Decision-Making: The Costs and Benefits of Search

Abstract

In conditions of uncertainty is it always better for a manager to act decisively rather than delay and seek more information? Action orientated managers may feel obliged to make a decision even if it proves to be the wrong one. On the other hand the systematic search for appropriate information can prove too time consuming and meanwhile promising opportunities can be lost. This paper reports on research into how British firms set about evaluating new product market opportunities. Is this for example related to factors such as the capital intensity of the relevant technology, or whether the firm is desperate for new profit opportunities? The results would seem to indicate that there are tangible pay-offs to be gained from ‘active search’.