Episode 052 - Are we making better workplace decisions? Understanding the Science Behind Our Choices
February 28, 2025 • 23 mins
In this episode, I discuss the science behind bounded rationality and offer ways to navigate our decision-making process. In this exciting episode, I delve into the fascinating realm of bounded rationality and uncover the hidden factors that influence our choices. Join me as I share insightful strategies that can empower you to make better decisions, enhance your problem-solving skills, and confidently navigate the complexities of daily life. Don’t miss out on these powerful tools that can transform your thoughts and decisions!
References
1. Viale, R., Gallagher, S., & Gallese, V. (2023). Bounded rationality, enactive problem solving, and the neuroscience of social interaction. Frontiers in Psychology, 14, 1152866. https://doi.org/10.3389/fpsyg.2023.1152866
2. Petracca, E. (2021). Embodying Bounded Rationality: From Embodied Bounded Rationality to Embodied Rationality. Frontiers in Psychology, 12, 710607. https://doi.org/10.3389/fpsyg.2021.710607
3. Simon, H. A. (1947). Administrative Behavior: A Study of Decision-Making Processes in Administrative Organization. Macmillan.
4. Simon, H. A. (1955). A behavioral model of rational choice. The Quarterly Journal of Economics, 69(1), 99-118. https://doi.org/10.2307/1884852
5. Simon, H. A. (1972). Theories of bounded rationality. Decision and Organization, 1(1), 161-176.
6. Simon, H. A. (1981). The Sciences of the Artificial (2nd ed.). MIT Press.
7. Todd, P. M., & Gigerenzer, G. (2012). Ecological rationality: Intelligence in the world. Oxford University Press. https://doi.org/10.1093/acprof:oso/9780195315448.001.0001
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dr Austin Tay (00:14):
Hello everyone, I'm Doctor Austin Tay. Welcome
to episode 52 of PsychChat , apodcast where we share evidence
based insights on navigating thecomplex world of work. Hello to
all our new listeners. We arethrilled to have you join us.
Don't forget to hit thatsubscribe button so you can
(00:35):
explore our earlier episodes andstay updated on all the exciting
new releases.
And a huge shout out to ourloyal subscribers. Thank you for
your incredible support. Yourreviews empower us to craft even
more enriching content just foryou. Today we are exploring
(00:56):
something that affects everyoneat work: how we make decisions.
Drawing on research in cognitivescience and organizational
psychology will uncover why evenwell planned decisions sometimes
fail, and more importantly, whatwe can do about it.
(01:17):
Let me start with a situationI'm sure many of you have
experienced. Picture this,you're facing an important
deadline for a major project.You have spent weeks
meticulously planning everydetail, analyzing all the data,
creating detailed spreadsheets,and holding multiple meetings
(01:43):
with stakeholders. You feelconfident you have considered
every possible anger. But whenit comes to the execution,
things start falling apartunexpectedly.
Team members interpretinstructions differently,
(02:03):
unexpected challenges arise, andwhat seemed perfectly logical on
paper becomes messy. Does thissound familiar? If you're
nodding your head right now,you're not alone. We are
experiencing what Herbert Simonnineteen fifty five first
(02:24):
identified as boundedrationality, and understanding
it could transform how youapproach workplace decisions. So
why we don't always make theperfect decision?
You know that feeling when youhave made a perfectly logical
(02:48):
decision, but things still don'twork out as planned. Well,
there's a fascinating sciencebehind this. Herbert Simon's
groundbreaking research,beginning with his work on
administrative behavior in 1947,challenged everything we thought
(03:08):
we knew about decision making.Simon challenged the economic
man model, which suggests thatindividuals make decisions by
thoroughly analysing everyavailable option. Contrary to
(03:31):
his perspective, Simon'sresearch revealed that we
function more like what hecalled the administrative man.
This concept describes a personwho makes reasonable decisions
based on practical limitationsand constraints. Recent
(03:57):
neuroscience research by Vialeet al. In 2023 has further
validated Simon's insights. Itshows how our brains' decision
making processes differsignificantly from traditional
rational models. The researchersfound that our decision making
(04:21):
is deeply embodied, meaning ourthoughts, physical experiences,
and social interactionsinfluence it.
