[Opinion] If You Have Difficulty Making Decisions

Professor Changhee Kim, Department of Business Administration, Incheon National University

There is likely no one who can refute the proposition that war brings great harm to humanity. Among them, World War II caused tremendous human casualties. However, as the saying goes, flowers bloom even during war, and it is no exaggeration to say that the major I have researched and studied began precisely during World War II.

While there are many important factors to winning a war, the importance of logistics cannot be overstated. It was an essential skill for commanders to devise and execute routes to safely and quickly supply necessary military materials and troops. This gave rise to the field known as "operations research."

After the war, operations research had a significant impact on industry. In the then manufacturing-centered field of production management, it was responsible for optimizing manufacturing, transportation, and other efficiencies, driving economic growth. Today’s column aims to introduce decision-making using these optimization techniques.

All of us make many choices in life, from major decisions like selecting a major, choosing a job, or picking a spouse, to lighter decisions such as what to have for dinner or whether to go to the hair salon today. Until now, we have mainly made qualitative decisions based on subjective information.

In contrast, quantitative decision-making is based on data. It involves the decision-maker’s goals and the constraints that limit those goals. The process is to find a way to achieve the goals while satisfying these constraints. How can companies make quantitative decisions? First, they need to collect data. When conducting due diligence at companies, it is often difficult to find places that properly record data. Even fewer specialize in managing it. Reliable data collection must come first for quantitative decision-making. Decisions made with incorrect data are bound to be wrong as well.

Another requirement is the conviction and will of management. Professor Kantorovich, a pioneer of "operations research," was a professor at Leningrad University during World War II. When the Leningrad region (now Saint Petersburg, Russia), where he was located, was besieged by the German Nazi army, he devised a transportation plan using Lake Ladoga, which was adjacent to Leningrad.

He introduced quantitative decision-making methods by collecting data such as measuring the thickness of the ice on Lake Ladoga, which was frozen in winter. His goal was the safe distance between transport vehicles. If the vehicles were too close, many supplies could be transported quickly, but the ice might break, causing casualties. Conversely, if the distance was too wide, transporting supplies would take longer. Therefore, it was important to find the optimal distance through quantitative decision-making.

Kantorovich did not stop at finding this optimal distance through quantitative techniques; he also had confidence in the optimal vehicle spacing he calculated. He showed passion by running among the transport vehicles, which were anxious about the ice breaking, to reassure them. Later, Professor Kantorovich was awarded the Nobel Prize in Economics for his contributions to developing such quantitative techniques.

As such, to make decisions using quantitative methods, accurate data must be gathered. If the accuracy of the collected data can be trusted and precise analysis is conducted with that data, the results can also be trusted. Then, the decision-maker must have confidence in the results and encourage the members. Why not try collecting even small amounts of data at your company or home? It could be an excellent option for those struggling with decision paralysis.

Changhee Kim, Professor, Department of Business Administration, Incheon National University

This content was produced with the assistance of AI translation services.