Proact And Heuristic Styles Of Decision Making: How They Are Used By People And Their Impact On Dayly Life

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Abstract

This is a report on two styles of reaching a decision by the use of a real life job shortlisting scenario. The two styles of decision-making, Proact and heuristics are discussed in detail, how they are of used by people in their daily life and how much of an impact do these styles have on our day-to-day lives. Both these techniques have their own advantages and disadvantages and how the disadvantages can later disappear to a certain extent by practicing the techniques day in and day out.

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Introduction

It is common knowledge that the tougher a decision is, the higher the stakes are and the same goes for the consequences. One has to consider numerous factors of complex nature. Making any choices for these decisions also exposes one to judgment from others. The whole idea of taking a difficult decision gives rise to anxiety, embarrassment, doubt, confusion and other similar feelings. Such feelings make decision making a burdensome affair. The book Smart Choices gives us a rather uncomplicated but proven solution to this decision-making problem.

This solution gives a decision maker to widen his perspective and see both the intangible and the tangible aspects of the situation in a much clear manner. This method also has a broad applicability and is not just limited to professional and business-related decision-making. However, one should not think that the job of this approach is to make decision making easy. This approach has been called as Proact in the book. It is an acronym for (Pr)oblem, (O)bjectives, (A)lternatives, (C)onsequences, and (T)radeoffs and these are different steps that need to be identified and taken one after the other (Indiana University, 2018).

On the other hand, there are other ways that many people make decisions without going through a process like Proact, one such technique is heuristics. Heuristics are like rules of thumb or more straightforward strategies that are relied upon by people while making decisions. Heuristics serve as coping mechanisms when our decisions are covered in a difficult environment (Albar & Jetter, 2009). In simpler terms, as defined in university presentations, heuristics are shortcuts taken by our brain when making a decision with incomplete information. Generally, it is helpful to depend on heuristics however their application has a potential to end up in errors (Bazerman and Moore, 2013).

Section 1

The Problem

The problem is to choose from a number of job opportunities from consulting firms. The choice is tough because multiple factors need to be considered. Factors such as Pay and other benefits, knowledge, and skills needed, level of autonomy, work-life balance, location, number of annual leaves, organizations reputation and employee satisfaction, and future opportunities. For instance, the job in question is with consulting firms and one of the many considerations would be whether any one of these firms needs me to get the Certified Management Consultant certification (CMC) and whether any of these organizations are willing to pay for this certification.

Objectives

One of the biggest objectives while shortlisting the jobs at these consulting firms would be to know which one of these would give me better opportunities to grow into a senior associate or a junior engagement manager within 5-to-7 years of joining and which of these organizations have a better work-life balance. As most of these jobs are from consulting firms, I have assumed many factors such as pay and skills to be similar in all the firms with some variations. As I do not have my own house or any immediate family in Canada, the location of the job is not a major concern for me.

Identify Alternatives

Since the decision making is already about choosing between offers from consulting firm, I had to narrow it down to the fields of consulting. Since these firms each have specific fields they serve in, my interests are drawn towards four specific fields and they are strategic consulting, public relation consulting, marketing consulting and financial consulting. However, in order for me to achieve my objectives of being a senior associate in financial consulting I will require a Chartered Financial Analyst certification or some specialization in finance because most other consultants in this firm possess these specializations.

Identify Consequences

Going ahead with these alternatives would bring with it a few expected consequences. Taking up a job with the PR consulting firm would mean having to take up clients whose practice may not align with my moral compass but due to conflict of interest agreement with the PR firm, I will have to keep my personal ethics below the company’s beliefs and requirements and on the bright side, being a PR consultant gives me an opportunity to work from any location and independently. Choosing the job with the consulting firm offering the job as a marketing consultant would most probably mean moving to their Edmonton branch location which means surviving the extreme cold weather for the major portion of the year. The only factor that makes me consider this job as an alternative is more paid annual leaves resulting in more visits back home in India. Choosing the Financial consulting job would been putting extra effort to get the CFA (or other financial specialization) to succeed in the long run by achieving set objectives but this would also mean having a broader scope than any other consulting fields, if I ever decided to move back to India without having to take step back or compromise in my career.

Make Tradeoffs

Making a trade-off would mean having to choose between the available alternatives and weighing their consequences. By giving it enough thought the only benefit of working with the PR consulting firm was to not have any regular work hours or having to work at any specific location, that benefit however not hold against other sacrifices and after paying attention to the effects of its consequences in the long run, I do not really see myself to be the best man for the job. However, the difficulty of tradeoff decision is to choose between working as a marketing consultant and financial consultant. Working as a marketing consultant has benefits like better work-life balance and more annual paid leaves and the downside is having to move to Edmonton and acclimating myself to the extreme cold weather for the most part of the year. Another issue that I had recently realized associated with marketing job is from a consulting assignment on CRMx. Inc., where the organization had to divert the funds from marketing to support operational functions. Even though this is the worst case scenario, it is still a scenario wherein the marketing executives have higher chances of getting out of jobs. Lastly, the financial consultant job, where the only downside is to get a CFA or a financial specialization. After contemplating it, I had figured that this certification holds a great value and is not actually an obstacle to success. Additionally, the chances of being forced out of jobs due to budget gets are much lower for finance departments over marketing departments or majorly any other departments as per my understanding.