Research done by Petraca in 2021shows that factors like your
physical environment, socialinteractions, and even your
(04:46):
body's state significantlyinfluence how you process
information and make choices.Let us now look at three real
world challenges that shape ourdecision. Let's explore what
Simon identified as the threefundamental bounds of our
(05:08):
rationality. What I like to callour brains' built in processing
limits. Recent research hasexpanded our understanding of
each of these.
One. Our mental inbox haslimits. Research by Simon in
(05:33):
1972 indicates that our brainshave specific limits in
processing information,typically managing only four to
seven pieces of information atthe same time. The study by
Viallet et al. In 2023 showsthat our brains filter
(05:56):
information automaticallyinfluenced by both conscious and
unconscious factors.
Recent findings in neurosciencereview that we heavily depend on
pattern recognition and mentalshortcuts. Todd et al in 2012
(06:18):
suggests that using thesemechanisms can lead to more
effective decision making,especially in complex
situations. These cognitivelimitations help to explain why
having more information does notnecessarily result in better
(06:42):
decision making outcomes. Numbertwo, the crystal ball problem or
what we call incompleteinformation. Now, in 1955, Simon
demonstrated that effectivedecision makers can work
efficiently even when theypossess only partial
(07:06):
information.
The process of findinginformation incurs real costs in
terms of both time andresources, which leads to a
concept Simon referred to as'satisficing' the idea of
settling for a satisfactorysolution rather than the optimal
(07:29):
one. Now research by Petraca in2021 indicates that our brains
have developed in ways thatenable us to make predictions
even when we do not havecomplete information available.
(07:50):
Viallet et al in 2023 highlightthat decisions generate ripple
effects that are oftenimpossible to fully anticipate
or even predict. Point numberthree, the time squeeze or the
(08:11):
temporal constraints. NowSimon's research demonstrates
that time pressure significantlyimpacts the decision making
process.
Now within organizations,decisions are made sequentially,
leading to what Viele et al. In2023 described as path
(08:37):
dependencies. Time constraintsnecessitate trade offs between
the quality of decisions and thespeed at which they are made.
The pace of change in theenvironment often exceeds our
ability to collect and alsoanalyse relevant data. So how is
(09:06):
modern science helping torevolutionise decision making?
Recent research hassignificantly enhanced our
comprehension beyond Simon'sinitial thoughts. As mentioned,
Viallet et al in 2023 uncoveredthree key aspects of decision
(09:26):
making that traditional theorieshave overlooked. Number one.
Embodied cognition. The researchconducted by Vialet et al.
In 2023 explores therelationship between mirror
neuron systems and socialinteraction. Their findings
(09:52):
indicate that decision makinginvolves cognitive functions and
sensorimotor regions in thebrain, highlighting the complex
interplay between mentalprocesses and physical
interactions. Petraca's researchin 2021 delves into embodied
(10:17):
rationality, showing that ourbodily states and physical
sensations significantlyinfluence the quality of our
decision making. This suggeststhat our emotion and physical
conditions can really shape ourchoices. Additionally, Viallet
(10:41):
et al discovered that decisionmaking is intricately connected
to our physical interactionswith the environment during
inactive experiences.
This connection emphasizes theimportance of considering both
(11:01):
mental and bodily aspects whenunderstanding how we make
decisions. Two. Social dynamics.The identification of
specialised neural networks canfacilitate social learning. The
(11:23):
research by Vielle et alhighlights that social
interaction plays a significantrole in decision making,
demonstrating how groupdecisions can help individuals
overcome their limitations.
(11:43):
This concept is furthersupported by Galiesz's study on
mirror neurons and socialcognition, which explore how our
neurological makeup influencesour social interactions.
Research has demonstrated thatsignificance of real time social
(12:06):
feedback can also enhancedecision making processes.
Three. Dynamic systemsperspective. In his influential
work, Simon in 1981 underscoresthe significance of
(12:26):
environmental adaptation indecision making.
