{"id":189,"date":"2017-07-26T18:42:34","date_gmt":"2017-07-26T18:42:34","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-principlesofmanagement\/?post_type=chapter&#038;p=189"},"modified":"2019-07-01T19:57:30","modified_gmt":"2019-07-01T19:57:30","slug":"introduction-the-decision-making-process","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wmopen-principlesofmanagement\/chapter\/introduction-the-decision-making-process\/","title":{"raw":"Barriers to Individual Decision Making and Styles of Decision Making","rendered":"Barriers to Individual Decision Making and Styles of Decision Making"},"content":{"raw":"<h2>What you\u2019ll learn to do: describe the barriers to individual decision making and common styles of decision making<\/h2>\r\nMaking decisions is easy. Making the right decision is hard. When making decisions, you will face many barriers, including the quality of information you have, the amount of time allowed, and several cognitive biases that will influence your decisions. In addition to these barriers, we'll also look at some common styles of decision making, including satisficing, optimizing, intuitive, rational, combinatorial, and positional.\r\n<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Describe the barriers to decision making.<\/li>\r\n \t<li>Identify common styles of decision making.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2>Barriers to Individual Decision Making<\/h2>\r\nObviously, not all decisions prove to be good ones. Sometimes that is due to unfortunate situations that would have been impossible to foresee. Other times, however, the problem with the decision could have been avoided. What are the potential barriers that we should be aware of during the decision-making process?\r\n<h3>Information-Related Barriers<\/h3>\r\nAlmost every decision is based at least in part on information that the decision maker trusts. The reliability and use of that information can potentially lead to multiple problems.\r\n\r\nOne of the most obvious information-related problems occurs when the information is either incorrect or incomplete. Trusting information that is faulty leads to many wrong deductions and conclusions. If information is incomplete, even if the decision maker is aware of that fact, uncertainty is introduced, and any decision based on that partial information could prove to be misguided.\r\n\r\nOn the other hand, a contrasting problem can arise when there is too much information available. An information overload can make it difficult to grasp the big picture and recognize which pieces of information are most important. Another problem it can create is that large sets of data may contain data that seems contradictory, leading the analyst to confusion or uncertainty and an inability to synthesize it as a whole.\r\n\r\nAn overabundance of information can also lead to an inability to process everything to the decision maker\u2019s satisfaction. The result can be a harmful delay in the decision-making process as the over-abundance of information is being considered for an undue amount of time. Similarly, if the decision maker is excessively concerned to find every possible piece of information, the same problem can arise.\r\n<h3>Circumstance and Time-Related Barriers<\/h3>\r\nA variety of difficulties can also arise from the circumstances in the midst of which a decision maker must work. One of the most common issues is stress, which can arise from a great number of sources. If the decision maker is experiencing abnormal levels of stress either in his personal life or work environment, that can often lead him to poor decisions that are out of character. He may be less objective or less disciplined in following the decision-making process he usually trusts. Recognizing high stress levels can provide the opportunity to intentionally protect against those tendencies.\r\n\r\nAlso, when time is a restricting factor, that often contributes to poor decisions. Unsurprisingly, evidence suggests that when decision makers feel rushed for time, their judgment often suffers. This is true even when there actually is sufficient time for the decision-making process: just the feeling of a lack of time causes problems. It is important to commit to taking sufficient time for decisions if at all possible (and it usually is).\r\n<h3>Cognitive Biases<\/h3>\r\n[caption id=\"attachment_655\" align=\"aligncenter\" width=\"562\"]<img class=\" wp-image-655\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/07\/26184544\/800px-Optical-illusion-checkerboard.svg_-300x225.png\" alt=\"A graphic image of purple and blue alternating squares with the lines in between the squares shaded different colors, making the parallel lines appear crooked\" width=\"562\" height=\"422\" \/> In this optical illusion all lines are parallel. Perceptual distortion makes them seem crooked.