Cognitive Biases as a Barrier to Decision Making
Individual cognitive biases will influence decision making.
Learning Objectives
Examine the complex individual influences central to the way in which decision making is pursued, most notably the cognitive, normative, and psychological perspectives
Key Takeaways
Key Points
- Decision making is shaped by individual personality and behavioral characteristics.
- Subjective biases can influence decisions by disrupting objective judgments.
- Common cognitive biases include confirmation, anchoring, halo effect, and overconfidence.
Key Terms
- dichotomies: Two elements, often mutually exclusive, that stand in juxtaposition to one another.
Decision making is inherently a cognitive activity, the result of thinking that may be either rational or irrational (i.e., based on assumptions not supported by evidence). Individual characteristics including personality and experience influence how people make decisions. As such, an individual's predispositions can either be an obstacle or an enabler to the decision-making process.
From the psychological perspective, decisions are often weighed against a set of needs and augmented by individual preferences. Abraham Maslow's work on the needs-based hierarchy is one of the best known and most influential theories on the topic of motivation—according to his theory, an individual's most basic needs (e.g., physiological needs such as food and water; a sense of safety) must be met before an individual will strongly desire or be motivated by higher-level needs (e.g., love; self-actualization.
The Myers-Briggs Type Indicator (MBTI) is a widely used diagnostic for identifying personality characteristics. By categorizing individuals in terms of four dichotomies—thinking and feeling, extroversion and introversion, judging and perception, and sensing and intuition—the MBTI provides a map of the individual's orientation toward decision making.
Types of Cognitive Bias
Biases in how we think can be major obstacles in any decision-making process. Biases distort and disrupt objective contemplation of an issue by introducing influences into the decision-making process that are separate from the decision itself. We are usually unaware of the biases that can affect our judgment. The most common cognitive biases are confirmation, anchoring, halo effect, and overconfidence.
1. Confirmation bias: This bias occurs when decision makers seek out evidence that confirms their previously held beliefs, while discounting or diminishing the impact of evidence in support of differing conclusions.
2. Anchoring: This is the overreliance on an initial single piece of information or experience to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, which can limit one's ability to accurately interpret new, potentially relevant information.
3. Halo effect: This is an observer's overall impression of a person, company, brand, or product, and it influences the observer's feelings and thoughts about that entity's overall character or properties. It is the perception, for example, that if someone does well in a certain area, then they will automatically perform well at something else regardless of whether those tasks are related.
4. Overconfidence bias: This bias occurs when a person overestimates the reliability of their judgments. This can include the certainty one feels in her own ability, performance, level of control, or chance of success.[2]
Time Pressure as a Barrier to Decision Making
Time pressure forces decision makers to shift from logical processes (ideal) to intuitive processes (sub-ideal).
Learning Objectives
Explain the way in which time pressure can influence decision making
Key Takeaways
Key Points
- Time pressure can distort decision -making processes and individual judgment and make them less objective and more influenced by intuition.
- Heuristics, or mental shortcuts, can deliver workable decisions under time pressure and in the absence of logical decision-making processes.
- Decision makers who feel as though they have ample time tend to arrive at more logically crafted, higher quality decisions than those who felt as though they had insufficient amounts of time, even if confronted by similar time pressure in real terms.
- While generally considered a barrier to decision making, time pressures may also have the opposite effect in terms of creating organizational motivation to render decisions and move on. In this way time pressure, real or perceived, may act as a deadline and encourage organizational dexterity.
Key Terms
- heuristic: A "shortcut" method of problem solving that makes assumptions based on past experiences. Examples include going by "rule of thumb," when you apply your experience of something having happened a certain way enough times that it's likely to continue happening that way. It is not guaranteed to be accurate every single time, but it cuts out processing time by avoiding detailed analysis of every particular situation.
Just as individual characteristics and cognitive biases can shape decision making, time pressure can also distort how we consider and choose between alternatives. Severe time constraints can make decision processes and individual judgment less objective and more influenced by intuition as more formal and rigorous approaches are ignored. All decisions are time-bound in the sense that we do not have an infinite amount of time to make a selection. Still, firm and proximate deadlines and limited resources are common causes of time pressure. Information overload is another. While considering all relevant factors is important to build support for the decision, data collection can eat up time better spent analyzing alternatives and making the decision itself.
Time pressure: Time pressure often forces decision makers to look for intuitive shortcuts rather than logically processing all of the required data.