He argues that decision makingshould not be viewed as a one
time event, but as a continuousand evolving process. This
viewpoint emphasizes that ourchoices are not made in
(12:51):
isolation, but are consistentlyshaped and influenced by the
environment around us.Similarly, Viallet at Tell
introduced the concept ofinactive problem solving. They
delve into how our decisions areclosely linked to various
(13:16):
environmental factors,highlighting that the
situational context is vital indetermining the outcomes of our
choices. Essentially, ourdecisions do not exist in a
vacuum.
They are affected by thecircumstances we find ourselves
(13:38):
in. Moreover, Petraca in 2021explores the mechanism of
embodied rationality. He focuseson the importance of rapid
feedback cycles, which play apivotal role in improving the
quality of our decisions.Petraca proceeds that we can
(14:01):
more effectively adjust ourchoices when we receive
immediate feedback about ouractions. This instant response
not only aids us in makingbetter decisions but also
enhances our overall decisionmaking processes over time.
(14:22):
So what are the research basedsolutions for making better
decisions? Drawing from bothclassical and contemporary
research, here are five evidencebased strategies for improving
organisational decision making: one. Environmental feedback (14:41):
undefined
integration Established feedbackmechanisms inspired by Simon's
nineteen eighty one research onhow environments adapt. Utilize
(15:03):
what Viele et al in 2023referred to as inactive problem
solving strategies. Developsystematic feedback loops that
effectively capture bothexplicit and implicit responses
(15:24):
from the environment.
Prioritise immediate feedbackover delayed feedback, as
emphasised by Petrucker'sfindings. Two. Social
interaction enhancements Utiliseinsights from neuroscience
(15:47):
research to enhance socialdecision making networks Develop
collaborative problem solvingactivities that engage the
mirror neuron systems to promoteempathy and connection among
(16:11):
participants. Design decisionmaking processes that integrate
diverse viewpoints, drawing onfindings from collective
intelligence studies to enhanceoutcomes. Implement social
(16:33):
feedback mechanisms that alignwith what Simon referred to as
procedural rationality,fostering more informed and
reflective decisions.
Three. Physical environmentoptimisation Design workspaces
(16:58):
that accommodate variouscognitive styles to enhance
productivity. Incorporateprinciples of embodied cognition
when arranging the layout of theworkplace. Develop spaces that
(17:20):
encourage both individualthinking and group collaboration
for effective decision making.Utilize environmental cues to
guide and improve the decisionmaking process for employees.
(17:45):
Four. Adaptive decisionframeworks Shift from
optimization to adaptationapplying Simon's satisficing
principle. Utilize iterativedecision making processes
(18:06):
informed by the latest researchin dynamic systems. Incorporate
feasibility into decision makingframeworks Aim to develop robust
solutions instead of strivingfor perfection. Five.
(18:31):
Cognitive load managementAcknowledge the cognitive
limitations as recognised bySimon (nineteen seventy two) to
improve decision makingeffectiveness. Break down
complex decisions into smaller,manageable parts to facilitate
(18:57):
analysis and action. Considerthe impact of decision fatigue,
as highlighted in recentresearch and implement
strategies to mitigate itseffects. Incorporate reflection
time based on findings fromembodied connection studies to
(19:22):
enhance understanding andretention of information. So
what are the practicalimplementation you can follow?
Now research conducted by Valeand Tell indicates that for
(19:44):
successful implementation,several key elements are
essential. One. Regularassessments of decision making
environments. It is crucial toregularly evaluate the context
in which decisions are made toensure they remain relevant and
(20:10):
effective. Two.
Continuous adaptation ofprocesses based on feedback.
Processes should be adjustedcontinually based on the
feedback received fromstakeholders, allowing for
ongoing improvement andresponsiveness to changes.
(20:36):
Three. Integration of social andphysical factors in decision
systems. Decision making systemsmust consider both the social
dynamics and physicalenvironments that impact
decisions, ensuring a holisticapproach.
(21:00):
Four. Recognition of both formaland informal decision processes.
Effective implementationrequires acknowledgment of both
formal structures and informalpractices that influence how
decisions are made, allowing fora comprehensive understanding of
(21:23):
the decision landscape. So basedon the insights from today's
research that I share, Iencourage you to explore and
modify your decision makingprocess throughout this week.
Number one, observe yourphysical state.
