6 Barriers to Effective Decision-Making (Real-Life Examples)

You have to make decisions every day, be it as small as deciding what to eat or as important as saying yes to that marriage proposal! Every decision affects your future. It is crucial to have strong decision-making ability. Anyone can make decisions at a slow pace, whereas those who know how to do it at a moment’s notice are the ones who get the trophy. However, it’s definitely not an easy task! It comes with several challenges or barriers. Effective decisions are made by overcoming these barriers.

This article discusses the different barriers to effective decision-making and their real-life examples, which help you understand how you can overcome the obstacles.

What is Decision-Making?

Decision-making is the art of choosing the suitable alternative at the right time when you’re presented with multiple options. It’s a subtle combination of logic, reasoning, and intuition. Decision-making is undoubtedly a skill that makes people stand out from crowds. Making rational decisions promptly while considering multiple alternative options is an underrated skill in today’s world.

106+ Decision Making Quotes
106+ Decision Making Quotes

If you take a keen look at the world’s famous personalities, it won’t be long before you realize that a considerable part of their success is making the right decisions at the right time in their careers. So, it’s of sheer essence that you work on your decision-making skills just as you would on any other practical skills.

Barriers to Effective Decision-Making

6 Barriers to Effective Decision-Making

Making decisions in practical life is easier said than done. Many people underestimate the importance of decision-making skills and take them for granted, but studies show that it’s a skill whose importance is second to none. Not only does it affect your professional life directly, but it also has a significant impact on your personal life.

There are some well-known barriers that keep you from making effective decisions at the right time. The top 6 barriers to effective decision-making are:

  • Bounded rationality
  • Escalation of commitment
  • Time constraints
  • Uncertainty
  • Biases
  • Conflict

We need to know and understand these barriers to become better at making decisions. Let’s go through each barrier one by one in detail, along with examples to help you understand them better:

1.     Bounded Rationality as a Barrier to Decision-Making

The concept of bounded rationality asserts that we cannot be perfectly reasonable when dealing with complex difficulties because we cannot fully comprehend all potential solutions or their implications.

The quantity of information that our brains can process is constrained. We often aren’t sure what to ask or what information to obtain since we haven’t encountered a particular circumstance before. Even if we have gathered all the information available, we might not be able to make sense of it all or confidently foresee the results of our decision.

Sometimes a particular learning component is not understood, making us prey to bounded rationality. Without all the facts, one may make poor decisions or decide to drop a problem altogether as a result. Both result in an incomplete result. Given the proverb “you learn something new every day,” which implies that nobody is ever truly knowledgeable, conquering bounded rationality is challenging.  

As a leader, it would be best not to work against bounded rationality but with it, understanding its place along with continual learning.

Example:

Suppose a hospital’s CEO faces an unexpected problem and can’t make it to the hospital when there is a crucial decision to be made. Instead, a doctor, the head of their department, is told to make the decision. This doctor would face the challenge of bounded rationality as they would not have the knowledge required to make an effective decision. 

2.     Escalation of Commitment

Escalation of commitment is the inclination for decision-makers to adhere to a wrong decision even when the outcomes worsen.

It could be challenging to rationally re-evaluate a decision once we’ve made it. Staying the path can appear simpler than acknowledging or admitting that a judgment was poor. Despite our best efforts, not every decision will turn out well. Effective managers are willing to re-evaluate decisions and reverse course as necessary because they understand that progressing in the wrong direction isn’t progress.

Example:

For example, a person has all the reasons in the world to quit a job because it’s not as fulfilling, but they won’t because it is easier to just go with it than to quit the job and find another one. There is also the risk of not being able to find another job. So, the person sticks to that job.

3.     Time Constraints as a Barrier to Decision-Making

It’s not always time management when talking about time constraints. Although managers may have done an excellent job of managing their time, unforeseen events may have made it necessary to make a decision immediately.

We are significantly less likely to make a sound, non-programmed decision when there is limited time to gather information and reason through it. Time constraints may lead us to employ heuristics rather than deep processing. Heuristics may speed up the process, but that doesn’t guarantee the best outcome.

Time constraints can be reduced by efficient planning, forecasting, and time management, even though some circumstances are beyond leaders’ control.

Example:

When a surgeon performs surgery on a patient, an unforeseen complication arises. Even though the surgeon is the best in their field, they would have to decide quickly to save the patient’s life. The decision may be good or bad. This is an example of time constraints.

4.     Uncertainty as a Barrier to Decision Making

Uncertainty is the condition of not understanding an outcome until it has really happened and is associated with the idea that an outcome is imagined but not yet realized. The desired result can be supposed, but due to the uncertainty, it can only be seen after the decision has been made. We regularly make decisions in the face of uncertainty because we cannot know the result of each option until we have actually selected it.

