizations, formal decision-making is then rather a corporate ritual justifying what corporate culture imposes as natural and uncontestable than a true scientific process aimed at discovering alternatives. The consultation routinely necessary for organizational decision-processes becomes a meaningless ritual as true communication is replaced by paperwork substitutes. The formality of consultative processes then rather works to confer respectability on the organizations decisions and conduct - and chanting of prayers before decisions in the past might have the same effect: legitimation of a decision rather than a substantive informing of the decision-process.

Prof Drummond questions, quite rightly, the automatic assumption of all instrumental decision-making that the objective and valuation criteria are given and that only the best ways to get to the target or to obtain optimal utility require investigation. Valuation and objectives are typically confused; conscious reflection, discussion and the circumstances of a particular moment will alter the perception of values and targets. Preferences do rarely exist in abstract as decision theory assumes; they are formed through action rather than through a formal decision; surveys trying to identify such value preferences are rarely true as an answer may not reflect the "true" preference which becomes only apparent in action and under pressure - and then typically remains volatile depending on the varying context. The discussion about instrumental strategies will often alter the sentiment about the right target. Her book is therefore entitled the "Art" rather then the "Science" of decision-making.

For the lawyer or policy-adviser/maker, her observations on "compliance" with formally decided rules are quite relevant. Conventional wisdom assumes that there is a sequence from formal decision to implementation and compliance (see my article, supra, in ARIEL 1999). But as Drummond argues - and most with a common sense view of reality will concur - compliance involves an inevitable element of discretion about the boundaries of the rule. Observation and application of the rule can both lead to the rule being accepted, but it can also involve active resistance and in effect undermining of the rule. Rules are made in heaven, but broken in reality. Looking at the compliance process with international conventions from the formal perspective leads therefore inevitably to a false sense of reality as the change, resistance and sometimes reverse of the rule-making by compliance is ignored. We need to look at compliance not only from the perspective of a rule gradually being observed, but also from the perspective of the prospect of a rule being modified, reversed or effectively negated.

What then are her "recipes" for better decision-making? First, she suggests that decisions made formally should be examined with intuition, and decisions made primarily with intuition should be subject to a much more rigorous analytical examination. She suggests that we need to be ready to look beyond the rituals of institutional decision-making and identify the emotional influences underlying such processes if only to make them more transparent. This reminds me of a story in Herodotus who describes important decision-making by ancient Persians: They discuss in formal meetings and decide; they then get drunk and review the decision; finally, in the aftermath and under the influence of hangovers, they carried out a last examination of their choice. Decision-making should be coupled with quiet and not pressured reflection to develop insight, in the end wisdom. Decisions should also always provide for an "exit" as there is a constant risk of being dragged down a pathway by mere events, without formal considerations, or a series of piecemeal decisions of minor weight - like the disastrous involvement in the Vietnam war. Cohesiveness of social groups makes for happier corporate families, but also suppresses the element of challenge and the potential for creativity which organizations need in times of danger for their survival - this is why creative and energetic people are not usually liked in organizations, except in cases of manifest crisis. Experience itself is - as experience with experienced people often illustrates - not always a strong argument, but it can be a "trap it leads to a closed mind"; experience is useful if it is reflected, it is deadening if it comes from a person or institution that can not reflect on its experience and the relative nature and merit of it.

I find this book stimulating, insightful, beautifully written with phrases and individual stories that capture attention. It is an excellent antidote for the earnest belief of the "organization person (man/woman)" in formal decision-making, consultation and the "decision" as the strategic high-point of an organisation's life, with instrumental measures flowing logically and easily from it. It is contrarian to much belief about obedient "compliance" and the virtue of experience. It has articulated - as a good analysis should do - my own experience with the hollowness of much conventional wisdom. Nevertheless, there is a whiff of incompleteness about both analysis and prescription. While I accept that much formal decision-making is ritual and risky, could one perhaps not only look at situations where it clearly has not worked, but also at the perhaps much more frequent situations where it works - perhaps in very structured environments. Do the processes of ritual consultation not also contain at least the possibility of substantive communication? Is the human reliance on prejudice, warped perception, dependence on ever-present myths and images not a practical and necessary approach to deal with the theoretically infinite complexity of reality and are the many disasters recounted perhaps not a reflection of the essential wisdom that in spite of humanity's craving, life can not be fully mastered and not be completely perfect? Whatever such perhaps unavoidable weaknesses, this is a book that anybody with an interest in and responsibility for decision-making, in particular within organizations, will benefit from.

Thomas Wälde
email : twwalde@aol.com
www.cepmlp.org
(added 05 March 2002)

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