One of the prominent features, which separate well-managed organizations from poorly-managed firms, is the caliber of leadership within the organization. From time to time, a business leader has to make vital decisions to steer the growth of an organization forward. As a result, the leader has to be equipped with effective decision making skills. Bazerman’s book, Judgment in managerial decision making, offers an insight into some of the behavioral skills which make brilliant decision maker. Broadly speaking, Bazerman’s book is full of fascinating ideas on the common decision making biases but falls short of ideas that elaborate rational negotiating skills.
Bazerman’s presentation of the common biases people commit when making crucial decisions is an engrossing read. This is a terrific eye-opener because many people do not realize when they commit a decision making bias. Although decision making process should be made of a series of structured steps, many decision makers allow errors to cloud their judgment. This arises when the decision maker makes an attempt to shortcut the decision making process (Bazerman, 2005). For example, some people use their experience and gut feelings to make crucial judgments. This leads to irrational decisions, which may prove to be costly to an organization (Bazerman, 2005). To a great extent, the biases arise from representative heuristic, availability heuristic and confirmation heuristic.
The examples provided in the book resonate well with most of the people's day-to-day operations. For example, irrational assumptions are quite common on the stock market. Financial evaluators wrongly, overestimate their client’s rates of returns, because they rely on the gut feeling (Bazerman, 2005). They also lie about statistics, and omit evidence that may contradict their position. Therefore, the issues presented by Bazerman proved to be fascinating as they are backed by evidence from people’s daily routine. The examples presented also resonate well with the readers because, for example, I commit decision making errors by sticking with the options that come to mind immediately.
However, the topic on making of rational negotiations does not inspire confidence, as expected. The ideas presented by Bazerman border on being too assertive, which may damage the trust between the negotiating parties. Negotiations should go beyond the areas discussed: creating and claiming value. For example, negotiators should aim to reach a common ground, and building a long-term trust between the parties involved. Moreover, negotiators should keep emotions at bay, and focus on the issues at hand because negotiation is a structural process, often compounded by trickery. Therefore, the negotiators need to be consistent in their behavioral pattern. Their main target is to set a goal, and make trade-offs with the other teams of negotiators.
Bazerman’s book is a fascinating read as it took me some steps further from what I know about cognitive biases. For example, Bazerman distinctly elaborates on how decision making biases govern people’s interactions. At some point, I was hit by the reality that people judge themselves as the most skillful, and correct- even in areas that are beyond their area of expertise. Many people suffer from cognitive biases, which they use to reinforce their positive illusions. It was also mind-boggling to read that sometimes negotiations require ceding power, although this may produce inequality. Outstanding leaders should aim to improve their decision making skills, frequently, because this is one of the key requirements in a globally competitive environment.
Bazerman, M. H. (2005). Judgment in managerial decision making (6th ed). New York, NY: John Wiley & Sons.