Section 2

The Availability Heuristic

This subdivision of heuristic puts to use immediate knowledge at discretion available in memory and past experiences as the tool for analyzing the possibility of an event to occur and by doing so one eliminates any type of analysis in depth (Tversky & Kahneman, 1973). The use of this heuristic anchors us from thinking over and above the readily available options. Being an international student in Vancouver, I will base my decision on which job pays me the most. The only research I will do is to use Glassdoor.com and find the salary range for consultants in these firms and choose the one with the highest pay range. Without putting much of a thought to other factors level of autonomy, the work-life balance, skills, and knowledge, or growth potential. Mainly because I would not want to think through the decision or do a research like I would have to when I use the Proact model.

The Representativeness Heuristic

As per the representativeness heuristic judgments made, are based on similarity, this is similar to availability heuristics because both of these heuristics subdivisions are based on memory (Pothos & Busemeyer, 2011). People use this heuristic when they are identifying the similarities of two phenomena that happened in different timelines (Vis, 2017). This heuristic can come in the picture when I am making the decision based on information from an acquaintances job that has a similar profile without considering the other factors and differences between the job profiles or when have any acquaintances within the firm but in a different job profile and base my decision on their job in that department. For instance, that department is reporting to a manager in an overseas location and is given utmost freedom which may not be the case in the team or department that I am being hired in.

The Confirmation Heuristic

Confirmation Heuristic happens when people are faced with the information they favor more, there are higher chances of accepting it without much contemplation. On the other hand, they over contemplate/criticize it in addition to suspiciously evaluating it (Bazerman & Moore, 2013). In order to overcome confirmation heuristic, one has to look out for more information and not just limit themselves to the information they have and in doing so one’s decision making quality also improves. Additionally, as per some studies, people start doing surprisingly better when they have access to more information and are not stuck with information that just confirms their original bias (Bazerman & Moore, 2013). When I decided to not pursue the PR consulting job, it was rather and belief from partial knowledge about the field that I had acquired from some not very credible sources and was predetermined to not pursue this option. There is no firm that would want to deliberately work with tainted clients and expect their in-house consultants to work with such clients. In my mind, however, I had already had this dream of working as a financial consultant as I had a belief that finance is a more widely accepted field than PR and financial consultants are of more analytical nature and sharp mind. While I wanted to finalize this the financial consultant position, I had looked for validation from various sources and in addition to selectively ignoring the non-conforming data.

The Affect Heuristic

A majority of one’s judgments are reached by an affective or emotional assessment and this happens way before one starts a form of reasoning happens. Despite the fact that events happen unconsciously, Slovic and his associates have provided evidence that people still utilize them as a base to reach their decisions instead of indulging in a fuller reasoning process. The probability of use of this heuristic increases when people are bound by a timeline (Kahneman, 2003). When a decision maker experiences a certain affect the correlations between risk and the benefit grow negative (Västfjäll, Peters, & Slovic, 2014). On one hand, where adaption of this heuristic decision is irrationally made by ignoring potentially important attributes, however, on the other hand, this heuristic serves as the means by which our natural cognitive systems workout difficult problems in time-sensitive and uncertain environments. This behavior points to the fact that less can be more for a human brain (Kralik, Xu, Knight, Khan, & Levine, 2012). I have experienced affect heuristics while shortlisting between the options decisions were not made based on hard-core facts about different fields of consulting, but my initial impression of the field and m impression of the acquaintances employed in these fields. I thought of them as sharp or even intellectually superior, would want to join the same field. In addition, at times some of the decisions were also based on how the thought of working in these fields of consulting made me feel about me.

Conclusion

To conclude, there is no doubt in the fact that Proact decision making is a sensible idea that one has to start practicing as throughout this report we have noted numerous benefits of being thorough and analytical along with following the right steps to deal with the complex nature of difficult decisions and how beneficial the technique is. However, one cannot ignore the fact that this can be a time confusing and at times a frustrating process for people if they start practicing such a technique at a later stage in life. In addition, while discussing the different heuristics I came to an understanding that when these heuristics happen because this is our brain's way of reaching a decision based on memories and experiences. And, at times heuristics can reach a decision by isolating some important factors. In order to improve decision making when practicing heuristics, one has to increase knowledge and understanding on every occasion they can. There are times when the decision has to be made within moments and one cannot really follow the Proact steps for reaching a decision so it is the heuristics that have to be depended upon.