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Our bias for perfection : When imperfections are good

posted this in JAP, Micro, OrgScience on May 29th, 2009

In the ongoing quest for better performance and outcomes the prevalent management literature seems to argue for perfection. Accuracy, efficiency, reliability, rationality and various other "perfection measures" have led us to an inherent bias against imperfections. Who wants slow changing organizations? Who’d prefer emotionally unstable employees?

But – is this bias justified? Are those perfection measures always good? Some of the literature questions that notion. Following are two quick examples I came across recently, one for the individual level and one for the organizational level.

Wong et. al ("Understanding the Emotional Aspects of Escalation of Commitment: The Role of Negative Affect", 2006, JAP) showed that high negative effect tends to lead to less judgment and decision making biases in situations of Escalation of Commitment. Testing "Negative Effect" the study examines the "Big Five" factor of Neuroticism, were higher levels of Neuroticism are likely to lead to a higher negative effect, suggesting that people who are higher on Neuroticism – a generally unpopular trait in managerial studies – are making decisions that are less biased. The theory explained that to avoid future dealings with the negative feedback of an unsuccessful decision neurotic people are more likely to withdraw from that decision. This isn’t to suggest that they’re less biased, but that because of their personalities they – ironically – tend to make the more rational decision in the case of "Escalation of Commitment" .

Denrell & March ("Adaptation as Information Restriction: The Hot Stove Effect", 2001, Org. Science) were even more counter intuitive. Their simulations showed that we have an inherent bias towards reliability (as opposed to risk) and against new alternatives that might be better in the long run but take practice to achieve results. The especially striking point (perhaps since we’re biased in thinking against imperfections) is that this is enhanced by the efficiency of fast accurate short-term learning and that – actually – it’s the slow imprecise ineffective learners that might be the ones to decrease the bias effect and achieve better results.

Something to think about.

May 29th, 2009 | Tags: , , , , , | Category: JAP, Micro, OrgScience | 2 comments
  • http://angelsalmon.spaces.live.com/ Zhi

    These findings, as compelling and counterintuitive as they are, simply beg a contingent perspective: neuroticism is not always bad and can be beneficial under certain conditions (e.g., escalation of commitment). I always have problems with “surprising” findings like these–other studies find that neuroticism is bad simply because right conditions or situtions are not specified–so?

    • http://mgto.org Fili

      Zhi – True. It questions whether there is ever a “right” or “wrong”, a “good” or “bad”.

      When we do our research, analyze the findings and review other papers we might be naturally biased in a certain direction, as we rely on our “common sense” to guide us if what we’re looking seems valid or not. It is surprising in a sense that it seems to undermine some of the key assumptions underlying management research. It goes beyond contingent factors into the issue of how we should be theorizing, evaluating and looking at behavior, especially when we don’t know what happens in the process between the before and after.