MHR 405 Lecture Notes - Sampling Bias, Groupthink, Group Conflict

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Published on 24 Feb 2014
Feb 14/ 2014
Class 7 Decision Making
Traditional Analytical Model (different from textbook but just more elaborate)
- identify problem
- identify objectives: what do we need to accomplish, how to find the solution
- pre-decision: decision about how we are going to make our decision does there have to be
- generate alternatives
- evaluate alternatives: should be separate from generate alternatives because they should not
mix, as this will blur different options
- make a choice
- implement choice
- follow up: one of most important steps because it’s the process where we see what mistakes
we have made, how could we have done a better job, etc. and this is the only way we know
we’re successful
Cognitive Biases in Decision-Making
Framing: People make different decisions based on the information that is presented to them;
when we frame the question in a positive way, it will lead to a conservative choice but when
we frame the question in a negative way, we tend to choose the risky decision because we
want to protect the sure thing (money)
Availability Heuristic: bias we use in decision-making; we base our judgements based on
information that is readily available to us; proximity make information more available about
someone or something which gives us more readily available information about someone
- it is not based on the actual content but more on social and environmental factors (ie)
choosing which company earns more revenue based on our familiarity with it and experiencing
strong emotional responses to the company that we know than not know  salient information
Ease of recall: recall an event easily we presume that it happens more frequently than an event
that is more difficult to recall; something that sticks out in our mind is more likely to be used in
decision making than a memory that is not as pervasive
Retrievability: make associates between events and things. In an organizational context is done
on purpose; it is structured in that way so we know where to go when we need to figure
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