Decision Traps And Its Effects On Decision Making

Decision Traps Overconfidence Bias- Managers, while taking decisions, tend to take impulsive decision by thinking they actually know more than there is to be known. However, sometimes certain amount of delusional overconfidence is required to find hope in unsuccessful outcomes. Steve Jobs created a â€Å"reality distorted field† and everyone around him were influenced by it. Such over confidence led him to innovation. â€Å"It was dangerous to get caught in Steve’s distortion field, but it was what led him to actually be able to change reality† (Isaacson, Pg. 118). Hindsight bias- It is also known as â€Å"I-knew-it-all-along† effect has far reaching implication in decision-making. Hindsight bias is reported as the tendency among people to claim that they would have predicted the occurrence of an outcome with a higher probability by using their outcome knowledge or hindsight rather than by using foresight (without any prior information of the event). Anchoring- It is the tendency of an individual to rely heavily upon certain information and then tries to adjust to that value so that he or she can accommodate other influential and circumstantial factors. Framing- The framing effect can be observed in a person’s decision when he or she shows too much dependence upon how a set of options is described. Escalation of commitment- It is important to know when to stop a particular activity. Managers face queries regarding plant size, strategic moves, and requirement of additional investments.Show MoreRelatedThe Big Lie of Strategic Planning by: Roger Martin668 Words   |  3 Pagesevident that strategic planning is important when it comes to decision making for many marketing managers. The article The Big Lie of Strategic Planning by Roger Martin, suggests that choosing a strategy strictly based on a certain process â€Å"entails making decisions that explicitly cut off possibilities and option† (Martin, 2014). 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