[\/caption]\r\n\r\nEven when circumstances are conducive to good decisions and a sufficient supply of accurate information is available, there are still a number of ways in which decision makers might be at fault in their manner of judgment. For instance, their perception\u00a0can be distorted. Understanding how this happens is relevant for managers because they make many\u00a0decisions daily. They must also deal with many people making\u00a0assessments\u00a0and judgments.\r\n\r\nFaulty ways of thinking during the analysis stage are often referred to as cognitive biases. A few common ones follow:\r\n<h4>Confirmation Bias<\/h4>\r\nConfirmation bias is the tendency to seek out or prefer information and opinions that we believe will confirm our own judgment. We want to be confirmed, so we pay more attention to information that we think supports us, and we ignore or diminish the significance of information to the contrary. We also tend to accept information at face value that confirms our preconceived views while being critical and skeptical of information that challenges these views. For example, if you believe your new diet of bananas and almonds is the healthiest foods to eat, you will search for and accept any supporting information on the virtues of bananas and almonds, and ignore and discount any contradictory information.\r\n<h4>Framing Bias<\/h4>\r\nFraming bias is the tendency to be influenced by the way that a situation or problem is presented. Framing a message with a positive outcome has been shown to be more influential than framing a message with a negative outcome. For example, public health messages that depict nonsmokers as happy and popular with sparkling white smiles has proven more effective than displaying a smoker\u2019s diseased lung. Numerous studies have demonstrated framing effects in our everyday lives.\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">We are more likely to enjoy meat labeled 75 percent lean meat as opposed to 25 percent fat.<\/li>\r\n \t<li style=\"font-weight: 400;\">93 percent of PhD students registered early when the framing was in terms of a penalty fee for late registration, with only 67 percent registering early when the framing was in terms of a discount for earlier registration.<\/li>\r\n \t<li style=\"font-weight: 400;\">More people will support an economic policy if the employment rate is emphasized than when the associated unemployment rate is highlighted.[footnote]\u201cThe Framing Effect Bias: Improving Decision Making Skills for Cognitive Misers.\u201d IQ Mindware. http:\/\/www.highiqpro.com\/willpower-self-control\/the-framing-effect-improving-decision-making-skills-with-capacity-strategy-training[\/footnote]<\/li>\r\n<\/ul>\r\nIt is important to be aware of this tendency because, depending on how a problem is presented, we might choose an alternative that is disadvantageous simply because of how it is framed.\r\n<h4>Hindsight Bias<\/h4>\r\nHindsight bias is the tendency to believe falsely that we would have accurately predicted the outcome of an event after that outcome is actually known. When something happens and we have accurate feedback on the outcome, we appear to be very good at concluding that this outcome was relatively obvious. For example, a lot more people claim to have been sure about the inevitability of who would win the Super Bowl the day after the game than they were the day before.\r\n\r\nWhat explains hindsight bias? We are very poor at recalling the way an uncertain event appeared before we realize the actual results of the event, but we can be exceptionally talented at overestimating what we actually knew beforehand as we reconstruct the past. Just listen to a call-in sports show after a big game, and hindsight bias will be on full display.\r\n\r\nWe seek out or prefer information and opinions that we believe will confirm our own judgment. We want to be confirmed, so we pay more attention to information that we think supports us, and we ignore or diminish the significance of information to the contrary.\r\n<h4>Anchoring<\/h4>\r\nAnchoring bias is a tendency to fixate on initial information and then fail to adjust for subsequent information. When our opinion becomes anchored to that piece of information, we cannot stray very far from it. For example, in a mock jury trial, one set of jurors was asked to make an award in the range of $15 million to $50 million. Another set of jurors was asked for an award in the range of $50 million and $150 million. The median awards were $15 million and $50 million respectively with each set of jurors.\r\n<h4>Halo Effect<\/h4>\r\nHalo effect concerns the preferential attitude that we have toward certain individuals or organizations. Because we are impressed with their knowledge or expertise in a certain area or areas, we unconsciously begin to give their opinions special credence in other areas as well. This would, for example, be exhibited when sports stars express their political opinions and the public gives strong weight to what they say. There is no logical reason to think that they have sound political opinions just because they have great skill in the realm of sports.