Describe three of the major decision traps and how to avoid them.
What will be an ideal response?
Examples could include these and others three major decisions traps are hindsight bias, overconfidence bias, and escalation of commitment. Hindsight bias, also commonly referred to as the I-knew-it-all-along effect, is well established and has been shown to have far-reaching effects. Hindsight bias is defined as “the tendency for
individuals with outcome knowledge (hindsight) to claim they would have estimated a probability of occurrence for the reported outcome that is higher than they would have estimated in foresight (without the outcome information).” Hindsight bias can be overcome by focusing on learning from past mistakes. Overconfidence bias is hubris, or inflated confidence in how accurate a person’s knowledge or estimates are. Leaders
may keep the overconfidence bias in check by assigning a trusted follower to critique the decisions (i.e., play the “devil’s advocate” role), by being open to different opinions,
and by placing limits on their power by having someone else approve decisions (a peer,
for example). Reminding oneself of past decision-making errors might be an effective way to keep the power effect on overconfidence in check. Escalation of commitment occurs when individuals continue a failing course of action after receiving feedback that shows it isn’t working. In effect, they try to turn the situation around by investing more after a setback. Escalation of commitment can be overcome by separating the initial decision maker from the decision evaluator; creating accountability for decision processes only, not outcomes; shifting attention away from the self; and being careful about compliments.
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The accountant for Darden Corp was preparing a bank reconciliation as of April 30, 2014 . The following items were identified: Allan's book balance $46,200 Outstanding checks 1,100 Interest earned on checking account 50 Customer's NSF check returned by the bank 500 In addition, Darden made an error in recording a customer's check; the amount was recorded in cash receipts as $150; the bank
recorded the amount correctly as $510 . What amount will Darden report as its adjusted cash balance at April 30, 2014? a. $44,650 b. $45,890 c. $46,110 d. $46,250
A chi-square value is significant when it exceeds 1.96
Indicate whether the statement is true or false
Kelsey told her employees that if a union formed it would be disastrous for the organization and the plant where they all worked would likely have to close. It appears that Kelsey violated which of the NO TIPS rules for what management cannot do.
A. No Threats B. No Interrogations C. No Promises D. No Spying E. None of the above
Parties to a contract governed by the UCC cannot modify the effect of the "perfect tender rule."
Indicate whether the statement is true or false