Question

You are interviewing for a promotion to a senior management position. You have done well on the interview and are down to the final question. Interviewer: our company is quite concerned with how psychological biases lead to poor investment decisions.

Prompt: If you are promoted, discuss 2-3 specific practices you will put into place to help debias the decision-making process of your division. How will these practices improve investment decisions?

minimum 300 words

Answer 1

Some practices I will put into place to help debias the decision-making process of My division:

1. Taking someone else's view: in order to prevent biases in the decision-making process of my division I would try to take someone else's point of view who has nothing to do with my decision. I would choose someone who has the knowledge and skills required to judge. And then I would let him evaluate whether my decision is biased or not. These persons can be government officials, intelligence agencies, or any person from within the organization but outside my division.

2. Critically analyzing the plan: firstly I would formulate the plan, and then I would rethink it and critically analyze it in order to find loopholes in my present plan. Then, finally, I would take the average of both the plans and try to implement that, it would help to de-bias the decision-making system of my division.

3. Training: usually people do not get to understand that they are doing business in decision making. So there is a need to make them understand that they are doing by biasness. So employees involved in the decision-making process would be provided with proper knowledge and training about the business, how to differentiate between the biased and unbiased, and how to correct it, with a proper system of feedback. It will be helpful in debiasness of the decision-making process

This practices will improve the investment decisions by lowering the risk factor in our investment plans and help to increase the investment returns in the long run because, when we debias our decision-making process, then we get to understand each and every aspect of the future plan we are required to make, we read a thing about each and every respect and information we have collected regarding the same, thus, helping us to see beyond our mindset and helping to improve the decision, causing a decrease in risk and improvement in returns.