Decision making is a key component of strategic management accounting.  Nearly everything we discuss in class has to do with getting information so that people can make better decisions.  As I’ve posted before, however, there is a risk of information overload where filtering out irrelevant information becomes more important than having enough information to make a decision.  Also, a recent piece highlighted that consumers have an easier time making purchases if they have fewer choices.  In fact, having too many choices makes it less likely that they will purchase anything.

In that context, I found a recent Wall Street Journal article very interesting because it highlights the fact that people with certain personality types have a harder time making decisions.  Those that have high levels of ambivalence find it more uncomfortable and more difficult to make decisions. 

If there isn’t an easy answer, ambivalent people, more than black-and-white thinkers, are likely to procrastinate and avoid making a choice, for instance about whether to take a new job, says Dr. Harreveld. But if after careful consideration an individual still can’t decide, one’s gut reaction may be the way to go.

In contrast, people that see the world as black and white and that can easily fall on one side of an issue have an easier time making decisions, but whether or not those decisions are “better” decisions is less clear.   A certain amount of ambivalence is necessary and desired in leaders so that all points of view and options are considered but too much seems to indicate that negative aspects fog the view of the decision maker:

Every job has good and bad elements. But people who aren’t ambivalent about their job perform well if they like their work and poorly if they don’t. Dr. Ziegler suggests that black-and-white thinkers tend to focus on key aspects of their job, such as how much they are getting paid or how much they like their boss, and not the total picture in determining whether they are happy at work.

Black-and-white thinkers similarly may recognize that there are positive and negative aspects to a significant relationship. But they generally choose to focus only on some qualities that are particularly important to them.

By contrast, people who are truly ambivalent in a relationship can’t put the negative out of their mind. They may worry about being hurt or abandoned even in moments when their partner is doing something nice, says Mario Mikulincer, dean of the New School of Psychology at the Interdisciplinary Center Herzliya in Israel.

The conclusions in this article would seem to indicate that the “typical accountant” would be better at decisions than most since most accountants I know fall squarely in the “black and white” camp.  Still, I know from personal experience that I have a really hard time making decisions (even trivial ones) even though I see myself as a black and white, non-ambivalent thinker.  Perhaps my own view of myself is out of touch with reality or maybe I just don’t fit the mold…in either case there is a lesson here as well that things that apply broadly to populations may not apply to individuals within that population. 

The bottom line is that knowing how you approach decisions is as important as having facts to make a decision.  Being able to see the whole picture while still making a timely, effective choice is the key to those in leadership positions.  Before one can get to that point, he/she has to know that different decision personalities exist so that they can take measures to move to a better place where decision making is concerned.  Even after reading this article several times I’m still not sure what conclusion one is supposed to take from it…maybe it is just that I can’t “decide” what the article is about?!  Still I find it interesting to ponder the points in the article and I think that is enough reason to share it here. 

Why So Many People Can’t Make Decisions. Shirley S. Wang. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 28, 2010. pg. D.1