Decision Making Process

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The power of methodology
The power of methodology 150 150 Stéphane THION

For over twenty years, numerous observers have pointed out a persistent gap between management research and the realities of the business world. Various reasons have been cited for this disconnect, with practitioners often criticizing academic research for its lack of practical relevance or even clarity (Avenier, 2009; Glady, 2014). Despite notable progress in recent years, this divide remains.

Yet, in an increasingly unstable world—marked by volatility, uncertainty, complexity, and ambiguity—knowledge management is more crucial than ever. Today, uncertainty is no longer the exception but the rule. As a result, the acquisition, revision, and even creation of knowledge have once again placed learning at the center of our concerns.

Learning how to conduct research, however, is first and foremost about acquiring specific skills—such as analytical thinking and systems thinking—as well as mastering a methodology. This methodology, along with its associated methods, enables individuals to engage with the latest knowledge in a given field: to challenge it, refine it, and contribute to its evolution.

Such research methodology and the skills it develops can offer significant value to the business world. Ultimately, it enhances decision-making processes. Furthermore, mastering these skills provides access to a vast body of scientific literature in management—and beyond—allowing professionals to analyze, understand, and apply this work effectively.



N. Glady (2014), Comment réconcilier le monde de la recherche et celui de l’entreprise, Harvard Business Review.
M.J. Avenier (2009), Franchir un fossé réputé infranchissable : construire des savoirs scientifiques pertinents pour la pratique, Management & Avenir 2009/10 (n°30), pages 188 à 206.

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Cognitive skills
Cognitive skills 150 150 Stéphane THION

As part of its ‘Skills Revolution by 2030’ project, the World Economic Forum is working on a taxonomy of global skills. This taxonomy currently includes two main categories of skills: skills, knowledge and abilities, and attitudes.

Within the first category, cognitive skills stand out alongside managerial, technological and engagement skills.

According to the World Economic Forum’s ‘Future of Jobs’ 2025 report, cognitive skills are increasingly in demand by large companies. And they will become even more important in the years to come.

Hence the question: what do cognitive skills cover?

According to the World Economic Forum, cognitive functioning refers to multiple mental abilities, which are categorised into three groups:

(1) creativity and problem solving,

(2) mathematics and statistical thinking, and finally,

(3) speaking and writing languages.

Creativity and problem solving include analytical thinking and systems thinking, which we discussed in two previous videos, as well as creative thinking, i.e. the ability to come up with a new idea or concept.

Statistical and mathematical thinking encompasses the ability to handle numbers, calculate or estimate, use advanced mathematical techniques or solve equations, and finally data analysis and mathematical modelling.

Finally, speaking and writing languages includes the basic skills of reading, speaking, writing, editing, and finally communicating in foreign languages.

Which brings us to the second question: how can this set of skills be acquired?

Clearly, the set of cognitive skills identified by the World Economic Forum corresponds to the purpose of doctoral programmes.

These programmes, whether the academic PhD or the DBA, which aims to improve the decision-making process in organisations, generally integrate all these skills through action learning.

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Analytical Thinking
Analytical Thinking 150 150 Stéphane THION

The world is changing. Rapidly. The production of knowledge, for example, through academic publications, is evolving exponentially. Technology, of which AI is the most emblematic example, is also following this trend. And what about the proliferation of dubious or even false information?

Unfortunately, in this complex and uncertain world, we all suffer from many prejudices. Within organisations, decision-making is becoming increasingly complex and risky.

As early as 1973-74, the work of Tversky and Kahneman highlighted the cognitive biases to which decision-makers were subject. Hogarth identified some thirty of these in 1987. And the work of Eisenhardt and Zbaracki, in 1992, showed that rationality was not the norm in decision-making processes within large organisations.

In this context, a skill is emerging: analytical thinking.

According to the World Economic Forum’s ‘Future of Jobs’ 2025 report, analytical thinking is and will remain the skill most in demand by large companies. This report is based on a sample of more than 1,000 large international companies. This skill has thus become a training priority for half of them.

So, what is analytical thinking?

According to the taxonomy of skills created by the World Economic Forum, analytical thinking is the ability to break down complex concepts and ideas into basic or fundamental principles. This skill encompasses critical thinking, which allows one to make judgements by analysing and interpreting facts and information.

The world of research has, of course, taken an interest in this skill. According to Facione (1990), analytical thinking involves skills such as classification, relating concepts and organising information, with the aim of identifying solutions or solving problems in a systematic way. According to Paul and Elder (2006), critical thinking covers skills such as clarifying concepts, analysing arguments and evaluating evidence and counter-arguments. It involves the ability to identify biases, prejudices and logical flaws.

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Why does methodology matter?
Why does methodology matter? 150 150 Stéphane THION

John D. Sterman (2000) wrote: “People are poor intuitive scientists, generally failing to reason in accordance with the principles of scientific method”. Sterman then goes on to explain his thinking with examples:

  • We do not generate sufficient alternative explanations or consider enough rival hypotheses.
  • Our judgements are strongly affected by the frame in which the information is presented.
  • We suffer from overconfidence in our judgements, wishful thinking and the illusion of control.
  • We violate basic rules of probability, do not understand basic statistical concepts such as regression to the mean or Bayes’ rule.
  • Memory is distorted by hindsight, the availability and salience of examples, and the desirability of outcomes.”

