undefined | unit 2 planning decision making

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UNIT 2

Planning

Q1) Explain the meaning and characteristics of planning.

A1) Planning is the fundamental management function, which involves deciding beforehand, what is to be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual process which lays down an organisation’s objectives and develops various courses of action, by which the organisation can achieve those objectives. It chalks out exactly, how to attain a specific goal.

Planning is nothing but thinking before the action takes place. It helps us to take a peep into the future and decide in advance the way to deal with the situations, which we are going to encounter in future. It involves logical thinking and rational decision making.

Characteristics of Planning

1. Managerial function: Planning is a first and foremost managerial function provides the base for other functions of the management, i.e. organising, staffing, directing and controlling, as they are performed within the periphery of the plans made.

2. Goal oriented: It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.

3. Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.

4. Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering the organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.

5. Intellectual Process: It is a mental exercise at it involves the application of mind, to think, forecast, imagine intelligently and innovate etc.

6. Futuristic: In the process of planning we take a sneak peek of the future. It encompasses looking into the future, to analyse and predict it so that the organisation can face future challenges effectively.

7. Decision making: Decisions are made regarding the choice of alternative courses of action that can be undertaken to reach the goal. The alternative chosen should be best among all, with the least number of the negative and highest number of positive outcomes.

Q2) Explain the process of planning.

A2) PROCESS OF PLANNING-

1. Perception of Opportunities: Perception of chances isn't carefully a portion of the arranging cycle. In any case, this consciousness of chances in the outside climate just as inside the association is the genuine beginning stage for arranging. It is essential to investigate conceivable future chances and see them plainly and totally.

2. Establishing Objectives: This is the second step in the arranging cycle. The major authoritative and unit destinations are set in this stage. This is to be accomplished for the long haul just as for the short reach. Objective determine the normal outcomes and show the end purposes of what can anyone do, the essential accentuation is to be set and what is to be cultivated by the different kinds of plans.

3. Planning Premises: After assurance of hierarchical destinations, the subsequent stage is setting up arranging premises that is the conditions under which arranging exercises will be attempted. Arranging premises are arranging suspicions the normal ecological and interior conditions.

4. Identification of Alternatives: The fourth step in arranging is to distinguish the other options. Different options can be recognized dependent on the hierarchical destinations and arranging premises. The idea of different choices recommends that a specific target can be accomplished through different activities.

5. Evaluation of Alternatives: The different elective strategy should be investigated in the light of premises and objectives. There are different methods accessible to assess choices. The assessment is to be done in the light of different variables. Model, money inflow and outpouring, chances, restricted assets, expected compensation back and so onward, the options should give us the most obvious opportunity with regards to meeting our objectives at the least expense and most noteworthy benefit.

6. Choice of Alternative Plans: This is the genuine purpose of management. An investigation and assessment of elective courses will reveal that at least two. Which is appropriate and advantageous and fit one is chosen.

7. Formulation of Supporting Plan: After planning the fundamental arrangement, different plans are determined in order to help the principle plan. In an association there can be different subsidiary plans like making arrangements for purchasing gear, purchasing crude materials, enlisting and preparing individual, growing new item and so forth these subsidiary plans are figured out of the essential or fundamental arrangement and perpetually needed to help the essential arrangement.

8. Establishing Sequence of Activities: After detailing essential and subordinate plans, the arrangement of exercises is resolved so those plans are placed without hesitation. After choices are made and arrangements are set, spending plans for different periods and divisions can be set up to give designs more solid importance for execution.

Q3) What is the importance of planning in management?

A3) Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. The activity helps managers analyse the present condition to identify the ways of attaining the desired position in future. It is both, the need of the organisation and the responsibility of managers.

Importance of Planning

It helps managers to improve future performance, by establishing objectives and selecting a course of action, for the benefit of the organisation.

It minimises risk and uncertainty, by looking ahead into the future.

It facilitates the coordination of activities. Thus, reduces overlapping among activities and eliminates unproductive work.

