·

When to Override a Decision

Ivan Jureta

To override a decision, you need to know a decision was made (observability), have rights to override it (authority), and believe that doing so will lead to a better outcome, including preventing undesirable outcomes (superiority).  

This text is part of the series on the design of decision governance. Decision Governance refers to values, principles, practices designed to improve the quality of decisions. Find all texts on decision governance here, including “What is Decision Governance?” here.

Which conditions should lead you to consider overriding a decision, provided you can?

  1. Misalignment of interests: you believe that the decision is not aligned with your interests, in that the decision is made in a way that is not aligned with your expectations and, or you expect outcomes which are lower than a threshold you want to achieve, or they will lead to outcomes harmful to you.
  2. Information asymmetry: you believe that the agent withheld or misused information when making the decision, and that this information is relevant, that is, if it were correctly used, it would have led to different outcomes.
  3. Moral hazard: You believe that the agent is ignoring or taking excessive risks, including when they do not seem aware of risks, and when you will be bearing the consequences and they will not, or will, but to a much lesser degree.
  4. Ethical and, or legal considerations: you expect the agent to prepare a decision in a way that ignores or violates specific principles and, or regulation that you expect the decision making and the decision to comply with.
  5. Urgency to decide: the decision is required rapidly, and you believe that the agent is not able to make the right decision as quickly as required.
  6. Performance or competence considerations: you believe that you can prepare a decision better, and, or that the outcomes of your decision will be better than that of the agent, because you hold more relevant specialized knowledge.
References and Further Reading
  • Aghion, Philippe, and Jean Tirole. “Formal and real authority in organizations.” Journal of political economy 105.1 (1997): 1-29.
  • Eisenhardt, Kathleen M. “Agency theory: An assessment and review.” Academy of management review 14.1 (1989): 57-74.
  • Shleifer, Andrei, and Robert W. Vishny. “A survey of corporate governance.” The journal of finance 52.2 (1997): 737-783.
  • Baker, Tom. “On the genealogy of moral hazard.” Tex. L. Rev.75 (1996): 237.