Making Good Sense: Assessing the Quality of Risky Decision-making

Abstract

How good are managers at making risky decisions? Recent research has identified this gap in decision-making research; this paper attempts to address this question in the context of risky decision-making. Following a review of the behavioural decision-making and sensemaking schools of research on risky decision-making, a research methodology is presented which is derived from a critique of the former school to address limitations of the research of the latter school. A combination of active information search and cognitive mapping was deployed to assess the performance of 45 project managers in identifying project risks. The findings show that some managers perform better than others at this type of decision-making due to the differences in the ways in which they tackle the problem. The concluding discussion argues that the two schools are more complementary than antithetical.