Anchoring also known as pivoting or focalism may be defined as a cognitive prejudice capturing the human propensity to rely, rather too heavily or as the word calls, anchor, on a single characteristic, angle, or piece of information when arriving at decisions. It’s more evident when children make decisions about their surroundings and how they take a ‘monoperspective’ on the same. Adjustment on the other hand involves articulating the information one has into reaching a plausible estimate[ CITATION Rei09 \l 1033 ].
Anchoring and adjustment therefore describe the art of basing heavily on a piece of information then bending it into a realistic estimate to cover the other elements of the matter at hand.
Anchoring and adjustment feature a lot in decision making; people overly rely on a piece of information which they get their hands or which they choose to have more faith upon thus setting or ‘anchoring’ their decision(s) in a biased manner inclined towards the direction of the information. The psychological heuristic which tune people into subconsciously evaluate chances with implicitly suggested pivot point (anchor) and from hence induce adjustments to the anchored point to reach their estimates. Due to its subconscious nature, it is implied many times in decision making processes where the manager(s) focus on one part of information when making at decisions. Sometimes leading to poor decisions since not all factors came into play when drawing the decision.
Anchoring and insufficient adjustment
Anchoring and insufficient adjustments are terms used to describe how the act of anchoring and adjustments may lead to poor decision making due to insufficient adjustments. This is when one fails to adjust the information they have to cover all the aspects of the matter at hand.
For instance, a manager may overly rely on the academic qualifications when employing a new staff rather than considering whether one could practically do the job at hand[ CITATION Rei09 \l 1033 ].
Reid, H & Robyn M. Rational Choice World: The Psychology of Judgement and Decision Making. New York: Sage, 2009.