Overcoming Cognitive Biases in Decision Making (original) (raw)
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Conference Papers, 2006
The author investigates different ways of thinking, and how this may be understood in the work environment as well as in ordinary life. Thinking about thinking may shed light on problems in decision-making. Three broad modes of thinking are defined, based on the intended results, and the kinds of questions associated with each mode, namely: the operational mode, the analytical mode, and the reflective mode. Using this as a template or model, a number of applications are discussed in order to illustrate the value of such a distinction.
Right decisions from wrong decisions: One manager’s perspective
Academia Letters, 2021
Problem solving and decision making models Simon (1959) proposes that all decisions involve three activities: intelligence; design; choice. Robbins ([2005] cited in Boddy, 2016, p. 211) categorises organisational decisions into programmed and non-programmed, where people at the lower levels typically address routine problems by applying organisational procedures. For a manager operating at a lower level (or otherwise in a routine situation), it may be beneficial to understand the rationale of having formal policies and procedures for problem solving. For a manager operating more strategically, there may not be an accepted method to solve their problem and so they must consider decision making models and assess their likely efficacy in the critical situation. Investigation shows that there are multiple competing decision and problem solving models (e.g. Nicholas, 2017; Krogerus & Tschäppeler, 2017) which are based either on the logical (reasoning), biological (processes) or heuristical (strategies). Capelo (& Dias, 2009) tell us that managers use the mental models they carry in their brains to make decisions. Therefore, it can be argued that knowing more models, ones that map to the problem and/or the organisational objective, provides better congruence between
Coulson-Thomas, Colin (2022), Foresight and Looking Ahead, Management Services, Vol. 66 No. 2, Summer, pp 19-24, 2022
In ambiguous, hazy, precarious and rapidly changing situations responsible management services professionals invariably wonder how resilient the productivity, quality, systems and other solutions they put in place will be and for how long they will still be appropriate or relevant and the advice they have given to clients and employers will remain valid. As events unfold, with hindsight it is often found that there were contingencies and precautions that could have been put in place and steps that could have been taken to reduce their negative impacts and better take advantage of any associated opportunities. Just as directors must not overlook or forget that the provision of strategic direction requires them to look ahead, when advising and supporting them practitioners need to be sensitive to signals and signs and prepared for a variety of eventualities while remaining balanced, positive and responsible. They should reflect on time horizons and their responsibilities and be ready to cope with uncertainties and the unexpected. They should think, question and challenge, including in respect of forecasting and the evaluation of scenarios. When considering the implications of future possibilities, direct and indirect impacts and consequences should be taken into account. Practitioners should avoid placing too much confidence in particular forecasting models and tools just because they are complex and a lot of effort and cost have been devoted to developing them. They should be professional and ready at each stage of a process from awareness, through understanding to commitment and action. Collective and collaborative responses may be required. Ideally, any approaches and business models used should be sufficiently fluid, organic and able to adapt and evolve to match whatever is determined or materialises. Forewarned is forearmed.
Intuitive and analytical judgement in management
2018
Constantly changing markets full of uncertainties need managers who know how to make decisions fast and effectively. We certainly rely mostly on analyzed and verifiable outcomes and are driven by the fact that decisions are only possible and 'good' by thinking about them consciously and analyze the best possible way of outcome step-by-step. However, a new "way of decision-making" is said to be always present in judgements, or even more dominant and therefore very crucial, but we are not really aware of it as it happens in the unconscious. Researchers therefore highly recommend starting to go deeply into the topic of intuitive decision-making to learn more about it and moreover to be able to control it, which then is meant to lead to 'better' managerial outcomes. In fact, this declaration needs to be analyzed by searching for answers, how the impact of specific domain expertise is on the two different decision-making processes, namely intuition driven and an...
LATERAL THINKING IN MANAGERIAL DECISION MAKING THROUGH SIX THINKING HATS TECHNIQUE
The importance of decision making in organizations need no emphasis. Organizations more than ever before are confronted with problems which require appropriate solutions at the appropriate time so much so that the manager is largely a decision maker than anything else. Although confronted with a lot of repercussions of a faulty decision, managers cannot ignore taking decisions. Different thinking approaches are adopted to analyse any given problem or situation. Originally developed for individual problem solving during counselling sessions, Six Thinking Hats is a lateral thinking method to analyse a concept, situation, or problem, idea or a model. This technique uses different thinking approaches required by an individual/group while analysing a given problem/situation in an effective way. In this model different thinking approaches are used in a systematic manner indicated bya different set of frame of references called coloured hats. By conceptualizing each type of hat, the manager focuses on the style of thinking associated with each colour so that the problem can be analysed from different angles and perspectives. In this paper, we have discussed how this technique can be used as a Tool for Lateral Thinking in Managerial Decision Making Process by integrating it with Decision Theory model.
Heuristics, Biases and Traps in Managerial Decision Making
Acta Univ. Agric. Silvic. Mendel. Brun. 2013, Volume 61, Issue 7, pp. 2117-2122.
The aim of the paper is to demonstrate the impact of heuristics, biases and psychological traps on the decision making. Heuristics are unconscious routines people use to cope with the complexity inherent in most decision situations. They serve as mental shortcuts that help people to simplify and structure the information encountered in the world. These heuristics could be quite useful in some situations, while in others they can lead to severe and systematic errors, based on significant deviations from the fundamental principles of statistics, probability and sound judgment. This paper focuses on illustrating the existence of the anchoring, availability, and representativeness heuristics, originally described by Tversky & Kahneman in the early 1970's. The anchoring heuristic is a tendency to focus on the initial information, estimate or perception (even random or irrelevant number) as a starting point. People tend to give disproportionate weight to the initial information they receive. The availability heuristic explains why highly imaginable or vivid information have a disproportionate effect on people’s decisions. The representativeness heuristic causes that people rely on highly specific scenarios, ignore base rates, draw conclusions based on small samples and neglect scope. Mentioned phenomena are illustrated and supported by evidence based on the statistical analysis of the results of a questionnaire.
EXPLORING THE ROLE OF MENTAL MODELS IN STRATEGIC DECISION MAKING
2008
ABSTRACT This study aims to be a contribution to a theoretical model that explains the decision-maker effectiveness under a feedback learning and mental models perspective. With appropriate mental models, decision-makers should be able to improve their capacity to deal with dynamically complex contexts, in order to obtain long-term success. We present a set of hypotheses about the influence of feedback information and systems thinking facilitation on mental models accuracy and on the quality of the decision.