The Impact of Cognitive Biases on Corporate Decision-Making: Analysis and Mitigation Strategies
In the business world, decisions are like the heartbeat of an organisation. They determine the strategy a company follows, influence its financial results, and shape its unique company culture. This paper analyzes three cognitive biases-confirmation bias, fundamental attribution error, and conformit...
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| Format: | Article |
| Language: | English |
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EDP Sciences
2024-01-01
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| Series: | SHS Web of Conferences |
| Online Access: | https://www.shs-conferences.org/articles/shsconf/pdf/2024/27/shsconf_icdeba2024_04007.pdf |
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| _version_ | 1846125670390824960 |
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| author | He Ruoyan |
| author_facet | He Ruoyan |
| author_sort | He Ruoyan |
| collection | DOAJ |
| description | In the business world, decisions are like the heartbeat of an organisation. They determine the strategy a company follows, influence its financial results, and shape its unique company culture. This paper analyzes three cognitive biases-confirmation bias, fundamental attribution error, and conformity bias-and explores their effects and consequences on corporate decision-making. These biases can lead to misjudgments by senior management in areas such as employee evaluation, hiring decisions, team collaboration, and customer relationship management. Additionally, they may foster a culture of flattery within the organization, which can negatively affect overall innovation and growth. By implementing strategies such as diverse team-building, data-driven decision-making, and fostering a culture of open feedback, companies can effectively mitigate the adverse effects of these cognitive biases on decision-making. While this study does not cover all biases that affect corporate decision-making, it offers a new perspective for understanding and improving the decision-making process, providing valuable insights for future research and practice. |
| format | Article |
| id | doaj-art-25c0c6d0aa4b44c3a672030c6e7b261e |
| institution | Kabale University |
| issn | 2261-2424 |
| language | English |
| publishDate | 2024-01-01 |
| publisher | EDP Sciences |
| record_format | Article |
| series | SHS Web of Conferences |
| spelling | doaj-art-25c0c6d0aa4b44c3a672030c6e7b261e2024-12-13T10:10:40ZengEDP SciencesSHS Web of Conferences2261-24242024-01-012070400710.1051/shsconf/202420704007shsconf_icdeba2024_04007The Impact of Cognitive Biases on Corporate Decision-Making: Analysis and Mitigation StrategiesHe Ruoyan0Fuqing Huaqiao Middle SchoolIn the business world, decisions are like the heartbeat of an organisation. They determine the strategy a company follows, influence its financial results, and shape its unique company culture. This paper analyzes three cognitive biases-confirmation bias, fundamental attribution error, and conformity bias-and explores their effects and consequences on corporate decision-making. These biases can lead to misjudgments by senior management in areas such as employee evaluation, hiring decisions, team collaboration, and customer relationship management. Additionally, they may foster a culture of flattery within the organization, which can negatively affect overall innovation and growth. By implementing strategies such as diverse team-building, data-driven decision-making, and fostering a culture of open feedback, companies can effectively mitigate the adverse effects of these cognitive biases on decision-making. While this study does not cover all biases that affect corporate decision-making, it offers a new perspective for understanding and improving the decision-making process, providing valuable insights for future research and practice.https://www.shs-conferences.org/articles/shsconf/pdf/2024/27/shsconf_icdeba2024_04007.pdf |
| spellingShingle | He Ruoyan The Impact of Cognitive Biases on Corporate Decision-Making: Analysis and Mitigation Strategies SHS Web of Conferences |
| title | The Impact of Cognitive Biases on Corporate Decision-Making: Analysis and Mitigation Strategies |
| title_full | The Impact of Cognitive Biases on Corporate Decision-Making: Analysis and Mitigation Strategies |
| title_fullStr | The Impact of Cognitive Biases on Corporate Decision-Making: Analysis and Mitigation Strategies |
| title_full_unstemmed | The Impact of Cognitive Biases on Corporate Decision-Making: Analysis and Mitigation Strategies |
| title_short | The Impact of Cognitive Biases on Corporate Decision-Making: Analysis and Mitigation Strategies |
| title_sort | impact of cognitive biases on corporate decision making analysis and mitigation strategies |
| url | https://www.shs-conferences.org/articles/shsconf/pdf/2024/27/shsconf_icdeba2024_04007.pdf |
| work_keys_str_mv | AT heruoyan theimpactofcognitivebiasesoncorporatedecisionmakinganalysisandmitigationstrategies AT heruoyan impactofcognitivebiasesoncorporatedecisionmakinganalysisandmitigationstrategies |