Identify and Define the Six Biases That Can Adversely Affect

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The Answer is 1.Being influenced by initial impressions: When considering decisions,the mind often gives disproportionate weight to the first information it receives (which can be as simple as a random comments by a colleague or a statistic read in a newspaper).For example,in business,managers frequently look at the previous year's sales when estimating sales for the coming year.However,in rapidly changing environments,giving too much weight to the past can lead to poor forecasts and misguided decisions.
2.Justifying past decisions: Many managers fall into the trap of making choices that justify their past decisions,even if those decisions no longer seem valid.For example,managers may invest tremendous time and energy in improving the performance of a problem employee whom they now realise should never have been hired in the first place.
3.Seeing what the manager wants to see: People frequently look for information that supports their existing instinct or point of view,and avoid information that contradicts it.This bias affects where managers look for information when considering decisions,as well as how they interpret the information they find.
4.Perpetuating the status quo: Managers may base decisions on what has worked in the past and fail to explore new options,dig for additional information or investigate new technologies.
5.Being influenced by problem framing: The decision response of a manager can be influenced by the mere wording of a problem.For example,consider a manager faced with a decision about salvaging the cargo of three barges that sank off the coast.If managers are given the option of approving (1)a plan that has a 100 per cent chance of saving the cargo of one of the three barges,worth $200 000 or (2)a plan that has a one-third chance of saving the cargo of all three barges,worth $600 000 and a two-thirds chance of saving nothing,most managers choose option 1.
6.Overconfidence: One of the interesting research findings on decision-making biases is that most people overestimate their ability to predict uncertain outcomes.Before making a decision,managers have unrealistic expectations of their ability to understand the risk and make the right choice.

Identify and Define the Six Biases That Can Adversely Affect

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Identify and Define the Six Biases That Can Adversely Affect

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Correct Answer:VerifiedShow Answer

Correct Answer:
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