Cognitive Bias in Decision Making for Managers

Running head: ACCOUNTING FOR MANAGERS 1
Accounting for Managers
Student’s Name
Institutional Affiliation
Question 1

ACCOUNTING FOR MANAGERS 2
Cognitive bias affects the way an individual makes judgemental decisions. I believe
that I am affected by Hindsight bias. As a manager, I have a tendency of seeing the event to
be more predictable once they have already occurred (Murata, Nakamura, & Karwowski,
2015). It is hard to predict the outcome of an occurrence before it happens. There is no way
of knowing the result before an event occurs. There are times when I give my subordinate
work, but when they fail to perform as expected or the outcome of a project is poor, I usually
tend to believe that I knew this is going to happen. According to research, Hindsight bias
affects human beings because they tend to distort their original predictions. Besides, many
people tend to view outcomes as inevitable and make an assumption of their ability to foresee
the future (Anderson, 2018).
Question 2
As a manager, I always want to give my best while working so that the outcome could
one of the best as compared to the rest of the teams. However, I am prone to be affected by
Confirmation Bias. This could be the case since I tend to trust only that set of data or
information that confirms my preconceptions (Althubaiti, 2016). As a result, I could end up
ignoring or even dismissing relevant information from my peers or research that completely
disagrees with my own idea. For instance, I may be given a project of determining the best
investment decision for the company. However, because of my preconceived mindset, I
might end up ignoring the most factual and valid investment idea while trying to confirm my
pre-conceived idea (Jain, Jain, & Jain, 2015). If the research proves otherwise, I might be
forced to find other sources of information that would prove my preconception as the best
move for the company.
Question 3