2 Step Approach to Decision Making: Daniel Kahneman

Daniel Kahneman discusses a two-step approach to improve managerial decision-making, inspired by effective candidate selection processes. This approach advocates for separately evaluating relevant criteria before forming a final judgment, unlike the typical one-step process where a decision follows directly from collected information. Kahneman argues that this two-step method, involving explicit listing and independent assessment of criteria, can mitigate biases and lead to better outcomes in various managerial decisions, such as merger evaluations. The article proposing this method is intended for Harvard Business Review.

Highlights

💡 Two-Step Decision Making: Kahneman proposes a two-step process for better decisions: separately assess relevant criteria, then make a final judgment.
➡️ Avoid Biases: This approach aims to mitigate biases inherent in typical one-step decision-making processes.
📊 Improved Judgment: Evidence suggests the two-step approach leads to better judgment compared to the typical one-step approach.
🏢 Applicable to Managerial Decisions: The method is applicable to a wide range of managerial decisions, including mergers and acquisitions.
🔍 Candidate Selection Analogy: The process mirrors effective candidate selection methods used by companies like Google.