(21:45):
Notice how your physicalfeelings such as stress or
comfort can affect the decisionyou make. Two. Record
environmental influences. Keep alook of how various
environmental factors like noiselevels or lighting impact your
(22:09):
choices. Three.
Examine social interactions.Reflect on how your
conversations and interactionswith others influence your
decision making. Four.Experiment with feedback
mechanisms. Try different typesof feedback, such as
(22:33):
constructive criticisms orpositive reinforcement, to see
how they affect your choices.
Share your experiences usingSITEchat, while as Petraca
twenty twenty one suggests, selfawareness of our decision making
processes is the first step toimprovement. Effective decision
(23:00):
making is not about achievingperfection, rather it involves
skillfully navigating ournatural limitations. This means
recognizing that we all haveconstraints and making the best
choices within those boundaries.Embracing our limitations allows
(23:23):
for more realistic andachievable decision making
processes, ultimately leading tobetter outcomes.
Hello everyone, I'm Doctor Austin Tay. Welcome
to episode 52 of PsychChat , apodcast where we share evidence
based insights on navigating thecomplex world of work. Hello to
all our new listeners. We arethrilled to have you join us.
Don't forget to hit thatsubscribe button so you can
(00:35):
explore our earlier episodes andstay updated on all the exciting
new releases.
And a huge shout out to ourloyal subscribers. Thank you for
your incredible support. Yourreviews empower us to craft even
more enriching content just foryou. Today we are exploring
(00:56):
something that affects everyoneat work: how we make decisions.
Drawing on research in cognitivescience and organizational
psychology will uncover why evenwell planned decisions sometimes
fail, and more importantly, whatwe can do about it.
(01:17):
Let me start with a situationI'm sure many of you have
experienced. Picture this,you're facing an important
deadline for a major project.You have spent weeks
meticulously planning everydetail, analyzing all the data,
creating detailed spreadsheets,and holding multiple meetings
(01:43):
with stakeholders. You feelconfident you have considered
every possible anger. But whenit comes to the execution,
things start falling apartunexpectedly.
Team members interpretinstructions differently,
(02:03):
unexpected challenges arise, andwhat seemed perfectly logical on
paper becomes messy. Does thissound familiar? If you're
nodding your head right now,you're not alone. We are
experiencing what Herbert Simonnineteen fifty five first
(02:24):
identified as boundedrationality, and understanding
it could transform how youapproach workplace decisions. So
why we don't always make theperfect decision?
You know that feeling when youhave made a perfectly logical
(02:48):
decision, but things still don'twork out as planned. Well,
there's a fascinating sciencebehind this. Herbert Simon's
groundbreaking research,beginning with his work on
administrative behavior in 1947,challenged everything we thought
(03:08):
we knew about decision making.Simon challenged the economic
man model, which suggests thatindividuals make decisions by
thoroughly analysing everyavailable option. Contrary to
(03:31):
his perspective, Simon'sresearch revealed that we
function more like what hecalled the administrative man.
This concept describes a personwho makes reasonable decisions
based on practical limitationsand constraints. Recent
(03:57):
neuroscience research by Vialeet al. In 2023 has further
validated Simon's insights. Itshows how our brains' decision
making processes differsignificantly from traditional
rational models. The researchersfound that our decision making
(04:21):
is deeply embodied, meaning ourthoughts, physical experiences,
and social interactionsinfluence it.
Research done by Petraca in 2021shows that factors like your
physical environment, socialinteractions, and even your
(04:46):
body's state significantlyinfluence how you process
information and make choices.Let us now look at three real
world challenges that shape ourdecision. Let's explore what
Simon identified as the threefundamental bounds of our
(05:08):
rationality. What I like to callour brains' built in processing
limits. Recent research hasexpanded our understanding of
each of these.
One. Our mental inbox haslimits. Research by Simon in
(05:33):
1972 indicates that our brainshave specific limits in
processing information,typically managing only four to
seven pieces of information atthe same time. The study by
Viallet et al. In 2023 showsthat our brains filter
(05:56):
information automaticallyinfluenced by both conscious and
unconscious factors.
