Management and Magic

Modern managers still believe in magic. Some of the superstitions they practice include forecasting, new product market research, capital budgeting, and long-range strategic planning. Under conditions of uncertainty, there is little evidence that use of these techniques makes for more effective decision making. However, like all superstitions, they do relieve anxiety and permit us to cope with ambiguous situations. The danger is that they may build biases into our decisions, and that these biases may be less efficient than simple random behavior. Better decision making under uncertainty requires a greater tolerance for ambiguity.

[1]  E. Langer.  The illusion of control. , 1975 .

[2]  J. March,et al.  Information in Organizations as Signal and Symbol. , 1981 .

[3]  Maurice Freedman,et al.  The Allocation of responsibility , 1973 .

[4]  J. Armstrong.  Forecasting with Econometric Methods: Folklore Versus Fact , 1978 .

[5]  Kets de Vries,et al.  Organizational Stress: A Call for Management Action. , 1979 .

[6]  Spyros Makridakis,et al.  Accuracy of Forecasting , 1979 .

[7]  Bela Gold,et al.  The Shaky Foundations of Capital Budgeting , 1976 .

[8]  E. Fama.  EFFICIENT CAPITAL MARKETS: A REVIEW OF THEORY AND EMPIRICAL WORK* , 1970 .

[9]  Spyros Makridakis,et al.  Forecasting and Planning: An Evaluation , 1981 .

[10]  Edward M. Tauber,et al.  How market research discourages major innovation , 1974 .

[11]  Michèle Hibon,et al.  Accuracy of Forecasting: An Empirical Investigation , 1979 .

[12]  B. M. Staw.  The Escalation of Commitment To a Course of Action , 1981 .

[13]  O. K. Moore,et al.  Divination—A New Perspective , 1957 .

[14]  R. L. Henshel,et al.  Forecasting: An Appraisal for Policy-Makers and Planners. , 1978 .

[15]  D. Norburn,et al.  Planning for Existing Markets: Perceptions of Executives and Financial Performance , 1975 .

[16]  E. Fama.  The Behavior of Stock-Market Prices , 1965 .

[17]  Robert G. Cooper,et al.  Beyond the marketing concept , 1979 .

[18]  B. E. Partridge,et al.  The Nature of Managerial Work , 1974 .

[19]  Richard T. Pascale,et al.  Zen and the Art of Management. , 1978 .

[20]  F. Eugene.  FAMA, . The Behavior of Stock-Market Prices, Journal of Business, , . , 1965 .

[21]  A. Athos,et al.  The Art of Japanese Management , 1982 .

[22]  S. Budner.  Intolerance of ambiguity as a personality variable. , 1962, Journal of personality.

[23]  Anne E. Benjamin,et al.  Random Walk Hypothesis for 543 Stocks and Shares Registered on the London Stock Exchange , 1975 .

[24]  F. Campos.  Validity of personality measures in personnel selection , 1966 .

[25]  A. Tversky,et al.  The framing of decisions and the psychology of choice. , 1981, Science.

[26]  D. Emanuel.  A NOTE ON SOME ‘WEAK FORM’ TESTS OF CAPITAL MARKET EFFICIENCY IN NEW ZEALAND* , 1979 .

[27]  R. Monty,et al.  The importance of perceived control: fact or fantasy? , 1977, American scientist.