When it comes to making decisions, human beings have built-in biases. So do companies and other organizations. In any number of ways, these biases can stall, skew, or deny the kind of clear-sighted decisions that are at the heart of strategic management. To effectively tie strategy to value creation, management should make tangible efforts to overcome these biases. The late Nobel Prize'winning psychologist and economist Daniel Kahneman laid the foundation for what we now call behavioral economics and behavioral finance. While his focus was primarily on individual decision-making, we had the opportunity to ask how it might apply to organizations. We asked him, 'If people don't behave in an economically rational way, is there any hope for organizations'' His response: 'I'm much more optimistic about organizations than individuals. Organizations can put systems in place to help them.' Managers can develop rules and processes that help overcome inherent decision-making biases. Drawing on Kahneman's insights, a group of McKinsey colleagues has proposed (or adopted from others) a number of techniques to help organizations understand and improve their decision-making in resource allocation. In this article, we discuss four common biases that can affect organizational decision-making, along with some potential remedies....

The United States is home to the best collection of research universities in the world. Those universities have contributed tremendously to America's prosperity, health, and security. They are magnets for outstanding talent from throughout the country and around the world. The Trump administration's recent attack on Columbia University puts all of that at risk, presenting the greatest threat to American universities since the Red Scare of the 1950s. Every American should be concerned. The rise of the American research university in the 20th century depended on many factors, including two crucial turning points. The first, at the start of the century, was the development of strong principles of academic freedom that allowed people and ideas to be judged by scholarly standards, not according to the whims or interests of powerful trustees, donors, or political officials. Stanford's dismissal in 1900 of Edward Ross'an economics professor who had incited controversy with his remarks about, among other topics, Asian immigrants and the labor practices of a railroad run by the university's founders'catalyzed a movement to protect the rights of faculty members to pursue, publish, and teach controversial ideas. Significant governance reforms took place in the same period, shifting control of professorial appointments from boards of trustees to presidents and faculties....

The study used algorithms to examine more than 235,000 economics papers and 93,000 medical and life-sciences papers that contain three-part phrases in their titles. The medical and life-sciences studies that used the format attracted 32 extra citations, on average, than did papers that don't contain such phrases, and the economics papers with this format received an extra 3.5 citations. 'When you have a catchy title, people are more likely to read at least the abstract or the whole paper,' says study co-author Klaus Wohlrabe, an economist at the Leibniz Institute for Economic Research in Munich, Germany. The analysis was published1 last month on the SSRN preprint server. The economics papers were published in journals indexed by the scholarly database Web of Science between 2006 and 2019. The life-sciences and medicine studies ' peer reviewed from 2001 to 2023 ' were rated 'good', 'very good' or 'excellent' by the post-publication appraisal service Faculty Opinions. Wohlrabe says that medical and life-sciences studies with three-part phrases in their titles attract more extra citations than do corresponding economics publications because 'the average citations for a medicine or life-sciences article is much higher than in economics'....

The Medicaid system has emerged as an early target of the Trump administration's campaign to slash federal spending. A joint federal and state program, Medicaid provides health insurance coverage for more than 72 million people, including low-income Americans and their children and people with disabilities. It also helps foot the bill for long-term care for older people. In late February 2025, House Republicans advanced a budget proposal that would potentially cut US$880 billion from Medicaid over 10 years. President Donald Trump has backed that House budget despite repeatedly vowing on the campaign trail and during his team's transition that Medicaid cuts were off the table. Medicaid covers one-fifth of all Americans at an annual cost that coincidentally also totals about $880 billion, $600 billion of which is funded by the federal government. Economists and public health experts have argued that big Medicaid cuts would lead to fewer Americans getting the health care they need and further strain the low-income families' finances....