Debiasing illusion of control in individual judgment: the role of internal and external advice seeking

This paper builds on behavioral strategy and strategic decision making literatures to propose a stronger integration of information acquisition behaviors in debiasing research. We argue that the advice-seeking behavior of executives—as their dominant way of information acquisition—may have a fundamental effect on cognitive biases in individual judgment. Empirical results of a vignette-based survey of 186 top executives in German SMEs support this claim. We posit that internal and external advice affect individual judgment differently and that external advice, in particular, is likely to be effective for debiasing. These results suggest new avenues for debiasing research that go beyond the active intervention techniques that have been the focus of debiasing research thus far.     

Supply Chain Inventory Replenishment: The Debiasing Effect of Declarative Knowledge

Previous experimental research demonstrates that inefficient replenishment decision making in the supply chain can be caused by specific judgment and decision biases. Based on the literature we use controlled experiments involving both student subjects and supply chain managers to test debiasing interventions that provide declarative knowledge, which is theorized to enhance the acquisition of procedural knowledge. We first investigate the effects of three debiasing components in a single‐echelon setting: knowledge of bullwhip, inventory position (IP), and use of a target order‐up‐to quantity. Experiment 1 (N = 1,608 decisions by 67 student subjects) using a 2 × 2 × 2 factorial design for the three components finds that the conceptual understanding of IP is salient for efficient replenishment decisions. We next examine the effects of the components in a simulated, multi‐echelon, serial supply chain, which introduces the additional complexity of coordination risk. Experiment 2 (N = 3,072 decisions by 128 student subjects) using a 2 × 2 × 2 factorial design finds that although subjects benefit from training components, there is evidence of cognitive overload with an increased quantity of information. Finally we test whether these debiasing components may be an effective training program for practicing supply chain managers who can be expected to have higher levels of procedural knowledge through experience gained in the field. Experiment 3 (N = 864 decisions by 36 supply chain managers) using a 2 × 1 design investigates the effects of an instructional training intervention which includes all three debiasing components and finds the intervention to reduce costs by 14%. We provide avenues for future research and successful practice.     

Determinants of group-level overconfidence in teams: A quasi-experimental investigation of diversity and tenure

Teams of business leaders make most strategic decisions in organizations. However, although a large body of research has analyzed cognitive biases of individual leaders, little is known about how those biases affect teams on the group level. Therefore, on the basis of research into group decision making and group diversity, we analyze demographic diversity and group tenure as two important determinants of overconfidence in groups. We report findings from a quasi-experimental field study involving 46 management teams, which suggest that diversity and tenure have separate, direct effects on group overconfidence. More specifically, we show that demographic diversity reduces group overconfidence, while group tenure increases it. These findings add a dynamic dimension to the conceptualization of group overconfidence in teams.     

Path to “Stardom” in Globally Distributed Hybrid Teams: An Examination of a Knowledge‐Centered Perspective using Social Network Analysis

Although distributed teams have been researched extensively in information systems and decision science disciplines, a review of the literature suggests that the dominant focus has been on understanding the factors affecting performance at the team level. There has however been an increasing recognition that specific individuals within such teams are often critical to the team's performance. Consequently, existing knowledge about such teams may be enhanced by examining the factors that affect the performance of individual team members. This study attempts to address this need by identifying individuals who emerge as “stars” in globally distributed teams involved in knowledge work such as information systems development (ISD). Specifically, the study takes a knowledge‐centered view in explaining which factors lead to “stardom” in such teams. Further, it adopts a social network approach consistent with the core principles of structural/relational analysis in developing and empirically validating the research model. Data from U.S.–Scandinavia self‐managed “hybrid” teams engaged in systems development were used to deductively test the proposed model. The overall study has several implications for group decision making: (i) the study focuses on stars within distributed teams, who play an important role in shaping group decision making, and emerge as a result of a negotiated/consensual decision making within egalitarian teams; (ii) an examination of emergent stars from the team members’ point of view reflects the collective acceptance and support dimension decision‐making contexts identified in prior literature; (iii) finally, the study suggests that the social network analysis technique using relational data can be a tool for a democratic decision‐making technique within groups.     

