The persistent presence of cognitive biases has influenced rational decisions and strategic management since the 1970s. These prejudiced errors in judgment, often systematic and predictable, breach the foundational assumptions of economic theory, leading to dire consequences such as social inequality, financial collapse, and governmental inefficiency. Even the brightest minds are not immune, making it crucial to address these biases head-on. Overcoming Cognitive Biases in Strategic Management and Decision Making unravels the complex tapestry of biases that infiltrate decision-making processes at all levels. From social injustice biases and reasoning errors to action-inaction and social biases, the book confronts the myriad of ways that biases manifest in critical moments. These pose a significant threat to sound decision-making in various fields, impacting professionals ranging from judges and doctors to public officials. The repercussions of unchecked biases are far-reaching, leading to flawed outcomes that echo through society. The urgent need for a strategic response to mitigate these biases and enhance decision-making processes forms the crux of the problem this book seeks to address.

Cognitive biases and their impact on decision making in general and specifically on strategic decision making have been recognized in psychological and management-related research over a long period. The vast research on this topic has unveiled more than 180 such potential flaws of decisions. The goal of this dissertation is to develop a better understanding of the role of cognitive biases in strategic decisions, how to detect and identify them and how to mitigate their influence in strategic decision practices. The articles of this dissertation provide four major contributions to the theoretical and practical knowledge on cognitive biases in strategic decision making: 1) This dissertation adds a mapping of more than 180 known cognitive biases based on the five phases of strategic decision-making processes and the three motivational backgrounds of cognitive biases. This mapping helps managers and other strategic decision makers to identify "what can go wrong" during their decision-making processes and allow them to recognize and anticipate these flaws, diagnose them, and take a next step towards a corrective intervention. 2) This dissertation shows for the first time the connection between the most prevalent cognitive biases, bias blind spots, and individual decision styles of managers. The resulting ranking of cognitive biases helps practitioners to focus on the "tip of the iceberg" and focus their corrective interventions on the most prevalent and impactful biases. The insights showed that rational and spontaneous decision makers report a smaller susceptibility for cognitive biases combined with bigger bias blind spots than other decision styles, and that intuitive decision makers have a higher awareness of their own bias susceptibility without showing bigger bias blind spots. 3) This dissertation integrates a more practice-oriented view of understanding (and communicating) debiasing techniques. This more practice-oriented understanding of debiasing techniques and the "know how" and where they might work supports the successful facilitation of decision-making practices in strategy. 4) And finally, this dissertation shows the relevance of the illusion of explanatory depth for strategic decisions. The results of these experiments demonstrate the need for a certain humility of managers concerning their knowledge of strategy-relevant digital technologies and that the technique of self-drawn, visual, explanations might help to overcome the individual overestimation of that knowledge.

Decision making or making judgments is an essential function in the ordinary life of any individual. Decisions can often be made easily, but sometimes, it can be difficult due to conflict, uncertainty, or ambiguity of the variables required to make the decision. As human beings, we constantly have to decide between different activities such as occupational, recreational, political, economic, etc. These decisions can be transcendental or inconsequential. Analyzing the Role of Cognitive Biases in the Decision-Making Process presents comprehensive research focusing on cognitive shortcuts in the decision-making process. While highlighting topics including jumping to conclusion bias, personality traits, and theoretical models, this book is ideally designed for mental health professionals, psychologists, sociologists, managers, academicians, researchers, and upper-level students seeking current research on cognitive biases that affect individual decision making in daily life.

Research Paper (undergraduate) from the year 2020 in the subject Business economics - Miscellaneous, grade: 1,7, University of Applied Sciences Constanze, language: English, abstract: Human's mind cannot grasp the causes of events in their completeness, but the desire to find those causes is implanted in man's soul. And without considering the multiplicity and complex-ity of the conditions any one of which taken separately may seem to be the cause, he snatches at the first approximation to a cause that seems to him intelligible and says: "This is the cause!". There are many models and frameworks in use in the business world today, and it is hard to keep track of them all. The MBA Model is designed to provide people with a broad groundling in all the key aspects of business. It is a simplified version of something more complex – it helps to understand a specific phenomenon by identifying its key elements. Management is the art of getting work done through others. It involves marshalling a set of resources to achieve desired objectives. Managers make decisions about allocating people and money in an effective way. There are many analytical tools to help decision making, including decision trees and net present value analysis. Most decision making is not as rational as we might expect it to be. Cognitive biases in decision making discusses why people often make snap judgements that are flawed, and how effective managers can overcome these biases to make better decisions. The following work is based on the theoretical foundations of the MBA model (25 need-to-know MBA models, Birkinshaw, 2017). After clarifying the basics in Part 1, examples of Cognitive Biases will follow. In the end of the Scientific Report the Management failure traced back to cognitive bias get explained.

From the Nobel Prize-winning author of Thinking, Fast and Slow and the coauthor of Nudge, a revolutionary exploration of why people make bad judgments and how to make better ones—"a tour de force” (New York Times). Imagine that two doctors in the same city give different diagnoses to identical patients—or that two judges in the same courthouse give markedly different sentences to people who have committed the same crime. Suppose that different interviewers at the same firm make different decisions about indistinguishable job applicants—or that when a company is handling customer complaints, the resolution depends on who happens to answer the phone. Now imagine that the same doctor, the same judge, the same interviewer, or the same customer service agent makes different decisions depending on whether it is morning or afternoon, or Monday rather than Wednesday. These are examples of noise: variability in judgments that should be identical. In Noise, Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein show the detrimental effects of noise in many fields, including medicine, law, economic forecasting, forensic science, bail, child protection, strategy, performance reviews, and personnel selection. Wherever there is judgment, there is noise. Yet, most of the time, individuals and organizations alike are unaware of it. They neglect noise. With a few simple remedies, people can reduce both noise and bias, and so make far better decisions. Packed with original ideas, and offering the same kinds of research-based insights that made Thinking, Fast and Slow and Nudge groundbreaking New York Times bestsellers, Noise explains how and why humans are so susceptible to noise in judgment—and what we can do about it.

Discover nine common business decision-making traps -- and learn practical tools for avoiding them -- in this "masterful," research-based guide from a professor of strategic thinking. (Daniel Kahneman, author of Thinking, Fast and Slow) We all make decisions all the time. It's so natural that we hardly stop to think about it. Yet even the smartest and most experienced among us make frequent and predictable errors. So, what makes a good decision? Should we trust our intuitions, and if so, when? How can we avoid being tripped up by cognitive biases when we are not even aware of them? In You're About to Make a Terrible Mistake!, strategy professor and management consultant Olivier Sibony draws on dozens of fascinating and engaging case studies to show how cognitive biases routinely lead all of us -- including even the most renowned business titans -- into nine common decision-making traps. But instead of rehashing the same old "debiasing" techniques that fail managers time and again, Sibony explains that the best way to avoid the pitfalls of cognitive bias is to craft an effective decision-making architecture in your organization -- a system of techniques and processes that leverage collective intelligence to help leaders make the best decisions possible -- and provides 40 concrete methods for doing so. Distinctive in the clarity and practicality of its message, You're About to Make a Terrible Mistake! distills the latest developments in behavioral economics and cognitive psychology into actionable tools for making smart, effective decisions in business and beyond. "Succinct, accurate, and even-handed. I loved it!" (Angela Duckworth, bestselling author of Grit) "The best, funniest, most useful guide to cognitive bias in business. If you make decisions, you need to read this book." (Safi Bahcall, bestselling author of Loonshots)