Recent findings in neurosciencereview that we heavily depend on
pattern recognition and mentalshortcuts. Todd et al in 2012
(06:18):
suggests that using thesemechanisms can lead to more
effective decision making,especially in complex
situations. These cognitivelimitations help to explain why
having more information does notnecessarily result in better
(06:42):
decision making outcomes. Numbertwo, the crystal ball problem or
what we call incompleteinformation. Now, in 1955, Simon
demonstrated that effectivedecision makers can work
efficiently even when theypossess only partial
(07:06):
information.
The process of findinginformation incurs real costs in
terms of both time andresources, which leads to a
concept Simon referred to as'satisficing' the idea of
settling for a satisfactorysolution rather than the optimal
(07:29):
one. Now research by Petraca in2021 indicates that our brains
have developed in ways thatenable us to make predictions
even when we do not havecomplete information available.
(07:50):
Viallet et al in 2023 highlightthat decisions generate ripple
effects that are oftenimpossible to fully anticipate
or even predict. Point numberthree, the time squeeze or the
(08:11):
temporal constraints. NowSimon's research demonstrates
that time pressure significantlyimpacts the decision making
process.
Now within organizations,decisions are made sequentially,
leading to what Viele et al. In2023 described as path
(08:37):
dependencies. Time constraintsnecessitate trade offs between
the quality of decisions and thespeed at which they are made.
The pace of change in theenvironment often exceeds our
ability to collect and alsoanalyse relevant data. So how is
(09:06):
modern science helping torevolutionise decision making?
Recent research hassignificantly enhanced our
comprehension beyond Simon'sinitial thoughts. As mentioned,
Viallet et al in 2023 uncoveredthree key aspects of decision
(09:26):
making that traditional theorieshave overlooked. Number one.
Embodied cognition. The researchconducted by Vialet et al.
In 2023 explores therelationship between mirror
neuron systems and socialinteraction. Their findings
(09:52):
indicate that decision makinginvolves cognitive functions and
sensorimotor regions in thebrain, highlighting the complex
interplay between mentalprocesses and physical
interactions. Petraca's researchin 2021 delves into embodied
(10:17):
rationality, showing that ourbodily states and physical
sensations significantlyinfluence the quality of our
decision making. This suggeststhat our emotion and physical
conditions can really shape ourchoices. Additionally, Viallet
(10:41):
et al discovered that decisionmaking is intricately connected
to our physical interactionswith the environment during
inactive experiences.
This connection emphasizes theimportance of considering both
(11:01):
mental and bodily aspects whenunderstanding how we make
decisions. Two. Social dynamics.The identification of
specialised neural networks canfacilitate social learning. The
(11:23):
research by Vielle et alhighlights that social
interaction plays a significantrole in decision making,
demonstrating how groupdecisions can help individuals
overcome their limitations.
(11:43):
This concept is furthersupported by Galiesz's study on
mirror neurons and socialcognition, which explore how our
neurological makeup influencesour social interactions.
Research has demonstrated thatsignificance of real time social
(12:06):
feedback can also enhancedecision making processes.
Three. Dynamic systemsperspective. In his influential
work, Simon in 1981 underscoresthe significance of
(12:26):
environmental adaptation indecision making.
He argues that decision makingshould not be viewed as a one
time event, but as a continuousand evolving process. This
viewpoint emphasizes that ourchoices are not made in
(12:51):
isolation, but are consistentlyshaped and influenced by the
environment around us.Similarly, Viallet at Tell
introduced the concept ofinactive problem solving. They
delve into how our decisions areclosely linked to various
(13:16):
environmental factors,highlighting that the
situational context is vital indetermining the outcomes of our
choices. Essentially, ourdecisions do not exist in a
vacuum.
They are affected by thecircumstances we find ourselves
(13:38):
in. Moreover, Petraca in 2021explores the mechanism of
embodied rationality. He focuseson the importance of rapid
feedback cycles, which play apivotal role in improving the
quality of our decisions.Petraca proceeds that we can
(14:01):
more effectively adjust ourchoices when we receive
immediate feedback about ouractions. This instant response
not only aids us in makingbetter decisions but also
enhances our overall decisionmaking processes over time.