It states in advance, what should be done in future, so it provides direction for action.

It uncovers and identifies future opportunities and threats.

It sets out standards for controlling. It compares actual performance with the standard performance and efforts are made to correct the same.

Planning is present in all types of organisations, households, sectors, economies, etc. We need to plan because the future is highly uncertain and no one can predict the future with 100% accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any organization for the survival, growth and success.

Q4) What are the different components of planning?

A4) A process of planning comprises of various components such as mission, objectives, policies, procedures, budget, programme and strategies. All of these are explained in detail in points given below: –

Components of Planning

Mission

Mission is the first component of planning that determines the fundamental purpose of every business organization. It basically tells for what purpose the business enterprise is carrying out is activities or what it wants to achieve. Mission of any organization denotes the direction in which it needs to make efforts for accomplishing their targets.

A mission statement clearly states the products and customer of business. This statement may be either in a written form or implicit from functioning of organization. It also reflects the beliefs and values of corporation and one can easily get to know the attitude of organization towards its workforce through it. Mission statement is used by distinct stakeholders of business for their relevant purposes.

Objectives

Objectives simply refers to the position which an organization is willing to attain. They are the end results of business and are also denoted as targets or goals. Setting of goals is starting point for planning as well as other management functions of business. Every business has distinct types of objectives that may be either individualistic and collective, general or specific in terms of their scope and long-term or short-term as per their time period. Objectives should be laid down by management team effectively and precisely by considering the mission and values of business. Managers must ensure that objects for each activity must be compatible with one another.

Policies

Policies are key component of a successful plan which basically guides the decision making of business enterprise. They put limits on scope of every decisions and manages basic leadership process for every operation of organization. Policies are formulated for distinct activities of business such as production, sales, human resource, etc. by managers. It must be ensured by management team that policies are not too much rigid that they are imposing excessive limits on functioning. They must be changed from time to time in accordance with the circumstances and challenges for better functioning of business organization.

Procedures

Procedures are the guidelines that directs the actions of managers and employees of an organization. They cleary demonstrate the manner for doing something. Procedure comprises of step-by step methods and also includes rules which regulate actions. It must be ensured by procedure of planning that procedures are concrete and practical. Procedures should be flexible and not too rigid as it makes the process of planning quite difficult.

Budget

Budgets refer to the plans that portray the expected results in numerical terms. It needs to be created by a business that expects to achieve something. A business will decide its objectives only by deciding its budget. A technique of budgeting is needed for most of the decisions, targets, and activities. For example, an income budget will reveal the financial profits and results of a business enterprise.

Programme

Programme relates to the outline of the broad objective of business enterprise. It represents a sequence of procedures, series, and policies that need to be implemented by the organization. Programme of a business enterprise describes series of necessary efforts that are systematic and have an order of priorities. These efforts are a must for the achievement of business objectives. Programmes are of two types that are short-term programmes and long-term programmes. Short-term programmes are like training programmes, sales promotion programmes and market research programmes. Long-term programmes includes programmes concerned with raising efficiency of supervisors, expansion of institution, modernization, office renovation etc.

Strategies

Strategies relate to a minute plan of action that focuses on attaining specific requirements. Effective strategy implementation assists in reaching out to the requisite goals. The process of strategizing depends upon the mission and values of the organization. Strategies are very effective and implemented by organizations to meet the challenges posed by their competitors in the market. Internal strategies and external strategies are two types of strategies that are formulated by the management team.

Q5) Explain the importance of Co-ordination in Management.

A5) Coordination Is the Essence Of Management

Coordination is the orderly synchronization of the efforts by unifying, integrating and harmonizing the activities of the subordinates for the achievement of the goals of the organization. Every business enterprise is divided into a number of departments and every department has a number of groups and individuals. Coordination is not a separate function of the management, it is the force that binds all the other functions of management.

The managers at all levels are concerned with achieving coordination while performing the functions of planning, organizing, staffing, directing and controlling. Coordination is implicit and inherent in all functions of management.

