BUSS5080 · Succeeding In The Accounting Profession
Thinking Skills & Decision Making
Week 7 is the cognition week of BUSS5080: how a professional actually thinks and decides. It treats good thinking as a trainable skill — critical thinking and bias-awareness (Chatfield), a growth mindset plus deliberate practice (Dweck / Ericsson) — then places every choice on the intuition → heuristics → rational-analysis continuum, explains why bounded rationality makes us satisfice, and drills the discipline of judging a decision by its process, not its outcome. It closes with two decision-quality tools: broaden the frame (Larrick) and the four hidden traps — anchoring, status-quo, sunk-cost and framing (Hammond, Keeney & Raiffa). The closed-book MCQ exam loves naming the right approach or trap and resisting outcome bias.
What this chapter covers
- 011. Critical thinking & bias (Chatfield) — reason carefully about evidence while catching your own biases; actively seek the disconfirming view
- 022. Growth vs fixed mindset (Dweck) — believing ability grows with effort drives you toward the stretch tasks that build skill
- 033. Deliberate practice (Ericsson) — targeted, feedback-driven effort at the edge of ability, with failure reframed as information, not a verdict
- 044. The decision continuum — intuition → heuristics → rational analysis, arranged by speed vs effort; match the approach to the stakes
- 055. Bounded rationality & satisficing (Simon) — finite time, information and cognitive capacity mean we pick the first 'good enough' option
- 066. Satisficing vs maximising (Schwartz) — maximisers get better outcomes but lower satisfaction; the skill is knowing when to switch modes
- 077. Rational analysis — the six-step weighted-scoring procedure and its four assumptions (well-defined choice, complete info, stable preferences, time)
- 088. Outcome bias — judge a decision by its process and the information available at the time, not by how it happened to turn out
- 099. Broaden the frame (Larrick) & the hidden traps (Hammond, Keeney & Raiffa) — more alternatives + explicit criteria; defend against anchoring, status-quo, sunk-cost and framing
Name the hidden trap and de-bias the decision
- +1Name the trap: this is the sunk-cost trap (Hammond, Keeney & Raiffa) — persisting with a course of action to justify past, unrecoverable spending.
- +2Explain the flaw: the $2M already spent is gone whether the project continues or not, so it is irrelevant to the choice now. A rational decision compares only the FUTURE costs ($1.5M more) against the FUTURE benefits — and here those benefits are small.
- +1De-bias move: judge on future value only and ignore sunk cost. A clean reframing test is 'if we were deciding today, with no money yet spent, would we start this project?' If the answer is no, stop.
- +1Distinguish it from the neighbours so you don't mislabel: this is not anchoring (no first number is dragging an estimate) and not status-quo (the director is actively spending more, not defaulting to inaction) — the tell is the appeal to PAST spend.
Key terms
- Critical thinking
- Reasoning carefully about arguments and evidence while recognising your own cognitive biases — actively seeking disconfirming views and slowing down on important judgments (Chatfield).
- Growth vs fixed mindset
- A fixed mindset treats ability as innate and unchangeable; a growth mindset treats it as developing through effort and feedback. The growth belief predicts skill development because it makes you take on stretch tasks (Dweck).
- Deliberate practice
- Focused, effortful, feedback-driven repetition at the edge of current ability — rehearse, get critique, iterate — rather than just 'doing more'. The mechanism by which skill is actually built (Ericsson).
- Bounded rationality
- Decision-making constrained by finite time, information and cognitive capacity (Simon). It is why we do not run full rational analysis on every choice.
- Satisficing
- Choosing the first option that is 'good enough' rather than searching for the optimum. Often the rational response to real limits, not laziness.
- Maximising
- Evaluating all options to find the single best one. Maximisers get objectively better outcomes but are less satisfied and more self-critical than satisficers.
- Outcome bias
- Judging a decision by how it turned out rather than by the quality of the process used to make it. A sound process can still draw a bad result, and a reckless call can get lucky.
- Hidden traps
- Psychological biases that distort choices (Hammond, Keeney & Raiffa): anchoring (over-weighting the first information), status-quo (bias toward the default), sunk-cost (justifying past spend) and framing (being swayed by gain/loss wording).
Thinking Skills & Decision Making FAQ
How is Week 7 examined?
As closed-book multiple-choice, and it is one of the heaviest MCQ suppliers in the unit. Expect items that make you place a decision on the intuition–heuristics–rational-analysis continuum and judge whether it fits, name the hidden trap distorting a choice (anchoring vs status-quo vs sunk-cost vs framing), or resist outcome bias by judging the process rather than the result. The group 'people-problem' case report also rewards using these frameworks — a decision matrix, or naming a trap — to structure a recommendation.
Is maximising always better than satisficing?
No, and assuming so is a designed trap. Maximisers do get objectively better outcomes — the classic example is roughly 20% higher starting salaries — but they are less satisfied and more self-critical, while satisficers are happier yet do slightly worse. The lesson is not 'always maximise'; it is to match the mode to the stakes: maximise the few decisions that truly matter and satisfice the rest, because bounded rationality means the cost of exhaustive search usually outweighs the value of a marginally better option.
How do I tell the four hidden traps apart?
Anchor on a one-word cue for each. Anchoring is a first NUMBER or frame dragging your estimate. Status-quo is a pull toward the DEFAULT or current state — inertia. Sunk-cost is persisting to justify PAST, unrecoverable spending. Framing is being swayed by gain-versus-loss WORDING of the same problem. The exam typically states one trap's definition under another trap's name, so read for the cue, not the label. (Confirming-evidence and forecasting traps can also appear.)
What is outcome bias and why does it matter in the exam itself?
Outcome bias is judging a decision by its result instead of its process. It matters because a good process can still yield a bad result and a poor process can get lucky, so a scenario that 'ended badly' does not prove the decision was wrong. Judge a decision on three things: the quality of the process (were real alternatives and explicit criteria used?), its soundness given the information available AT THE TIME rather than with hindsight, and whether the effort spent matched the decision's importance.
Is intuition a bad way to decide?
No — intuition is necessary and appropriate for the many small, familiar, low-stakes choices we make daily; it is a fast, unconscious weighted average of past experience. The point of the continuum is not that intuition is inferior but that you should match the approach to the situation: lean on intuition or simple heuristics when the stakes are low or time is short, and escalate to slow, structured rational analysis when a decision is important, recurring and data-rich.
Exam move
Build this chapter around one reflex: for any decision stem, name the approach (intuition / heuristics / rational analysis), check whether it fits the stakes, then name the trap and the de-bias move. Memorise the two short lists cold — rational analysis's six steps and its four assumptions, and the four hidden traps with their one-word cues (first number / default / past spend / gain-loss wording) — because the MCQ swaps a definition under the wrong label to catch you. Rehearse the discipline of judging process over outcome, since examiners plant scenarios that 'ended badly' from a sound process to test whether you fall for outcome bias. Keep the satisficing-vs-maximising trade-off straight (better outcome vs higher satisfaction; match mode to stakes), and be ready to broaden a narrow 'whether-or-not' frame into a 'whether-and-which' set scored on explicit, weighted criteria. Finally, tie the mindset material to action: a growth mindset matters because it drives deliberate practice, and deliberate practice is targeted, feedback-driven effort — not merely time on task.