(14:22):
So what are the research basedsolutions for making better
decisions? Drawing from bothclassical and contemporary
research, here are five evidencebased strategies for improving
organisational decision making: one. Environmental feedback (14:41):
undefined
integration Established feedbackmechanisms inspired by Simon's
nineteen eighty one research onhow environments adapt. Utilize
(15:03):
what Viele et al in 2023referred to as inactive problem
solving strategies. Developsystematic feedback loops that
effectively capture bothexplicit and implicit responses
(15:24):
from the environment.
Prioritise immediate feedbackover delayed feedback, as
emphasised by Petrucker'sfindings. Two. Social
interaction enhancements Utiliseinsights from neuroscience
(15:47):
research to enhance socialdecision making networks Develop
collaborative problem solvingactivities that engage the
mirror neuron systems to promoteempathy and connection among
(16:11):
participants. Design decisionmaking processes that integrate
diverse viewpoints, drawing onfindings from collective
intelligence studies to enhanceoutcomes. Implement social
(16:33):
feedback mechanisms that alignwith what Simon referred to as
procedural rationality,fostering more informed and
reflective decisions.
Three. Physical environmentoptimisation Design workspaces
(16:58):
that accommodate variouscognitive styles to enhance
productivity. Incorporateprinciples of embodied cognition
when arranging the layout of theworkplace. Develop spaces that
(17:20):
encourage both individualthinking and group collaboration
for effective decision making.Utilize environmental cues to
guide and improve the decisionmaking process for employees.
(17:45):
Four. Adaptive decisionframeworks Shift from
optimization to adaptationapplying Simon's satisficing
principle. Utilize iterativedecision making processes
(18:06):
informed by the latest researchin dynamic systems. Incorporate
feasibility into decision makingframeworks Aim to develop robust
solutions instead of strivingfor perfection. Five.
(18:31):
Cognitive load managementAcknowledge the cognitive
limitations as recognised bySimon (nineteen seventy two) to
improve decision makingeffectiveness. Break down
complex decisions into smaller,manageable parts to facilitate
(18:57):
analysis and action. Considerthe impact of decision fatigue,
as highlighted in recentresearch and implement
strategies to mitigate itseffects. Incorporate reflection
time based on findings fromembodied connection studies to
(19:22):
enhance understanding andretention of information. So
what are the practicalimplementation you can follow?
Now research conducted by Valeand Tell indicates that for
(19:44):
successful implementation,several key elements are
essential. One. Regularassessments of decision making
environments. It is crucial toregularly evaluate the context
in which decisions are made toensure they remain relevant and
(20:10):
effective. Two.
Continuous adaptation ofprocesses based on feedback.
Processes should be adjustedcontinually based on the
feedback received fromstakeholders, allowing for
ongoing improvement andresponsiveness to changes.
(20:36):
Three. Integration of social andphysical factors in decision
systems. Decision making systemsmust consider both the social
dynamics and physicalenvironments that impact
decisions, ensuring a holisticapproach.
(21:00):
Four. Recognition of both formaland informal decision processes.
Effective implementationrequires acknowledgment of both
formal structures and informalpractices that influence how
decisions are made, allowing fora comprehensive understanding of
(21:23):
the decision landscape. So basedon the insights from today's
research that I share, Iencourage you to explore and
modify your decision makingprocess throughout this week.
Number one, observe yourphysical state.
(21:45):
Notice how your physicalfeelings such as stress or
comfort can affect the decisionyou make. Two. Record
environmental influences. Keep alook of how various
environmental factors like noiselevels or lighting impact your
(22:09):
choices. Three.
Examine social interactions.Reflect on how your
conversations and interactionswith others influence your
decision making. Four.Experiment with feedback
mechanisms. Try different typesof feedback, such as
(22:33):
constructive criticisms orpositive reinforcement, to see
how they affect your choices.
Share your experiences usingSITEchat, while as Petraca
twenty twenty one suggests, selfawareness of our decision making
processes is the first step toimprovement. Effective decision
(23:00):
making is not about achievingperfection, rather it involves
skillfully navigating ournatural limitations. This means
recognizing that we all haveconstraints and making the best
choices within those boundaries.Embracing our limitations allows
(23:23):
for more realistic andachievable decision making
processes, ultimately leading tobetter outcomes.
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