In other words, data can be biased because people are biased. Even scientists are biased. For instance, Hogarth (1987) discusses 30 different biases and errors documented in decision-making research.

Further evidence that highlights the importance of methodology in the difficult process of managerial decision-making.

This is probably why analytical thinking is the skill that will be most in demand in the business world between now and 2027, according to WEF Future of Jobs 2023 and 2025.

  1. Sterman, J. D., 2000, Business Dynamics, Systems Thinking and Modelling for a Complex World, Boston, McGraw Hill, p.30.
  2. Hogarth, R. M., 1987, Judgment and choice, 2nd Edition, New York: Wiley.
  3. World Economic Forum (2023), Future of Jobs Report 2023: Insight report, Figure 4.6 p.43

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Does decision process matter?
Does decision process matter? 150 150 Stéphane THION

This was the question posed by Dean & Sharfman nearly 30 years ago in their paper: ‘Does decision process matter? A study of strategic decision-making effectiveness’ (Academy of Management Journal, 1996, n°39).

To examined whether decision-making processes are related to decision effectiveness, they studied 52 decisions in 24 companies. More specifically, the goal was to determine if procedural rationality and political behaviour influence decision success.

The main finding of their research was that ‘managers who collected information and used analytical techniques made more effective decisions than those who did not’. And ‘those who engaged in the use of power or pushed hidden agendas were less effective than those who did not’. But their research also confirmed that ‘environmental instability and quality of decision implementation play important roles in influencing decision effectiveness’.

If this well-known research confirms the importance of rationality, in an increasingly unstable environment, most chief executives and managing directors acknowledge the importance of analytical thinking in skills management.

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The challenge of strategic decision-making in a VUCA world
The challenge of strategic decision-making in a VUCA world 150 150 Stéphane THION

In a volatile, uncertain, complex, and ambiguous environment, strategic decision-making, and more generally, organizational decision-making become more and more complex. The creation of new knowledge, the dissemination of information via networks (particularly social networks), and the development of technology to automate the collection and processing of this information are all evolving exponentially. What was complicated yesterday is even more so today.

Since the 1970s, a great deal of research has sought to shed light on how strategic decisions are made and what the consequences are.

In their research named “Strategic Decision-Making”, Kathleen M. Eisenhardt and Mark J. Zbaracki (1992) identified three major “choice paradigms”:  rationality and bounded-rationality, politics and power and garbage can (the later taking place in ambiguous settings designated as organized anarchies). A few years later, James W. Dean and Mark P. Sharfman (1996) showed that strategic decision-making effectiveness was influenced by decision processes and that “managers who collected information and used analytical techniques made decisions that were more effective than those who did not”. Ten years later, a literature review carried out by Said Elbanna (2006) suggested strongly that rationality and more specifically procedural rationality is positively related with decision effectiveness. Rationality, bounded rationality, and procedural rationality highlight the path towards a more precise concept. Herbert A. Simon defined procedural rationality as the ‘extent to which decision-making process reflects a desire to make the best decision possible under the circumstances’ (1978). Later, James W. Dean and Mark P. Sharfman (1993) define rationality as ‘the extent to which the decision process involves the collection of information relevant to the decision, and the reliance upon analysis of this information in making the choice’.

From these numerous studies, the main skill underpinning the effectiveness of strategic decision-making is analytical thinking. Analytical thinking has been defined as a cognitive process that consists of (1) identifying and decomposing a complex concept, problem, system, or process into parts, (2) examining those parts and their distinct characteristics or functions, and (3) communicating or articulating how the parts relate to the whole (Christopher W. Brandt and Will Lorié, 2024).

Chief executives and managing directors acknowledge the importance of analytical thinking in skills management, with 68% considering it to be the most important skill in the coming years, and almost half of them planning this skill as a priority in their upskilling or reskilling programmes (Report Future of Jobs, World Economic Forum, 2023).

Learning analytical thinking (and the related skill of critical thinking) is a complex, time-consuming process.

Would you like to acquire these skills? Contact us.

References:

Brandt, W. and Lorié Will (2024). Measuring student success skills: A review of the literature on analytical thinking. NCIEA, Center for Assessment

Dean, J.W. and Sharfman, M.P. (1993). Procedural rationality in the strategic decision making process. Journal of Management Studies, 30, 587–610.

Dean, J.W. and Sharfman, M.P. (1996). Does decision process matter? A study of strategic decision making effectiveness. Academy of Management Journal, 39, 368–396.

Eisenhardt, K.M. and Zbaracki, M. (1992). Strategic decision-making. Strategic Management Journal, 13, 17–37.

Elbanna, Said (2006). Strategic decision-making: Process perspectives, 8, 1, 1-20.

World Economic Forum (2025). Future of Jobs Report.

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