When you take decisions, beware of their unintended consequences


More alcohol was consumed in total in America during Prohibition than had been consumed in an equivalent period before the ban. $2,000,000,000,000 worth of business was transferred from brewers and barkeepers to bootleggers and gangsters (Brogan, 1990).

The law of unintended consequences means that our decisions become ends in themselves or lead to the precise opposite of what we intended. For example, one firm launched a programme to place international assignees in their subsidiaries around the world. The aim was for these assignees to act as a conduit for exchanging “best practice” and driving company policy. McNulty (2000) found that the assignees also used their network to exchange information about their financial packages which they then tried to increase. They also shared information about vacancies in other firms. Thus a process designed rationally to increase communications in the interests of the firm actually increases staff turnover, thus worsening communication.

McNulty suggested that prior to making any major change, a pilot programme could offer managers an opportunity to assess the wider consequences of what they are about to implement. The unintended consequences can be weighed and measured, and elements of the proposed major change amended so as to take account of the results of the pilot. When making a change, eternal vigilance remains the best defence for managers.


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Daily Management Nugget

Research and facts which all managers should know

Today’s Nugget:

When you take decisions, beware of their unintended consequences (click above)

Tomorrow’s Nugget:

You’re in charge but they won’t change? You’re not alone