\r\n<h4>Overconfidence Bias<\/h4>\r\nOverconfident bias is particularly easy to understand. It basically amounts to the idea that an individual decision maker trusts his own judgment (usually his intuition) and allows that judgment to override evidence to the contrary. His opinion counts more strongly to him than that of experts who are more knowledgeable and often more than factual data that contradicts his views. From an organizational standpoint, as managers and employees become more knowledgeable about an issue, the less likely they are to display overconfidence. And overconfidence is most likely to arise when employees are considering issues outside of their area of expertise.\r\n<h4>Status-Quo Bias<\/h4>\r\nSome decision makers prefer to avoid change and maintain the status quo. This desire, perhaps unrecognized, often leads them to favor ideas that do not lead to significant changes. Evidence and ideas that support change are neglected as a result.\r\n<h4>Pro-Innovation Bias<\/h4>\r\nPro-innovative bias is the opposite of the status-quo bias. Rather than prefer things to stay the same, the innovation bias gives preference to any new and innovative idea simply because it represents something new. The feeling is that new ideas must be better than old ones. Even if no objective evidence supports the new idea as useful and helpful, it is still attractive just by virtue of being new.\r\n\r\nHere is an explanatory video that will help you understand some of these biases along with others:\r\n\r\nhttps:\/\/www.youtube.com\/watch?v=cAbdmV3VOwA\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/12188\r\n\r\n<\/div>\r\n<h2>Styles of Decision Making<\/h2>\r\n<h3><strong>Optimizing vs. Satisficing<\/strong><\/h3>\r\nThe \u201cfog of war\u201d refers to the uncertainty common on a battlefield.\u00a0 Business is not quite that bad, but there often isn\u2019t good information for a full analysis.\u00a0 With limitations on information, thoughtful analysis may be impossible. So what\u2019s a decision maker to do? There are two ends of a spectrum from which to approach this: satisficing and optimizing. <strong>Satisficing<\/strong>\u2014a combination of the words \u201csatisfy\u201d and \u201csuffice\u201d\u2014means settling for a less-than-perfect solution when working with limited information. <strong>Optimizing<\/strong> involves collecting as much data as possible and trying to find the optimal choice. Generally, decision makers don\u2019t pick one or the other\u2014you can think of satisficing to optimizing as a spectrum, and each decision starts with an assessment of how critical it is. A branch of management called management science offers methods for solving complex problems.\r\n<h3><strong>Intuitive vs. Rational<\/strong><\/h3>\r\nAccording to Daniel Kahneman, who you\u2019ll read more about in the next section, each of us has two separate minds that compete for influence. One way to describe this is a conscious and a subconscious perspective. The subconscious mind is automatic and <strong>intuitive<\/strong>, rapidly consolidating data and producing a decision almost immediately. The subconscious mind works best with repeated experiences. The conscious, <strong>rational<\/strong> mind requires more effort, using logic and reason to make a choice.\u00a0 For example, the subconscious mind throws a ball and hits the target, while the conscious mind slowly describes the physics and forces required to complete the action.\r\n<h3><strong>Combinatorial vs. Positional<\/strong><\/h3>\r\nAron Katsenelinboigen proposed this description based on how the game of chess is played.\u00a0 A <strong>combinatorial<\/strong> player has a final outcome in mind, making a series of moves that try to link the initial position with the final outcome in a firm, narrow, and more certain way. \u00a0The name comes from the rapid increase in the number of moves he must consider for each step he looks ahead.\u00a0 The <strong>positional<\/strong> decision-making approach is \u201clooser,\u201d setting up strong positions on the board and preparing to react to the opponent. A player using this strategy increases flexibility, creating options as opposed to forcing a single sequence.\r\n\r\n[caption id=\"attachment_1190\" align=\"aligncenter\" width=\"600\"]<img class=\"wp-image-1190\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/08\/08211344\/the-strategy-1080533_1920.jpg\" alt=\"Pieces set up on a chess board, with a man appearing out of focus in the background with a thoughtful expression on his face\" width=\"600\" height=\"409\" \/> Like chess players, businesses can use combinatorial or positional strategies to make decisions.