Risky business : making decisions off the cuff

Abstract

In line with accepted decision making theory, individuals engage in rational decision making. Decisions made under conditions of bounded rationality may have serious adverse consequences. Employees making decisions on behalf of their employer are often faced with situations where perfect
and complete information is not available, and time is limited. Under such conditions, we posit that employees will make decisions that are increasingly bounded. At its most extreme neither time nor information is available to make a decision and rational decision making, bounded or not, reaches its limits. Many authors suggest that this is the point at which improvisation takes place. Although opinion in the literature is mixed regarding the efficacy of improvised decisions, we argue that improvised
decisions place the organisation at considerable risk and as a consequence are undesirable.