Decision Making Biases and Errors

Managerial decision making is the process by which managers respond to opportunities and threats by analyzing options and making great decisions about goals, courses of action and to improve the organizational performance.
Unfortunately, some managers often do not have all or the most required information. So, they face some Decision-Making Biases and Errors in the decision process, such as: Overconfidence bias and Availability Bias.
Overconfidence in Decision-Making Biases and Errors is holding unrealistically positive views of one self and one's performance.
Overconfidence in decision making as a manager, might lead to failure by getting the wrong view of the situation and take the wrong judgments and misuse of problems over estimate skills and the manager won't get the performance he is willing for. This error will appear over and over since the rule used to make decision is flawed. * Examples: * An employee giving a presentation for a proposal of a specified project. He covered all the required topics has given to him and was certain that the proposal would be accepted but overlooked the main purpose of the presentation, which is keeping the clients interested due to overconfidence which blinded him from seeing the bigger picture/aim of the meeting. He failed to capture the clients attention and they ended up not adopting the project. * A person who thinks his intelligence of direction is much better than it actually is. He could show his overconfidence by going on a long trip without a map and rejecting to ask for directions if he gets lost along the way. * A person who thinks he is precious to his employer when almost anyone could actually be able to do his job. The person might show his overconfidence by coming in late to work because he thinks he is never going to get fired, or by being overly demanding about getting a raise and bullying to quit if he doesn't get his way.
Availability Bias is losing decision-making bias objectivity by focusing on the most recent events, it is easily imagined, but uncommon events are highly weighted in our brains, recent events get weighted disproportionately higher than the past events. So, when taking a decision or evaluating options and probability as a Manager, just because one option comes to mind faster and easier to imagine, doesn't necessarily mean it is the right and correct one to its problem and situation. If the manager did not take the decision into consideration the many other factors involved in one single experience he won't get the performance that he is willing to get, it won't be the right decision and it will lead to failure, disappointments and a bad decision could change what the company have built a way for success in the previous years. There would be no innovative ideas, the organization would have routine events.
It allows a person to judge a situation on the basis of the examples of similar situations that come to mind, allowing a person to extrapolate to the situation in which they find themselves.
This heuristic sometimes could be beneficial, but the frequencies that events come to mind are usually incorrect reflections of their actual probability in real life. * For example:

* If a student was asked whether their college had more students from Montana or more from California, their answer would probably be based on the personal examples they were able to recall. But is it the right answer? It could be Yes or No without thinking of the right answer just using his common sense.

* A Manager asked to take a decision about adopting a project or not and answered without thinking the right way and the project was profitable but his answer was effected from the previous awful event and he lost the opportunity to start a new way to get profits and had to close his company because it wasn't making enough revenues and he didn't put an hard effort to think of how profitable this project was.
Wasta

Wasta is the magical oil that smoothes the way to jobs, promotions, university places and much else besides. In fact, with the right connections, it can solve almost any kind of problem in the Arab Region.
The intermediary in cases of Wasta must be someone with influence (in order to secure the favor) but not necessarily a relative or even a close friend; quite possibly just a passing colleague or sometimes a complete stranger. By using his influence to perform a service, the Wasta acquires prestige and honor but, perhaps more importantly, the person receiving the favor incurs a debt of appreciation which may have to be repaid in unspecified ways at some point in the future.
The origins of Wasta are by no means disreputable. It has a long and generally respectable history as a way of managing relations between families, clans or tribes through intermediaries. In the event of a blood feud, for example, Wasta's – either an individual or a group of elders respected by both sides – could be called upon to resolve the matter through negotiation and give and take while salvaging the honor of the parties involved.
Wasta planted in the Arab Culture, but inconsistent with Muslims teaching regarding hiring practices .
Islam stressing hiring on the basis of qualifications and merit in several places. Moreover, Rampant in Arab World, despite the violation of Islamic teachings. * Reasons to seek Wasta in the Arab World: * In need for money. * Most Arab economies suffer from very high levels of unemployment. * Issues that make "Wasta" against the managerial ethics: * Giving a preference to a certain candidate while applying for a job vacancy even without the required classifications because of good relation with the candidate, this violates the codes of ethics in Cluster one ( Be a dependable organizational citizen ): Demonstrate courtesy, respect, honesty and fairness and that is not fair to the hard workers and the ones who deserve this chance of getting hired. * Accepting bribes to inner connection for an outsider to get a certain job done or for receiving confidential information that is occurring in the organization, this violates the codes of ethics in Cluster two ( Do not do anything unlawful or improper that will harm the organization): Bribes are prohibited.