Decision making issues - uncertainity, biases, in personal and group decision making

The world had become more complex and the information more abundant and therefore decisions have become more difficult. The pace of change and the range of choices have increased, and decisions have to be made more often. Unfortunately, we are faced with so many bias and uncertainty in personal and group decision making which leads to bad decisions. 

Personal decision making biases: Confirmation, Anchoring and framing

¤ People happen to favor information that confirms their beliefs. For example if you need to buy a product, and think of product A, then you go ahead of asking your friends about the product. Your friends tell you how bad the product is, you will tend to believe so and change your decision about using the product. Another example is one I faced in finding a job in accounting field, I had really struggled to get one (as an international student) and I thought of asking around how to go about it. Most friends who have been here for long insisted that its hard to get a professional job having the visa restrictions. Since I had tried, and the friends confirmed so, it became a belief and I decided to look for a job outside my career. I also happen to work with graduates in different fields e.g. Accounting, Business Administration, and Marketing etc.  still working in nursing field, since they believe that it is the most available and "easy-to-get" job in Australia, and some have even decided to change their career to nursing.

¤ We have the tendency to rely mostly on the first piece of information presented to us. For example, using the same example above of finding a job, Most organization needed someone who can work full-time, and I was only allowed to work for 40 hours per fortnight. My cousin gave me information regarding other different types of jobs that I can get and do with these restrictions. These jobs included working as an assistant in nursing or in customer service for McDonald, Woolworth, and Kmart etc. He started with Assistant in nursing and insisted how better paying it is compared to the rest, was flexible and readily available. This affected my decision as I relied on the pay and flexibility. I needed money, and I wanted a job that will fit in my school schedule.

¤ The way you frame information has a large impact on how the person receiving it feels about it, and in turn affects the choices he/she makes.  It is mostly driven by emotions.People tend to be risk averse when information is posed in terms of gains but risk seeking when information is posed in terms of avoiding losses. For example at work where I work as an assistant in nursing, there is one client who has a very strict daughter. One day while attending to the client, the daughter told me "If you fail to put the call bell close to mum, and anything happens to her, you will be responsible and you will pay it hard.." Wah! Was that a threat?... That really influenced my actions, and every time I get into that room I have to ensure that the call bell is close to her mum, I can't dare forget! What if she told me "Please make sure mum has the call bell so that she can call when she needs something" 

Group decision making biases

The group decision making bias that disturbs me most is Group failure. This is assuming that with many smart people involved, good choices will follow automatically and therefore failing to manage the group decision-making process. Members agree prematurely on the wrong solution. Then they give each other feedback that makes the group as a whole feel certain that it is making the right choice. Members discourage each other from looking at the flaws in their thought process. 

The groups may become polarized, with members shifting unreasonably to more extreme position or clinging to opposite sides of an issue. Therefore, progresses toward a rational decision become impossible. Groups can make better decisions than individuals, but only if they are helped along by a skillful leader. There is little excuse for using costly group meetings to make inferior decisions.

How to overcome group distortions

v There should be clarity of language and mutual understanding among all members of the group.

v All members of the group should seek both knowable facts and reasonable estimates of the "unknowable" that will need to make the decision.

v The group should allow enough time for brainstorming and planning before making a decision.

v Leaders should encourage disagreement in early stages of any group process. Then as more facts and insights are gained, the leaders should guide the group toward convergence on a final choice.

v Leader should rarely state their own opinions early in group's deliberations because many group members will fear to offer their own ideas if they contradict the leader’s.

v The group should avoid coercion.

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References:

John S. Hammond, Raph L. Keeney, and Howard Raifa, Harvard Business Reveiw: The hidden traps in Decision making, 1998

http://http-server.carleton.ca/~aramirez/4406/Reviews/TPham.pdf

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Steve Baillie
Shaun Mays