Looking beneath the surface

Abstract

PurposeThis article aims to discuss some of the most common ways in which business decisions are affected by cognitive biases. It focuses on the individual level of decision making and discusses how biases are deeply entrenched in the way that many decisions are made. It also discusses how flaws in decision making can escalate when executives are under pressure, over‐confident or part of a group.Design/methodology/approachThis article draws on a range of research in cognitive and organizational psychology to show the potential effect of cognitive biases on corporate decision making.FindingsThe article argues that it is necessary to develop a better understanding of the effect of cognitive biases on executive decision making. Whilst research suggests that many aspects of decision‐making processes operate outside one's conscious awareness, it is suggested that these flaws may be easier to monitor and control when one is aware of their potential impact on corporate decisions.Originality/valueThe paper demonstrates how a lack of awareness of the widespread operation of cognitive biases reduces the possibilities for good corporate governance.

Behavioural Biases Distorting the Demand for Environmentally Friendly Freight Transport Modes: An Overview and Potential Measures

“…Hall [75] Partial confirmation found Habit Behaviours, which have been repeated and executed satisfactorily, may become habits.…”

“…Group thinking (sometimes also referred to as herd mentality) means that the opinion of the group is valued higher than the opinion of an individual in the decision-making process [75]. The statements regarding group thinking are inconclusive; six statements were found to disprove it and ten were found to confirm this bias.…”

Creating a Nexus between Dark Triad Personalities, Non-Performing Assets, Corporate Governance and Frauds in the Indian Banking sector

“…As per Rossouw (2009), societal norms, culture, values, shareholder approach, laws, regulations and patterns of ownership play important roles in corporate governance. According to Hall (2007), the board of directors are decision-makers and have all the powers to make decisions that affect the stakeholders and a large number of people. The way to solve corporate scandals not only is through structural processes and policies but also relates to human attributes.…”

The relationship between personality and the capacity to think strategically

“…Whereas previous research explored various aspects of strategic decision making and leadership characteristics (Lim 2012;Ahmed, Hasnain & Venkatesan 2012;Venkatraman & Huettel 2012;Bracha & Brown 2012;Hoffman, Woehr, Maldagen-Youngjohn & Lyons 2011;Gelissen & De Graaf 2006;Leone, Penolazzi & Russo 2013;Muehlfeld, Van Doorn & Van Witteloostuijn 2011;Hall 2007;Bowler, Bowler & Cope 2012), the purpose of this study was to test the relationship between personality factors and the ability to think strategically, thus establishing the existence of those personality factors capable of predicting the ability to think strategically. This research is intended to provide practical solutions for the talent management practices of human resource departments, by exploring the relationship between personality and the potential ability of leaders to think strategically.…”