What I liked about the topics (positive emotions)
In Bazerman’s book, what I liked most was the six major but simple steps especially meant for managers towards making a rational decision when solving various problems. The first step is to clearly defining the problem at hand, that is, the problem should be specific so as to arrive at an accurate solution. Secondly, the criteria to be used in the process should be indentified and then weighed according to the preferences from other criteria. The decision maker is then expected to prepare the alternatives for weighing the options to determine the best. The alternatives are then rated on the several criterion selected to determine how each alternative achieve solution as per the criterion. The final step is calculating the final optimality of the decision based on the ratings above. These steps sound simple yet important when faced with challenges of making a rational judgment.
I was also much interested on the judgmental heuristic and the human rationality. Many people including the managers tend to use heuristic approach in their decisions which can solve even complex decision in a simple way. Heuristic according to Bazerman are those limiting strategies that people have at hand to guide them before making any decision. He mentioned two types of heuristic which includes the representative and the available heuristic. Representative heuristic are those which people tend to judge people’s character based on their past portrayed image while available heuristic are those which people can predict occurrences based on the past probability of occurrences. According to the book, rationality means the act of making a logic decision which is expected to yield an optimum result. Managers therefore, need to know that the optimal decisions we make would always depends on the reaction we receive from others on their choices, this means that before decisions are made, other people’s behavior towards the outcome must considered. Secondly, as a manager, in order to make good decisions, I must follow the good advices that are availed to me so as to improve my decision making processes. It also states that good choices of strategies can only be arrived at when we as managers recognize how we make decisions, since by knowing it we will also know the kind of errors that we might commit. Furthermore, the book states that heuristic plays an important role in helping those managers who are in a busy environment to make quick decisions on the complex problems they experience at the work place because it tend to make decision making so simple even at difficult decision making situations and this has motivated me even more as a future manager.
These topics stimulate a positive emotion on me because it acknowledges how the human mind works of when making judgmental decisions and how it can be improved more. Heuristic approach, for instance, is very useful to the managers who operate in the busy environment to make quick and wise judgments.
What I didn’t like about the topics (negative emotions)
Despite the positive emotions that the book arouses in me, I also dislike the fact that many life decisions are affected by the vividness of information. This is because most of the people ignore clear data that would otherwise explain the vividness of the subject. Most people would then prefer a less vivid data to avoid being misled.
Secondly, most people may have poor memory structures even if they apply the heuristics in their decision making processes and their information may be used to develop managerial decisions. This would lead to systematic errors in managerial judgment simply because, most natural strategies do not serve and managers routinely rely on social networks.
Thirdly, I did not like on how people or even managers use the representativeness heuristic even though sometimes is useful while they earlier on ignored the base rates or the background information relevant to the problem. This is because this tendency is stronger even when vivid information is available. Some people do use base rate data correctly at the absence of available information which otherwise is commendable. People use base rates sensibly even in the absence of personal descriptions and make inferences from random samples. People understand relevance of base rate information but fail to use such data when individuating data are at hand. To sum up, ignoring base rates leads to unfortunate implications such loss of life savings to entrepreneurs when they think base rate for failure is not relevant.
Finally, another dislike was on how with insensitivity to sample size people or managers use the representativeness heuristic with failure to know that larger samples would always give more reliable information than smaller samples.
In this topic, the sources of negative emotions have been stimulated by seeing how leaders use availability and representativeness heuristics to come up with useful decisions while relying on information that is not worthy. For instance, availability heuristic is biased when vividness and recency of the information is relied on since the information may have been scrapped to make people create interest on it. Relying on such information would be misleading. In addition, negative emotions have been stimulated by use of representative heuristic while ignoring information such as base rates and sample sizes which may lead to a less accurate data.
What did I learnt?
In these topics I have been able to learn that many people tend to focus too much on particular matters or events and too little on other matters due to barriers of bounded awareness which could otherwise cause harm and they thus need to follow a simple six steps in their decision making.
Secondly, people or organizations tend to have inattention blindness which can make them fail to realize their goal as they do the unnecessary or move astray. Therefore, people make mistakes due to
Thirdly, heuristics helps in solving complex decisions. For instance, availability heuristic seek to explain the tendency for decision makers to rely on more vivid data unlike bounded awareness which clearly monitors on specific variables that are part or out of focus in some specified domains.
Fourthly, for managers’ decisions to be reliable, they should put into consideration the base rates of the information and the sample size should be relatively large.
This book is recommended to managers who want to make informed decisions and to improve their decision making process. A rational decision can be generated from availability and representativeness heuristics. Based on the bound awareness, managers can then filter their information to arrive at the best decision.
Bazerman, M. H., (2010), Judgment in Managerial Decision Making; Wiley & Sons, ISBN: 0-471-68430-9.