Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 21

Decision-Making Biases Obtain from your library a copy of the following article: D. Kahneman, D. Lovallo, and O. Sibony, "Before You Make That Big Decision... ," Harvard Business Review, June 2011, pp. 51-60. In this article, the authors argue that, "Even highly experienced, superbly competent, and well-intentioned managers are fallible...." (p. 60). They discuss a variety of cognitive biases associated with the decision-making process. Such biases can diminish the quality of decisions. The authors maintain that understanding these biases may decrease their effect and offer a checklist designed to facilitate decision quality control.
Required
1. What is meant by the term "cognitive bias"
2. What is the specific decision-making context addressed by the authors of this article
3. What are the three major categories of the decision quality-control checklist recommended by the authors
4. What are the specific cognitive biases discussed by the authors of this article