[\/caption]\r\n\r\nIn business, a market share strategy is positional.\u00a0 A dominant market share gives a firm negotiating power even with lesser product.\u00a0 A complex situation with many players and many solutions might require a more combinatorial strategy. Apple faced a complex environment when it entered the music streaming business.\u00a0 It created an ecosystem that served artists, labels, and customers without dominating the music business.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/12189\r\n\r\n<\/div>\r\n<h2><strong>Check Your Understanding<\/strong><\/h2>\r\nAnswer the question(s) below to see how well you understand the topics covered in the previous section. This short quiz does\u00a0<strong>not<\/strong>\u00a0count toward your grade in the class, and you can retake it an unlimited number of times.\r\n\r\nUse this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.\r\n\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/6716","rendered":"<h2>What you\u2019ll learn to do: describe the barriers to individual decision making and common styles of decision making<\/h2>\n<p>Making decisions is easy. Making the right decision is hard. When making decisions, you will face many barriers, including the quality of information you have, the amount of time allowed, and several cognitive biases that will influence your decisions. In addition to these barriers, we&#8217;ll also look at some common styles of decision making, including satisficing, optimizing, intuitive, rational, combinatorial, and positional.<\/p>\n<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Describe the barriers to decision making.<\/li>\n<li>Identify common styles of decision making.<\/li>\n<\/ul>\n<\/div>\n<h2>Barriers to Individual Decision Making<\/h2>\n<p>Obviously, not all decisions prove to be good ones. Sometimes that is due to unfortunate situations that would have been impossible to foresee. Other times, however, the problem with the decision could have been avoided. What are the potential barriers that we should be aware of during the decision-making process?<\/p>\n<h3>Information-Related Barriers<\/h3>\n<p>Almost every decision is based at least in part on information that the decision maker trusts. The reliability and use of that information can potentially lead to multiple problems.<\/p>\n<p>One of the most obvious information-related problems occurs when the information is either incorrect or incomplete. Trusting information that is faulty leads to many wrong deductions and conclusions. If information is incomplete, even if the decision maker is aware of that fact, uncertainty is introduced, and any decision based on that partial information could prove to be misguided.<\/p>\n<p>On the other hand, a contrasting problem can arise when there is too much information available. An information overload can make it difficult to grasp the big picture and recognize which pieces of information are most important. Another problem it can create is that large sets of data may contain data that seems contradictory, leading the analyst to confusion or uncertainty and an inability to synthesize it as a whole.<\/p>\n<p>An overabundance of information can also lead to an inability to process everything to the decision maker\u2019s satisfaction. The result can be a harmful delay in the decision-making process as the over-abundance of information is being considered for an undue amount of time. Similarly, if the decision maker is excessively concerned to find every possible piece of information, the same problem can arise.<\/p>\n<h3>Circumstance and Time-Related Barriers<\/h3>\n<p>A variety of difficulties can also arise from the circumstances in the midst of which a decision maker must work. One of the most common issues is stress, which can arise from a great number of sources. If the decision maker is experiencing abnormal levels of stress either in his personal life or work environment, that can often lead him to poor decisions that are out of character. He may be less objective or less disciplined in following the decision-making process he usually trusts. Recognizing high stress levels can provide the opportunity to intentionally protect against those tendencies.<\/p>\n<p>Also, when time is a restricting factor, that often contributes to poor decisions. Unsurprisingly, evidence suggests that when decision makers feel rushed for time, their judgment often suffers. This is true even when there actually is sufficient time for the decision-making process: just the feeling of a lack of time causes problems. It is important to commit to taking sufficient time for decisions if at all possible (and it usually is).