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Implications of Cognitive Biases for Management Models: Biases in Individuals as a Source of Corporate Irrationality

Nordenstorm, Karl (2015) MIO920
Production Management
Abstract
The field of Cognitive Psychology has
discovered a large number of automatic and
systematic errors of judgement that humans
make. These are called cognitive biases and
cause irrational behavior in diverse contexts.
Prior research has found that cognitive biases
can cause irrational behavior in companies. For
example company functions, such as planning,
have been found to suffer from systematic errors
caused by cognitive biases. Insights into how
cognitive bias cause irrationality has helped in
improving corporate functions.
This study explored new ways that cognitive
biases seem to influence some specific academic
models (management models) within quality
management and qualitative forecasting.
Purpose: This study had the... (More)
The field of Cognitive Psychology has
discovered a large number of automatic and
systematic errors of judgement that humans
make. These are called cognitive biases and
cause irrational behavior in diverse contexts.
Prior research has found that cognitive biases
can cause irrational behavior in companies. For
example company functions, such as planning,
have been found to suffer from systematic errors
caused by cognitive biases. Insights into how
cognitive bias cause irrationality has helped in
improving corporate functions.
This study explored new ways that cognitive
biases seem to influence some specific academic
models (management models) within quality
management and qualitative forecasting.
Purpose: This study had the main purpose to identify new
ways that cognitive biases might influence
management models.
The study was exploratory, and its scope was
adjusted as the study was conducted, in response
to its findings. Sub-purposes included deciding
which models to analyze and developing the
methodology for finding implications.
Methodology: The choice of which management models to
study, was based on the volume of prior work
about the impact of cognitive biases on that
management model, as well as how feasible it
seemed that the model would be influenced by
the cognitive biases.
These models were analyzed with regards to 21
cognitive biases. The analysis was made using a
modification of the methodology used in prior
studies similar to this one. This methodology
builds upon logical argumentation.
Results/Conclusion: The results included a high number of
hypotheses of potential implications of
cognitive biases. Ways of mitigating the
irrational influence were suggested in
conjunction to many of these hypotheses.
The chosen models to study were: Delphi
method forecasting, structured analogies
forecasting, subjective approach forecasting,
and the process of finding flaws in processes. (Less)
Please use this url to cite or link to this publication:
author
Nordenstorm, Karl
supervisor
organization
course
MIO920
year
type
M1 - University Diploma
subject
keywords
Cognitive bias, cognitive psychology, behavioral economics, qualitative forecasting, Delphi method, structured analogies forecasting, process-management
other publication id
15/5536
language
English
id
8169869
date added to LUP
2015-11-12 13:24:16
date last changed
2015-11-12 13:24:16
@misc{8169869,
  abstract     = {The field of Cognitive Psychology has
discovered a large number of automatic and
systematic errors of judgement that humans
make. These are called cognitive biases and
cause irrational behavior in diverse contexts.
Prior research has found that cognitive biases
can cause irrational behavior in companies. For
example company functions, such as planning,
have been found to suffer from systematic errors
caused by cognitive biases. Insights into how
cognitive bias cause irrationality has helped in
improving corporate functions.
This study explored new ways that cognitive
biases seem to influence some specific academic
models (management models) within quality
management and qualitative forecasting.
Purpose: This study had the main purpose to identify new
ways that cognitive biases might influence
management models.
The study was exploratory, and its scope was
adjusted as the study was conducted, in response
to its findings. Sub-purposes included deciding
which models to analyze and developing the
methodology for finding implications.
Methodology: The choice of which management models to
study, was based on the volume of prior work
about the impact of cognitive biases on that
management model, as well as how feasible it
seemed that the model would be influenced by
the cognitive biases.
These models were analyzed with regards to 21
cognitive biases. The analysis was made using a
modification of the methodology used in prior
studies similar to this one. This methodology
builds upon logical argumentation.
Results/Conclusion: The results included a high number of
hypotheses of potential implications of
cognitive biases. Ways of mitigating the
irrational influence were suggested in
conjunction to many of these hypotheses.
The chosen models to study were: Delphi
method forecasting, structured analogies
forecasting, subjective approach forecasting,
and the process of finding flaws in processes.},
  author       = {Nordenstorm, Karl},
  keyword      = {Cognitive bias,cognitive psychology,behavioral economics,qualitative forecasting,Delphi method,structured analogies forecasting,process-management},
  language     = {eng},
  note         = {Student Paper},
  title        = {Implications of Cognitive Biases for Management Models: Biases in Individuals as a Source of Corporate Irrationality},
  year         = {2015},
}