Question

Munger discussed the role of bias. What role does personal bias and experience play in overall decision making? When you think about your role as a loan officer, how do you keep you personal bias from impacting your decisions.

What are some things that come into your decision making on giving loans? I truly agree with Munger'a analysis of gathering multiple sources to find a solution. Open mindedness is key when using different methods and ideas when it comes to problem solving as a whole.

Answer 1

Personal Bias and experience both plays an important role in decision making. It can be in many forms like- repetition Bias, Experimental limitations, Incremental decision making, faulty generalisation, etc. Many biases come in the way of decision making process which calls for correction of decision. These biases is sometimes very harmful for overall growth of the organization as bad decision make the company suffer ultimately.

As a loan officer, personal bias like preferring family and relatives for loans, giving known person loans quickly and on easy terms, relaxation in terms of official formalities, etc. All such biasness are very commonly found in this profession. To avoid such biasness, it is to be kept in mind that money is the need of everyone. You are just a facilitator, you have to do justice with everyone who deserves the credit. Credit cannot be offered simply on bias terms. If it will be like this, it will disturbs whole banking process later. The pints which is to be kept in mind while giving loans are the capability and credibility of seeker to return back the loans as well his/her past records of monetary transactions. Assets hold by him and some nominee who can be called if any problem arises out of emergency or non-payment of loan. I also agree with Munger’a analysis of gathering information from multiple sources with open minded approach while solving the problem.