Myth of Continuity

1. Models are evident everywhere, whether they are in forecasting, operations, decision making or financial decisions. Beside these theoretical or physical models, there are other model which we use everyday in different situations without realizing that we are using them and are used as a matter of habit. These mental models can be described as…

1. Models are evident everywhere, whether they are in forecasting, operations, decision making or financial decisions. Beside these theoretical or physical models, there are other model which we use everyday in different situations without realizing that we are using them and are used as a matter of habit. These mental models can be described as the standard operating procedures of the brain and are part of our mental reasoning process. Mangers use these models every day to make routine decisions on a day to day basis without realizing that they are using these mental models and actually it has become a habit with them.

2. These mental are required if the managers are to make rational and reasonable decisions, which conform to the rule, values, traditions, customs, etc. of the organizations. The only problem and sometimes a plus point also is that once used they become self sustaining and self conforming. If these are in synchronization with the present day reality and values, then they allow the manager to make realistic and prudent decisions and if they are not in synchronization with the reality then the manger starts making poor and faulty decisions. It is possible that some models may while others may not in synchronization and then such situation leads to a mix of good and poor decisions.

3. The basic premise in all these models is the concept of continuity or the assumption that all environmental conditions remain the same and they have been in the past based on which the model was formulated or acquired. But environmental conditions never remain the same, but keep changing sometimes very slowly and sometimes at a fast pace. There are situations in which no past model or experience exist and which one encounters for the first time. In such a case there is no past reference and one is forced to improvise or create a solution and to make a new model based on new inputs or modify the old models accordingly. It, therefore, implies that the models are required to change as per changing situations if the decisions are to remain prudent and reasonable. As the pace pf change increases one starts losing confidence in its ability to make good decisions because these models have not kept pace with the changing circumstances. It is, therefore, essential that a manager develops the ability to perceive these new changes that are being imposed on the environment or past environmental conditions.

4. The managers will have to develop an intuitive sense in order to anticipate these changes and to incorporate them into these mental models and amend or change them to suit the present day conditions. If we continue with the myth of continuity and assume that things will remain the same, then there is nothing to stop us from making poor decisions. Old model need to be changed or modified or even discarded and newer models created if one has to be a successful decision maker and continue to make reasonable and reliable decisions.

5. When we are looking at a solution or trying to anticipate things, then we generally try to use analogy as a tool. This looking for an analogy in the past is the natural outcome of the state of continuity. But what we forget is that the analogy is to be viewed in the context of conditions which were present at that time. If conditions are the same then the analogy will lead to reliable and prudent decisions but when they are not the same then it may lead to disastrous results. What is required is to view the analogy in its totality rather than just the main points or similarities.

6. For any mental model to be successful, it should change keeping pace with the environment to which it is applicable. Every mental model has some general shortcomings and it is advisable to keep them in mind while using such models. These are: –

(a) They are simplified version of reality.

(b) They are most effective in an era of continuity.

(c) Their effectiveness is very greatly dependent on the accuracy and reliability of the inputs given to them.

(d) The answers provided by these models need to be interpreted by the managers making the decisions and are there subject to interpretation errors.

(e) Inappropriate model may be used in a situation.

(f) Wrong perception of reality.

(g) Time frame in which the decisions are required to be made will reflect in the type and authenticity of the output.

(h) Mental stress of the decision maker.

(i) Limitations and pressure carried by the surroundings.

(j) Loyalty to old models and a sense of confidence in them and a general relation or lethargy in order to modify or change them.

(l) Human bias.