Smart People, Dumb Decisions Within Any Organization Essay

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Smart People, Dumb Decisions

Within any organization or process, there is a purposeful role of decision making that is the result of taking in stimuli, choosing from alternatives, and making a final choice of an action, in action, or choice of action. This is true in the small business world, multinational corporations, individual life, and even with governments.

One other way of looking at decision making is that it is ingrained within the human psychological perspective; one can get quite complex about this, but essentially, from a cognitive perspective, any decision making process needs to be continuous and evolving as the individual or organization reacts to the environment, and the stimuli received. Thus, from a normative perspective, there is a logic and rationality involved in the ongoing process, we may or may not agree with that logic, but for the individual or group making the decision, the process is there (Kahneman & Tversky, 2000).

Michael Mauboussin, in his article Smart People, Dumb Decisions, analyzes how really bright, in fact sometimes brilliant, people have two major obstacles that impact the manner in which they make decisions.

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First, is the human brain -- over mnillions and millions of years evolved to make decisions that have absolutely nothing to do with modern life. Second, the world we live in, with its speed, complexity and technological evolution, is sometimes so rapid and fluctuating that it is difficult to begin to catch up (Mauboussin, 2010). This combination of biology (brain) and the environment often makes it difficult to make appropriate judgements that are workable and cognitively wise for ourseleves.

That being said, it is ironic that we can confirm judgments of others much more satisfactorially than those of ourselves. This is confirmed with other research that says we tend to confirm views based on -- what else -- our own personal experience and prior knowledge and limit, or downplay, information that goes contrary to our own pre-existing world view or hypothesis. Many call this a self-fulfilling prophecy, but it is clear that the way we tend to make and justify our own decisions is based on our lack of ability to often step outside the box of our own….....

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