Making decisions, as Peter Drucker put it, ‘is the specific executive task’.2 But the situations in which managers decide can differ sharply. Some involve risk, uncertainty or lack of predictability while others lack clear structure and present decision-makers with ambiguity in some form. And yet, in spite of much research, we still have no unified account to explain how managers make decisions let alone to help them decide effectively. Different research streams specialise in different aspects of judgement and decisionmaking (JDM) (...) and produce results which apply in different contexts. Some focus on decisions under risk, some on cases of uncertainty, some on different aspects of ambiguity. Some are objectivist and others interpretive, basing themselves on paradigms which are mutually exclusive. As a result, managers relying on any one of them when making decisions can get only partial help because no one paradigm covers every aspect of the issues on which they decide. This paper addresses the lack of a unified account. It offers a framework for comparing the different research approaches to JDM and their incommensurable paradigms. It describes the central role of metaphors, stories and formal models when managers make decisions. It adopts a neo-pragmatic perspective which treats all three as special forms of model rather than representatives of opposing paradigms. This in turn makes possible a unified account in which specific functions are assigned to each form of model in specific stages of decision-making; metaphors and stories represent the interpretive paradigm and formal models the objectivist paradigm. Finally, to shape future research, the paper derives five propositions about the use and impacts of metaphors, stories and formal models from an account of how they are actually used by managers making decisions. (shrink)

Making decisions, as Peter Drucker put it, ‘is the specific executive task’.2 But the situations in which managers decide can differ sharply. Some involve risk, uncertainty or lack of predictability while others lack clear structure and present decision-makers with ambiguity in some form. And yet, in spite of much research, we still have no unified account to explain how managers make decisions let alone to help them decide effectively. Different research streams specialise in different aspects of judgement and decisionmaking (JDM) (...) and produce results which apply in different contexts. Some focus on decisions under risk, some on cases of uncertainty, some on different aspects of ambiguity. Some are objectivist and others interpretive, basing themselves on paradigms which are mutually exclusive. As a result, managers relying on any one of them when making decisions can get only partial help because no one paradigm covers every aspect of the issues on which they decide. This paper addresses the lack of a unified account. It offers a framework for comparing the different research approaches to JDM and their incommensurable paradigms. It describes the central role of metaphors, stories and formal models when managers make decisions. It adopts a neo-pragmatic perspective which treats all three as special forms of model rather than representatives of opposing paradigms. This in turn makes possible a unified account in which specific functions are assigned to each form of model in specific stages of decision-making; metaphors and stories represent the interpretive paradigm and formal models the objectivist paradigm. Finally, to shape future research, the paper derives five propositions about the use and impacts of metaphors, stories and formal models from an account of how they are actually used by managers making decisions. (shrink)

Part 1 of this paper1 used the notions of equivocality and uncertainty to distinguish the situations in which managers make judgements and decisions and described in general how managers use models in these different contexts. This final second part describes in detail the three types of models managers use: formal models, stories and metaphors. It offers five propositions about how managers use the three types of model, propositions which can usefully form the basis of future empirical research.