Using our brains to develop better policy

Current governmental practices often use a method called weight of evidence (WoE) to integrate and weigh different sources of information in the process of reaching a decision. Recent advances in cognitive neuroscience have identified WoE-like processes in the brain, and we believe that these advances have the potential to improve current decision-making practices. In this article, we describe five specific areas where knowledge emerging from cognitive neuroscience may be applied to the challenges confronting decisionmakers who manage risks: (1) quantifying evidence, (2) comparing the value of different sources of evidence, (3) reaching a decision, (4) illuminating the role of subjectivity, and (5) adapting to new information. We believe that the brain is an appropriate model for structuring decision-making processes because the brain's network is designed for complex, flexible decision making, and because policy decisions that must ultimately depend on human judgment will be best served by methods that complement human abilities. Future discoveries in cognitive neuroscience will likely bring further applications to decision practice.     

Collective Intuition: Implications for Improved Decision Making and Organizational Learning

This article establishes the foundation for research on collective intuition through a study of decision making and organizational learning processes in police senior management teams. We conceptualize collective intuition as independently formed judgement based on domain‐specific knowledge, experience and cognitive ability, shared and interpreted collectively. We contribute to intuition research, which has tended to focus its attention at the individual level, by studying intuition collectively in team settings. From a dual‐process perspective, we investigate how expert intuition and deliberation affect decision making and learning at various levels of the organization. Furthermore, we contribute to organizational learning research by offering an empirically derived elaboration of the foundational 4I framework, identifying additional ‘feed‐forward’ and ‘feedback’ loop processes, and thereby providing a more complete account of this organizational learning model. Bridging a variety of relevant but previously unconnected literatures via our focal concept of collective intuition, our research provides a foundation for future studies of this vitally important but under‐researched organizational phenomenon. We offer theoretical and practical implications whereby expert intuitions can be developed and leveraged collectively as valuable sources of organizational knowledge and learning, and contribute to improved decision making in organizations.     

Top management team diversity and ambidexterity: The contingent role of shared responsibility and CEO cognitive trust

Earlier research has suggested that diversity is a double-edged sword when achieving organizational ambidexterity. While it may contribute to the development of new combinations of exploration and exploitation, it may also lead to disagreements and potential conflict within top management teams (TMTs). To improve our understanding of the effectiveness of diversity in ambidextrous organizations, we develop a synergistic perspective on TMT diversity and examine how two types of diversity – functional and age diversity – affect the achievement of organizational ambidexterity. We also identify shared responsibility and CEO cognitive trust as important contingencies that may complement the effects of diversity within TMTs in terms of resolving potential conflicts and managing tensions between exploration and exploitation effectively. Based on multisource data, our study shows that CEO cognitive trust and shared responsibility moderate the relationship between different types of diversity and ambidexterity. Our study has important implications for research on organizational ambidexterity, diversity, and senior leadership.     

Cognitive and Motivational Biases in Decision and Risk Analysis

Behavioral decision research has demonstrated that judgments and decisions of ordinary people and experts are subject to numerous biases. Decision and risk analysis were designed to improve judgments and decisions and to overcome many of these biases. However, when eliciting model components and parameters from decisionmakers or experts, analysts often face the very biases they are trying to help overcome. When these inputs are biased they can seriously reduce the quality of the model and resulting analysis. Some of these biases are due to faulty cognitive processes; some are due to motivations for preferred analysis outcomes. This article identifies the cognitive and motivational biases that are relevant for decision and risk analysis because they can distort analysis inputs and are difficult to correct. We also review and provide guidance about the existing debiasing techniques to overcome these biases. In addition, we describe some biases that are less relevant because they can be corrected by using logic or decomposing the elicitation task. We conclude the article with an agenda for future research.     

基于两类残缺偏好信息的交互式群决策方法研究

提出不同残缺偏好信息的交互式群决策方法。利用矩阵元素之间的可达性关系,给出区间数判断矩阵残缺元素的确定方法。定义了不同偏好信息的群体满意度,基于群体判断与决策个体判断之问的偏离程度,与决策者进行交互,使得决策者的意见尽可能协调一致。根据修正意见求解得到方案排序,并通过算例说明方法的有效性。     

The Effects of Hindsight Bias on Jurors' Evaluations of Auditor Decisions*

Hindsight bias refers to the tendency of individuals with outcome knowledge (hindsight) to alter their perception of an event such that, ex-post, one's assumed ability to predict an event is greater than one's ex-ante ability. Auditors must make decisions without knowledge of an eventual outcome, but auditor liability is determined from a perspective that includes outcome knowledge. A behavioral experiment was conducted with 92 prospective jurors. Jurors were presented with a case in which auditors performed an audit of a client company and subsequently issued the standard, favorable audit report. Outcome knowledge was manipulated as: (1) no outcome (control group), (2) negative outcome (bankruptcy and subsequent lawsuit), and (3) negative outcome with a debiasing strategy. Results indicate that outcome knowledge biased jurors' evaluations of the auditor's judgment. Additional analysis revealed that the results are consistent with a cognitive interpretation of hindsight bias. The debiasing strategy was found to be effective in mitigating hindsight bias.     

