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52 views

Activity #4 -

Uploaded by

Sophia Pimentel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Name: Ron Ron S.

Gatdula Date: June 24, 2024


Prof: Florinda Bautista Subject: PBA – 2C

Case Study: Decision-Making at Macao Corporation


Macao Corporation is a multinational manufacturing company that produces consumer
electronics. The company has been facing a significant decline in sales and market
share over the past two years. As a result, the executive team at Macao Corporation
needs to make critical decisions to revive the company's fortunes. The following are
some key observations:
Anchoring Bias: The executive team at Macao Corporation tends to rely heavily on
historical sales data and market trends when making decisions. They anchor their
decisions on the past and fail to consider emerging technologies or changing consumer
preferences.
Groupthink: The decision-making process at Macao Corporation is dominated by a few
senior executives, and dissenting opinions are often discouraged. This leads to a lack of
diverse perspectives and hampers the quality of decision-making.
Sunk Cost Fallacy: Macao Corporation has invested a significant amount of resources
in a particular product line that is no longer performing well in the market. However, the
company is reluctant to discontinue the product due to the sunk costs associated with
its development.
Confirmation Bias: The decision-makers at Macao Corporation tend to seek
information that confirms their preexisting beliefs and hypotheses while neglecting
contradictory evidence. This biases their decision-making process and limits their ability
to explore alternative solutions.

Now, let's delve into some questions for analysis and discussion:

1. How can Macao Corporation overcome anchoring bias in its decision-

making process and ensure a more forward-looking approach?

- Macao Corporation should use scenario planning to investigate future

possibilities and vary its data sources beyond previous trends in order to combat

anchoring bias.
2. What steps can be taken to encourage diverse perspectives and mitigate

groupthink within the executive team at Macao Corporation?

- By promoting a culture that welcomes differing viewpoints, actively seeking out

other viewpoints, and engaging people from a variety of backgrounds in decision-

making teams, Macao Corporation can lessen the effects of groupthink.

3. How can Macao Corporation address the sunk cost fallacy and make

rational decisions regarding underperforming product lines?

- In order to counter the sunk cost fallacy, thorough cost-benefit evaluations that

prioritize future expectations above previous investments must be carried out.

Additionally, the opportunity costs of carrying out underperforming initiatives must be

assessed.

4. What strategies can be implemented to reduce confirmation bias and

encourage a more open-minded approach to decision-making at Macao

Corporation?

- Establishing peer reviews, encouraging decision-makers to actively seek out

contradictory facts, and designating a devil's advocate role to challenge dominant

beliefs are all necessary to reduce confirmation bias.

5. How can cognitive biases be managed and minimized throughout the

organization, beyond the executive team?


- Macao Corporation should identify bias factors, conduct frequent cognitive bias

training, and set up feedback mechanisms for an unbiased decision-reviewing

process in order to control cognitive biases throughout the entire organization.

6. What role can data-driven decision-making play in overcoming cognitive

biases at Macao Corporation? How can the company leverage data and

analytics to make more informed and objective decisions?

- At Macao Corporation, data-driven decision-making ought to include employing

real-time data-driven predictive analytics, defining clear metrics for impartially

assessing decision results, and decreasing dependence on subjective

interpretations.

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