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CMA Foundation · Fundamentals of Business Economics and Management · Decision-making - Types and Process

A manager in Ahmedabad, reviewing sales reports, notices only the figures that support her belief that a product is doing well and overlooks declining regional numbers. Which perceptual barrier is operating, and what is the best remedy?

The barrier is selective perception, where a person notices only information confirming existing beliefs. The best remedy is to seek varied data and independent views so that declining regional figures are not ignored. The case involves one individual, so groupthink or sunk-cost explanations do not fit.

  1. AEscalation of commitment; ignore past costs
  2. BSelective perception; seek varied data and independent viewsCorrect
  3. CBounded rationality; stop gathering information
  4. DGroupthink; form a larger committee

Explanation

Noticing only information that fits existing beliefs is selective perception, a form of bias. The remedy is to widen information sources and invite independent challenge. Groupthink involves group pressure, which is not described here, so the other pairs mismatch.

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