Abstract

Under increasing pressure to make better decisions in less time, managers often use the quickest and easiest decision-making method: going on "gut feel." But recent decision research shows that intuition is much less reliable than most people believe. Managers need to use more sophisticated methods. This article describes a series of increasingly accurate (and demanding) decision-making approaches. It starts with purely intuitive choices, which are quickest and least accurate, and then examines heuristic short-cuts and rules-of-thumb. It then discusses more demanding and reliable methods, such as bootstrapping and value analysis. This article then examines the strengths and weaknesses of each approach in terms of speed, accuracy, and justifiability, with illustrative applications to managerial practice. Finally, the authors offer practical advice for managers on how the more sophisticated techniques can be incorporated into the organization.