Tuesday, October 26, 2010
We Have A Strategy?
Good judgment and decision making are necessary in identifying appropriate plan strategies across multi-period settings in which one period’s choice affects the value of future outcomes. The plan must consider the impact of the current period’s decision on future outcomes in order to choose the pattern of effort that would maximize total results. However, when faced with this sort of multi-period decision problem, organizations often ignore the “internality” (that is, the impact of current decisions on the utility of future decisions), and instead choose actions that maximize the payoff in the current period at the expense of the overall outcome across periods. This behavior is referred to as “melioration.”
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