Application of Heuristics, Framing, and Bounded Awareness in Decision Making

This essay discusses the application of heuristics, framing, and bounded awareness in decision making process. It explores how these factors affect decision making in complex situations and provides examples to illustrate their impact. The essay also examines the biases associated with these factors and suggests strategies to address them.

Running head: PSYCHOLOGY
Psychology
Name of Student
Name of University
Author Note

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Table of Contents
Part-1..........................................................................................................................................2
Introduction............................................................................................................................2
Discussion...............................................................................................................................2
Conclusion..............................................................................................................................6
Part-2..........................................................................................................................................7
Scenario 1...............................................................................................................................7
Scenario 2...............................................................................................................................9
Scenario 3.............................................................................................................................11
Reference..................................................................................................................................13

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Part-1
Introduction
The ability possessed by an individual for conducting an analysis of complex
problems can be considered as minor after making comparisons to the problem it faces on a
broader level. In the words of Dewey (2016) the analysis of difficult issues can be made into
an association with concepts that are clearly involved in influencing the decision making
abilities of an individual. In the modern world, decision making process can be utilised
effectively so that business performance can be enhanced and to mitigate any possibilities of
risk in the future. In this regard, factors like heuristics, framing and bounded awareness can
be critical in affecting the decision-making process directly for the managers. The essay
focuses on the application of these factors so that present world complex problems that exist
in human minds can be addressed.
Discussion
Heuristics are the decisions made based on the mental stability of the individuals so
that complex problems can be solved. One of the characteristic of heuristic decision is that it
is made in quick time without abiding a set of written rules. At the same time, Kaplan and
Atkinson (2015) argued that one drawback is that with the fast paced decision making
process the rate at which judgemental errors can occur among people be more. It can be seen
that rational behaviours cannot be related to a monetary benefit that provides opportunities to
attain results suitable for effective decision-making process.
Wheelen et al. (2017) stated that the relationship with biasness is of utmost
significance and has an impact on the decision making process. Heuristics can be divided into
three parts that includes confirmation, availability and representativeness. The three

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categories are the primary sources that make significant contribution to the biasness in
decision making activities. To understand the application of heuristics in decision making
system it is necessary to adopt quantitative style of problem solving. At the same time
individuals can enhance the decision-making process so that relevant decisions can be taken.
An example of the influence of availability heuristics can be the fact that people are
more inclined to shout out words that start with T rather than with the K. This is because
counting large number of words beginning with T is easier than counting it with K. This can
be considered as an effective example in which the heuristic decisions are provided at a rapid
pace based on random selection, opinions and record gathered. De Bruijn and Ten Heuvelhof
(2018) are of the opinion that rational decisions need to be taken for self satisfaction.
However, the decision taken cannot be comprehended beyond the understanding of the
human mind.
Representative heuristics makes comparisons between the real data and the prototype
of the individuals. Example of representative heuristic is the fact that unconditional love and
care that is provided by members closer people can bring about a proper sense of judgement
for the people and at the same time ensure proper judgement in terms of complex decisions.
Rosemann and vom Brocke (2015) stated that mental health judgements and decisions are
influenced by various categories. The skills of the human beings are limited while making
comparisons to issues that are relative. In the case of confirmation heuristics effective
decisions can be taken at complex times. The basis is made on two systems that include the
human instinct, emotion and institution and the output of these factors associated with the
system. Therefore, it can be said that a strong and positive relationship can be made between
heuristics and the effect on decision making process.

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Wright and Coyne (2018) pointed out that the characteristics of bounded awareness
are similar to that of the heuristics. The formulation of complex decisions can be rarely
possible if the considerations are clear and based on relevant factors related to the gathering
of information. The limited associated with the human mind can be of knowledge and time
with the application of decision support system. Bounded awareness can be considered as the
failure to apply focus on data that are relevant and useful based on the cognitive process of
the mind. Azadnia, Saman and Wong (2015) pointed out that opportunities exist to link the
systematic bias so that rationality of the human beings related to the perceptual process can
be reduced.
At the same time, inbound awareness of information can have a significance influence
on the ultimate decision taking by the individuals. It can be said that information that is
created by the people has little or no effect on the decisions. Kock and Georg Gemünden
(2016) argued the fact that bringing together people while taking decisions can be considered
as a unique manner of attaining information. An analysis has been made that states the fact
that known information are shared by the group members which in turn fail to comply with
the rationality associated with bounded awareness.
As stated in the discussion groups tend to be associated with bounded awareness that
can help in sharing unique information among the members. Jacquette (2016) pointed out that
bounded awareness prevents individuals to search for new information. The capacity of the
human mind can be of limit to the value of information and the problems in comparison to it
are insignificant. Hence, relation can be made with bounded awareness in which individuals
fail to process relevant and important information. Numerous choices degrade the decision
making ability as individuals feel to gain a tendency to remain overwhelmed.

