Understanding Cognitive Biases in Decision-Making PPT

This PPT slide, part of the 30-slide Strategic Decision Making PowerPoint presentation, outlines 6 core cognitive concepts or biases that significantly influence decision-making. Each bias is briefly defined, emphasizing how these cognitive errors can lead to unreliable human judgment.

Availability Bias is highlighted first, indicating a tendency to prioritize information that is easily recalled, often because it is recent or particularly striking. This can skew perceptions of importance and relevance in decision-making processes. Next, Confirmation Bias is discussed, which describes the inclination to favor information that supports existing beliefs while disregarding contradictory evidence. This bias can severely limit the scope of analysis and lead to flawed conclusions.

Excessive Coherence follows, pointing out the human tendency to create coherent narratives from limited evidence. This can result in oversimplified interpretations that ignore critical nuances and complexities inherent in situations. The slide then introduces Mental Model, which refers to a simplified representation of complex situations. These models can often lack the necessary depth and detail, leading to misinterpretations.

Noise is also addressed, denoting unwanted variability in judgments that should ideally be consistent. This variability can stem from irrelevant factors affecting decision-making, which can introduce significant errors. Lastly, Representative Bias is mentioned, where decisions are made based on perceived similarities to known categories rather than on relevant statistical data.

The concluding statement emphasizes the importance for organizations to recognize these biases as they navigate decision-making processes. Understanding these cognitive biases can lead to more informed and effective strategies, ultimately enhancing organizational performance.

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Decision Making Cognitive Bias