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Hiring by Computer Models

Newsletter • volume 1 • number 12

Leading business schools are now using computer models to analyze certain management issues, such as hiring decisions. By combining mathematical equations with game theory, they can model the behavior of corporate leaders whose decisions affect others in the company.

These models are used to develop answers to such organizational questions as "what effect does management style have on performance?" Business schools like Stanford and Northwestern, now conduct research in and teach MBA students this new discipline called "Business-oriented Economics" which focuses on the organization, not just markets and prices.

As this new model is applied to executive selection and hiring, two key variables emerge in all business economists' calculations: the successful, prospective boss's personality type and a description of the organizational environment.

Although these computer models might improve hiring decisions, they are not yet a replacement for the subjective probing that effective interviewers must do.