Main results from the systematic literature review about the impact of cognitive biases on strategic decisions
| Author(s) | Journal | Type of cognitive biases | Contribution |
|---|---|---|---|
| James and Barnes, 1984 | Strategic Management Journal | Risk perception | It is important to recognize cognitive limitations, to consider strategy risks in relation to qualitative aspects and to find expression in strategic plans |
| Schwenk (1986) | Academy of Management Review | Confidence in a strategy | Executives can manipulate the information in order to become overconfident in their decisions |
| Hunt (1989) | Organizational Behavior and Human Decision Processes | Analytic, intuitive and mixed-in cognitive styles | The decision-makers' cognitive style affects the preferred strategy over phases of the decision process |
| Amason (1996) | The Academy of Management Journal | Cognitive affective conflicts | Cognitive conflict improves the decision quality, while affective conflict threatens the decision quality. Decision quality is higher when multiple perspectives are discussed |
| Busenitz and Barney (1997) | Journal of Business Venturing | Overconfidence and representativeness | Entrepreneurs have different behaviors from managers in large organizations in terms of biases and heuristics |
| Miller et al. (1998) | Strategic Management Journal | Cognitive diversity and comprehensiveness | Diversity does not promote examination of the opportunities neither long-range planning |
| Hodgkinson et al. (1999) | Strategic Management Journal | Framing bias | Cognitive mapping is relevant for experienced and nonexperienced decision makers, especially, cognitive mapping prior to choice reduces bias |
| Knight et al. (1999) | Strategic Management Journal | Interpersonal conflicts | Decisions are formed on the basis of differences among individuals |
| Das and Teng (1999) | Journal of Management Studies | Illusion of manageability and focus on limited targets | Four types of cognitive biases (prior hypotheses, exposure to limited alternatives, insensitivity to outcome probabilities and illusion of manageability) influence five modes of decision-making (rational, avoidance, logical incrementalist, political and garbage can) |
| Keh et al. (2002) | Entrepreneurship Theory and Practice | Risk perception and opportunity evaluation | Cognitive biases negatively affect the opportunity evaluation. This relationship is mediated by risk perception |
| Olson et al. (2007) | Journal of Management | Cognitive diversity | Benefits derive from diversity and conflict in strategic decision-making |
| Kaplan (2008) | Organization Science | Framing bias | Framing is considered a cognitive process to cope with turbulent environments |
| Shepherd and Williams, 2015 | Journal of Management | Perceptions of the environment | Opportunity assessment is the first entrepreneurial decision. Heuristics can facilitate the decision-making process |
| Meissner and Wulf (2017) | European Management Journal | Cognitive diversity and illusion of control | Focus on the group composition characteristics for the improvement of judgment in decision-making teams |
| Barberà-Mariné et al. (2019) | Management Decision | Organizational learning | Organizational factors affect the decision-making only in routine tasks |
| Author(s) | Journal | Type of cognitive biases | Contribution |
|---|---|---|---|
| Risk perception | It is important to recognize cognitive limitations, to consider strategy risks in relation to qualitative aspects and to find expression in strategic plans | ||
| Confidence in a strategy | Executives can manipulate the information in order to become overconfident in their decisions | ||
| Analytic, intuitive and mixed-in cognitive styles | The decision-makers' cognitive style affects the preferred strategy over phases of the decision process | ||
| Cognitive affective conflicts | Cognitive conflict improves the decision quality, while affective conflict threatens the decision quality. Decision quality is higher when multiple perspectives are discussed | ||
| Overconfidence and representativeness | Entrepreneurs have different behaviors from managers in large organizations in terms of biases and heuristics | ||
| Cognitive diversity and comprehensiveness | Diversity does not promote examination of the opportunities neither long-range planning | ||
| Framing bias | Cognitive mapping is relevant for experienced and nonexperienced decision makers, especially, cognitive mapping prior to choice reduces bias | ||
| Interpersonal conflicts | Decisions are formed on the basis of differences among individuals | ||
| Illusion of manageability and focus on limited targets | Four types of cognitive biases (prior hypotheses, exposure to limited alternatives, insensitivity to outcome probabilities and illusion of manageability) influence five modes of decision-making (rational, avoidance, logical incrementalist, political and garbage can) | ||
| Risk perception and opportunity evaluation | Cognitive biases negatively affect the opportunity evaluation. This relationship is mediated by risk perception | ||
| Cognitive diversity | Benefits derive from diversity and conflict in strategic decision-making | ||
| Framing bias | Framing is considered a cognitive process to cope with turbulent environments | ||
| Perceptions of the environment | Opportunity assessment is the first entrepreneurial decision. Heuristics can facilitate the decision-making process | ||
| Cognitive diversity and illusion of control | Focus on the group composition characteristics for the improvement of judgment in decision-making teams | ||
| Organizational learning | Organizational factors affect the decision-making only in routine tasks |
Source(s): Our elaboration
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