Business Analytics 4: Decision-Making Traps Discussion Example

This discussion board post analyzes the "anchoring trap" in decision-making within a business context, drawing from the Harvard Business Review article "The Hidden Traps in Decision Making." The student provides a personal example from their experience in a mid-sized technological farm, where a CEO's decision to promote a manager was influenced by a casual comment, thereby illustrating the anchoring trap. The post explains how the CEO gave undue weight to initial information, leading to a suboptimal choice. Recommendations include maintaining an open mind, considering multiple perspectives, and establishing a decision-making body to mitigate the impact of biases. The post underscores the importance of recognizing and avoiding cognitive biases to make more rational and effective decisions in leadership and management roles. The assignment fulfills the prompt by selecting a decision-making trap (excluding the sunk cost trap), providing a real-world example, and explaining why it fits the chosen trap's characteristics.

Running head: BUSINESS ANALYTICS
Business Analytics
Name of the Student:
Name of the University:
Author Note:

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Trap name: The Anchoring Trap
What happened:
I have worked in a mid-sized technological farm in the past.
I joined as an associate and gathered much knowledge
about corporate work and decision-making. While working in
the organization, a situation arose when one of the
managers retired. The organizational policy was to consider
the existing employees first for the post. If none were found
unsuitable only then someone else was appointed from the
outside. There were two candidates that had any possibility
of fulfilling the roles of that position. One was a person who
had exuberant personality. He was a good leader but had
the tendency to make fun of the people around them. He
was outspoken and had quite a bit influence over the team
that he led. He was also biased towards the people that he
liked and sometimes called on favors from other people. the
other one had a more subdued personality but was an
exceptional leader. He was fair and just, treated everybody
the same way and made sure that the team members had
his full support in every situation. Before the CEO could take
the decision, the former leader had a chance to talk to him.
Being an influential personality he casually mentioned that
the other leader was too mellow and judicious to perform
the required duties of the specific position. This comment,
though innocuous, took an impression in the CEO and he
announced the next day that the former leader has been
selected for the post of manager.
Why it fits this trap:
Anchoring trap is our minds phenomenon of giving too much
weight to the very first information or first impressions that
we get (Hammond, Keeney & Raiffa, 2006). It is quite a
popular saying that the first impression of a person or a
thing is the last impression. It means that the very first
opinion that we form about someone or something clouds
our rational thought and unknowingly we get biased
towards 5that opinion. Many of our decisions are guided by
this anchoring trap and it requires an extremely conscious
mind to bypass this trap and take a decision rationally. This
kind of anchor can affect the mind in many forms. They can
be a comment made by a friend, family or colleague, they
can be post or newspaper article or they might be a popular

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post seen at any social media website. These affect our
rational judgment by making us lean towards the decision
that justifies or supports the information formerly gathered
or opinion formerly formed.
In the given context, the CEO’s judgment too, was clouded
by the anchoring trap. When the new position for manager
opened up, the two likely candidates had equal chance of
securing the position. Initially, nobody tried to influence the
decision of the CEO. Though it was clear from the start that
the other person was a better leader and much capable of
handling any situation better. His calm and collected nature
helps him judge any situation better. the other candidate
that got selected may or may not have made the comment
purposefully. He is an exuberant person and shares many
jokes with almost all the people in the organization. The
CEO might have been used to this kind of off-hand remark
made by him and that is why he did not think that comment
to be anything special. Nonetheless, it clouded his judgment
and he took a decision in the favor of the less efficient
candidate.
Recommendations:
The situation that occurred can be identified by the decision
maker by keeping an open mind. The CEO took a decision
too hastily. If he had taken time to rethink the whole
situation he would have understood that he was being
guided by a first impression. By looking at the situation from
an objective point of view one can identify the problem that
arose. He could have also discussed it with other people of
the organization and create a strengths and weaknesses list
that would have made his decision much more rational.
There are many steps that an organization can take to
prevent occurrences like this in future. First of all, before
anybody can put an idea into one’s mind, the person should
think the matter independently so that he has an unbiased
point of view to begin with. This view then is only likely to
change if the opinion of the other person is rational enough.
Second, the organization must form a decision making body
so that no decision can be taken by one single person. This
effectively reduces chances of such errors. Moreover,
keeping the mind open and remaining conscious that any
innocuous comments made by any person, interested to the

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cause or not, should not create any impression on them is
necessary.

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References
Hammond, J. S., Keeney, R. L., & Raiffa, H. (2006). The
hidden traps in decision making. Harvard Business
Review, 84(1), 118–126