The CEO as the Pilot of a Corporation: Applying ‘Human Factors’ within Executive Decision-making Domains

Abstract

Situation awareness (SA), human factors (HF), user-oriented design (UOD), object-oriented design (OOD) are all scientific concepts and practices developed within industrial management contexts. In scope, HF thinking incorporates diverse knowledge and techniques gleaned from various disciplines including brain physiology, behavioural psychology, cognitive ergonomics and organisational behaviour. HF explicitly acknowledges the delineation of technical and non-technical skills: its scientific value is also actively subject to intensive scrutiny by academics and practitioners, given the non-trivial nature of its applications and outcomes.

Arguably, a HF approach is especially relevant and valuable to contemporary management applications. Organisations face unrelenting competitive challenges from digital technologies (automation, product design, distribution systems) and capital mobility (in product, finance, and increasingly, labour markets). Business model disruption per se – manifesting visibly as ‘platform businesses’ – has resulted in rapid restructuring of firms and economic systems according to the so-called ‘internet of things’.

Thanks to information technologies, and investor impatience, executive decisions are increasingly of a higher tempo, and with greater personal accountabilities. The distance between corporate decisions and operating outcomes (including product lifecycles) is shortening. Intuitively, in these conditions, appropriating HF precepts and its underlying focus on ‘safety’, provides fruitful opportunities for refining executive decision-making and training.

This working paper has three parts. The first part reviews the principal literature to develop a global scheme of HF concepts and extant knowledge, including safety in practice. The second part provides phenomenological observations within ‘traditional’ high-demand domains (i.e. aviation, critical infrastructure, medicine and military), and explores executive decision-making within enterprises and financial markets (illustrating features of the context) and how adverse economic outcomes may be viewed somewhat analogously with catastrophes of traditional domains. The third part explores some preliminary ideas about incorporating SA and HF into management education programs, using the knowledge which has been developed within traditional domains.

Keywords: situation awareness, safety science, cognitive ergnomics, management of technological innovation

JEL Classification: D20, D80, M10