In the schematic, the vertical line represents Time as on-date. We need to take a decision which will impact our future and we have three possibilities.
• 11 The first possibility is when we have no information about the future hence our decision can only be based on past experience, guess work or intuition.
• 12 The second possibility is when we have partial information about the future events.
• 13 The third possibility is when we have all the information about the future and therefore can take a decision easily based on complete information . It is only a utopia.
Project managers are required take decisions on the availability of partial information i.e. 12 state. Decision making therefore is tough.
Decision making is the most fundamental attribute of living beings which gets activated dynamically when it comes to our survival process. Decisions require information either based on facts or perceived facts.
In the context of decisions made under uncertainty, a ‘good’ decision is one that is based on sound decision making principles. Because decisions must usually be made before full information is available and uncertainties are resolved, a good decision might have lucky and unlucky consequences.
However, we should not criticize decision makers for the unlucky outcomes. They should be criticized only if their analysis at the time of making the decision was not based on due diligence. After the event, it is easy to give advice as to what should have been done. We need to bear in mind that complete information will never be available before taking a decision.
Any audit done must also view the assumptions made at the time of taking decisions and not just look at outcomes in isolation.