How We Make Decisions: Are We in Control of Our Decision Making?

We all think we are in control of our decision-making but we are not. It is daunting to know that we make decisions every day that are influenced by various factors of which we are not consciously aware. Our brain is naturally bias both for physical survival like storing fat for the day when there is no food or mentally by rationalizing actions we take that may do us harm. For the purpose of this course and this week’s discussion, we will focus on those mental factors that our brain naturally uses to keep us safe and in our psychological “comfort zone”. These factors are put into three major areas: Personal Preferences “Comfort Zone Bias”, Psychological Bias (Filtering the Information We Collect), and Specific Personal Influences (Skewing how we interpret the information collected). Understanding how these hidden traps affect our decision making and developing skills to minimize their affect will greatly enhance our ability to make quality decisions. Theme #1: Personal Preferences and the Comfort Zone Bias Each person is distinctive. Our makeup is comprised of personal strengths, weaknesses, personality, genetic disposition, habits, norms, risk, environmental and cultural influences. We make decisions with our own personal habits and preferences, whether the decision fits our habits or not. In other words, we make decisions we know how to make rather than making the decision we need to make. We refer to this action as the “comfort zone bias”. Our preferences naturally seek to bring the decision into our realm of comfortable understanding rather than looking for new and more decision centric ways to make the decision. An individual’s personality and risk aversion are two areas that play a great deal of influence in our life within an organization. A closer examination of these two examples will help to explain the salience of the “comfort zone bias”. Sandra Krebs Hirsh and Jane A.G. Kise in their work with the Meyers-Briggs Personality Type indicator attempt to explain how personality preferences affect our decision-making habits and styles. Hirsh and Kise discuss four points at which a person’s personality intersects with decision making preferences: energy levels, gathering input, reaching conclusions, and approach to life. A person’s energy source will govern the way they gain information or experience the decision-making process. The extravert is someone who gathers strength or energy from being with others. The “outer world” stimulates them into action. It would not be unlikely then that they would turn toward others to collect information or ask for advice as opposed to the introvert who gains strength from quiet times free from people. The introvert would be energized from the ideas they pursue in their alone time. Hirsh and Kise discuss decision making preferences as to gathering input in the context in terms of the Sensing and Intuitive person. (DEF, 2009) For example, a person who is typed as having a Sensing preference is one who would prefer to gather information from those things they can sense now. They would seek out information that was factual and known to them here and now. Sensing personalities would shy from uncertainty and would be skeptical of endeavors that were risky in nature. Compare this to the person who possesses an intuitive personality. This person would gather information by preferring the hidden meanings, ideas or possibilities that could be. They are future oriented and likely to be risk takers in their decision making. Personality affects the decision making process in how we draw conclusions. The Meyers Briggs describes a person’s personality in terms of a thinking or feeling person when it comes to reaching conclusions. In the case of the thinker conclusions are reached based on objective reasoning and impartial criteria, constant principles, truths and logic. The feeling person prefers drawing conclusions on value-based, person-centered criteria. They are motived in seeking harmony with their decision. Finally, a person’s personality affects their approach to life which in turn affects their decision making. The terms used to describe a person’s approach to life by Meyers-Briggs are judging and perceiving. The judging personality wants to live an ordered life with goals and structure, with most things decided so they can move along. The perceiving person wants to be spontaneous and flexible. They will postpone decisions to stay open to new information and opportunities. Personality is an important influence on how we make decisions. Another area worthy of some focus is risk aversion and tolerance. The game show host is standing next to you on the stage, saying: “You have $30,000. You can keep the money or decide to play and possibly lose it all. Behind one of these three doors is $100,000. If you choose the wrong door the $30,000 stays with me. If you pick the right door, you have $130,000.” Do you do play or walk away? Risk Aversion and Risk Tolerance are two factors that affect how we make decisions. Decisions that involve uncertainty means a desired outcome may not actually result. The greater degree of uncertainty or risk the less likely a person is to take the risk. Or is it? Risk tolerance is dependent on what is at stake and varies with one’s comfort in taking risks. When risk is understood and there is a willingness to accept that risk, the decision-making process can be more effective. For example, in our door example above knowing the probability of picking the right door for some may be worth taking the risk while for some a one in three chances is too high. Better to keep the money in hand than risk losing it all. Risk tolerance is often defined by a person’s comfort zone makeup. Risk can often play into the effect of other bias factors. For instance, Outcome Bias, judging the outcome rather than how the decision is made, may play into taking a risk you might not have taken if the process had focused on the decision being made rather than the outcome. Choosing to play the doors in our scenario above or choosing to drive while drunk are good examples of the interaction between risk assessment, outcome bias and decision making. Making only the comfortable decision often limits the choices to be made or the data collected to make a quality decision. The best way to counteract the comfort zone bias is to identify your preferences. If you understand that your personality is anchored in the here and now it is easier to identify ideas that are future oriented as a way to balance the preference. Taking the time to know who you are in terms of personality, norms, culture, strengths and weaknesses especially in contrast to others will broaden your decision-making style and approach. Looking at just one preference like personality is not comprehensive enough when looking at the comfort zone bias. Culture, gender, age, psychological, environmental factors (education, economic status, social status etc.) We will examine a few of these in more depth. Theme #2: Filtering the Information We Collect PSYCHOLOGICAL BIAS: Earlier we looked at how the comfort zone bias affects the way we approach decision making. Another hidden trap to the decision-making process is the way we filter and interpret information. The way we filter information we