A management heuristic is a method by which managers try to come up with a solution based on cognitive short-cuts, rules and frameworks they have made up through past personal experience and inductive reasoning.
- "it is never good to be first mover in the market"
- "trust your guts"
- "I always talk to a couple of potential customers before I invest."
- "you need to have strategic clarity as opposed to strategic ambiguity"
- "You either become become Number 1 or 2 in the market"
- "New businesses should be profitable in year 3"
Interesting questions to explore are.
1. what are the leading management heuristics ?
2. how are they formed ? what are antecedents?
3. are they helpful when it comes to managerial decision making in executive boards?
4. how important are they ?
5. how are they changing over time ? how and by what processes are they revisited?
6. how do they delineate against biases ?
Note: Oct 7th.
On particular bias that needs be removed is the Halo-Effect (opposite is the Horn Effect). It basically amplifies the positive attitude one has towards a brand/product regarding a distinct related brand/product. An example for a halo-effect would be:
Apple cars must be of great quality !
Note: Oct 8th
Path dependence, is a related concept . It explains how the set of decisions one faces for any given circumstance is limited by the decisions one has made in the past or by the events that one has experienced, even though past circumstances may no longer be relevant.