Coordination is required in Planning – Systematic planning of work and allied aspects from top to bottom of the organization. Example. Coordination between production department plans and sales department targets.

Coordination is required in Organizing – For the systematic division of work among individuals and departments. Assigning authority, responsibility, and accountability. Example: If the finance manager is given authority to raise funds, he/she should also be given the responsibility to manage funds efficiently.

Coordination is required in staffing – For placement of right persons on the right jobs. Example CA should generally be given work of financial nature.

Coordination in Directing – Among orders, instructions, and suggestions. Coordination is required for the free flow of information, sound leadership, and suitable incentives for good performances. Example a manager instructs the subordinates motivates them and also supervises their work.

Coordination in controlling – Coordination between planned standards and actual performances. Control of activities through personal observation and other techniques.

Need for coordination

Growth in size – As organizations grow in size, the number of people in the organization also increases. They may work for cross purposes. So, coordination is needed to integrate their efforts and activities, i.e., to bring unity of action.

Functional differentiation – In an organization, there may be separate departments of production, finance, marketing, and human resources. All departments have their own objectives, policies, strategies, etc. So, there may arise a conflict between them. For example, the marketing department’s objective may be to increase sales by 10 percent by offering discounts. But the financial department may not approve such discounts as it means loss of revenue. Therefore, coordination is necessary to link the activities of various departments and to avoid conflicts among them.

Specialization - In modern organizations, there is a high degree of specialization, arising out of the complexities of modern technology and the diversity of tasks to be performed. So, organizations employ a number of specialists, who think that they only are members, which leads to conflict between them. Therefore, coordination is required to avoid conflict between the specialists and the other members.

In the absence of coordination, there will be chaos and conflicts in the organization as shown in the figure. There will be no synergies among production, sales, accounts, stores and other departments and the customers will not get timely delivery of goods.

Q6) Explain the process of MBO.

A6) Management by Objectives (MBO) is a strategic approach to enhance the performance of an organization. It is a process where the goals of the organization are defined and conveyed by the management to the members of the organization with the intention to achieve each objective.

An important step in the MBO approach is the monitoring and evaluation of the performance and progress of each employee against the established objectives. Ideally, if the employees themselves are involved in setting goals and deciding their course of action, they are more likely to fulfill their obligations.

Steps in Management by Objectives Process

1. Define organization goals

Setting objectives is not only critical to the success of any company, but it also serves a variety of purposes. It needs to include several different types of managers in setting goals. The objectives set by the supervisors are provisional, based on an interpretation and evaluation of what the company can and should achieve within a specified time.

2. Define employee objectives

Once the employees are briefed about the general objectives, plan, and the strategies to follow, the managers can start working with their subordinates on establishing their personal objectives. This will be a one-on-one discussion where the subordinates will let the managers know about their targets and which goals they can accomplish within a specific time and with what resources. They can then share some tentative thoughts about which goals the organization or department can find feasible.

3. Continuous monitoring performance and progress

Though the management by objectives approach is necessary for increasing the effectiveness of managers, it is equally essential for monitoring the performance and progress of each employee in the organization.

4. Performance evaluation

Within the MBO framework, the performance review is achieved by the participation of the managers concerned.

5. Providing feedback

In the management by objectives approach, the most essential step is the continuous feedback on the results and objectives, as it enables the employees to track and make corrections to their actions. The ongoing feedback is complemented by frequent formal evaluation meetings in which superiors and subordinates may discuss progress towards objectives, leading to more feedback.

6. Performance appraisal

Performance reviews are a routine review of the success of employees within MBO organizations.

Q7) What are the advantages and disadvantages of MBO?

A7)

Advantages-

Benefits of Management by Objectives

Management by objectives helps employees appreciate their on-the-job roles and responsibilities.

The Key Result Areas (KRAs) planned are specific to each employee, depending on their interest, educational qualification, and specialization.

The MBO approach usually results in better teamwork and communication.