基于创业团队先前经验的新技术企业市场进入战略选择研究

基于社会认知和战略选择等理论知识,探讨创业团队先前经验构成特征与进入战略创新性的逻辑关系,并探索技术独享性和环境宽松性对团队决策的影响。基于随机抽样的问卷调研方法,利用150份新技术企业样本进行实证分析。研究结果表明,新技术企业初始战略来源于创业团队基于先前经验而达成的集体认知决策,技术导向型团队倾向于通过产品或服务的创新进入市场,而市场导向型的团队则会竭力从交易结构的创新入手,兼顾技术和市场导向的团队,虽然拥有多元化的认知模式,却没能迸发出应有的创造力。技术独享性在创业团队经验构成与进入战略创新性之间发挥正向调节作用,但没有改变团队成员固有认知模式;环境宽松性改变了创业团队在选择市场进入战略时的关注点,当环境较为宽松时,技术导向型和市场导向型的创业团队都呈现出对产品或服务创新的忽视,而加大了在交易结构上谋求创新的力度。     

Invisible Whispering: Restructuring Collaborative Decision Making with Instant Messaging

Organizational decision making is dominated by teams. When an important decision is required, a team is often formed to make it or to advise the individual decision maker, because a team has more resources, knowledge, and political insight than any one individual working alone. As teams have become geographically distributed, collaboration technology has come to play an important role in such collective decision making efforts. Instant messaging (IM) is an increasingly prevalent workplace collaboration technology that enables near‐synchronous text exchanges on a variety of devices. We examined the use of IM during face‐to‐face, telephone, and computer‐mediated team meetings, a practice we call “invisible whispering.” We introduce Goffman's characterization of social interaction as dramatic performance, differentiable into “front stage” and “backstage” exchanges, to analyze how invisible whispering alters the socio‐spatial and temporal boundaries of team decision making. Using IM, workers were able to influence front stage decision making through backstage conversations, often participating in multiple backstage conversations simultaneously. This type of interaction would be either physically impossible or socially constrained without the use of IM. We examine how invisible whispering changes the processes of collaborative decision making and how these new processes may affect the efficiency and effectiveness of collaborative decision making, as well as participation, satisfaction, relationships among team members, and individual attention.     

Seeing Is Believing: The Transitory Influence of Reputation Information on E‐Commerce Trust and Decision Making

This research examines the transitory influence of reputation information on consumer decision making regarding an e‐vendor. Using social judgment theory to explain how reputation information's effect on perceptions may be fleeting, we specifically examined how user trusting beliefs related to an e‐vendor change after a simple exposure to the Web site. A total of 369 college students participated in an experiment that found that reputation information was initially strongly related to trusting beliefs regarding the e‐vendor, but a brief nonpurchase‐related exposure to the e‐vendor's Web site—that is, direct experience—reduced reputation's effects significantly. This research provides insights into why reputation information may be more important in certain circumstances than in others and enhances our understanding of how consumer decision making is affected by different purchasing contexts. This research also has implications on the design and use of trust‐building technologies.     

Feedback in DSS as a Source of Control: Experiments with the Timing of Feedback

Well-designed feedback can improve decision making but to date there has been no comprehensive study of feedback in decision support systems (DSS) that could guide developers in its design. This work examines the opportunities and means to enhance cognitive control in decision making by providing appropriate feedback with DSS. It concentrates on the timing of feedback, which has been shown to affect the use of feedback and also demonstrates the potential advantages of using information technology over and above manual decision environments. Two experiments test the effects of controlling the timing of cognitive feedback on the user's cognitive control. The first tests the effect of timing one source of cognitive feedback, and the second tests the effect of timing two sources of feedback. The findings suggest that the design of feedback should become a routine part of the development of DSS.     

