Specific facets of conscientiousness—particularly achievement striving and dutifulness—may affect escalation of commitment.51 First, achievement-oriented people hate to fail, so they escalate their commitment, hoping to forestall failure. Dutiful people, however, are more inclined to do what they see as best for the organization, so they are less likely to escalate their commitment. Second, achievement-striving individuals appear more susceptible to hindsight bias, perhaps because they have a need to justify their actions.52 We don’t have evidence yet on whether dutiful people are immune to this bias.

Who makes better decisions, men or women? It depends on the situation. When the situation isn’t stressful, decision making by men and women is about equal in quality. In stressful situations, it appears that men become more egocentric and make more risky decisions, while women become more empathetic and their decision making improves.53

We know people with higher levels of general mental ability (GMA; see Chapter 5) are able to process information more quickly, solve problems more accurately, and learn faster, so you might expect them to be less susceptible to common decision errors. However, GMA appears to help people avoid only some of them.54 Smart people are just as likely to fall prey to anchoring, overconfidence, and escalation of commitment; probably because being smart doesn’t alert you to the possibility you’re too confident or emotionally defensive. It’s not that intelligence never matters. Once warned about decision-making errors, more intelligent people learn more quickly to avoid them.

Cultures differ in time orientation, the value they place on rationality, their belief in the ability of people to solve problems, and their preference for collective decision making. Differences in time orientation help us understand, for instance, why managers in Egypt make decisions at a much slower and more deliberate pace than their U.S. counterparts. Second, while rationality is valued in North America, that’s not true elsewhere. A North American manager might make a decision intuitively but know it’s important to appear to proceed in a rational fashion because rationality is highly valued in the West. In countries such as Iran, where rationality is not paramount to other factors, efforts to appear rational are not necessary.

Third, some cultures emphasize solving problems, while others focus on accepting situations as they are. The United States falls in the first category; Thailand and Indonesia are examples of the second. Because problem-solving managers believe they can and should change situations to their benefit, U.S. managers might identify a problem long before their Thai or Indonesian counterparts would choose to recognize it as such. Fourth, decision making in Japan, a collectivistic society (see Chapter 4), is much more group-oriented than in the United States, an individualistic society (see Chapter 4). The Japanese value conformity and cooperation, so before Japanese CEOs make an important decision, they collect a large amount of information to use in consensus-forming group decisions.

Anyone who has ever seen a commercial knows about nudging. Commercials represent one of the most outright forms of an organization’s attempt to influence our perceptions (of a product) and our decision (to acquire that product). Nudging has also been used positively in the development of corporate social responsibility (CSR; see Chapter 3) initiatives to change people’s expectations for organizations.55 People differ in their susceptibility to suggestion, but it is probably fair to say we are all receptive to nudging to some degree.

Managers are influenced by the criteria on which they are evaluated. If a division manager believes the manufacturing plants under his responsibility are operating best when he hears nothing negative, the plant managers will spend a good part of their time ensuring that negative information doesn’t reach him.

The organization’s reward systems influence decision makers by suggesting which choices have better personal payoffs. For example, if the organization rewards risk aversion, managers are more likely to make conservative decisions.

David, a shift manager at a Taco Bell restaurant in San Antonio, Texas, describes constraints he faces on his job: “I’ve got rules and regulations covering almost every decision I make—from how to make a burrito to how often I need to clean the restrooms. My job doesn’t come with much freedom of choice.” David’s situation is not unique. All but the smallest organizations create rules and policies to program decisions and get individuals to act in the intended manner. In doing so, they limit decision choices.

Almost all important decisions come with explicit deadlines. For example, a report on new product development may have to be ready for executive committee review by the first of the month. Such conditions often make it difficult, if not impossible, for managers to gather all information before making a final choice.

Decisions aren’t made in a vacuum; they have context. For example, it’s common knowledge that the largest determinant of the size of any given year’s budget is last year’s budget. Choices made today are largely a result of choices made over the years.