Cognitive biases in strategic decision making: A systematic literature review

Document Type : Review Article

Authors

1 PhD Student in Strategic Management, Department of Business Strategy and Policy, Faculty of Management, University of Tehran, Tehran, Iran

2 Assistant Professor, Department of Business Strategy and Policy, Faculty of Management, University of Tehran, Tehran, Iran

3 Professor, Department of Business Strategy and Policy, Faculty of Management, University of Tehran, Tehran, Iran

Abstract
Recognizing intuition in management and proactively addressing biases can significantly lead to better evaluation of decisions and subsequently improve decision-making quality. The subject of Bias is not only explored in management literature but also in fields like economics, psychology, medicine, law, education, and others, each examining biases and related issues from its own perspective. Therefore, this research, using a management approach, will study cognitive biases and their types. The aim of this systematic review is to provide a comprehensive and up-to-date overview of research on biases affecting strategic decision-making, leading to a better understanding of managers’ decision-making patterns. By identifying cognitive biases influencing strategic decision-making, this research will help managers make better decisions by being aware of potential pitfalls and provide researchers with a comprehensive list of these biases for conducting more structured research.48 biases influencing strategic decision-making were identified and presented. Since the meanings of many biases overlap, the summary table separates “similar titles” to avoid repetition. To compare biases with related meanings where the differences are not negligible, a separate column, “Biases with Related Meanings,” distinguishes these types of biases. A categorization of biases was also provided to offer a framework for studying them. The biases presented in this research were categorized into three groups: cognitive limitations, motivational biases, and a hybrid category. The cognitive nature of biases relates to human limitations in receiving, processing, and storing information. However, the motivational nature stems from human instincts and basic needs. The main underlying mechanism of motivational biases is self-interest

Keywords


 
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