New Product Development Decision‐Making Effectiveness: Comparing Individuals,Face‐To‐Face Teams,and Virtual Teams*

A total of 411 subjects participated in two decision‐making experiments in order to examine the effectiveness of new product development project continuation decisions. Using escalation of commitment theory, in Study 1, individual versus face‐to‐face team decision‐making effectiveness was compared. Study 2, an extension of Study 1, compared the new product development decision‐making effectiveness of individuals, face‐to‐face teams, and virtual teams. A virtual team is a geographically and temporally dispersed and electronically communicating work group. In Study 2, the virtual teams communicated asynchronously via groupware technology. Our findings suggest that teams make more effective decisions than individuals, and virtual teams make the most effective decisions.     

Decision Making and Cognition in Multi‐Echelon Supply Chains: An Experimental Study

Supply chain performance often depends on the individual decisions of channel members. Even when individuals have access to relevant information, order variation tends to increase when moving up the supply chain, a phenomenon known as the bullwhip effect. While prior research has investigated several structural/environmental factors which can mitigate the bullwhip effect, the underlying behavioral factors contributing to it are an open question. Using a production and distribution decision‐making simulation representing a four‐stage serial supply chain, we find that the cognitive profile of decision makers contributes to the bullwhip effect. We found that the specific decision tendency to underweight the supply line is linked to an individual's level of cognitive reflection. Furthermore, performance differs for entire supply chains and for specific echelons, and holds under standard mitigation efforts. The findings have implications for supply chain design, education, and industry.     

A Dynamic Perspective on Diverse Teams: Moving from the Dual-Process Model to a Dynamic Coordination-based Model of Diverse Team Performance

The existing literature on diverse teams suggests that diversity is both helpful to teams in making more information available and encouraging creativity and damaging to teams in reducing cohesion and information sharing. Thus the extant literature suggests that diversity within teams is a double-edged sword that leads to both positive and negative effects simultaneously. This literature has not, however, fully embraced the increasing calls in the broader groups literature to take account of time in understanding how groups function [e.g. Cronin, M. A., Weingart, L. R., &; Todorova, G. (2011). Dynamics in groups: Are we there yet? The Academy of Management Annals, 5, 571–612]. We review the literature on diverse teams employing this lens to develop a dynamic perspective that takes account of the timing and flow of diversity's effects. Our review suggests that diversity in groups has different short-term and long-term effects in ways that are not fully captured by the currently dominant double-edged sword metaphor. We identify an emerging perspective that suggests a tropical depression metaphor—that has the potential, over time, to develop either into a dangerous hurricane or diffuse into a rainstorm that gives way to sunshine, as more apt to capture the dynamic effects of diversity in teams. We conclude by outlining an agenda for redirecting future research on diverse teams using this more dynamic perspective.     

Differences in Managerial Cognitions of Competition1

It has been assumed that strategic decision making and implementation are both achieved through managers' sharing homogeneous cognitions of competition (e.g. Porac and Thomas, 1990). This paper tested the assumption of homogeneity of cognitions of competition, using a sample of 24 managers from the off-shore pumps industry. A variety of cognitive mapping techniques were used and maps were compared using a self-rating methodology. The results indicated that managers' mental models of competition are diverse, rather than homogeneous, but that this diversity increases as company boundaries are crossed and as functional boundaries are crossed. Therefore, it is concluded that future cognitive studies of competitive industry structures should assume diversity of cognitions rather than homogeneity. Specific propositions with regard to such research are drawn from the findings.     

Decision Making in Cross‐Functional Teams: The Role of Decision Power*

Through a series of game‐theoretical models, this study systematically examines decision making in cross‐functional teams. It provides a framework for the design of an organization‐specific decision‐making process and for the alignment of a team's microdecision with the “optimal” decision that maximizes the firm's payoff. This study finds that even without changing the team leader, firms could change and even dictate the team's microdecision outcome via adjusting the team member's seniority, empowering team members with veto power or involving a supervisor as a threat to overrule the team decision. This finding implies that to reposition products in the marketplace, structuring cross‐functional teams’ microdecision‐making processes is essential.     

基于模糊判断矩阵的群决策方法研究

对多个决策者给出的偏好信息的有效集结是群决策过程的重要问题之一.不同类型的偏好信息有不同的集结方法.基于模糊判断矩阵一致性的定义,提出一种加权集结方法的最优化模型,从而得到群决策中一类模糊判断矩阵的集结方法,并进一步分析和研究群组判断矩阵与各决策者给出的判断矩阵之间关系的一些重要性质.