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Diversity in a Global Business World
Challenges to Achieving Diversity
Management Textbooks Boundless Management Diversity in a Global Business World Challenges to Achieving Diversity
Management Textbooks Boundless Management Diversity in a Global Business World
Management Textbooks Boundless Management
Management Textbooks
Management
Concept Version 10
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Diversity Bias

Cognitive biases carried by individuals in organizations can create negative outcomes and reduce diversity of perspective.

Learning Objective

  • Apply the four false consensus biases commonly identified to the value of avoiding diversity risks in business.


Key Points

    • Individuals face various cognitive biases that can affect organizational life. A cognitive bias is the human tendency to make systematic decisions in certain circumstances based on cognitive factors rather than evidence.
    • The false-consensus bias is a cognitive bias whereby people tend to overestimate how much other people agree with them, and to assume that their own opinions, beliefs, preferences, values, and habits are normal and that others think so as well.
    • Status quo bias is a cognitive bias in which the current baseline (or status quo) is taken as a reference point, and any change from that baseline is perceived as a loss.
    • In-group favoritism is the tendency of individuals to provide preferential treatment to those of a similar perspective or disposition.
    • A stereotype is a thought that may be adopted about specific types of individuals or certain ways of doing things, the basis of which may not reflect reality. Stereotypes can lead to misunderstandings, stifled innovation, and potentially damaging group behaviors, including discrimination.
    • These biases should be actively prevented and screened for within the work environment of any multinational corporation.

Terms

  • homophily

    A tendency towards similarity in groups.

  • bias

    An inclination towards something; predisposition, partiality, prejudice, preference, predilection.

  • diverse

    Consisting of many different elements; various.


Full Text

Individuals face various cognitive biases that can affect organizational life. A cognitive bias is the human tendency to make systematic decisions in certain circumstances based on cognitive factors rather than evidence.

Bias arises from various processes that are sometimes difficult to distinguish. These processes include information-processing shortcuts, motivational factors, and social influence. Several of these biases have especially impactful intersections with diverse groups. Examples include the false-consensus bias, status quo bias, in-group favoritism, and stereotyping.

Diversity Bias Types

False-Consensus Bias

A cognitive bias whereby people tend to overestimate how much other people agree with them, and to assume that their own opinions, beliefs, preferences, values, and habits are normal and that others think so as well.

This bias is especially prevalent in group settings where people think the collective opinion of their own group matches that of the larger population and, sometimes by extension, that those who do not agree with them are somehow defective. This can impair the integration of diverse perspectives and lead to misunderstandings.

Status Quo Bias

A cognitive bias in which the current baseline (or status quo) is taken as a reference point, and any change from that baseline is perceived as a loss. Status quo bias should be distinguished from a rational preference for the status quo, as when the current state of affairs is objectively superior to the available alternatives, or when imperfect information is a significant problem. A large body of evidence, however, shows that an irrational preference for the status quo—a status quo bias—frequently has a negative affect on decision-making.

In-Group Favoritism

A social process that may have links to cognitive biases but also to other social dynamics. This bias relies on a tendency toward homophily (the tendency of similar types of individuals to form groups), as in-group favoritism is the tendency for individuals to provide preferential treatment to those of a similar perspective or disposition. As this can include the allocation of resources, promotions and other critical organizational attributes, it poses a serious threat to inclusion (and the benefits of inclusion).

U.S. male/female wage comparison 1979–2005

Women consistently make less than men in the workplace. It is likely a result, at least in part, of in-group favoritism.

Stereotyping

Stereotyping is categorizing—in ways that may or may not accurately reflect reality—specific types of individuals or certain ways of doing things. While stereotypes do not necessarily lead to prejudice and/or discrimination, expectations and beliefs about the characteristics of members of groups perceived as different from one's own can lead to misunderstandings, inflexibility, stifled innovation, and potentially damaging group behaviors.

Taking these biases into account with regard to the business environment highlights some of the pitfalls that must be avoided in a diverse business environment. These biases should be actively prevented and screened for within the work environment of any multinational corporation.

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