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Therefore, as pointed out Vitell (2015) bounded awareness can help individuals to be
specific in terms of the decisions taken. In this regard, it can be said that individuals need to
comprehend the limits associated with the knowledge gained and the ability to make
decisions. This can help in eliminating any major decision making failures while leading to
better judgement decisions. The critical biases are taken into account by the impact made by
the decision making process and the bounded awareness that exists within the process. Any
risk associated with improper decision making need to be eliminated so that rational
decisions in difficult situations can be made.
Framing helps in understanding the nature related to making distinct decisions and the
judgements that are made by the individuals. According to Meisenbach (2017), the discretion
at which decision is made can be attributed to the demands of the people and the manner in
which it decisions made affect averting any type of crisis. It has been observed that human
behaviour fluctuates based on situations related to crisis. Framing can be considered based on
the choices associated with the monetary results in a real and hypothetical situation.
The impact of framing can be significant as compared with the perceptual appearance
that is made by individuals. The formation of decisions based on problems can be based on
the rational choices made by the individuals. As pointed out by Pullen and Rhodes (2015)
rational decision makers need to provide resistance while framing choices. Framing helps in
gaining a critical impact on the decisions so that choices can be framed. There may be
inconsistencies as well as errors in decision making process among the individuals. The
classical view provides a risky behaviour among the human beings that exists between
understanding the best and worst possible outcomes.
According to Kumar and Steinmann (2015), framing can be negative as well as
positive depending upon the influence of the information and that of the illustrated audience.

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The impact of framing can be constituent of the decision making activities associated with
various domains of the individuals. The effectiveness with which framing can occur can be
based on the activities taken by the people and the attitude that contradict the decision
making process. It has been stated by Sisk et al. (2018) the choice of risky options have a
negative impact on the decision making process based on various application of framing. In
this regard, an example can be provided that highlights the evaluation of gambles that are
related to the referral point of significant farming effects.
Such characteristics have been observed based on the decisions taken by the
individuals. The risk averting system provides individuals with an opportunity to continue
with the decision making process and ensure proper mitigation of the risk by analysing its
impact. Kolk (2016) pointed out the reflection effect is crucial for making predictions related
to the framing heuristics. The complexity of rational behaviour during the time of decision
making can be based on certain problems related to the individuals. The effectiveness taken
as per decision can be considered as the development that needs to take place based on the
decision making activity of the people. Therefore, biasness related to framing can be
considered as significant for an effective decision making process.
Conclusion
It can be concluded that the significance of decision making concept can be associated
with various biases based on the discrete concepts. The adoption of heuristics for making
decisions in complex situations at a rapid pace can be erroneous. At the same time, bounded
awareness can be related with missing important information associated with effective
decision that are based on the limitations of the human mind. Framing can be done based on
complexity of the situations suffered by human being while farming decisions. Hence, it can
be said that with the completion of the analysis an illustration can be made about the goals
that need to be achieved based on decision making activity.

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Part-2
Scenario 1
Walmart specialises in delivering various types of products ranging from retail to the
development of daily usage products for meeting the necessity of the customers
(Walmart.com, 2018). The products are available under a single roof and the company
indulges in conducting business via online application of identifying customers. This can be
considered as one of the decision making skill of the company.
It has been seen that Walmart has developed a reputation in the e-commerce platform
based on its international reputation (Walmart.com, 2018). Despite this, decisions are taken at
a rapid manner in the company. Therefore, the application of heuristics for understanding the
decision making process of the company can be applied to avoid error in the activity.
Recognising the bias
The biasness associated with Walmart can be recognised by the significant feedback
that can be seen from the platform that helps in the selling of the products. These feedbacks
are provided by the sellers with which Walmart is in a partnership with. The focus of the
management is on the critical manner in which profitability can be gained. As stated by Jonas
(2017) most of the suppliers of Walmart are not qualified to provide the company with
quality products. Therefore, the decision to maintain business contact with these suppliers
brings about a downfall for the reputation of the company.
In this case, it can be pointed out that the senior managers such as the CEO of the
company can be charged with such an error that may have a negative impact on the company.
Therefore, degradation of decision making activity can be considered as a heuristic process.
Therefore, Walmart had to suffer loss of customers due to poor quality of products.