seek to use is often affected by the selective perception bias. This is the idea that what information we actually pay attention to is very often defined by what we expect to see. For example, the next time you are driving down the highway think about red cars. See if you do not start looking for them and find them way more often than if red cars were never brought to your attention. Our minds misshape reality to support our viewpoint rather than challenge the basis foundation of our conclusions. Selective perception filters out the information or data that we collect by steering us in the direction of paying attention to information that we expect to see rather than looking for information with complete objectivity which yields new perspectives and often new alternatives to the decision to be made. A review of the other cognitive bias filters shows us the psychological influences that control our individual decision making. Theme #3: Interpreting the Data We Collect Special Personal Bias Derived from Culture, Gender, Age and Emotions While hidden psychological traps can affect the way we filter information that we collect in our decision making, other factors like age, emotion, culture, education, work family, and gender will all act together to influence the way we interpret the information we collect. Where and when we are born as well as our sex gives us context to our lives and thus an ingrained bias as to how we interpret the information in front of us during the decision-making process. For instance, a woman seeking work outside the home in Yemen, a country where the majority of women do not work or are forbidden to work, is unlikely to seek a high-level decision-making position. The bias against women in the workforce in any capacity would limit her choices and thus discourage her seeking employment in that capacity. Moreover, in Yemen an older woman’s decision-making ability will be respected more than that of a younger one no matter how much education they may have. In the reading this week take a closer look at how these influences affect how we interpret the information we collect in making our decisions. We have often been told that we should never make a decision in anger. That seems like good advice yet heeding this advice is not always as easy at it seems. Emotions can play a large part on how we interpret data in making decisions. For instance, if you were the sole owner of a business that provided jobs to the whole town and the numbers are clearly telling you that the business is going under it is very likely that you would do whatever it would take to keep the business afloat, including compromising your own personal wealth out of concern for the community. The feeling of guilt may well outweigh the decision to take a sounder financial path like selling or closing the business. Emotions can have a subtle and yet strong affect over the conclusions we draw during the decision-making process. While reading this week try to think of how you make decisions and how many of these ideas influence your decision-making process. Please read and complete the instructions below: Jessica Cuthbert was made Director of Cuisine at the historic all male Garrick Gentleman’s Club (meeting club) in London. Her appointment to the position came only six months ago and after 20 years with the club in other positions. The membership admired her management skills and her family heritage as there had been a Cuthbert at Garrick’s since 1831 when the club was founded. She worked hard in her new post. Cuthbert was known for being tough but fair in her approach to her staff. She was civil to everyone but was considered a loner by her fellow directors and remote in her dealings with others. She often judged her co-workers and found little tolerance for their sometimes less than logical thinking. Fearful that should would not be treated with respect and determined that she would be in control despite her gender, Cuthbert became overly attentive to her staff and micromanaged everyone from the lowest dishwasher to her head Chef. The staff were unhappy with the change in her treatment of them and were demoralized. They had taken to calling her “iron drawers” behind her back. Yesterday two of the clubs oldest, and controlling board members of the club, came to report her poor behavior to you. She recently was overheard by several Club members arguing in loud voices with the Chef who threatened to quit. The members said, “she cannot be seen having a “female” row again even if she is a Cuthbert. Further, the Chef is too good to have him leave. This is what you get for hiring a woman.” They want to see action. You call Jessica into your office and apprise her of the situation. She says very little but appears to be very shaken by the threats uttered by the members. She does explain that she has worked hard and that the Chef is much older than her and he wants to control the whole kitchen especially the menu. He just wants to spend money on food without understanding the costs he is generating. When you ask Jessica about her reaction to the club members concerns she draws herself up to full height and replies with defiance,” I realize that I am a woman in an all men’s club and that is a problem with many of the members. I have worked for this club for over twenty years and have always tried to act respectfully to the members and the staff. I resent being told that my behavior was due to a Female Row.” You are the general manager of the Club a position that is new to you as well and you will have to handle the situation. However, before you make your final decision report to the class the following: What is your first impression as to how to handle Jessica and the members? Take the Jung Typology Test at http://www.humanmetrics.com/ and tell the class how your personality type is reflective of your first impression? How does your personality relate to Jessica’s? Be sure to tell the class what type you believe she is under the typology. What about this decision that makes you feel outside your comfort zone and why? What is your emotional reaction to Jessica’s reply to your inquiry? Does your gender influence your initial reaction to Jessica’s response to your recitation of the member’s comments? The conclusion must have no less that four (4) quotes and two sentences of explaination. Use headers! Thanks. Please use (ALL) only the following as references: (1) https://www.inc.com/betsy-mikel/when-playing-it-safe-in-business-and-life-is-disastrously-risky.html (2) http://archive.fortune.com/magazines/fortune/fortune_archive/2005/06/27/8263490/index.htm Decisions, Decisions SECOND IN A SERIES OF ANNIVERSARY SPECIALS (FORTUNE Magazine) By JERRY USEEM June 27, 2005 (3) https://www.forbes.com/sites/eriklarson/2017/03/06/what-personality-types-say-about-your-decision-making-at-work/#547250972ddb (4) https://lifehacker.com/the-science-of-breaking-out-of-your-comfort-zone-and-w-656426705 (5) https://www.bbc.com/news/science-environment-26258662 (6) https://saylordotorg.github.io/text_organizational-behavior-v1.1/s15-05-the-role-of-ethics-and-nationa.html (7) https://www.youtube.com/watch?v=wEwGBIr_RIw 12 Cognitive Biases Explained – How to Think Better and More Logically Removing Bias (8) https://www.youtube.com/watch?v=AK0GYBTNx5Q Cognitive Biases 101, with Peter Baumann