Since biases distort reasoning in business, overcoming bias is crucial to making managerial decisions. In the case of Flat Panel Corporation, a lot of processes related to decision-making during the personnel downsizing and restaffing process reflect degrees of different bias. Such bias has a negative effect on the effectiveness and fairness of the final layoff decision.
Anchoring bias, or insufficient adjustment prevails in the early stage of the decision making process. For example, throughout the early discussions, Taylor made a strong personal remark on the characterizations of certain candidates before asking for others’ opinion. Since people tend to make insufficient adjustments from initial estimates and first impressions, his remark is likely to mislead thoughts of individuals in his own team, making the whole outcome squinting towards his personal perceptions.
Availability heuristic can also be a severe problem that affects the layoff decision. An example is that when deciding whom in the director board is going to be the likely casualty of the layoff, they nominated Lee without even evaluating his performance and contribution to the company. The main reason for laying him off was that he was not connected with aerospace contractors, and was hired from outside the industry, which reflects that the team members relied on superficial information to arrive at a decision. Also, when it comes to deciding which kind of assessing methods to use, they gave EES the least weight simply because it is used by the smallest percentage of the company, which maybe the most easily available data at that point. If they were to make this decision from a more reasonable and critical perspective, they should dig deeper into some essential factors such as assessing methodologies used and practicability of the proposed method.
The problem of halo effect can been seen in the