The Firm Trapped by Good Decisions

Can a firm gradually lose its ability to make effective decisions through a series of sound and successful choices? Could what is seen today as experience, expertise and managerial stability become an obstacle to change and adaptation tomorrow?

Firms generally take past successes as evidence that their decisions were right. As these decisions are repeated, resources, skills, contracts and organizational structures take shape around them. Choosing a different path gradually becomes harder, even when circumstances have changed and the reasoning that guided earlier decisions no longer holds. In this situation, the problem is not necessarily a bad decision; sometimes the very decisions that were right in the past are what trap the firm.

From decision quality to understanding decision logic

This presentation begins with noise and bias in judgment and decision-making. It explores why more data, algorithms or even less disagreement among managers do not necessarily lead to better decisions. An organization’s decisions may become more consistent while still reflecting a shared bias.

The discussion then turns to a more fundamental issue: organizations usually record their decisions and sometimes their outcomes, but pay less attention to documenting and examining the reasoning behind a decision. Which options were considered? Which assumptions and criteria were decisive? Why was some evidence accepted and other evidence set aside? And when conditions change, is the same choice still defensible?

Without answers to these questions, accumulated experience does not necessarily improve the ability to decide. An organization may have a long history of decisions yet lack an understanding of why they were made or how to learn from them when making future choices.

Analytical memory: from recording decisions to organizational learning

The second part introduces organizational analytical memory: a capability that goes beyond archiving documents, meeting minutes and reports. It seeks to preserve and reconstruct the relationships between a problem, the evidence, assumptions, options, the final choice and its consequences.

In this framework, AI can help find scattered evidence, suggest analytical connections and compare similar decisions. The aim, however, is not to replace human judgment with seemingly certain machine answers. Every claim must be linked to traceable evidence, inference must be distinguished from documented fact, and when evidence is insufficient, “we do not yet know” must remain a valid answer.

The value of this capability extends beyond reviewing past decisions. A firm that understands its own patterns of decision-making is better placed to identify what it should preserve and when it needs to revisit choices that once proved successful. Analytical memory can therefore become an important capacity for organizational learning, agility and decision governance.

About the presentation

The initial idea emerged from the challenge of identifying and analyzing recurring patterns in discussions among experts. Through Mehran Ziabary’s scientific collaboration with Dr. Farhad Nili, and under Dr. Nili’s guidance, it developed into an inquiry into decision-making and learning within firms.

The result was “The Firm Trapped by Good Decisions: Decision Logic, Analytical Memory and Organizational Agility,” presented by Dr. Farhad Nili at the 20th International Project Management Conference on 19 Mehr 1405 (11 October 2026).

These 23 slides seek to connect economics and decision theory with new AI capabilities for understanding organizational behavior. Their purpose is to raise a fundamental question in the management and governance of firms, rather than to introduce a software product or a ready-made technical solution:

How can the experience of making decisions become the capacity to make decisions, without an organization becoming trapped by its past successes?