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Business Leaders encounter decisions influencing them to utilize behavior bias rather than rational behavior. Performing customer service duties in the sales department allow me to experience sale floor managers and customer service representatives choosing ideal customers that the company believed would make higher purchases oppose to other customers. Additionally, chief executive officers have been observed conducting training to persuade their staff on deciding business practices that were base on personal experience and emotions versus rational and logical facts to increase economical sales.
Loewenstein (2017) mentions economist defining human behavior in the business arena before psychologist infiltrating the behavior of working professionals. Loewenstein (2017) continues to explain the difference between judgments and choices. Judgment is when people have a perceived notion on a business matter base of their individual feelings or thought process. Choices are the decisions people make personally or professionally which stems from their innate belief systems on the situation. Cognitive psychologist utilizes a term titled “heuristic mechanism” which means people incorporate memories and previous circumstances of events to determine the outcome of new scenarios (Loewenstein, 2017).
Direct TV Entertainment and Communication employed employees to provide customer care for cable TV and telecommunication. Team meetings were implemented to encourage high working performance and surplus sales. Mangers facilitated business modules that were based on their opinions of low valued customers with limited finances or minimum economic status. Staff was informed not to spend significant time on the phone or provide service with people who appeared not able to afford cable installation or services. It was to the company surprise that the high valued customers provided more excuses on why they did not want to sign contractual agreements to pay for Direct TV equipment. Low valued customers presented urgency behind the need to have TV and telephone in their home and demonstrated higher customer service retention which cause high turnover ratios in account receivables compared to high value customers. Managers realized that they allowed their stigmas and belief system of low-income families not being able to afford cable impair their judgment and choices when making business decisions that were needed to increase revenue and sale quotas.
I have learned past experiences do not guarantee identical outcomes in situations that have not occurred in my personal life, education, or work history. George (2017) expounds on how individuals become susceptible to allowing their personal bias to hinder healthy decision-making skills when issued alternatives that will impact their business operations. Learning to remove emotions and managing personal bias will help organizational leaders practice effective and logical behaviors in their economic affairs.
Loewenstein, G. (2017). Behavior economics 101: Judgement, choice, and time. Rotman Management, 20-25 Retrieve from https://lopes.idm.oclc.org/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=122580591&site=ehost-live&scope=site
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