Judgment in Managerial Decision Making, 8th Edition

CHAPTER TWELVE

Improving Decision Making

At this point in the book, you may be wondering why human judgment is so terrible. In fact, the situation is not as bad as it seems. Our brains generally serve us well. We are able to perform computational miracles with the three pounds of gray matter between our ears. To pick just two examples, our ability to understand verbal language and to recognize human faces is far beyond that of even the fastest and most powerful computers.

Researchers who study judgment and decision making focus our work on the frailties and shortcomings of human judgment because such examination provides us with the best opportunities to understand the human mind. We learn the most about how we accomplish our goals not by observing successes, but by taking account of failures. When do we confuse one face with another? When do we confuse one word with another? Answers to these questions have helped us understand how our minds process visual and auditory information (Holt & Lotto, 2008; Yovel & Kanwisher, 2005). Just so, the study of judgment biases has revealed a great deal about how people make decisions.

The study of biases is also of immense practical value. Abundant evidence shows that the decisions of smart managers are routinely impaired by biases. Studying how organizations fail can provide useful lessons about what helps them succeed (Bazerman & Watkins, 2004; Perrow, 1984; Ross & Staw, 1986; Sitkin, 1992; Weick, 1993). The good news is that many interventions ...