<\/p>\n<h3>Cognitive Biases<\/h3>\n<div id=\"attachment_655\" style=\"width: 572px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-655\" class=\"wp-image-655\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/07\/26184544\/800px-Optical-illusion-checkerboard.svg_-300x225.png\" alt=\"A graphic image of purple and blue alternating squares with the lines in between the squares shaded different colors, making the parallel lines appear crooked\" width=\"562\" height=\"422\" \/><\/p>\n<p id=\"caption-attachment-655\" class=\"wp-caption-text\">In this optical illusion all lines are parallel. Perceptual distortion makes them seem crooked.<\/p>\n<\/div>\n<p>Even when circumstances are conducive to good decisions and a sufficient supply of accurate information is available, there are still a number of ways in which decision makers might be at fault in their manner of judgment. For instance, their perception\u00a0can be distorted. Understanding how this happens is relevant for managers because they make many\u00a0decisions daily. They must also deal with many people making\u00a0assessments\u00a0and judgments.<\/p>\n<p>Faulty ways of thinking during the analysis stage are often referred to as cognitive biases. A few common ones follow:<\/p>\n<h4>Confirmation Bias<\/h4>\n<p>Confirmation bias is the tendency to seek out or prefer information and opinions that we believe will confirm our own judgment. We want to be confirmed, so we pay more attention to information that we think supports us, and we ignore or diminish the significance of information to the contrary. We also tend to accept information at face value that confirms our preconceived views while being critical and skeptical of information that challenges these views. For example, if you believe your new diet of bananas and almonds is the healthiest foods to eat, you will search for and accept any supporting information on the virtues of bananas and almonds, and ignore and discount any contradictory information.<\/p>\n<h4>Framing Bias<\/h4>\n<p>Framing bias is the tendency to be influenced by the way that a situation or problem is presented. Framing a message with a positive outcome has been shown to be more influential than framing a message with a negative outcome. For example, public health messages that depict nonsmokers as happy and popular with sparkling white smiles has proven more effective than displaying a smoker\u2019s diseased lung. Numerous studies have demonstrated framing effects in our everyday lives.<\/p>\n<ul>\n<li style=\"font-weight: 400;\">We are more likely to enjoy meat labeled 75 percent lean meat as opposed to 25 percent fat.<\/li>\n<li style=\"font-weight: 400;\">93 percent of PhD students registered early when the framing was in terms of a penalty fee for late registration, with only 67 percent registering early when the framing was in terms of a discount for earlier registration.<\/li>\n<li style=\"font-weight: 400;\">More people will support an economic policy if the employment rate is emphasized than when the associated unemployment rate is highlighted.<a class=\"footnote\" title=\"\u201cThe Framing Effect Bias: Improving Decision Making Skills for Cognitive Misers.\u201d IQ Mindware. http:\/\/www.highiqpro.com\/willpower-self-control\/the-framing-effect-improving-decision-making-skills-with-capacity-strategy-training\" id=\"return-footnote-189-1\" href=\"#footnote-189-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/li>\n<\/ul>\n<p>It is important to be aware of this tendency because, depending on how a problem is presented, we might choose an alternative that is disadvantageous simply because of how it is framed.<\/p>\n<h4>Hindsight Bias<\/h4>\n<p>Hindsight bias is the tendency to believe falsely that we would have accurately predicted the outcome of an event after that outcome is actually known. When something happens and we have accurate feedback on the outcome, we appear to be very good at concluding that this outcome was relatively obvious. For example, a lot more people claim to have been sure about the inevitability of who would win the Super Bowl the day after the game than they were the day before.<\/p>\n<p>What explains hindsight bias? We are very poor at recalling the way an uncertain event appeared before we realize the actual results of the event, but we can be exceptionally talented at overestimating what we actually knew beforehand as we reconstruct the past. Just listen to a call-in sports show after a big game, and hindsight bias will be on full display.<\/p>\n<p>We seek out or prefer information and opinions that we believe will confirm our own judgment. We want to be confirmed, so we pay more attention to information that we think supports us, and we ignore or diminish the significance of information to the contrary.<\/p>\n<h4>Anchoring<\/h4>\n<p>Anchoring bias is a tendency to fixate on initial information and then fail to adjust for subsequent information. When our opinion becomes anchored to that piece of information, we cannot stray very far from it. For example, in a mock jury trial, one set of jurors was asked to make an award in the range of $15 million to $50 million. Another set of jurors was asked for an award in the range of $50 million and $150 million. The median awards were $15 million and $50 million respectively with each set of jurors.