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Practicing Decision-Making

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Review of a past decision based on the models and traps discussed in the book – “Practicing Decision-Making”.

The decision I will be reviewing in this paper is – “I decided to close down the small business venture I was operating and pursue an MBA from EDHEC”. Firstly, I will present the situation around this decision.

I was operating a high end retail gaming centre – a small entrepreneurial venture I set up about two and half years ago. As this was my first exposure to business dynamics (I had an engineering background with three and half years of software development experience) - the initial six months of setting up the venture and the subsequent two years of operating it involved a steep learning curve. I faced a lot of new challenges and learnt a lot about small retail businesses while dealing with these challenges. The vision of my gaming centre was to promote the latest computer games and help improve the gaming scene in Hyderabad, India. But I was disappointed to notice that off late the game development companies were moving away from the traditional computer gaming platform to the new console gaming platform (to cut down on piracy). I realised that this would have an adverse long term effect on my centre due to the vision I had for the centre and the USP I built around it. Also, a new entertainment multiplex had come up very close to my gaming centre and even though it did not have an immediate effect on the revenue I realised that in the long term it is going to eat into my revenue due to its much higher investment in infrastructure. This is when I felt that I have to diversify and/or relocate my gaming centre but before doing that I wanted to consolidate my experiences so far with an MBA from ISB (a top 20 in the world business school located in Hyderabad). I was planning to keep the centre running and pursue my MBA simultaneously as both were in Hyderabad. But in December 2009 I was notified that I was not selected to the college after the application and interview process. After a lot of thinking finally in March 2010 I decided to close down my gaming centre and pursue an international MBA and that is how I ended up at EDHEC. In the following pages I will discuss the factors I considered, the model I followed and the traps I fell in unconsciously during this decision making process.

I had identified the problem regarding which I needed to take a decision – I wanted to consolidate my experiences so far with an MBA – so that the future steps I take in the business domain are better informed and more balanced compared to my current business venture. Also, I had identified that I wanted to invest in a world class MBA – as the course quality was important to me and also so that I gain exposure to global business patterns. I had already tried and failed to get into the best business school in India and I was not satisfied with the course quality in the remaining schools in India so I realised that I will have to try for international business schools. This is when the decision became difficult for me as in this case I will have to close down the gaming centre I was operating – and the only thing I will be taking along with me is the experience I gained in setting it up and operating it.

In retrospect, I believe that I was operating under the influence of two of the traps mentioned in the book. The first one is the freezing effect – the fact that I had decided to venture into business dynamics even though I had little experience in the field lead to my tendency to improve my knowledge in this field so that I will be successful in my first decision. But I believe that this is a minor factor as it can also be justified as having a long term vision of being successful in business dynamics. The second trap – I believe this had a major role to play in my final decision – is the ‘False sense of freedom’. After reading about this trap in the book I realised that inherent sociological factors played a major role in the final decision I took. In the society I grew up in a lot of weightage is given to the fact that a person should get “settled” by the time they are in their 30s. Here “settled” means a combination of having a stable job / revenue, having a reasonably good social standing and should have started a family. Due to this factor I had to apply a time constraint in my decision making process – I have to start my MBA course this year or else I will be delaying the inherent social process. Due to this constraint, the idea of doing a 1 year intensive course was much more attractive compared to a 2 year course. Also, due to this constraint, even though I had fewer options to apply to due to it being late in the admissions cycle I felt that waiting for a year and applying to higher ranked colleges at the start of the next admissions cycle was not feasible for me.

I believe that for the decision I took, i.e., to close down my gaming centre and pursue an MBA from EDHEC, I followed the satisficing model and was influenced by two traps – the freezing effect and the false effect of freedom. I would say that I followed a modified satisficing approach because I did consider a few different options but I did not consider all the options and also among the options I considered I simplified the information I had and also I was influenced by my background and experience.

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