Wednesday, February 9, 2011

Organisational Behaviour Lecture Series - Part 1 - Individual Processes - Perception - Cognitive Bias

Organizational Behaviour Lecture Series - Part 1

Individual Processes - Cognitive Bias

Cognitive Biases

The term cognition refers to a faculty for the processing of information. It is the process of perceiving, thinking, reasoning, analyzing and remembering.

Information is the value or quality of a message or communication between a sender and a receiver. Data is observation of facts and information is a collection of data from which conclusions may be drawn, decisions taken and knowledge acquired.
Understanding Human Behaviour is sine qua non for the successful design and operation of Organisations (Human Activity Systems), Management Information Systems and, indeed, all Information Processing Systems.

Human behaviour plays an important role in human information processing.

It must be remembered that Information Systems are not installed in a vacuum; they are implanted into a living body, an organisation, a Human Activity Systems.

Human beings are being continuously exposed to an enormous number of stimuli. Cognition of all the stimuli is not possible and most stimuli are eliminated by a complex cognitive process. Even those perceived may be subject to cognitive biases.

A better understanding of human information processing enhances the usefulness of information technology and systems.


Here are a few salient cognitive biases which affect information formulation, acquisition, analysis and interpretation:

Adjustment and Anchoring – In situations of information overload there is a tendency to resort to the anchoring and adjustment heuristic and to rely too heavily, or “anchor” on a past reference or on one trait or piece of information when making decisions. For example, you may emphasize too much on the first piece of information you encounter.

Selective Perception – You accept / absorb only that information that is in consonance with, or confirms, your views, beliefs and values.

Wishful Thinking – You interpret information according to what might be pleasing to imagine (as you would like things to be) rather than according to actual evidence or rational logical reality.

Self-fulfilling Prophecy – is the tendency to engage in behaviors that elicit results which will (consciously or not) confirm our beliefs. You seek, acquire and analyze only that information that confirms or lends credibility to your views and values and ignore any information that contradicts your views or values. This is a “Confirmation bias” exemplified by an irrational tendency to search for, interpret or remember information in a way that confirms your preconceptions.

Ease of Recall – Information which can easily be recalled or accessed affects your perception of the likelihood of similar events occurring again. You rely too much on information that is easy to recall from memory.

Conservation – You reach premature conclusions on the basis of too small a sample of information.

Order Effects – The order in which information is presented to you affects information retention in your memory. Typically, the first piece of information presented (primacy effect) and the last piece of information presented (recency effect) assume undue importance in your mind.

Overconfidence – The greater the amount of data the more confident you are about the accuracy of the data.

Availability – you only rely on and use easily available information and ignore significant information that may not be so easily sourced.

Bandwagon Effect – you develop a tendency to believe information because many other people believe the same information. This may be a manifestation of Groupthink and you tend to “jump on the bandwagon”.

Hindsight – you are unable to think objectively if you receive information that a certain outcome has occurred and then told to ignore this information. With hindsight, outcomes that have occurred seem to have been inevitable; sometimes this is called the “I-knew-it-all-along” effect, the inclination to see past events as being predictable. You see relationships more easily in hindsight than in foresight.

Habit – You choose some information because it was previously accepted for a perceived similar purpose (precedence syndrome) or because of superstition.

Illusion of Control – You develop a tendency for to believe you can control or at least influence outcomes that you clearly cannot and hence you will seek, interpret, process and use information accordingly in an irrational manner.

Gambler’s Fallacy – You falsely assume that an unexpected occurrence of a “run” of some events enhances the probability of occurrence of an event that has not occurred. You develop a tendency to think that future probabilities are altered by past events (when in reality it is not so) and process information accordingly.

D√©formation professionnelle – you tend to process information according to the conventions of your own profession, forgetting any broader point of view. You fall victim to the Law of the Hammer – “When the only tool you have is a hammer, every problem looks like a nail” – this may happen owing to overspecialization or too straitjacketed professional training which hampers a liberal broad perspective.

(To be continued…)

Copyright © Vikram Karve 2010
Vikram Karve has asserted his right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this book review.
© vikram karve., all rights reserved.
VIKRAM KARVE educated at IIT Delhi, ITBHU, Lawrence School Lovedale, and Bishop's School Pune,  is an Electronics and Communications Engineer by profession, a Human Resource Manager and Trainer by occupation, a Teacher by vocation, a Creative Writer by inclination and a Foodie by passion. An avid blogger, he has written a number of fiction short stories and creative non-fiction articles in magazines and journals for many years before the advent of blogging. His delicious foodie blogs have been compiled in a book "Appetite for a Stroll". Vikram lives in Pune with his family and pet Doberman girl Sherry, with whom he takes long walks thinking creative thoughts. 
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