<\/p>\n<h4>Halo Effect<\/h4>\n<p>Halo effect concerns the preferential attitude that we have toward certain individuals or organizations. Because we are impressed with their knowledge or expertise in a certain area or areas, we unconsciously begin to give their opinions special credence in other areas as well. This would, for example, be exhibited when sports stars express their political opinions and the public gives strong weight to what they say. There is no logical reason to think that they have sound political opinions just because they have great skill in the realm of sports.<\/p>\n<h4>Overconfidence Bias<\/h4>\n<p>Overconfident bias is particularly easy to understand. It basically amounts to the idea that an individual decision maker trusts his own judgment (usually his intuition) and allows that judgment to override evidence to the contrary. His opinion counts more strongly to him than that of experts who are more knowledgeable and often more than factual data that contradicts his views. From an organizational standpoint, as managers and employees become more knowledgeable about an issue, the less likely they are to display overconfidence. And overconfidence is most likely to arise when employees are considering issues outside of their area of expertise.<\/p>\n<h4>Status-Quo Bias<\/h4>\n<p>Some decision makers prefer to avoid change and maintain the status quo. This desire, perhaps unrecognized, often leads them to favor ideas that do not lead to significant changes. Evidence and ideas that support change are neglected as a result.<\/p>\n<h4>Pro-Innovation Bias<\/h4>\n<p>Pro-innovative bias is the opposite of the status-quo bias. Rather than prefer things to stay the same, the innovation bias gives preference to any new and innovative idea simply because it represents something new. The feeling is that new ideas must be better than old ones. Even if no objective evidence supports the new idea as useful and helpful, it is still attractive just by virtue of being new.<\/p>\n<p>Here is an explanatory video that will help you understand some of these biases along with others:<\/p>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"Common Biases and Judgment Errors in Decision Making Organizational Behavior (by Jennifer Lombardo)\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/cAbdmV3VOwA?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"lumen_assessment_12188\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=12188&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_12188\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<h2>Styles of Decision Making<\/h2>\n<h3><strong>Optimizing vs. Satisficing<\/strong><\/h3>\n<p>The \u201cfog of war\u201d refers to the uncertainty common on a battlefield.\u00a0 Business is not quite that bad, but there often isn\u2019t good information for a full analysis.\u00a0 With limitations on information, thoughtful analysis may be impossible. So what\u2019s a decision maker to do? There are two ends of a spectrum from which to approach this: satisficing and optimizing. <strong>Satisficing<\/strong>\u2014a combination of the words \u201csatisfy\u201d and \u201csuffice\u201d\u2014means settling for a less-than-perfect solution when working with limited information. <strong>Optimizing<\/strong> involves collecting as much data as possible and trying to find the optimal choice. Generally, decision makers don\u2019t pick one or the other\u2014you can think of satisficing to optimizing as a spectrum, and each decision starts with an assessment of how critical it is. A branch of management called management science offers methods for solving complex problems.<\/p>\n<h3><strong>Intuitive vs. Rational<\/strong><\/h3>\n<p>According to Daniel Kahneman, who you\u2019ll read more about in the next section, each of us has two separate minds that compete for influence. One way to describe this is a conscious and a subconscious perspective. The subconscious mind is automatic and <strong>intuitive<\/strong>, rapidly consolidating data and producing a decision almost immediately. The subconscious mind works best with repeated experiences. The conscious, <strong>rational<\/strong> mind requires more effort, using logic and reason to make a choice.\u00a0 For example, the subconscious mind throws a ball and hits the target, while the conscious mind slowly describes the physics and forces required to complete the action.<\/p>\n<h3><strong>Combinatorial vs. Positional<\/strong><\/h3>\n<p>Aron Katsenelinboigen proposed this description based on how the game of chess is played.