Posted: June 15th, 2022

Understanding Emotional Influences on Decision-Making

1. Biases in Decision-Making
Last week, we laid the foundation for a proper understanding of
emotions, moods, and biases as they relate to the leader and decision-making.
Further, we looked at the development of emotional intelligence construct as
related to effective leadership within the organization. Further, we also
discussed at length the importance of such an understanding in your own
professional leadership career and how such an understanding can assist you in
becoming an effective leader. In this module, we will closely examine
individual biases and how they can influence the way we make decisions as
organizational leaders. Biases can be useful if the leader does not allow such
to adversely affect decisions or negatively affect the way they relate to
followers. On the other hand, biases can certainly be counterproductive if not
kept in check or in some cases eliminated altogether. Whatever the case, we all
are affected by individual biases to a certain extent and having a proper
understanding of such biases will help us to avoid some of the unnecessary
negative results that can occur in the organizational setting.
Individual biases can impact the decisions that leaders make.
Bazerman and Moore (2013) discussed 12 different biases that impact these decisions.
The first two are referred to as availability biases. Leaders use Ease
of Recall when their “decisions are affected by the vividness of
information” (p. 35). They use Retrievability based on how their memory
structures the search process. As a result of these biases, managers can make
assumptions that may not be accurate.
Bazerman and Moore (2013) discussed several representative
biases.Review the five specific biases they discussed:

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Insensitivity to base rates
Insensitivity to sample sizes
Misconceptions of chance
Regression to the mean
The conjunction fallacy
While the likelihood of a specific occurrence is usually related
to the likelihood of similar types of occurrences, leaders tend to overuse this
in their decision-making. This can lead to irrationalities, especially when
they are not aware of this tendency. This kind of bias often manifests itself
when leaders stereotype others or things based on a few characteristics.
The final set of biases identified by Bazerman and Moore (2013)
are confirmation biases.Review the five biases involved in
this set:

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The confirmation trap
Anchoring
Conjunctive and disjunctive event bias
Hindsight and the curse of knowledge
Overconfidence
These biases occur when leaders fail to focus on perceiving
differences in people and things as opposed to focusing on similarities.
Leaders display this bias when they do not fully analyze evidence that
contradicts their preconceived ideas of a situation.
You will see from the image below the different types of
decision biases and their accompanying distortions.
.gif” alt=”place holder”>http://blogs.hbr.org/cs/2012/09/how_to_minimize_your_biases_when.html
Click to Enlarge
Emotion vs. Analytics: Decision Making
and the Biased Brain

How to be decisive and confident in decision making. Why
starting with price can lead to bad decisions. How loss aversion trumps
opportunity—and how to counter negative emotions.
Check Your Understanding
Compare the statement on the front side of the card with
the answer on the back.
.csuglobal.edu/file/11e3c75a-d233-4fcf-830b-c827099f56cd/1/production/MGT672_9/mgt672_9.html” title=”Check Your Understanding”>Click Here to Begin

2.
Understanding Emotional Influences on Decision-Making
Module 8 presented the impact of emotions and moods on
leadership decision-making. Bazerman and Moore (2013) discussed how specific
emotions can influence the decisions leaders make. They identified some basic
emotions that they stated were the same across cultures. These emotions
included happiness, sadness, fear, disgust, and anger. Each of these emotions
can impact how leaders make decisions.
Daniel Goleman popularized the term emotional
intelligence in 1995 when he published his book Emotional
Intelligence.Goleman built his work off the early work of Howard
Gardner on multiple intelligences. He suggested the people have multiple
intelligences as illustrated below.
.gif” alt=”place holder”>http://www.psych2go.net/a-garden-of-intelligence/
Click to Enlarge
Many leaders mistakenly believe that their emotions do not
impact their decision-making. In many cases, leaders believe that they cannot
control these emotions. As a result, emotions can impact the way decisions are
made.

The basis of Goleman’s work is the belief that people who understand their own
emotions are able to understand the emotions of others. Emotional intelligence
is (1) self-awareness, (2) self-management, (3) awareness of others, (4)
empathy, and (5) relationship management. As a result of managing emotions at
work, leaders can increase both their personal and social competency. Leaders
using emotional intelligence will encourage cooperation and collaboration in
the workforce. They will build meaningful connections with their subordinates,
which will lead to better decisions and outcomes for their organization.
.gif” alt=”place holder”>http://community.tncc.edu/faculty/dollieslager/ei.html
Click to Enlarge
Conclusion
This week, we have examined the important construct of emotional
intelligence and individual biases. Importantly, we have seen how such can have
a direct effect on how we make decisions as organizational leaders. Having a
solid understanding of these concepts will help you become a more effective
leader regardless of the organizational context. Whether you aspire to lead a
large organization, or are assigned the task to function within a small team,
the concepts this week are very important and should help you lead in a highly
effective manner.
References
Bazerman,
M.H., & Moore, D. A. (2013). Judgment in managerial decision making(8th
ed.). Hoboken, NJ: John Wiley and Sons.
Goleman, D.
(1995). Emotional intelligence. New York, NY: Bantam Books.

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