After reading a blog on the Harvard Business Review on consensus and how business decisions are made (link), I started to wonder about the hierarchical structure of a company and why in many traditional structures, the decision making power is often relayed all the way to the top.
One reason, I believe, is that people are simply are too un-equipped with business tools to make a judgement on their own because of the risk of a failed experiment or venture. In fact, many would happily shelve the task to higher executives.
Executives deliberating endlessly
The issue, I believe, lies within two fields: ineffective operations forecasting tools and poor managerial decision tools. As discussed in COMM 101’s operations class, forecasting is important to determine whether a proposed change’s outcome will bring in enough sales to justify making that change. Even providing basic forecasting information can produce more confident decisions.
In addition, managerial decision tools can analyze the potential profits or resources that needs to be devoted to a venture. A clearer understanding of costs, with amortized and sunk costs removed can help solidify whether a venture will be successful in generating profits.