Individuals face various cognitive biases that can affect organizational life. A cognitive bias is the human tendency to make systematic decisions in certain circumstances based on cognitive factors rather than evidence. Bias arises from various processes that are sometimes difficult to distinguish. These processes include information-processing shortcuts, motivational factors, and social influence. Several of these biases have especially impactful intersections with diverse groups (Figure 1). Some of these are the false consensus bias, status quo bias, tendency toward homophily, and stereotyping.
False Consensus Bias: A cognitive bias whereby a person tends to overestimate how much other people agree with him or her, and to assume that their own opinions, beliefs, preferences, values, and habits are 'normal' and that others also think so. This bias is especially prevalent in group settings where one thinks the collective opinion of their own group matches that of the larger population and, sometimes by extension, that those who do not agree with them are somehow defective. This can impair the integration of diverse perspectives and lead to misunderstandings.
Status Quo Bias: A cognitive bias in which the current baseline (or status quo) is taken as a reference point, and any change from that baseline is perceived as a loss. Status quo bias should be distinguished from a rational preference for the status quo ante, as when the current state of affairs is objectively superior to the available alternatives, or when imperfect information is a significant problem. A large body of evidence, however, shows that an irrational preference for the status quo—a status quo bias—frequently affects decision-making.
Homophily: A social process that may have links to cognitive biases but also to other social dynamics. Homophily is the tendency of individuals to associate and bond with similar others. The presence of homophily has been discovered in a vast array of network studies. This is often expressed in the adage "birds of a feather flock together".
Stereotype: A thought about specific types of individuals or certain ways of doing things, but that may or may not accurately reflect reality. While stereotypes do not necessarily lead to prejudice and/or discrimination, the presence of expectations and beliefs about the characteristics of members of groups perceived as different from one's own can lead to misunderstandings, inflexibility, stifled innovation, and potentially damaging group behaviors.
Applying these biases to the business environment and diversity in general highlights some of the pitfalls that must be avoided in a diverse business environment. These biases should be actively prevented and screened for within the social work environments of any multinational corporation.