The starting point in handling complexity is simplification. Simplification means filtering out data that seems to be irrelevant. Whilst this speeds up decision-making, there is a danger that decision-makers will notice information selectively. Moreover, they may be systematically biased in paying attention to information. In the literature for this week, you examine the main traps that decision-makers may encounter and build a foundation for understanding how to avoid these traps.
Given this week’s required readings and your further research, complete a 850-1,000 word Literature Synthesis
· Critically evaluates key arguments from both a scholarly and a practitioner-oriented point of view;
· Critiques underlying assumptions evident in the articles and identifies any new insights for practice and scholarship;
· Extends the thinking and application of your review with additional resources and experiential analyses.
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REQUIRED RESOURCES
· Bazerman, M.H. and Moore, D.A. (2008) Judgment in Managerial Decision-making, 7th ed. Chichester: Wiley.
Copyright 2008 by John Wiley & Sons Inc. – Books. Reprinted by permission of John Wiley & Sons Inc. – Books via the Copyright Clearance Center.
o Chapter 2, ‘Common Biases’ (pp. 18-40)
This chapter examines the three general heuristics decision-makers may automatically use during the decision-making process. The authors highlight these various heuristics by identifying specific judgement biases attributed with each general heuristic.
· Drummond, H. (2001) The Art of Decision-making: Mirrors of Imagination, Masks of Fate. Chichester: Wiley.
o Chapter 8, ‘Tricks of Mind’
This chapter explains several judgmental traps associated with decision-making through the lens of the Barings Bank collapse in 1995. The author identifies each type of judgmental trap, the resulting effect on Barings, and finally, how Barings could have counteracted the effects of those traps.
· The de Bono Group. Six Thinking Hats. Retrieved from http://www.debonogroup.com/six_thinking_hats.php
This website examines Edward de Bono’s tool for problem solving and decision-making and serves as a starting point for student research into the Six Thinking Hats method.
· Andersen, C. J. (2003) ‘The psychology of doing nothing: forms of decision avoidance result from reason and emotion’, Psychological Bulletin, 129(1), pp.139-166.
· Bazerman, M.H. and Watkins, M.D. (2008) ‘Cognitive roots: The role of human biases’. In Predictable Surprises: The Disasters You Should Have Seen Coming and How to Prevent Them. Boston: Harvard Business Press.
· Hammond, J. S., Keeney, R. L. and Raiffa, H. (1998) ‘The hidden traps in decision-making’, Harvard Business Review, 76(5), pp.47-58.
· Kahneman, D. (2011) Thinking Fast and Slow. London: Allen Lane.
This book provides an in-depth over-view of cognitive biases.