Decision-making is very much what we do every single day and almost every moment. There’re two types of decisions – programmed and non-programmed. A programmed decision is repetitive and routine in nature. It is common in organisations and largely automatized, subject to rules and policies. A non-programmed decision is more unusual and made less frequently. Non-programmed decisions are the ones that are subject to biases. The brain cannot give the same energy to the same decision. In an attempt to draw shortcuts to save time and energy, it depends on the influence of data it already holds which affects one’s decision-making at work and home.John S. Hammond, Ralph L. Keeney, and Howard Raiffa of the Harvard Business Review’s 10 MUST READS examined eight psychological traps or biases that can affect the way we make business decisions and some of these can be related to personal decisions. The traps discussed below influence how people make decisions across all disciplines be it engineers, accountants, consultants, lawyers, and even stock analysts. These include;The anchoring trap – This bias leads one to give disproportionate weight to the very first information they receive. This may include any initial impressions, estimates, or date anchors which subsequently affect thoughts and judgments. Anchors come in different forms and one must be careful to be able to catch them. It could, for example, be a comment by a friend, or morning newspaper, or a billboard one drives passed. In business, one of the most common types of anchors is the past event or trend for example many marketing firms or departments set their marketing objectives based on past sales. So, this becomes an anchor. Although this approach will give more or less accurate estimates, it will put a lot of emphasise on the past instead of on the future. This…
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