Hidden Flaws in Strategy: Can Insights From Behavioral Economics Explain Why Good Executives Back Bad Strategies?

Topics:
Equity,
Investment Strategy
Tags:
Economics,
Flaw,
Insight,
Management,
Security,
Strategy
Source:
McKinsey & Company

Vendor Registration: required

Overview: Insights from behavioral economics have been used to explain bad decision making in the business world, 2 and bad investment decision making in particular. Some private equity firms have successfully remodeled their investment processes to counteract the biases predicted by behavioral economics. This article aims to help rectify the omission by highlighting eight4 insights from behavioral economics that best explain some examples of bad strategy. Each insight illustrates a common flaw that can draw us to the wrong conclusions and increase the risk of betting on bad strategy.

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Format: HTML | Pages: 9

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