Money Ball Essay In todays business world, any decision made by a manager can have serious implications on the

progress of the organization. In addition to the intense pressure, the manager is also under constant scrutiny from his peers and supervisors. Keeping all this in mind, any soon-to-be business manager needs to be fully prepared to defend his decision making abilities. The book Moneyball gives a fair idea of this process, as the manager of the featured baseball team is faced with similar kinds of challenges. Q) With the limited resources in hand, how can a manger make the most effective decision? Every manager in modern world is faced with the limitation of resources. Organizations expect the manager to make effective decisions with a limited amount of resources on hand. This was the case with Billy, the manager of Oakland As baseball team. He had to select the best possible players for the club with only a limited amount of money at his disposal. It is very important for a manager to think outside the box in these situations. The manager has to understand that all his competitors have access to the same information and therefore, in order to outperform his competitors, the manager needs to be creative. By thinking outside of the box a manager is engaging in integrative thinking. As in the case of Billy, the manager needs to understand that market perception is not always right. The manager also has to learn from the experience of others. People learn with experience, so it is very important to interact with people around you. With a large number of interactions, you get to learn new things you might not otherwise have learned. It is very important that the manager not think that his experience is typical. Every individual has unique learning style and experiences. As a result, it is very important for the manager to understand and learn from the experiences of his peers and supervisors. Before making any decision, a manger should always research the decision thoroughly. There is always a tendency to be affected by the latest information. However, the manager needs to understand that its not always the latest information which is the most relevant. He needs to study past performances as well. What a particular individual or company historically does is not necessarily what they will do next. So before making any decision, a manager needs to evaluate the big picture. By doing this, he can base his judgment on both current and past performances. As mentioned in the book, there was the bias toward what people saw with their own eyes, or thought they had seen. The human mind played tricks on itself when it relied exclusively on what it saw, and every trick it played was a financial opportunity for someone who saw through the illusion to the reality (Chapter 2). This advice is very important for a manager. They have to understand that whatever they think they are seeing is not always correct. The mind will often interpret a situation in the way that best suits it. The manager needs to be very particular about the biases these situations can create and he needs to evaluate these types of situations fairly as any decision which is biased by his imagination is bound to be ineffective. Therefore, he needs to direct his thoughts rationally and make unbiased decisions.
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Q) How can a manager ensure that his decisions are effective? A manager needs to understand that not all the decisions he makes will be correct. There will be some decisions that are bound to be erroneous, so he has to be prepared to face the consequences of these bad decisions. By challenging the conventional wisdom, there will be some element of risk to the managers decisions. As described in the book, there was a significant amount of risk-taking in Billys decision. He was going after lesser known players while all of his competitors were going for the big and famous players. But he minimized this risk by doing intense research about the players. The lesson is that any manager needs to engage in thorough research before making important decisions, in order to minimize the risks involved. The manager also needs to evaluate the probability of a successful decision. This can be achieved by calculating the probability of success of earlier decisions. The final output should always be based on the previous probability and any new information that might affect the decision. In the book, Billy mentions "We're blending what we see but we aren't allowing ourselves to be victimized by what we see", (Chapter 2). This goes on to show that all the new information which a manager receives needs to blend with the probability based on his previous experiences. As a result, the final output or decision is automatically sensitive to both the new information and the past experience. Any decision based on this type of probabilistic estimate thus reduces the risk involved. The manager also needs to be adaptive. In modern world it is very easy for any manager to succumb under the pressure, as the pressure is very intense. The manager needs to have confidence in his ability, which can be observed from his attitude. Any organization will not expect its manager to be short of confidence. The organization will also expect its manager to have a strong passion for his work. As in the case with Billy, he was always confident about his decisions. This confidence was visible through his actions and helped him adapt to the ever-changing scenarios in the baseball world. The manager needs to be a progressive thinker. He should be able to judge the relevance of any information. In modern world, people tend to dwell too much into the statistics. Having the statistics is very important but, it is even more important for the manager to understand the relevance of statistics. There is no point wasting any effort in relying on irrelevant statistics. He should always remember that with the evolution of internet and software industry, thousands of statistics are now available for any type of measurement. So he has to choose which statistics to follow and which not to follow. He should also be careful about the interpretation of the statistics. As mentioned in the first question, the human mind plays tricks on itself, so people have a tendency to interpret statistics in a way that best suits them. In these cases, bias is again introduced into the decision. So the manager needs to be aware of these biases, as Billy did. Before looking into the statistics of players, he filtered out all the irrelevant statistics. He ignored the traditional statistical parameters on which the players were routinely evaluated. Similarly a manager in business world needs to determine the statistical parameters that are most important for his decision and then evaluate his decision based on those parameters.
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Q) How can a manager select the best fit for his team and organization? Selecting the right candidate for his team and organization is one of the major responsibilities of the manager. A manager always works in a team, so it is very important for him to select the right candidate for the team. He needs to prioritize his requirements and accordingly choose the right candidate. In todays world there is no shortage of talent. So a manger needs to understand that an individual with a higher price tag is not necessarily the most talented. If any talented but inexperienced individual is trained and exposed to the business world, then he or she can also perform as per the managers expectation. This was the same principle adopted by Billy. He selected lesser known players and groomed them for the team. Any team needs to have a right mix of experience and its the responsibility of senior members to train and help the new members of the team. The manager also needs to evaluate the cost benefit involved with hiring fresh talent in his team. Any experienced individual who has joined the organization for a raise in salary can leave the organization for the same reason. By hiring fresh talent, a manager can expect a sense of commitment from them. Fresh talent can also introduce new thinking to the team. The manager also needs to understand the cost involved with hiring. An experienced person with a high price tag can be replaced with two or three comparatively inexperienced individual. This is what Billy was doing. He replaced the experienced player on his team with couple of players with less experience. This does not mean that the manager should replace all the experienced individuals in his team. Given a situation where an individual has to leave the organization, the manager can think along these lines. A manager needs to understand the importance of statistics. Many managers in modern business world end up spending enormous amount of money on individuals who are not useful for the organization. A manager needs to think rationally. He needs to select an individual based not on his market appearance, but on the basis of meaningful statistics. As mentioned in the book, strange results are obtained when you ceased to prejudge a player by his appearance, and his less meaningful statistics, and simply looked at what he had accomplished according to his meaningful stats. What begins as a failure of the imagination ends as a market inefficiency: when you rule out an entire class of people from doing a job simply by their appearance, you are less likely to find the best person for the job. You could, in essence, buy a stock, pump it up with false publicity, and sell it off for much more than you'd paid for it, (chapter 5). The same is the case for the business manager. If he rule out a particular candidate just because of his experience, then he will be less likely to select the right candidate. The manger should evaluate all the candidates on the basis of the important parameters that are required. Before making any decision, a manager needs to believe that there is room for improvement in any decision. If his predecessors or his competitors are hiring a certain kind of individual, it does not follow that he also needs to hire these kinds of people. Rather, he should understand what is required from the individual and select the person accordingly.