Effective evaluation for A2 business: the “halo effect”

The most important skill that candidates need to show off in their AS/A2 exams is an ability to effectively evaluate. Evaluation statements put candidates in the top mark band on most of the bigger questions.

For this reason, I’m always on the lookout for ways in which the quality of evaluation in student responses can be improved. When I was reading at the weekend I came across a new term (for me, anyway) that I thought would be worth adding to my list of tips – a so-called ‘halo effect’.

At the end of longer questions, the examiner is hoping that you will provide a judgement. It might be a question asking if it’s wise for a firm to relocate, or invest in a new production line. There’s rarely a straightforward ‘correct’ answer to these questions. Instead, you’re being tested on your ability to say “hmmmm ..... well the answer depends on this and this. But if such-and such were true, I might change my answer”.

That’s the basis of a good evaluation: that your final answer depends on a variety of things. Here are some ideas:

- A range of factors to consider. An interesting question or case study will be expecting you to sift through some difficult choices, situations and issues.
- A range of views to consider. Remember that decisions often look different from the rival perspectives of different stakeholders.
- A range of timescales in which events unfold. Most significant decisions will have both short term and long term consequences.
- A range of questions that still need to be asked. It’s often smart to point out that the wisdom of any decision rests on several unknowns. Say what new facts might come along that would change your decision.
- A range of value judgements to be made. Different people often come to different judgements because they have different values and subjective opinions.

Where does the “halo” part fit in? It appeared in a recent article in The Economist which was covering an important discussion: if it’s wise for firms (in this case from emerging markets to build environmentalism into their strategy for growth. I suppose any discussion should include “it depends”.

The article says:

“Switzerland’s IMD business school has argued that management writers are prone to “the halo effect”: they treat the temporary success of a company as proof that it has discovered some eternal principle of good management. The fact that some successful companies have embraced (policy x) does not prove that (policy x) makes a firm successful.”

Some time ago the same newspaper argued that:

“Much of our thinking about company performance is shaped by the halo effect … when a company is growing and profitable, we tend to infer that it has a brilliant strategy, a visionary CEO, motivated people, and a vibrant culture. When performance falters, we’re quick to say the strategy was misguided, the CEO became arrogant, the people were complacent, and the culture stodgy”. In fact, the truth is probably more complicated and depends on other factors.

I thought that was interesting, from an evaluation perspective. I might see if I can use it!