How to Minimize Biases and Increase Objective Decision Making

MGT 362

Change Management and Implementation/

How to Minimize Biases and Increase Objective Decision Making

Within any organization, biases will occur. Biases are created among people and the various backgrounds, thoughts, assumptions and actions associated with those people. It is essential to understand biases and how they can affect the organization as well as the change management process within the organization. Biases can be defined as 1) prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair 2) cause to feel or show inclination or prejudice for or against someone or something. Dictionary.com. Biases. Retrieved May 18, 2018.

Biases can be categorized into three different categories; perception biases, solution selection biases and problem solving biases.  The perception biases include: overconfidence bias, deterministic fallacy, hallo effect, ludic fallacy, ostrich bias, and the zero-risk bias. The problem-solving biases include: egocentric bias/fundamental attribution error, “is-ought” fallacy, narrative fallacy, hyperbolic discounting, and availability/confirmation. The solution-selection biases include: action bias, institutional bias, sunk-cost bias, and the planning fallacy (Gibbons, 2015, p 125).

The change management process can be hugely impacted and adversely affected by biases within any organization. Biases greatly decision making processes, from the hiring to implementing policies and procedures, or lack thereof. There are many benefits to knowing and understanding the various biases along with the errors often associated with those biases. It can help an organization cultivate the best culture possible as well as ensure the organization has sound decision-making policies in place that ensures all stakeholders are treated fairly.

Influential Biases

There are many biases that can influence the outcome of an analysis. The first influential bias I am going to discuss is the confirmation bias. This bias often occurs when we tend to accept only new information that supports our old ideas. Oftentimes, when we would like a certain idea or concept to be true, we will believe it to be true, whether it is or not. We become motivated by wishful thinking. This thinking error leads us to stop gathering new or any information altogether, even though the evidence gathered thus far has confirmed the views we would like to be true.

As humans, once we have formed a view, we embrace any information that confirms that view and we tend to ignore or even reject information that is contrary to our view or casts doubt on it. This, in turn, enables us to become prisoners of our own assumptions. An example of when this bias could arise is in a scenario when you have tried to reach a friend, by phone (or email), leaving messages, yet have not received a call in return. The relationship has been somewhat ambivalent in recent years. In this situation, it would be easy to jump to conclusions and tell yourself that your friend wants to avoid you. The danger, of course, is that you leave this conclusion unchecked and start to act and possibly react to your friend as though it were true.

The overconfidence bias is the tendency to be more confident in one’s own abilities, such as driving, teaching, or spelling, than is objectively reasonable. This overconfidence can also include matters of character. Generally, most people believe that they are more ethical than their competitors and peers. People in this category assume that they have good character and will often take ethical issues lightly. They assume they have good character and will therefore do the right thing anytime they encounter ethical challenges. Oftentimes, overconfidence bias causes people to overestimate how much, and how often, they will donate money or volunteer their time to charities. This bias causes us to act without proper reflection, thus enabling us to act unethically. http://ethicsunwrapped.utexas.edu/glossary/overconfidence-bia.

Institutional bias describes a tendency for the procedures and practices of particular institutions/organizations to operate in ways that result in certain social groups being advantaged or favored and other social groups being disadvantaged or devalued. This bias usually occurs because the majority simply follows existing rules or norms. Institutional racism and institutional sexism are the most common examples. Even in an ideal setting, where individuals within an organization hold no stereotypes or prejudices toward a group, discrimination may still occur.

Examples of institutional bias are almost boundless due the domains where this particular bias is found as well as the groups it affects; they are considerably varied. An organization may be biased whether or not the individuals within the organization actually maintain those practices or have biased intentions themselves.

How Biases Arise

Although the word bias has a negative connotation, it is often unintentional. Biases usually occur as a result of mental shortcuts that allow us to make quick and efficient decisions. Usually, quick decisions allow us to save time and energy. However, there are situations that arise when our quick decisions and reactions can lead to bad decision making and ultimately adverse outcomes. This can be attributed to the impact our everyday thinking and the biases that we incorporate in our everyday thinking. Few of us are aware of them or even know they exist. Biases often work well because they are systematic, predictable and easy. Problems arise when individuals habitually rely on this method of decision making and they completely exclude or intentionally ignore additional information or facts.

Minimizing/Overcoming Biases

Data analysis is a tool used to assess information and knowledge. We then rely on and apply the information and knowledge collected from the data analysis to make decisions and determine the best possible outcomes in business and in life situations. Data analysis should be objective, however, it is possible to alter the results due to heuristic errors and biases. While certain risks may be obvious in a project, individual biases can influence the ability for change to be effective.

When an organization does not understand biases, the morale can be low, quality of employees, as well as the retention rate, could be down, and the public perception of the organization could be compromised.

Conclusion

Effective leaders understand and are knowledgeable of all the biases that can occur within an organization. These leaders recognize the importance of change, inclusion, communication and the neutralization of biases. The more biases are neutralized the greater the benefits to the employees and the organization overall.

There are many benefits to understanding biases. The organization could potentially save costs by not over or under estimating resources required. This will then enable the organization to allocate resources effectively. Another benefit is improved staff morale. This increases employee commitment, effort and longevity.

References

Weisbord, M. (2012). Productive workplaces: Dignity, meaning, and community in the 21st century (3rd ed.). New York, NY: Pfeiffer.

Chitta, K. (2014). Change agility: Leadership, transformation, and the pursuit of purpose. Charleston, SC: Createspace.

Gibbons, P. (2015). The Science of Successful Organizational Change: How Leaders Set Strategy, Change Behavior, and Create an Agile Culture. Retrieved from VitalSource Bookshelf.

Bias. (2018). In Dictionary.com. Retrieved from http://www.dictionary.com/browse/bias.

amonghttps://pdfs.semanticscholar.org/11a1/e6c5b057873053e7450f278b38496e3d7c62.pdf