It provides the employees with a clear understanding of what is expected of them. The supervisors set goals for every member of the team, and every employee is provided with a list of unique tasks.

Every employee is assigned unique goals. Hence, each employee feels indispensable to the organization and eventually develops a sense of loyalty to the organization.

Managers help ensure that subordinates’ goals are related to the objectives of the organization.

Limitations of Management by Objectives

Management by objectives often ignores the organization’s existing ethos and working conditions.

More emphasis is given on goals and targets. The managers put constant pressure on the employees to accomplish their goals and forget about the use of MBO for involvement, willingness to contribute, and growth of management.

The managers sometimes over-emphasize the target setting, as compared to operational issues, as a generator of success.

The MBO approach does not emphasize the significance of the context wherein the goals are set. The context encompasses everything from resource availability and efficiency to relative buy-in from the leadership and stakeholders.

Finally, there is a tendency for many managers to see management by objectives as a total system that can handle all management issues once installed. The overdependence may impose problems on the MBO system that it is not prepared to tackle, and that frustrates any potentially positive effects on the issues it is supposed to deal with.

Q8) Write a brief note on Management by Exception.

A8) It is a system of identification and communication that signals the manager as to when and where his attention is needed. The main object of this system is to enable the manager to identify and isolate the problems that call for decision and action, and avoid or ignore or pay less attention to less critical problems which better be handled by his subordinates.

Under this system the manager should receive only condensed, summarised and invariable comparative reports covering all the elements, and he should have all the exceptions to the past averages or standards pointed out, both the specially good and the specially bad exceptions.

This gives him a full view of the progress in a few minutes of time. Thus by using the experience in a systematic way (i.e., having the knowledge of past attainments), a careful analysis is made with reference to existing records and standards of performances.

Advantages of Management by Exception:

1. It saves time. Manager attends to real problems at a particular point of time.

2. Concentrated efforts are possible, as this system enables the manager to decide when and where he should pay his attention. It identifies crisis and critical problems.

3. Lesser number of decisions is required to be taken, which enables the manager to go into detail.

4. This enables to increase span of control and increase the activities for a manager.

5. Use of past trends, history and available data can be made fully.

6. It alarms the management about the good opportunities as well as difficulties.

7. Qualitative and quantitative yardsticks are provided for judging the current position.

8. It prevents management from over managing.

Limitations of Management by Exception:

Management by exception is not a solution to all management problems; it has its limitations as well.

Some of them are:

1. It requires a comprehensive observing and reporting system.

2. It increases paper work.

3. The system is silent till the problem becomes critical.

4. Some important factors, like human behaviour, are difficult to measure.

Q9) Explain the concept and components of Management Information System.

A9) Management requires complete information relating to a problem or issue in right time in order to make effective decisions. The proper collection, handling and providing the right information to the right manager in right time not only reduce the risk of wrong decisions but also work as an effective controlling technique. Complexities involved in business and economic activities and voluminous government regulations create the need for supply of right information to the right manager in the right time.

Management Information System (MIS) is defined as, “a formal method of making available to management accurate and timely information necessary to facilitate the decision-making process and enable the organisation’s planning, control and operational functions to be carried out effectively.”15 “The system provides information on the past, present and projected future and on relevant events inside and outside the organisation.”

Generally, an organisation’s MIS consists of a series of information systems of varying degrees of complexity, competence and scope.

They are:

(i) Transaction processing and inquiry response;

(ii) Management information for operational planning, decision-making and control;

(iii) Management information for tactical planning and decision-making; and

(iv) Management information system for strategic planning and policy planning and decision-making.

An organisation’s information system must provide the various types of information required by managers at the various levels of organisational hierarchy with different levels of operational responsibilities, operational control, management control and strategic planning.

The number of computer based information systems in private and public sector organisations has grown exponentially during the past two decades. To build computer based information systems new computer products and service industry has developed to supply the tools necessary.

