Cognitive biases and decision-making strategies in time of changes: A systematic literature review

Purpose: In a work environment marked by unprecedented complexity, volatility, and ambiguity, managers must accomplish their objectives while navigating many challenges. This paper aims to investigate potential interrelations among environmental transformations, cognitive biases, and strategic decisions. In particular, the purpose of the study is to crystallize the state of art on the impact of cognitive biases on strategic decisions, in the context of environmental transformations. Design/methodology/approach: The authors have conducted a systematic literature review to identify existing relevant work on this topic and to detect potential avenues for future research. Findings: The findings highlight how decision-making is influenced and enabled by internal (e.g. perception) and external factors (e.g. digitalization). Specifically, the strategic role of cognitive biases appears to be crucial when investigating the related impact on strategic decisions in times of environmental transformation. Practical implications: Implications are drawn for scholars and practitioners interested in evaluating the role of specific decision-making determinants for the formation and implementation of strategic decisions. In this sense, we stress that decision-makers need to manage their cognitive biases and select the right information out of a wide data set in order to adapt to environmental transformations. Originality/value: By systematizing the literature review, potential interrelations among environmental transformations, cognitive biases, and strategic decisions are identified. Furthermore, the primary phases that drive the decision-making process are proposed (analysis, decision, onboarding, and control).