Essay on the article How Organizations Can Overbalance

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Essay on the article How Organizations Can Overbalance For my essay I read the article How Organizations Can Overbalance: Decision Overreach as a Reason for Failure by David C. Wilson, David J Hickson, and Susan Miller. This article appeared in The American Behavioral Scientist, in August 1996. In this essay I will first objectively identify the thesis and how the authors supported it, and secondly I will give a subjective interpretation of how this article affects strategic thinking, and an evaluation of this article in terms of what value it has in strategic thinking. Let us begin. The thesis that the authors used in this article was to identify what constitutes decision overreach. They concluded that there were two proponents that identified it, and they were disproportionality and irreversibility of the decision. Disproportionality was defined as “the scale of the move decided on relative to the size and scope of the organization”, especially when at least doubling the size of the activity or capacity (Wilson 999). Irreversibility is of course the inability to reverse or correct the situation. The authors also noted that both criteria must be met for decision overreach as even if the decision is disproportionate if it wasn’t irreversible they could still recover by cutting their losses, and also if it were irreversible but not disproportionate they may also be able to recover as they would have enough assets. The authors also based their arguments on two specific cases out of 55 cases that were revisited in 1990 to 1993, of which the 55 cases were a representative of one third of the 150 cases covered in the “Bradford Studies.” (Wilson 995) The two firms in which decision overreach happened were given the names of Thomson, which was a brewery, and Jacobite, an engineering factory.

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