Example:

A simple example of uncertainty in decision-making would be when we have to choose between two gifts to give a colleague for their birthday, but we are uncertain as to what their likes and dislikes are. You would only see the colleague’s reaction after giving them the gift.

5.     Biases as a Barrier to Decision-Making

When making decisions, biases adhere to the idea that the choice is intimately linked to ingrained beliefs and worldviews. Additionally, it strengthens ideas that are comparable to our own thoughts. 

There are numerous ways in which decision-makers may make mistakes in their manner of judgment, even when the conditions are favorable for making sound decisions and there is an adequate supply of reliable information. For example, their perception might be warped. Briefly discussed below are the different types of biases:

  • Confirmation Bias:

The tendency to seek out or favor information and viewpoints that we believe would confirm our own judgment is known as confirmation bias. Since we want confirmation, we focus more on information that we believe supports us and downplay or dismiss information contradictory to our beliefs.

  • Status Quo Bias:

Some decision-makers favor maintaining the status quo and avoiding change. They frequently choose ideas that do not result in significant improvements due to this ambition, which may go unnoticed.As a result, evidence and concepts that encourage change are disregarded.

  • Framing Bias:

The predisposition to be swayed by how a situation or problem is presented rather than looking at the facts is known as framing bias. It has been demonstrated that communicating a message with a good outcome is more persuasive than presenting one with a negative outcome.

  • Anchoring Bias:

Anchoring bias is the propensity to focus on the first piece of information and not make adjustments for new information. We are unable to deviate from our opinion too much once it is linked to that piece of information.

  • The Halo Effect Bias:

The halo effect is our tendency to see some people or groups more favorably than others. We inadvertently start to give their ideas extra weight in other areas as well since we are pleased with their skills or knowledge in a certain area.

  • Pro-Innovation Bias:

The innovation bias favors fresh and innovative ideas merely because they represent something new, as opposed to preferring things to remain the same. There is a perception that fresh ideas must be superior to old ones. Even if there is no conclusive evidence to support the new notion as beneficial and valuable, it is nevertheless appealing because it is fresh.

  • Overconfidence Bias:

The Overconfidence Bias essentially boils down to the notion that a person making a decision trusts their judgment, often their intuition, and lets that opinion take precedence over opposing information. They value their viewpoint more than the opinions of more knowledgeable specialists and frequently more than the evidence that contradicts their beliefs.

Example:

An easy example of a bias in decision-making would be when you decide to marry a person you love knowing but disregarding the fact that they are not suitable for you and that the marriage will most likely result in divorce. This is because of a personal bias. You ignore the facts and figures and decide based on your feelings. 

6.     Conflict as a Barrier to Decision-Making

While conflict can be uncomfortable, especially in the short term, there are instances when it is required for the organization, group, or department to function well in the long run. Conflict is often disliked and avoided wherever possible. The ideal decision, however, can be one that will involve some conflict. In other words, conflict can be good sometimes. There are two types of conflict:

  • Process Conflict

The ideal method to accomplish a task is at the center of process conflict, which is productive, task-oriented, and not person-centered. It can result in better performance as people collaborate to explore many possibilities and choose the best ones.

  • Relationship Conflict

Relationship conflict is a conflict between people that is more private and centers on personal attacks instead of disagreements over ideas. Generally speaking, this form of conflict should be avoided at all costs.

Decisions should be made with a keen awareness of the potential for relationship conflict. Instead of focusing on the individual, feedback should be given on behaviors and procedures.

Example:

For example, an organization must decide which one of the two publication companies to go for. Some people would want to opt for one company, while some would opt for the other. This would result in a conflict.

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Takeaway

Making a decision can occasionally be likened to a massive challenge. As professionals and individuals, we frequently encounter situations in our work and personal lives where making a decision is difficult. You will be able to make more sensible decisions in the future by carefully examining and learning from the numerous difficulties encountered. It can be helpful if you are informed about several circumstances.

Additionally, admitting that you are not the source of all knowledge and that your judgments might be biased or uncertain would result in a comprehensive discussion and a team decision, ensuring everyone is on board and responsible. 

Emidio Amadebai

As an IT Engineer, who is passionate about learning and sharing. I have worked and learned quite a bit from Data Engineers, Data Analysts, Business Analysts, and Key Decision Makers almost for the past 5 years. Interested in learning more about Data Science and How to leverage it for better decision-making in my business and hopefully help you do the same in yours.

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