Judgment and decision making
The process of decision making calls for the incorporation of the most effective approaches. One aspect which majorly impacts decision making is biases. There are various types of biases, while some may lead to positive impacts on decision making, there are specific biases which have negative impacts on the quality of the decision making process. Simon’s theory outlines the concept of bounded rationality as a core determinant in decision making. His arguments are further emphasized by various concepts which explain biases in decision making. First, the concept of judgment in decision making brings out the relationship between sober judgment of all the available aspects and effective decisions (Baron, 2014). The concept of systems thinking proposes a holistic approach to analysis of systems and their relations with each other as a way of influencing the right decisions. Biases on the other hand outline the various systematic patterns that are different from the normal approaches, which individuals and organizations may use in the process of decision making. Finally, the principle of bounded rationality relates decision making to the amount of information which is available to influence the choices. It can therefore be noted that each of these concepts are interrelated and all impact decision making in a number of ways. This paper outlines the various ways in which the concepts above can be applied in influence decision making processes in real life scenarios in organizations. The discussion details the identification of the biases, ways in which it is addressed and the potential impact of this approach in enhancing the quality of decision making based on the given scenario (Baron, 2009).
The human resource department at Apple Company has identified a gap which may need the selection and recruitment of new employees. The employees are intended to work as sales and marketing representatives in various regions in Australia where the multinational’s subsidiaries are located. The HR manager together with the management team therefore has to consider the applications tendered after the vacancies were announced. The process is aimed at ensuring the most qualified and competent individuals are recruited by Apple Company Intl.
Based on the scenario above, judgment is basically anchored on the qualifications of the applicants. The selection process at the organization is guided by a specific job description which has details of the requirements, qualifications and personal attributes. In this scenario, the selection panel uses the applicant’s credentials to identify the bias. Consequently, the individuals who fail to meet the minimum standards as per the recruitment policy are eliminated from the process (Gilovich, 2013). The secondly approach involves taking the selected individuals through an interview process to ascertain their personal attributes and skills. In this situation, the selection panel anchors its judgment on the applicant’s physical presentations and communication skills.
Bounded rationality
In a bid to avoid discrimination, the agreements and decisions made on the best candidate are linked to the consideration of various factors and not solely on the qualifications. This is an approach used by the organization to overcome the bias established in the preliminary stages. By basing judgment on a wide array of factors, the quality of the decision is largely enhanced. Relying on a single piece of information confines the decision making process while bringing in other aspects increases the scope of options and choices from which sound judgments on the scenario are eventually made. Based on the scenario above, the final decision is based on individual merit with respect to skills, qualifications and personal attributes Greenwald, 2010).
With reference to the same scenario above, it can be noted that the decision making process is majorly dependent on the piece of information that the organization is able to deduce from the applicants. Since bounded rationality confines decision making to cognitive limits, the selection panel at Apple International is likely to base the choice of candidate on the information that is within their reach regarding these individuals. Consequently, bias is recognized in this case based on the amount of information which the applicants relay either through the application documents or during the interview process.
Since the organization is a large one, several applications are often received. It is a fact worth noting that the selection panel may not be able to assimilate and digest every single content as detailed in these applications (Hardman, 2009). Consequently, the decision making process is mainly anchored on the careful consideration of what the company feels is important or good enough for the given scenario. This approach in overcoming bias is not only important in ensuring that the best selection and recruitment decisions are made at the organization but is also essential in improving the speed of the process. Improved decision making outcomes go a long way in minimizing related costs which works to the advantage of the organization
The management at McDonalds has discovered increase in operational errors, low efficiency, and challenges in inventory management, record keeping and financial accounting. This situation has been caused by the manual approaches to operations. In order to solve the noted problems, the company intends to introduce an enterprise system. The technological invention is an application which shall rely on computer aided regulation of various processes. The company needs to make a decision on the best vendor of the software package from the list of applicants. The decision making process is intended at securing the most effective enterprise system.
Systems thinking
Based on the scenario above, the process of bias identifying the bias involves a holistic analysis of the existing systems within the organization. Based on the analysis, it is possible to identify the specific areas which need the necessary adjustment. Systems thinking involve the holistic consideration of the systems which collectively lead to achievement of organizational goals (Kahneman, 2012). By noting the points of inefficiency, it is therefore possible to identify and recommend the relevant adjustments that would improve operations within the organization. While settling for the best enterprise system, the management at McDonalds considers the operating system that would easily fit into their organizational system and culture. Additionally, bias recognition here aims at settling on the system whose installation would effectively address the noted challenges. Systems approach to analysis improves the quality of decision making outcomes by ensuring that the choice which the company eventually settles on best addresses the noted gaps.
This portion is done with references to McDonald’s case above. In a bid to settle for the best enterprise system, the management at McDonalds has to heavily rely on the information that they have not only about the vendors but also regarding the enterprise system. Consequently, bias recognition in this scenario would be pegged on the information that the selection panel has about the enterprise systems. The less popular ones are eliminated based on the fact that not much is known about them (Richard, 2011). In this case, ambiguity effect is applied in recognizing the bias and hence making the most informed decisions.
After establishing the bias, they are then overcoming through the installation of a trial version of the program to monitor its effectiveness while still giving the organization various other options to pick from. Applying the concept of biases while selecting the right enterprise system does not only enable the organization to settle on the best but also ensures that the ultimate choice is effectively able to address the core organizational challenges. In a nut shell, the careful application of biases in decision making helps in eliminating the options which are relatively less satisfactory (Plous, 2013). This approach does not only reduce the complexity of the decision making process but also has a direct impact on the quality of the outcomes.
Conclusion
Organizational decision making involves a wide array of factors and concepts. Before the final decision is made, the individuals or parties involved often analyze a number of factors, systems, consequences and options (Schacter, 2009). The concepts of biases, bounded rationality, systems thinking as well as judgment and decision making are all essential aspects which impact the quality of the decision making process. It can however be concluded that effective decision making relies on the systems within an organization, available information regarding the situation as well as the maximum cognitive limits within which the process can be stretched.
References
Baron, J. (2014). Thinking and deciding. Cambridge, UK: Cambridge University Press.
Baron, Bishop, Michael, J. (2009). Epistemology and the Psychology of Human Judgment. New York: Oxford University Press.
Gilovich, T. (2013). How We Know What Isn’t So: The Fallibility of Human Reason in Everyday Life. New York: The Free Press.
Gilovich, T. (2012). Heuristics and biases: The psychology of intuitive judgment. Cambridge, UK: Cambridge University Press.
Greenwald, A. (2010). The Totalitarian Ego: Fabrication and Revision of Personal History American Psychologist. American Psychological Association. 35 (7), pp. 60
Hardman, D. (2009). Judgment and decision making: psychological perspectives. Wiley- Blackwell.
Kahneman, D. (2012). Judgment under Uncertainty: Heuristics and Biases. Cambridge, UK: Cambridge University Press.
Richard H. (2011). Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias. The Journal of Economic Perspectives. American Economic Association. 5 (1), pp. 193– 206.
Plous, S. (2013). The Psychology of Judgment and Decision Making. New York: McGraw-Hill.
Schacter, D. (2009). The Seven Sins of Memory: Insights From Psychology and Cognitive Neuroscience . American Psychologist. American Psychological Association. 54 (3), pp. 55-60
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