Psychological fads can be bad
I was relaxed, reading through the August IE and enjoying the good articles. Then I came to "Culturally Aligned" by Greg Lane. The article caused me to sit up and take notice. I think it could easily lead to lawsuits. One of my jobs on the corporate staff of a very large company was to discourage the latest psychological fad.
My main concern is that the average manager is in no position to make use of personality tests, whether from the Internet or from expensive consultants (who may have gotten them off the Internet). We industrialists are not psychologists, and psychologists are not industrialists. We have little in common.
Testing raises questions: What is the validity of each test? What are managers going to do with the intimate knowledge they obtain, assuming the results are valid? What are managers not going to do with such information (such as refuse to promote someone)? How many lawsuits can be generated by employees who can state, "You should have known what I was like?"
Do we want to run a business, or do we want to get involved in a morass of psychobabble for which we have no or little training? As humble managers, we do not want to possess information of such a personal nature or even medical information. How could we prove we used the information fairly, even if we never opened the envelope that contained the data?
I believe it was in the 1970s that well-known personality inventory "tests" were shot down by courts. The courts held that testing must be pertinent to individual jobs. I suspect that today’s personality tests have little to do with the wielding of a hammer or scheduling of products. Nor can they be proven to predict the success rate of a Nikola Tesla, Thomas Edison or Bill Gates.
Psychologists have to make a buck the same as the rest of us, but I do not want them to lead us into legal traps while doing so.
In other observations about August’s magazine, "Target: Carrying Costs" was outstanding. Reginald Thomas Lee demonstrated how complex the inventory costing problem can be.
One of my assignments was managing inventory that totaled about $10 million in three locations. It was hard to gin up an accurate evaluation in each shipping location, but senior management agreed that if we could double sales without increasing the inventory and ship each order from the best location, we would be rolling in dough.
So we spread a large fixed cost over twice as many sales. We weren’t sure about the exact value of the inventory, but we were sure that spreading it over many more sales would allow me to retire and write letters to IE magazine, happily ever after.
Thomas S. Fiske
In a photo caption on Page 51 of the September 2013 issue, Carlo Alberto Magni should have been listed as the sole author of "The Internal Rate of Return Approach and the AIRR Paradigm: A Refutation and a Corroboration."
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