While a large number of people are employed to design and operate information systems, many more individuals are involved as users or “consumers” of information systems. Users include individuals from a broad spectrum of occupations ranging from workers in a factory to the top management of a corporation.

Use of an information system includes the receipt of a report, the submission of input for a system and the operation of a terminal or a similar activity. Most individuals encounter these systems in other activities, in addition to work experiences with computer based information systems. Credit and users of a bank, travellers making reservations and many other confront computer based systems directly or indirectly.

In today’s complex society, knowledge of computer based information systems is vital for an educated individual, particularly for the professional manager. It has been estimated that 1/3rd or 1/2 of the gross national income of the United States is currently attributed to the production and distribution of information.

This trend is a departure from a traditional economy based on the production and distribution of tangible goods. This clearly shows that we are entering an “Information Age.” For most organisations in the future if not already the determining factor in competition, will be the processing and analysing of information.

According to Murdick and Ross. “The MIS operating system by exchange of information, management information system is designed to take advantage of modern tools and techniques. But MIS is neither refers to a traditionally data processing nor to the sophisticated computer system.”

According to Paul Siegal, “An MIS is not a sophisticated computer system, a communication network, a generalised data base management system, an accounting system; the MIS is philosophy, an approach a point of view, a way of seeding the organisation as a whole. It is at the core of an hierarchy of system.”

The organisational system provides product and service for the environment system, the organisation information system provides all the data and information needed by the organisational system and the management information system provides the management oriented information to the organisation information system. Carl Hayel says “Management Information System is planned and organised approaches to supply executive with intelligence aids that facilitate the managerial process.”

From the analysis of the above views, we can infer that the management information system is a systematic approach to furnish timely, adequate, accurate information to the proper person in the hierarchy with a view to assist him in taking such decision as optimise the interrelationship of man, material machines and money to attain organisational goals effectively.

The objective of MIS is to provide information for decision making on planning, initiating, organising and controlling the operations of the subsystems of the firm and to provide a synergistic organisation in the process.

The MIS has various components, which are as follows:

Executives:

Executives are the people who utilize MIS. These people are computer professionals who operate MIS for data processing to achieve organizational goals like planning and decision-making.

2. Hardware:

The hardware components of MIS include various input and output devices that helps in feeding data as well as displaying the information when required. The input devices include the keyboard, scanners and mouse. The output devices may be the monitor, printer, network devices, and so on.

3. Software:

Computer programs which are designed to do a specific task for example, MS Office, Banking Software’s, Railway’s applications etc, different kinds of software available to process the data/information in an organization such as ERP (enterprise resource planning) and CRM (customer relationship management).

4. Organizational Procedures:

Procedures are sets of rules or guidelines that an organization establishes for the use of a computer-based information system. The procedures may vary from one organization to another. It may also vary from one department to another as per the requirement. For example, the working of production department is different from the working of sales department. The production department requires information regarding the raw material or quantity of goods to be produced. So, the production department sets its procedures in such a way that the MIS system helps in retrieving the information required by the department. In the similar way, the sales department requires information regarding the quantity of goods sold and the other expenses that occurred during the sales of the product. Therefore, the sales department sets the procedures in such a way that they get only that information which is required from the MIS.

Q10) What are the techniques of decision making?

A10) Decision-making is a step-wise process. There are certain highly effective as well as systematic approaches that can help us in taking the right decisions with great consistency. While there is nothing that can guarantee error-free decision-making, some decision-making methods can reduce the likelihood of making poor decisions.

Command method

In this method, decision-making is an executive power, and the decisions are taken by a central authority. This is an authoritative or dictatorial method as it doesn’t necessarily involve the opinion of other stakeholders. One of the major drawbacks of this method is ignorance about alternate options or opinions.

At the same time, this is also the fastest and clearest decision-making process as it doesn’t involve conflicts and discussions with other people. This decision-making technique is beneficial in emergencies when there is not enough time to hold discussions or undertake lengthy analysis or review processes.

