Question

For your initial post, address the following: Decision surrounding biases have a great impact on organizations. From what you have read and researched, discuss the impact of biases on the decision-making process. Choose one of the heuristic options listed in chapter 3 and provide a basic analysis of how it creates a bias and give a real-world example.

Initial Post Length: minimum of 350 words  

Answer 1

Solution -

In business world biases are a common factor that impact the decision making process by making the process much shorter but at the same time by making the process much more short-sighted and lesser holistic in nature. The one major heuristic is the anchoring heuristic which allows the user to form a bias on the first information available and hinders from exploring further. Anchoring bias is a faulty heuristic as it leads to situations where the affected does not look at the new information at hand and only tries to conform to the information that was presented at first instance and his or her cognitive engine has processed certain rules based on that information and believes them to be true. One such situation that I have encountered at my workplace is with freshers who are recruited as business analysts who start forming opinions at the time of requirement gathering and end up only looking at the information provided from one angle and make quick recommendations. I remember a particular incised where one of the freshers Ron who was a business analyst had gone for a requirement gathering exercise and by reading the process document had made certain assumptions. During the whole exercise of interaction with the user, Ron was only looking at what he had learned from the process document. He validated his understanding as per the document alone and little did he realised that the document was not updated since the last 4 months when there were certain changes in the process which he failed to capture. This resulted in wrong requirements gathering and faulty recommendations from the consultants. Ron in this case anchored himself to the process document and stuck to its principles without considering the live situation where the user was narrating the modified process.

Anchoring biases disfigure the judgement of the individual and leads to certain dangerous situations where the individual believes certain bthings which may only be partially correct and ignores certain facts that challenge the individual's first perceptions.