Yes, often it is seen that most of today’s management decisions are not based on evidence, firstly, they seemed to be guided by sensationalism, guts feeling and, intuitions (Baldwin, Bommer, & Rubin, 2013) which I think is the halfway truth towards actuality. Except this psychological variable which propagates a false sense of self-gratification in decision maker, the company is also constrained by lack of evidence due to their inadequate knowledge about the subject matter, i.e., how to gather the data and perform the research. Whereas the evidence-based decision making is a logical, systematic, scientific and analytical way of data collection and inferences which require resources in terms of money, knowledge, and skills but sadly all the business entities or the decision makers might not afford it.
As per (Baldwin, Bommer, & Rubin, 2013), the evidence-based management decision could be practiced and calibrated into individual and organizational well-being through detailed and in-depth analysis of circumstances and situations, i.e. through cause and relation analysis, had companies like Nokia Inc. and Kodak Inc. understood the issue of decreasing demand for their products(profit) were due to consumer inclination towards android platform and market demand for photo digitalization respectively, they would not have failed (Sull, 1999). Similarly, no process holds the best approach; it depends upon the situation and decision should be contingent on various internal and external environmental factors.
Further, knowledge management helps to create a pool of data which could be retrieved for future assistance supporting to validate the evidence. And unequivocally, the organization and managers determination of practicing evidence-based decision making and researches through training, seminars, on and off the job learning and benchmarking from other well-doing organization could be an asset.
The applicability of evidence-based management is also crucially important; understanding of organizational behavior and business environment analysis supports the accumulation of the raw data which we can find from internal and external environments for decision making. As opted by (Baldwin, Bommer, & Rubin, 2013) these evidences can be collected through well modeled and planned process called “Big E Evidence” and often could also be within the organization periphery gathered through mundane and straightforward process. Depending upon the situation, problems, its impact, and risk associated the manager chooses the ways of collecting evidences.
The imposition of the findings and outcome of the evidence-based decision making depends upon circumstances, i.e., is the company going through structured or unstructured problems, is the phenomenon happening in an organization programmed or are they completely new? The best approach is always to being with self-audit, it helps the manager to be vivid of his own strength and weakness, and it helps him to be self-aware of himself. It is really important that he should erase his biases and predisposition that he has acquired previously from his learning. Further, the manager extracts phenomenal cues and understanding from the mutual interaction of person, environment and the business as advocated by the “social learning theory”
Having fair presence and research-based evidences, the manager, after identifying the scenario opt to set the goal, which should be SMART, i.e. specific, measurable, attainable, reliable and time-bound. He then allocates the resources the organization has in the best optimum and efficient way, he links result with rewards which mostly persuades and motivates the employees evolving to effective learning by doing organizational culture.
Pfeffer and Robert (2005) in their research entitled “Evidence-Based management” published in Harvard Business Review has also focused on the importance of evidence-based management, it not only provides the decision maker with required pool of data to make informed decisions but also revitalizes and creates a conducive, motivated working environment in an organization through an integrative and holistic approach . The evidence which proceeds from premises using and analyzing deeper knowledge, employing facts makes it more reliable but equal caution has to be maintained as these process could be situation specific and often it’s hard to create an analogy and replica of existing model as management scenarios could be unique in their own ways.
If we see the real business scenario, the companies like Amazon.com, Facebook.com are focused more on the evidences and scientific ways of making decisions and are outperforming than those following traditional procedure. It not only energies the strategic level of the company but also benefits overall hierarchy of the company through increased productivity.
For example, a recent hike in the general interest rate in the economy of the USA by Federal Reserve was an evidence-based decision to solve the macroeconomic turbulences; Federal Reserve was determined to increase the general inflation rate. Similarly, reduction in the corporate tax rate was also evidence-based management decision where the Republicans slashed the tax rate to create positive economic impacts. So, whether it is a small organization(private entity) or government(public institutions), the decision makers are always benefited by this scientific way of decision making but should be cautious as each situation are unique in their own way and often the analogy could be a fallacy.
The evidence-based decision making is a scientific, analytical, planned and logical step which has higher chances of rewards in compare to intuitions and guts feelings. And could be practiced and learned well by the managers creating a paradigm shift in management undertakings.
Bibliography
Baldwin, T. T., Bommer, W. H., & Rubin, S. R. (2013). Managing Organizational Behavior: What Great Managers Know and Do. New York: McGraw-Hill.
Sull, D. N. (1999). Why good companies go bad. Harvard Business Review, 42-52
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