Consultation

Consultation is the commonest among all the decision-making techniques for taking long-term decisions. Under this technique, the decision-maker seeks inputs from others and considers them diligently, but the eventual power of decision remains with her.

It usually takes longer when you apply this technique compared to the time the command decision-making methods as it involves taking the opinions of multiple people and in-depth evaluation and discussions. This process makes others feel valuable as it takes into account their opinions. It can do wonders for employees’ satisfaction and loyalty as they would feel involved with the decision-making process even though the final decision is not taken by them.

Voting

Voting is considered one of the most democratic techniques of decision-making in management. During this process the available options are brought to the notice of all group members and each action is deliberated upon. Once the discussions are complete, the present members vote in favor of the option they find most suitable. The option selected by the majority of the voters is regarded as the final decision.

Voting is the preferred decision-making method among committees, boards of directors, or senior company executives. Voting techniques of decision-making in management are time-bound which ensures that the process does not drag for too long.

Brainstorming

Brainstorming is among the various techniques of decision-making that proves beneficial when there are no clear options in sight. Under this technique, all group members get together to find options through discussion and debate.

Decisions related to strategy, policy-making, laying down of rules and procedures and operations usually involve a lot of brainstorming. This is one of the lengthier processes of decision-making as there are usually a lot of ideas and differences of opinions that have to be overcome before a final decision is taken.

Multi-point analysis

This is easily among the best decision-making methods while going for an acquisition or a major purchase. Under this technique, businesses undertake a systematic evaluation of all options available to them. Factors such as cost, return on investment, quality, performance, and skill required, among other relevant points, get evaluated.

Suppose a company needs to buy a fleet of vehicles for transporting its employees safely. Various vehicle makers will submit their proposals which will then be evaluated on factors such as comfort, mileage, safety, number of passengers, and driving ease.

Consensus

Among all the decision-making techniques, the consensus method is the most difficult and time-consuming. In this process, the group holds several rounds of discussions until everyone unanimously agrees upon a decision.

Since this is one of those decision-making methods that requires everyone to overcome their differences and decide in favor of one option, it often drags on endlessly without any result.

Barring scenarios where the decision affects all members of the group directly and they are all equal stakeholders in the decision, this is among the techniques of decision-making in management that should be rarely used.

Q11) Discuss the impact of technology on decision making.

A11) Technology is ubiquitous in all phases of the decision-making process. At the data collection stage, people use technology to access information—from Google, Wikipedia, or other sources, and this information influences the decision maker in the following decision steps. Technology helps people filter, analyze, and process information as well as formulate alternatives and evaluate them, whether consciously or unconsciously. In his book Predictably Irrational, Ariely (2010) showed the way products and their prices are displayed on a website can induce people to buy them. Any information, even covert, affects the subconscious. For example, coloring a shopping button orange encourages people to click and buy much more than other colors (Ariely, 2010).

1. The extent of technology's involvement in the decision-making process

Before analyzing the factors that affect the decision-making process, we examine the degree of integration (and intervention) of the technology in this process. A technology that is minimally involved in the decision-making process will have minimal impact on the process, and a technology that is significantly involved in the decision-making process will have a major impact on the process. Performing this analysis allows us to estimate the magnitude of the technological effect of the factors that are discussed below.

2. The amount of information and its reliability

Technology enable people to access a large amount of digitally stored information from all over the world. Meehl (2013) was the first researcher to argue that decisions can be simplified to a linear formula, leading to better decisions. Edwards (1954) showed that by focusing on a small number of variables (on average, about three) rather than performing complex calculations, people can make better decisions. Large amounts of information can cause “information overload” (Chan, 2001; Hurwitz et al., 2020), which interferes with the decision process by increasing cognitive load, and other negative influences such as increasing heart rate (Nowak et al., 2018).

