‘Think before taking important decision in business’

Source: The Hitavada      Date: 27 Nov 2017 10:33:18


 

Business Bureau,

Highlighting that even a small decision may cause huge loss to an individual or an organisation, Vinayak Gavankar, Director of ISD Training Centre at VIA, recently said that instances of misjudgments have created a curiosity among behavioral scientists and they have been studying it reasons responsible for it.


Speaking at a seminar organised by Vidarbha Industries Association (VIA) on ‘The Psychology of Misjudgement’, Gavankar said that the behavioral scientists had carried out research to find out observed whether the tendency of misjudgment is present in human being or birds and animals have posses it.


In its endeavor to help its members remain up to date in various fields VIA HRD Forum has been organising a series of talks on different topics. One such talk titled ‘The Psychology of Misjudgment’ was conducted by Gavankar where in he said that the psychologist and behavioral scientist have been studying the decision making process for a long time.


“While observing behaviors of birds and animals, they realized that birds and animals sometimes get easily misled by a particular colour, sound or smell. Due to this their decisions go wrong. For example ants dragging and throwing out a live ant out of their community, thinking her to be dead. It may be because of a particular smell,” he said .


Quoting another example, he said that the scientist have also observed that a mother turkey bird hugging and kissing an enemy bird because of some familiar sound and action,” he said.


“One should be aware of all the biases and should not jump to quick conclusion. Have a cooling period before taking an important decision and develop a checklist of all biases and use them regularly. Make list of all our misjudgments and try to find out which biases caused them,” he advised the participants. Gavankar said that in business world if a chief executive officer or a chief financial officer an organisation takes a particular decisions, it affects large number of persons. “One wrong investment decision is enough to wipe out millions of dollars,” he added taking this into account, he described some of the cognitive biases and how they affect decision making with suitable examples. He said the first bias is ‘Incentive Bias’- wherein people are driven by the incentives and if the incentive structure is not right they may be motivated to behave wrongly.


He cautioned the audience by saying, “If you are a consumer you should be wary of all those professions where people are highly incentives to push their products,” he said. The second bias is called ‘Commitment’ bias which says one tend to stick to his opinions even if later it turns out to be wrong. The third biases called ‘Authority’ bias which says one tends to accept and follows instructions of an authority even if the instructions are wrong.


Gavankar further said that the fourth bias is called ‘Availability’ bias, which says one tend to take decision based on the recent and available information to him, rather than studying the base rate probabilities.
The fifth bias is known as ‘Social’ bias which says one tends to do what others are doing even if that is wrong or inconvenient. The sixth bias is called ‘Framing’ bias, which says one takes decision not on the basis of data, but the way the data is presented. Gavankar also spoke on other related topics.


Earlier, Aditya Saraf, Vice President – VIA and former Chairman of HR. Forum gave an opening remark while Neelam Bowade Program Coordinator conducted the proceedings and introduced the speaker.