There are some effective approaches to dealing with time pressure. Clearly defining the decision and its parameters early on can reduce ambiguity and make it easier to hone in on relevant data. Setting clear boundaries on matters such as who will participate and how long discussions will continue can similarly manage the amount of time given to a decision. In many instances, the use of heuristics can be applied to complex decisions to serve as shortcuts in conducting analysis and weighing alternatives.
There is evidence that suggests the perception of time pressure may impact decision quality. Decision makers who believe they have ample time to make a decision tend to arrive at more logically crafted decisions than those who feel as though they have an insufficient amount of time. While time pressure is generally perceived as being a barrier to effective decision making, it may also have the exact opposite effect. A limited time frame can focus mental energy and effort to bring the appropriate resources to bear on a decision more quickly and efficiently than otherwise might have been the case.
Group Conflict as a Barrier to Decision Making
Group dynamics, which involves the influence of social behavior, is the primary determining factor in the success of group outcomes.
Learning Objectives
Recognize the value and potential drawbacks of group dynamics in making decisions
Key Takeaways
Key Points
- Interpersonal and group dynamics can make it difficult for groups to make decisions effectively.
- The presence of well-developed group cohesiveness, often achieved through healthy levels of dissent, typically results in preferable outcomes, while groupthink can lead to avoiding dissent and thus to premature consensus.
- The leader 's behavior, group norms, and how the decision-making process is structured can help prevent groupthink.
Key Terms
- Synergy: Benefits resulting from combining two different groups, people, objects, or processes.
- group: A number of things or persons in some relation to one another.
- groupthink: The psychological phenomenon wherein a desire for conformity within a group results in them making an irrational decision; by actively suppressing dissenting viewpoints in the interest of minimizing conflict, group members reach a consensus without critically evaluating alternative viewpoints.
Delegating key decision making to groups, teams, or committees occurs often within organizations. Decisions made by groups can be better informed by broader perspectives and different sources of information and expertise than those made by an individual decision maker. Along with these advantages, however, interpersonal and group dynamics presents dilemmas that can make it more difficult for groups to make effective choices.
Group cohesion, or positive feelings between individuals and productive working relationships, contributes to effective group decision making. In cohesive groups information is more easily shared, norms of trust mean it is easier to challenge ideas, and common values help focus decisions around shared goals. Encouraging constructive disagreements and even conflict can result in more-creative ideas or more solutions that are easier to implement.
Group dynamics: the New Zealand All Blacks: Rugby, a game with fifteen players per team, is the ultimate team game. Group dynamics require all fifteen players to work together, often demanding tremendous synergy to outlast an opponent. The historic success of New Zealand's All Blacks has been attributed not only to skill, but also to how the team achieves ideal group dynamics.
Groupthink
One of the greatest inhibitors of effective group decision making is groupthink. Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome. By isolating themselves from outside influences and actively suppressing dissenting viewpoints in the interest of minimizing conflict, group members reach a consensus decision without critical evaluation of alternative viewpoints.
Loyalty to the group requires individuals to avoid raising controversial issues or alternative solutions, and there is a loss of individual creativity, uniqueness, and independent thinking. The dysfunctional group dynamics of the in-group produces an illusion of invulnerability (an inflated certainty that the right decision has been made). Thus the in-group significantly overrates its own decision-making abilities and significantly underrates the abilities of its opponents (the out-group). Furthermore, groupthink can produce dehumanizing actions against the out-group.
Psychologist Irving Janus, the leading theorist of groupthink, identified ways of preventing it:
- Leaders should assign each member the role of "critical evaluator." This allows each member to freely air objections and doubts.
- Leaders should not express an opinion when assigning a task to a group.
- Leaders should absent themselves from many of the group meetings to avoid excessively influencing the outcome.
- The organization should set up several independent groups working on the same problem.
- All effective alternatives should be examined.
- Each member should discuss the group's ideas with trusted people outside of the group.
- The group should invite outside experts into meetings. Group members should be allowed to discuss with and question the outside experts.
- At least one group member should be assigned the role of devil's advocate. This should be a different person for each meeting.
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- Some "content adapted from \"Decision making,\" WikiJob, https://www.wikijob.co.uk/content/interview-advice/competencies/decision-making, (May 21, 2018)" ↵
- Some "content adapted from \"Decision making,\" WikiJob, https://www.wikijob.co.uk/content/interview-advice/competencies/decision-making, (May 21, 2018)" ↵
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