After studying this chapter, you should be able to: Articulate the role of the external environment in management decisions and effectiveness, explain the five major dimensions of an organization’s general environment, describe the critical forces in the organization’s task environment, | Judgment in Managerial Decision Making 8e Chapter 3 Common Biases Copyright 2013 John Wiley & Sons As noted previously, we tend to use heuristics, or rules of thumb, to reduce the complexity of our decisions. Often, these heuristics allow us to make effective decisions in a short amount of time. However, under the right set of circumstances they can also lead us into making biased decisions. Avoiding the biases that come with the use of heuristics is so difficult that even the most intelligent people are prone to error. Before introducing key biases, take a few minutes to answer the following questions. Write down your answers. 1 Problem 1: Causes of Death Rank order causes of death Estimate death rates Rank Cause of Death Deaths in 2009 War and civil conflict Nutritional deficiencies, including starvation Respiratory infections, lung cancers, and lung diseases This problem will require you to estimate death rates in 2009. Note that the world population was billion in 2008. For | Judgment in Managerial Decision Making 8e Chapter 3 Common Biases Copyright 2013 John Wiley & Sons As noted previously, we tend to use heuristics, or rules of thumb, to reduce the complexity of our decisions. Often, these heuristics allow us to make effective decisions in a short amount of time. However, under the right set of circumstances they can also lead us into making biased decisions. Avoiding the biases that come with the use of heuristics is so difficult that even the most intelligent people are prone to error. Before introducing key biases, take a few minutes to answer the following questions. Write down your answers. 1 Problem 1: Causes of Death Rank order causes of death Estimate death rates Rank Cause of Death Deaths in 2009 War and civil conflict Nutritional deficiencies, including starvation Respiratory infections, lung cancers, and lung diseases This problem will require you to estimate death rates in 2009. Note that the world population was billion in 2008. For this problem, please look at each cause of death in the second column. First, rank order the causes of death from what you think is the most common (=1) to what you think is the least common (=5). Second, give an estimate for the number of deaths that each cause was responsible for in 2009. 2 Problem 2: Words with “a” What percentage of words in the English language begin with the letter “a”? For this problem, give your best estimate of the percentage of words in the English language that begin with the letter “a”. 3 Problem 3: Words with “a” What percentage of words in the English language have the letter “a” as their third letter? For this problem, give your best estimate of the percentage of words in the English language that have “a” as their third letter. 4 Lisa is 33 and is pregnant for the first time. She is worried about birth defects such as Down syndrome. Her doctor tells her that she need not worry too much because there is only a 1 in 1,000 chance that a woman of her age .
