Biases In Decision Making

INTRODUCTION

Since time immemorial, decision making has been an integral part of the functioning of an organization and its employees. Any employee belonging to any tier, be it the top level management or the support staff, irrespective of their line of work, is expected to take cognitive decisions for the integral functioning of the workplace. Their decisions are expected to be taken after conscious and deliberate thought, and spending ample time thinking about the implications and considering the impact this can lead to from all perspectives, and the final decision is to be sound and void of any bias. But at times, the decisions being made may be a result of automated heuristic based processing that is based on preconceived notions and

The influence of these biases, at times, lead the decision to a negative state and does not bode well for the organization. The biases are such that the effect they have on the decision can be identified from almost all the stages of the decision making process.

a. Prior Hypothesis Bias: One of the most prevalent biases existing in the process is that decision makers tend to make decisions based on their previous beliefs or hypotheses about the relation between different variables. The problem arises when the beliefs are erroneous, but the decision maker remains unconvinced inspite of the abundant evidences of their fraudulence. When affected by this form of bias, decision makers who are in a positive light about the current strategy of the organization tend to ignore information that show dissociation between their performance and expectation. Conversely, those who have a negative opinion of the current performance will try to stress more on the information that suggests so and choose to ignore the others. This bias can also be called the confirmation bias and perhaps the most interesting part about it is that people are most prone to this bias when they believe strongly that their opinion is true and have good information to back it. Decision makers who are of the strong belief that their decision should be accurate, are less likely to be affected

The biases that exist in an organization does not solely depend on the type of work; it is rather widespread. Hence we have shown below the characteristics of the same which we have chosen.

Segmentation and Classification:

Refer to Table 1 for the data related to diversity in the age groups and occupations of the respondents.

Refer to Graph 1 for the graphical split-up of the respondents based on their age and occupation.

It should be noted that the age groups of 35-50 and above 50 may require further extensive research as the data sets relating to these groups are not large as compared to the others.

These employees have answered questions based on the types of biases and how these have been evident in the organization, both among themselves and their peers. Then the percentages of the biases were calculated.

Refer to Table 2 for the percentage wise split-up of the biases among the respondents.

Refer to Graph 2 for the graphical representation of the biases and their percentage of influence among the