Reducing the amount of information is not sufficient to increase decision quality per se. The reliability of the information also plays a role. A study of 460 sites in 113 countries showed that about 35% of medical websites and about 75% of financial sites provided poor and unreliable information (Messaris & Humphreys, 2006, pp. 145). This does not prevent users from thinking that the information on these sites is reliable and accurate and acting on it. Regarding personal health, for example, people have been shown to seek medical information online before they even talk to their doctors, many times resulting in panic and unnecessary medication (Hesse et al., 2005).

Large amounts of information and unreliable information impair almost every decision-making stage, from filtering data to weighing alternatives, as it is very difficult to filter and process large amounts of data, and it is difficult to draw proper and reliable conclusions. Therefore, technology should provide reliable information at the precise time of relevance for a specific decision.

3. Frequent exposure to information

In addition to the amount of information and its credibility, frequent exposure to information can also affect a person's decision making. Studies of “fake news” dissemination in democratic elections have shown that social networks may bias the election. The researchers assumed that frequent exposure to information could make people believe in the information. The more frequent the exposure, the more likely it is that a person will be inclined to believe that the information is, more evidence based, or more reliable (even if it is false; Allcott & Gentzkow, 2017; Bossetta, 2018). This assumption is based on a bias called the availability heuristic, a mental shortcut for making decisions on the basis of what is most dominant or accessible in memory (Tversky & Kahneman, 1974). Similarly, web users tend to assign higher credibility to websites that are rank higher in a search engine (Pan et al., 2007).

Biased decisions as a result of frequent exposure to information is often reflected in the data collection phase and causes biases in filtering, analysis, and information processing, as well as in the alternative-weighing phase. Therefore, it is preferable to maintain balanced information exposure for all alternatives, so as not to bias and favor one alternative over another only because of the amount of exposure.

Many technologies do not allow this to be monitored, although Facebook has begun to take an active part in this field. In addition to fighting fake news, for political advertisements they now also make sure that their users are equally exposed to every candidate in a contest (but still within each candidate's budget limit; e.g., Sanz & Thorbecke, 2020).

4. Digital amnesia

Digital amnesia (or the “Google effect”) is the tendency for people to forget information they can find quickly by using online search engines (Sparrow et al., 2011). A side effect of this phenomenon is that people might believe they are smarter than they really are, since they think information is easily accessible to them. In addition, there is a high correlation between the development of information-intensive technologies (big data) or smart devices and an increase in this phenomenon (Dirin et al., 2019). Digital amnesia impairs the data collection phase, as people may forget the data they have compiled. People should therefore be made aware that without documentation of the data collected, it is very difficult to overcome this bias.

5. Defaults

Using defaults in partial automation technology can streamline and shorten decision time but on the other hand can cause one of the strongest biases in the human decision process. When people make decisions with a preselected (default) option, they are more likely to choose this option, as it is easy to implement (Thaler & Sunstein, 2008). In the experiment by Skitka et al. (1999) described above, part of the problem was that the default was the solution proposed to the pilots by the flight computer, resulting in the pilots accepting the proposed solution even when it contradicted their training and other indications.

Defaults may be significantly stronger in some areas (e.g., consumption decisions; see Thaler & Sunstein, 2008) and less effective in others (e.g., decisions concerning the environment). Also, defaults are more effective when they operate through endorsement (defaults that are seen as conveying what the choice architect thinks the decision maker should do) or endowment (defaults that are seen as reflecting the status quo; Jachimowicz et al., 2019). Defaults act as a stressor on the alternative-weighing stage and can thus have a very strong influence on the decision maker.

6. Automation

As we mentioned above, we are interested in partially automated technologies, in which a person can decide to accept an action, reject it, or choose an alternative. Such a choice architecture is usually aimed at simplifying the decision process but is prone to biases. Kahneman (2003a) described two types of thinking procedures. System 1 is more intuitive and implosive and processes information almost automatically through recovery and inclusion, aided by imagination and emotion. System 2 is slower but rational and systematic. System 1 solves problems quickly and with minimal effort but is therefore prone to decision biases. Therefore, a technology that simplifies the decision process, making it more automatic, is prioritizing System 1 over System 2 to perform its operations. This, on the one hand, reduces the decision time, but on the other hand it exposes the decision maker to many mistakes.

