The Impact of Cognitive Biases on Strategic Decision-Making

Abstract

This research investigates the existence of cognitive biases in the context of strategic decision-making among higher education institutions in the Pakistan and the influence of Confirmation Bias, Overconfidence Bias, Anchoring Bias, Loss Aversion, and Status Quo Bias. Methods- A survey distributed to 200 university leaders, faculty members, and administrators across the Pakistan recovered and analyzed 193 responses used to examine how far those biases affect decisions of curriculum development and resource allocation, faculty hiring, and international partnerships. The results identify that Confirmation Bias and Overconfidence Bias are highly prevalent and have a considerable impact on the strategic decisions taken. The correlation and regression analyses suggest that in all clusters of strategy-related decisions, Confirmation Bias is the most significant predictor of performance outcomes, followed by Overconfidence Bias. The findings emphasize the need for colleges and universities to cultivate structured, evidence-based decision-making frameworks to reduce the detrimental impact of cognitive biases and thus encourage more rational, data-supported strategic planning. It informs the better grasp of cognitive biases affecting decisions in an educational context and provides significant guidelines for enhancing institutional decisional processes.

Keywords: Cognitive Bias, Strategic Decision-Making, Higher Education, Confirmation Bias, Overconfidence Bias, Anchoring Bias & Loss Aversion