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Measuring the bias
The method used to measure the biasness is by the feedback of the customers and the
method adopted by the managers to mitigate the issue. Walmart takes rapid decision to fast
track the suppliers to sell products using its platform. The heuristics can be formulated with
the business process of Walmart so that the customer management process can be degraded.
According to Pruzan (2016), negligence and fast decision often leads to heuristic biasness.
Therefore, the application of heuristics can be associated with the decision making process
adopted by the managers of Walmart to improve its profitability as well as the relationship
with the customers.
Strategies to address the bias
The strategies that can be taken for addressing the bias are to ensure that heuristic
decisions are taken to avoid any form of biasness. Feedback need to be taken from the
customers about the manner in which improvement can be made that can help in resolving
the issue in an effective manner. As stated by Rainsford and Woods (2016) decisions with the
help of the employees can be taken so that authentic solution to a problem can be identified.
Walmart also need to analyse the appropriate manner by which it can gain knowledge about
the suppliers so that fresh products can be purchased. Therefore, the application of rational
decision can help Walmart to reduce the biasness and ensure decisions are taken at a steady
pace.
Process to improve decision
Walmart can improve the scenario by recovering the strategies associated with
making rational decisions. This can be done by providing significant time for the evaluation
of the issues. At the same time, Walmart can gain creditability by providing fresh products to

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the customers. The senior managers of Walmart need to enhance the decision making process
as it is the responsibility of the managers to provide an insight about the strategies adapted to
the employees. The relationship between the customers and the company needs to be elevated
so that loyalty can be maintained. In this manner Walmart can take decisions based on the
responses provided by the customers. These actions can help Walmart to reduce the heuristic
biases.
Scenario 2
Samsung is one of the leading companies in the world of technology and is known for
making innovative products. The USP of the company is the efficient services that are offered
that meets the needs of the customers. However, in the recent world the manner in which
Samsung faces competition from Apple has provided the company with significant loss in the
market (Samsung.com, 2018). Thus, the manner in which Samsung can identify its biasness
can be analysed.
Recognising the bias
For Samsung the application of bounded awareness can be applicable mainly due to
the fact that the company is run by centralised leadership. According to Crane and Matten
(2016), this form of leadership structure restricts the growth of other employees and thus
decision making activities are compromised. Therefore, the decision made by Samsung in
terms of promoting the employees lack innovation and therefore, lack of creativity is the
main reason for Samsung to lose out its competitive advantage to Apple. Disregard to the
economic behaviour of a country has a significant impact on the business performance of
Samsung.
Measuring the bias

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The biasness can be measured by analysing the internal and external financial growth
of Samsung. It has been seen that the employees of the company have made a complaint
about feeling neglected which in turn had a deep impact on the development of the company
and the performance. Along with this communication also plays a major role in the decision
making activities. Samsung senior managers also display dominating signs during meetings
in which ideas and views of the subordinates are not taken into consideration. According to
Ferrell et al. (2019), lack of group decision can often lead to bad decisions being taken by the
company and lead to its downfall.
Strategies to address the bias
The strategies adopted to address the bias can be the application of effective
communication. This can help Samsung gain relevant idea about the thoughts of the
employees and ensure that creativity is encouraged within the organisation. The functional
unit and the top level management need to take initiatives for the development of decisions
within the organisation.
Process to improve decision
The process to improve the biasness can be to develop a systematic communication
process. For Samsung, the development of creativity within the organisation can be made by
the upward and downward communication. The integration of various members in the
organisation can have a significant rational decision of the company. As stated by Ferrell and
Fraedrich (2015) increase in the critical success factor of the company can help in addressing
the biasness issue.

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Scenario 3
In order to understand the bias based on framing, the example of Microsoft can be
considered. Microsoft is a leading It company that is credited for providing the most used
software in the computer. The main aim of the company is to make profit and it is for this
reason that the company recently entered into an acquisition with Nokia (Microsoft.com,
2018). This can be considered as a poor decision activity of the company as with the aim of
making profit, Microsoft fails to take into account internal and external activities related to
business (Microsoft.com, 2018).
Recognising the bias
The bias that is associated with the company is in its development of mobile games in
association with Windows. The games available of Microsoft are usually played in Windows
platform which again can be attributed to the profit making scenario of the company. Thus,
the framing of Microsoft can be to draw the attention of the customers in using smart android
phones so that the applications manufactured by the company can be analysed.
Measuring the bias
The bias can be measured by shifting the business portfolio necessary for the
completion of the shift in platform. Crane and Matten (2016) is of the opinion that the
irrational decisions of the company can be based on the decision making process that usually
degrades the business and directs it to run at a loss. The decisions taken are based on
profitable judgement of the market.
Strategies to address the bias
In order to address the bias, Microsoft need to ensure that it conducts proper market
research so that external factors associated with the shifting of platforms can be avoided. This

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can help Microsoft to maintain the uniqueness and uniformity of the products and the games
that it undertakes for the development of the mitigation technique of the biasness.
Process to improve decision
The process adopted to improve the condition is by enhancing the decision making
activities so that Microsoft can continue with the development of proper software that can
help the company to regroup its business policies in the market. At the same time, acquisition
of different business can provide Microsoft with the ability to continue with its dominance in
the market in the gaming department as well.

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