Understanding Biases and Heuristics in Organizational Decision-Making

This essay delves into the various biases that affect decision-making processes, such as selection bias, overconfidence bias, and confirmation bias, highlighting how these can lead to flawed conclusions. It also examines general heuristics, including availability, representativeness, and anchoring and adjustment, illustrating how these mental shortcuts can both aid and hinder effective decision-making. The essay provides a scenario involving a company manager to demonstrate the association between availability heuristics and confirmation bias, suggesting strategies to overcome these biases through consultation and comprehensive evaluation. The conclusion emphasizes the importance of preventing biases to ensure sound decision-making in management.

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Introduction
The essay is based on examination of different biases in decision making. There are many
biases recognized by the researchers identified as limitations of the decisions made. The best
decision making procession is done through avoidance of such biases. Biases in any decision-
making process bring about the errors leading to poor conclusions regarding those decisions (De
Martino & Dolan, 2016). The essay again looks at the general heuristic which is mental shortcuts
which makes people be able to make certain decisions or solve some issue in efficient manner.
The essay will examine some of the three heuristics in relation to the decision-making process.
The essay will again look at the association of some heuristics to the biases identified.
Biases in decision-making
A. Selection bias
In this type of bias, the individual involved in making decisions gives the priority on
things which are of less importance. It involves giving less attention to things which are not
basic. This is mostly influenced by the interest of the individual (Klein & Zsambok, 2013). It
mostly occurs when the two groups of the individuals have significantly different thoughts
regarding an item or idea. In this case, the individuals have different decisions in making a
judgment regarding the outcome.

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B. Overconfidence bias
This type of bias occurs especially when one has got too much faith in something or a
certain idea. It mostly occurs in a situation whereby the individual believes in his or her
knowledge most. It is believed that the contribution to the decision making is given more value
than the way it should be.
Confirmation Bias
This type of bias occurs when one approves information that supports his or her interest
of choice (Busenitz & Barney, 2017). The individual in this type of bias focuses on the
information that rejects any information against what he/she believes. This type of bias may lead
to the biased type of decisions because the individual does not take time to factor out all the
important information.
Three general heuristics
A. Availability heuristic
In the process of making the decisions, one may remember some relevant things quickly.
Following the fact that those things are more available in the mind, one will be able to judge that
they are most important (Abel, 2013). This type of heuristic leads to thinking that some
outcomes are relevant to be decided and selected that they real be.

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The representativeness heuristic
This type of heuristic involves making the decision by comparing some present situations
which are most mental prototype representative. When one is trying to decide if someone is
trustworthy, one may start by comparing the features of the individual in relation to what the one
held in his/her mind. This type of heuristic causes one to have a classification of the individual
representatives as compared to the individual character (Lo & McCord, 2015).
Anchoring and adjustment heuristic
This type of the heuristic involves estimation of the value and size in quantity stating the
initial value of the decision to the final estimation. In this type of the heuristic, the individual is
influenced by the initial anchor value of the decision made which may be unreliable or irrelevant
(Gigerenzer, 2011). This type of heuristic brings about the insufficient information on decision to
be made. It can be qualitatively based on the fact that people may have the initial impression
persisting on hard way to change.
Availability heuristic associated with confirmation bias
I will relate this to our company manager who was trying to impose some new changes
for the payment terms of the employees. He was trying to extend the deadline for the payment of
the employees within the company. It is true that he was supposed to make the decision
regarding the same before officially announcing it. Instead of the manager looking on some of
the impacts the decision could bring to the employees he was busy looking on ways to handle

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any rejection of his decision. In this case, he expressed confirmation bias biases since he did not
consider if the decision is applicable and worthy to be imposed but just looking on how to handle
the employees’ rejections of the decision. The availability heuristic is associated to this bias
through the way he makes the decision and convincing strategies so quickly without even
presenting the case to the management team. The bias could be overcame by consulting all other
members of the management team and present the proposal to the employees for the suggestions.
The manager should first have a memorandum voting giving the clear reasons as to why he came
up with the decision. The will of the employees and management team should be weighed and
final conclusion done by agreement of all members of the company for a better decision.
Conclusion
The essay has examined some of the biases in decision-making processes in deep
thought. It has as well given the analysis of some heuristic and how they associate with the
biases explained in the essay. A scenario used tries to figure out the associated bias with a
selective heuristic so as to bring out the idea of the two factors in decision making process. It has
been concluded that since bias is the limitation in decision making they should be prevented
before making any decision.

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References
Abel, C. F. (2013). Heuristics and problem solving. New Directions for Teaching and
Learning, 2003(95), 53-58.
Busenitz, L. W., & Barney, J. B. (2017). Differences between entrepreneurs and managers in
large organizations: Biases and heuristics in strategic decision-making. Journal of
business venturing, 12(1), 9-30.
De Martino, B. & Dolan, R. J. (2016). Frames, biases, and rational decision-making in the
human brain. Science, 313(5787), 684-687.
Gigerenzer, G. (2011). How to make cognitive illusions disappear: Beyond “heuristics and
biases”. European review of social psychology, 2(1), 83-115.
Klein, G. A. & Zsambok, C. E. (2013). Decision making in action: Models and methods. In This
book is an outcome of a workshop held in Dayton, OH, Sep 25–27, 1989.. Ablex
Publishing.
Lo, H. K., & McCord, M. R. (2015). Routing through dynamic ocean currents: General heuristics
and empirical results in the gulf stream region. Transportation Research Part B:
Methodological, 29(2), 109-124.