Computer monitors and decision aids are increasingly common additions to critical decision-making contexts such as intensive care units, nuclear power plants, and aircraft cockpits. These accessories are aimed at reducing human error. Skitka et al. (1999) tested their effect on pilots. The researchers compared error rates in a mock flight task with and without a computer that supervised the pilot and recommended real-time decisions. The pilots tended to accept the computer recommendation even when it contradicted their training and the indications of other instruments. The authors explained that the high error rate was related to the pilots being used to accepting computer recommendations in real flights. In other studies, automation has been shown to increase complacency for both experts and naive users (Parasuraman & Manzey, 2010).

Automation can impair data analysis and processing, formulating alternatives, and weighing alternatives in the decision-making process. People should strive to use technology that is not too systematic, something that reduces complacency.

7. User experience

Some have argued that research on the interface through which content is presented is as important as research on the content itself (Brasel & Gips, 2014; Jansson-Boyd, 2011). Surprising? The normative approach to decision making argues that importance should only be attributed to the content itself. However, many studies have proved that interfaces can subconsciously influence decision making (Jansson-Boyd, 2011; Kim, 2016; Robins et al., 2010; Robins & Holmes, 2008). These studies showed that platforms that require touch (such as a touch screen) increased a phenomenon called the endowment effect (Thaler, 1980), an emotional bias that causes individuals to value an owned object higher, often irrationally. Brasel and Gips (2014) showed that increasing the endowment effect in a mobile interface increased the confirmation bias (the tendency to interpret, favor, and remember information in a way that confirms beliefs and hypotheses while giving disproportionately less attention to information that supports alternative options).

Studies also showed that holding a product before buying it increased the likelihood of doing so; people also reported a great deal of satisfaction with mobile browsing, and advertising on mobile platforms far outperformed advertisements on mobile platforms (Brasel & Gips, 2014; Jansson-Boyd, 2011). Concentrating on designing a user-friendly interface ensures quick and accurate interpretation but on the other hand opens up a lot of biases.

Accepting technology as a source of authoritative information can also affect the perception of reliability derived from information accessed with that technology. Studies have shown a link between a website's reputation, its graphic design, and the degree of people's trust in the content found on the site (Robins et al., 2010).

These biases can impair decision making in the information analysis phase and in the alternative-weighing phase. Therefore, a convenient user interface helps prevent many distractions, but care should be taken to reduce resulting biases. Convenient user interfaces can increase the confirmation bias and may cause unreliable information to appear reliable.

8. Emotions and technology

Technologies are capable of conveying and mediating many emotions, and they can generate positive or negative emotions (Loderer et al., 2020). On the other hand, there are emotions that technologies cannot properly convey. Technologies were found to suppress a person's empathy, a very negative by-product, since empathy helps people make better decisions for society (Shank, 2014).

Affective computing is the research and development of systems and devices that can identify, interpret, process, and even respond to a person's emotional state. Affective computing can be very useful in many areas. Many software programs appear to save lives by identifying users' emotional state and providing assistance, for example by recommending relevant links. Other software can help students learn online while providing affective feedback on their work (Brigham, 2017). Some technology developers may take advantage of affective computing. Ariely (2016) showed that internet marketing is more effective through mobile devices. He explained that consumers are influenced by time pressure, and mobile advertisements increase the sense of time pressure, leading to impulse purchase decisions.

Emotions play an important role in decision making and are widely discussed in the literature (Andrade & Ariely, 2009; Israel et al., 2019; Lahav et al., 2019; Naqvi et al., 2006; Shavit et al., 2016). Emotions can help a person make better decisions. But when emotions are manipulated or when a person's experiential system does not properly represent their emotions, emotions can disrupt decision making at the alternative-weighing stage of the process. We suggest, therefore, that technology should not suppress or manipulate people's emotions but can help people with emotional decision making while maintaining neutrality in the process.

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