8. Framework for Future Thinking

Question 1

Management Theory

Answer 1

Based on robust research: rich, rigorous and robust data

Evidence-based management reduces the complexity and difficulty of the data so that managers can understand it to make better decisions

Testing management theory

• empirically
• pre and post analysis for pre and post intervention
• longitudinal studies (intervention changing behaviour)
• experimentation

Question 2

Theory

Answer 2

statement that 
predicts (prediction)
which actions will
lead (causality)
to what results and 
why (explanation)

has to be supported by strong empirical data –> simplifies decision making by expressing known relationships between decision variables

Question 3

Role of theory

Answer 3

A sense-making process
- interpret the present, understand what is happening and predict the future

Central role in managerial decision making
- tailored to the specific operating climate of a business (circumstance contingency)

Question 4

Where theory comes from [OCH]

Answer 4

Observation and Description of phenomenon

• inductive reasoning (specific instances to general conclusions)
• deductive reasoning (general principles to specific conclusion)

Classification and Categorisation of phenomenon
- to organise confusing and complex phenomena meaningfully based on their differences

Formulation of hypothesis

• what causes the phenomenon to happen and why
• theory generation: prediction, causation and explanation

Question 5

Theory behind Theory Buiding

Answer 5

Iterative process

1. Explains what causes an outcome
2. Process of categorisation to move from tentative understanding to reliable prediction and control
3. Studying failures to build good theory
   - understand the boundary conditions of theory
   - refine our understanding of phenomena

Question 6

Pinpointing Causation

Answer 6

Causation: the relationship between cause and effect
- can only be effectively established through hard science

Correlation: a connection between two things

True causation cannot be derived through social science due to the changing nature of variable social sciences study
- only can determine the strength of correlation

Understanding fundamental causality
- from highly detailed field research and not data mining

Question 7

Moving towards Predictability

Answer 7

Theories need to make predictions

• to allow testing
• to falsify the theory
• to improve from failures
• circumstance contingency

Question 8

Circumstance Contingency

Answer 8

Theory defines what causes what and why, but also how the mechanism will produce different outcomes in different situations

• moderators: change the relationship
• mediators: better explain the relationship

Allows executives to understand and adapt to changes

To make success possible, predictable and sustainable

Question 9

To be a discerning consumer of theory [DRCC]

Answer 9

Phenomenon description is a good start; but it has to be tested

Beware of revolutionary changes recommenda-tions (change basic assumptions)

Classification of phenomenon is a step; but still needs analysis

Correlations masqueraded as causation often take the form of adjectives

Question 10

Wicked Problems [IICCCI]

Answer 10

Problem that is impossible to solve because of incomplete, contradictory and changing requirements that are difficult to recognise

Complex interdependencies will result in the creation of other problems when you try to solve for one aspect of it (through traditional reductionist methods)

Question 11

Integrative Thninking

Answer 11

To hold two opposing ideas in mind and creatively resolve the tension between the two by generating a new one that contains elements of the others but is superior to both

• not about compromise: need to recognise the tension and balance it out
• a better solution than all existing options
• adopt a “both/and” mindset, not “either/or”

Question 12

4 Stages of Decision Making [SCDR]

Answer 12

1. Determine Salience
   - to seek out the less obvious but potentially relevant factors
   - factors are deeper than prima facie evidence, see underlying issues
   - focus on the cause, not the symptoms
2. Analyse Causality
   - multi-directional and multi-linear relationship among salient factors
3. Envision the Decision Architecture
   - seeing problems as a whole rather than in bits and pieces
   - examine how the parts fit together and how decisions affect one another
   - do not succumb to cognitive laziness
4. Achieving Resolution

Question 13

Benefits of Integrative Thinking [COW]

Answer 13

Creates a sense of limitless possibilities

Generates options and new solutions

Welcome the challenge of shaping the world for the better