Economic Affairs

The science and art of decision-making in business

Many mistaken decisions are rooted in cognitive biases, some of which are unconscious. PHOTO ILLUSTRATION: UNSPLASH
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Businesses make decisions all the time. Some have good outcomes, but many, if not most, do not. Countless management books have been written on strategies for success with bestselling titles such as In Search Of Excellence, Built To Last and Good To Great, which purport to draw lessons from successful companies. But the lessons have not always stood the test of time.

For instance, research by McKinsey &Co on how the 50 companies featured in these three books fared two decades later showed that collectively they barely outperformed the market, while many, such as Circuit City, Kodak, K-Mart and Wang Labs went bankrupt or were acquired.

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