\u00a0 A <strong>combinatorial<\/strong> player has a final outcome in mind, making a series of moves that try to link the initial position with the final outcome in a firm, narrow, and more certain way. \u00a0The name comes from the rapid increase in the number of moves he must consider for each step he looks ahead.\u00a0 The <strong>positional<\/strong> decision-making approach is \u201clooser,\u201d setting up strong positions on the board and preparing to react to the opponent. A player using this strategy increases flexibility, creating options as opposed to forcing a single sequence.<\/p>\n<div id=\"attachment_1190\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1190\" class=\"wp-image-1190\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/08\/08211344\/the-strategy-1080533_1920.jpg\" alt=\"Pieces set up on a chess board, with a man appearing out of focus in the background with a thoughtful expression on his face\" width=\"600\" height=\"409\" \/><\/p>\n<p id=\"caption-attachment-1190\" class=\"wp-caption-text\">Like chess players, businesses can use combinatorial or positional strategies to make decisions.<\/p>\n<\/div>\n<p>In business, a market share strategy is positional.\u00a0 A dominant market share gives a firm negotiating power even with lesser product.\u00a0 A complex situation with many players and many solutions might require a more combinatorial strategy. Apple faced a complex environment when it entered the music streaming business.\u00a0 It created an ecosystem that served artists, labels, and customers without dominating the music business.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"lumen_assessment_12189\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=12189&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_12189\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<h2><strong>Check Your Understanding<\/strong><\/h2>\n<p>Answer the question(s) below to see how well you understand the topics covered in the previous section. This short quiz does\u00a0<strong>not<\/strong>\u00a0count toward your grade in the class, and you can retake it an unlimited number of times.<\/p>\n<p>Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.<\/p>\n<p>\t<iframe id=\"lumen_assessment_6716\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=6716&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_6716\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-189\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Barriers to Individual Decision Making and Common Styles of Decision Making . <strong>Authored by<\/strong>: Aaron Spencer and Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Reading: Barriers to Individual Decision Making. <strong>Authored by<\/strong>: Aaron Spencer, David Thompson, PhD, and Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Image: Optical-illusion-checkerboard. <strong>Authored by<\/strong>: AnonMoos. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:Optical-illusion-checkerboard.svg\">https:\/\/commons.wikimedia.org\/wiki\/File:Optical-illusion-checkerboard.svg<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/pdm\">Public Domain: No Known Copyright<\/a><\/em><\/li><li>Revision and adaptation of Boundless Management: Decision-Making Styles. <strong>Authored by<\/strong>: Boundless. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/courses.lumenlearning.com\/boundless-management\/\">https:\/\/courses.lumenlearning.com\/boundless-management\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Chess. <strong>Authored by<\/strong>: jarmoluk. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/en\/the-strategy-win-champion-1080533\/\">https:\/\/pixabay.com\/en\/the-strategy-win-champion-1080533\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>Common Biases and Judgment Errors in Decision Making Organizational Behavior. <strong>Authored by<\/strong>: Mohamad Ali Ezzeddine. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=cAbdmV3VOwA%20\">https:\/\/www.youtube.com\/watch?v=cAbdmV3VOwA%20<\/a>. <strong>License<\/strong>: <em>All Rights Reserved<\/em>. <strong>License Terms<\/strong>: Standard YouTube License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-189-1\">\u201cThe Framing Effect Bias: Improving Decision Making Skills for Cognitive Misers.\u201d IQ Mindware. http:\/\/www.highiqpro.com\/willpower-self-control\/the-framing-effect-improving-decision-making-skills-with-capacity-strategy-training <a href=\"#return-footnote-189-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":21046,"menu_order":2,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Barriers to Individual Decision Making and Common Styles of Decision Making \",\"author\":\"Aaron Spencer and Lumen Learning\",\"organization\":\"\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Reading: Barriers to Individual Decision Making\",\"author\":\"Aaron Spencer, David Thompson, PhD, and Lumen 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