The word decision can be defined as, "the act of reaching a conclusion or making up one's mind" American Heritage, Essentially, a decision is a choice that an individual or a group of people makes. A decision can be a single action, an entire process, or even just a single spoken word or gesture. Decision-making is one of the defining characteristics of leadership.
Imagine that you're researching a potential product.
You think that the market is growing, and, as part of your research, you find information that supports this belief. As a result, you decide that the product will do well, and you launch it, backed by a major marketing campaign.
However, the product fails. The market hasn't expanded, so there are fewer customers than you expected. You can't sell enough of your products to cover their costs, and you make a loss.
In this scenario, your decision was affected by confirmation bias. With this, you interpret market information in a way that confirms your preconceptions — instead of seeing it objectively — and you make wrong decisions as a result.
Confirmation bias is one of many psychological biases to which we're all susceptible when we make decisions. In this article, we'll look at common types of bias, and we'll outline what you can do to avoid them. What Is Psychological Bias?
Psychologists Daniel Kahneman, Paul Slovic, and Amos Tversky introduced the concept of psychological bias in the early s. They published their findings in their book, " Judgment Under Uncertainty.
For example, you might subconsciously make selective use of data, or you might feel pressured to make a decision by powerful colleagues. Psychological bias is the opposite of common sense and clear, measured judgment. It can lead to missed opportunities and poor decision making.
Common Psychological Biases Below, we outline five psychological biases that are common in business decision making. We also look at how you can overcome them, and thereby make better decisions. Confirmation Bias As we showed above, confirmation bias happens when you look for information that supports your existing beliefs, and reject data that go against what you believe.
This can lead you to make biased decisions, because you don't factor in all of the relevant information. A study found that confirmation bias can affect the way that people view statistics. Its authors report that people have a tendency to infer information from statistics that support their existing beliefs, even when the data support an opposing view.
That makes confirmation bias a potentially serious problem to overcome when you need to make a statistics-based decision. How to Avoid Confirmation Bias Look for ways to challenge what you think you see.
Seek out information from a range of sources, and use an approach such as the Six Thinking Hats technique to consider situations from multiple perspectives.
Alternatively, discuss your thoughts with others. Surround yourself with a diverse group of people, and don't be afraid to listen to dissenting views.
You can also seek out people and information that challenge your opinions, or assign someone on your team to play "devil's advocate" for major decisions. Anchoring This bias is the tendency to jump to conclusions — that is, to base your final judgment on information gained early on in the decision-making process.
Think of this as a "first impression" bias. Once you form an initial picture of a situation, it's hard to see other possibilities. How to Avoid Anchoring Anchoring may happen if you feel under pressure to make a quick decision, or if you have a general tendency to act hastily.
So, to avoid it, reflect on your decision-making history, and think about whether you've rushed to judgment in the past.
Then, make time to make decisions slowly, and be ready to ask for longer if you feel under pressure to make a quick decision. If someone is pressing aggressively for a decision, this can be a sign that the thing they're pushing for is against your best interests.
Read our article on the Ladder of Inference to find out more about the stages of thinking that people tend to go through when they make good decisions.
This can help you ensure that you've made a thorough, well-considered decision. Overconfidence Bias This happens when you place too much faith in your own knowledge and opinions.
You may also believe that your contribution to a decision is more valuable than it actually is.The Psychology of Religion - The Psychology of Religion is composed of a variety of different perspectives, which in certain cases proves difficult in determining both the clinical and pastoral implications of a theory.
Decision making in the workplace is something that all managers are faced with at one time or another during their careers. Some decisions are minor and some are major, but what we have to keep in mind is the decisions we make can make or break a company.
You can learn another 55 decision-making skills, like this, by joining the Mind Tools Club. Join the Mind Tools Club Today!
Get the Free Newsletter. Learn new career skills every week, and receive our latest offers, plus get our Personal Development Plan Workbook FREE when you subscribe.
WARWICK BUSINESS SCHOOL, UNIVERSITY OF WARWICK IB Management, Organisation and Society 1. Can a decision ever be truly 'rational'? Evaluate this question drawing on the examples and theories given in the lectures.
The Role of Cognitive Dissonance in Decision Making This Research Paper The Role of Cognitive Dissonance in Decision Making and other 64,+ term papers, college essay examples and free essays are available now on regardbouddhiste.com Autor: review • December 21, • Research Paper • 2, Words (10 Pages) • Views4/4(1).
“Majority decisions tend to be made without engaging the systematic thought and critical thinking skills of the individuals in the group. Given the force of the group's normative power to shape the opinions of the followers who conform without thinking things through, they are often taken at face value.