ABSTRACT
This chapter has outlined the use of cognitive heuristics in strategic decision-making. The following key points were identified:
Strategic decisions are not always based on a logical and analytical assessment of the situation. Instead, they are often made using cognitive heuristics. These are mental shortcuts, or “decision rules” that are part of everyone, and they are largely unavoidable.
There are many different heuristics that are used by managers – largely unconsciously on many occasions. These include anchor and adjustment, availability, representative, and moral heuristics.
Some heuristics can be used consciously. Examples include EBA, conjunctive, and WADD – all of which are often used in strategic procurement decisions.
We do not argue that heuristics are “good” or “bad”. In this chapter, we merely show that they are prevalent, and therefore need to be understood.
