Repeatedly making decisions for extended periods of time is mentally taxing and leads to what psychologists call ‘decision fatigue’. As a result, the decision makers will revert to default decisions—decisions that require the least amount of mental work. For example, one study showed that judges tended to refuse parole at a greater rate during periods […]
Subject: Decision Making
Why Cross-functional Teams Need Strong Leaders
Previous studies have demonstrated the quality of decisions that emerge from cross-functional teams. Most of these studies focus on the outcome of cross-functional deliberations, but not the deliberation process itself. A study built on the simulation of six cross-functional teams reveals that the type of leader or leaders guiding the deliberations of the team will […]
Read More… from Why Cross-functional Teams Need Strong Leaders
How Bringing Self to Work Inspires Ethical Behaviour
The self-concept refers to how people think of themselves. I am a good person, I am a good listener, I am impatient — these are the kinds of ideas and thoughts that people have of themselves (i.e. self-perception) that contribute to their self-concept. People are complex human beings, however, and the self-concept may differ depending […]
Read More… from How Bringing Self to Work Inspires Ethical Behaviour
Wrong Incentives Push CEO to Focus on the Short-term
A number of different incentives can potentially push leaders to make decisions that favour short-term returns over long-term value. To test whether such incentives actually have an impact on decision-making, a team of researchers used market reaction to new project announcements by CEOs. They compared differences in the market response to CEOs who had incentives […]
Read More… from Wrong Incentives Push CEO to Focus on the Short-term
How Linear Thinking in a Non-Linear World Leads to Wrong Decisions
When it comes to business – and most areas of life – we tend to think in straight lines. For example, if one shelf holds 50 books, two shelves will hold 100 books and three shelves will hold 150 books. Graph the number of shelves on an x-axis and number of books on a y-axis […]
Read More… from How Linear Thinking in a Non-Linear World Leads to Wrong Decisions
Typical Air Quality in Offices Hurts Cognitive Function
Over a period of six days, a team of researchers recreated a variety of air quality conditions, and simultaneously conducted cognitive tests of volunteers under the various conditions to determine whether poor or even average air quality impacts our cognitive abilities. Manipulating in a laboratory setting the amount of airborne Volatile Organic Compounds (VOCs), which […]
Read More… from Typical Air Quality in Offices Hurts Cognitive Function
Algorithms and Statistical Models Vs Human Judgement
Decades of research have shown that algorithms (defined here as any evidence-based forecasting formula, including statistical models) are more accurate than forecasts made by humans. However, research has also shown that most people have greater confidence in their ability to make forecasts rather than leaving it to mathematical formulae — an attitude known as ‘algorithm […]
Read More… from Algorithms and Statistical Models Vs Human Judgement
How Testosterone Leads to Overpricing on Wall Street
Enthusiasm for your job is usually an asset. However, new research reveals that on Wall Street, such enthusiasm may backfire as the rush of winning triggers physiological changes that undermine rational thinking and decision-making. Specifically, the research studies the impact of increased testosterone levels on the buy-and-sell decisions of 140 traders taking part in a […]
Read More… from How Testosterone Leads to Overpricing on Wall Street
Bad Luck Doesn’t Just Happen: The Case of the Costa Concordia
Despite its best intentions, a company may have structures and processes in place that allows it to construct its own misfortune. This is organizational ‘zemblanity’, a term coined by writer William Boyd. Zemblanity is the antonym of serendipity, which, in an organizational context, occurs when an organization purposefully puts itself in position to take advantage […]
Read More… from Bad Luck Doesn’t Just Happen: The Case of the Costa Concordia
How People React to the Fairness of Decisions: Trust Makes a Difference
People react differently to decisions based on what they perceive was the fairness of the outcome as well as the fairness of the process — and whether or not they trusted the decision makers in the first place. For example, if people trust a manager, they are more likely to see both the outcome and […]
Read More… from How People React to the Fairness of Decisions: Trust Makes a Difference