The article I chose talks about biases and how they can be
beneficial, but if used too often or incorrectly can be detrimental. The article is based up on the ideas and knowledge
of professor Norma Montague, which has been published in the Journal of Accountancy. Montague developed five bias’s that could be very
harmful if they are used incorrectly in any business environment.
The first bias is availability: This when you pull the most available
information to make a decision. To
prevent this situation from occurring probe your own answer. Where am I getting this answer? Is this formulated from my own mind? Or did someone else tell me this? Is this answer repetitive or has it only occurred
once? An good example of this bias is
assuming a customer won’t want you to check other stores for the availability
of a certain item that your store doesn’t have in stock. What you are doing is deleting the options
and facts about the customer and providing your own. Maybe the consumer lives in the area where
the other store is located, or maybe the customer is headed that direction
tomorrow for work or a child’s birthday party.
Anchor bias is the information that is given to you for you
to make a decision upon. The anchor bias
is used in the business world when dealing with budgets. When your boss comes to your office and asks
you to formulate a marketing strategy for a spa treatment for the month of
December, you will be given a budget in order to work around. In some cases the budget is plenty to work
with but most are cut a little short.
The budget is your anchor, and your negotiating skills are now going to
be put into play. When in an anchoring
situation, look for the facts and details of the situation, try not to assume
the anchor that you have been given is all you have.
Overconfidence is the fourth bias and we, as future business
leaders, may see this in our future in big corporations and you may have
already experienced in your education process.
Have you ever been in a group project and you set deadlines of when we
need to meet, when the PowerPoint needs to be created and when you’re going to
memorize your speech? In that instance,
have you found out that your group has to meet one more time, or there isn’t enough
time to put the PowerPoint together, or you delayed your speech practice so far,
that you’re not able to memorize it?
This is the bias of overconfidence.
You have set the bar for success so high you aren’t able to achieve to
final result.
The last two biases’ that Montague explains is a
rush-to-solve and confirmation bias. Rush-to –solve bias is found when a time
restraint is placed upon the decision maker.
When a time restraint is in place, a student or future business leader
will have to rely on any and all information that they already know, instead of
doing their due diligence. And the confirmation bias is when a business
leader assesses only one-side to a situation of information. The leader doesn’t evaluate if their position is respectable or accurate. This is a person who ‘thinks they are right.’
Overall, what can be pulled out of these biases is take your
time, do your research, never settle for what’s in front of you, ask questions,
don’t assume and don’t overestimate the situation at hand. To change and prevent these biases a future
business leader needs to understand their own learning techniques. The way an individual learns is also
important. Impulsive learners work
quickly and may fall into the availability and rush-to solve bias
categories. Whole-part learners will
succeed when dealing with the anchor bias.
They are more than likely to ask questions to gain the big picture. Reflective learners will be less likely to
fall into any of these bias categories because these individuals are thinkers,
slow and are precise. Age differences
will also be a factor to these biases based on how much knowledge an individual
has to include into their bias.
Link: http://www.fastcompany.com/3045035/work-smart/5-common-unconscious-biases-that-lead-to-bad-decisions
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