An organization, in order to meet its goals and objectives, needs a thorough planning, analysis, assessment and monitoring of all the aspects which can make a business run successfully. Strategic Management involves all these aspects which are required by a business enterprise to function properly.  

When you utter the word business, there are some fragmented ideas which come to your mind. Like accounting, marketing, information system, operations or audit. Strategic Management takes all the key features together and studies them with a holistic approach. This in turn pops up three questions which are important for a complete understanding of the terminology: 

a) What are the factors which establish the total corporate performance of a large enterprise? 

b) What are the reasons for which some companies succeeds while others fail? 

c) What is the role of the manager in making a business successful? 

Before answering the above questions, let us see what the word strategy stands for in a business? 

A strategy is a demarcation which draws a line between what a company should do and what it should not do. It not only enables the enterprise to excel in what it is best doing at, but also restricts it from doing certain activities which other businesses generally do. A thorough discussion about this line of demarcation forms the main theme of the strategic management- “ What a company should do” and “ What is should not do”.  

In this context, three fundamental questions needs to be answered for a better grip on the subject.  

1) Where do we stand in competition? 

In order to be successful and beat the rival companies in competition, you need to have a bold marketing strategy. Search for an attractive marketing opportunity which will promote your business, but remember, every marketing effort will be futile if you don’t possess a better resource than your competitors.  

This leads us to our second question: 

2) How do we compete? 

While answering this question, we can add one important pointer which can make a particular company serve better than the others. This pointer is capability. The resources which we are talking about and which will help in marketing may be a tangible asset like land or property or intangible like skills and expertise. These resources along with capabilities can place a particular company in an advantageous position.  

The above-stated questions will help us to answer a key aspect of strategic management, that is, strategy formulation.  

This gives us our third and a functional question: 

3) How do we execute? 

In order to execute what a business enterprise needs to do, it has to undertake an implementation plan which makes an ally between the people and the organization and brings them together with the particular strategy. In order to align the people with the strategy of the enterprise, factors like motivation, incentives, leadership, control system etc play a key role.  

Remember: 

A bad strategy will make you a wrong thing unnecessarily without perfection 

A bad execution will make the right thing go horribly wrong 

Many companies mistakenly follow either of the two points and turn up without any profit. 

So, the wise idea is to have a: 

A good strategy and a good execution will only lead you to do the right thing correctly and flawlessly. 

A strategy can generally be defined as a three-legged tool which will be firm enough to make the strategy a success. The three legs are  

1. Marketing Opportunity: An effective and attractive market opportunity will help you to plan your strategy. 

2. Resources and Capabilities: These two helps an enterprise to serve better than it’s competitors. 

3. Execution Plan: A well- synchronized execution and implementation plan will align the people and the enterprise with the strategy. 

A strategy will never work if either of these three factors is missing. 

As discussed above, marketing opportunity and resources fall under the category of Strategy Formulation. It can be classified as External Analysis and Internal Analysis which again come with a host of other factors. 

1) External Analysis includes Competitor Dynamics, Industry Analysis and Industry Evolution 

2) Internal Analysis can be further classified as Business Level and Corporate Level 

1. Business Level includes Competitive Positioning, Generic Strategies, Building Competitive Advantage and Sustaining Competitive Advantage. 
2. Corporate Level includes Vertical Integration and Diversification 

Execution plan falls under Strategy Implementation which consists of two factors- Incentive and Control System and Organization Structure.  

Educational Objectives: 

Strategic Management has three basic educational objectives. 

1) Acquiring Diagnostic Skills: By this you learn to fill in the gap in the information by making an appropriate conclusion. There is no room for analysis here and you have to come to a suitable conclusion sans the basic facts which are required to do analytical reasoning. This is more about acquiring knowledge of how to act fast in an emergent situation. The more ably you can apply diagnostic reasoning, the more successful you can be.  

2) Improve communication skills: This helps you to communicate and convince your diagnostic skills and the conclusion in a believable way so that the person whom you are trying to persuade readily accept your conclusion. Communication is a two-way skill which comes with listening. If you are making a quick diagnostic conclusion, you need to be patient and listen to what others say. This will help you elicit information required for making the conclusion.  

3) Application: The third and the final objective is to learn, understand what you are learning, apply them practically to strategic situations and analyze them. This will come to your respite when there is a scarcity of resources and a better performance is accepted.  

Strategic Management studies help you to deal with the complex and ambiguous world which exists behind the four walls of the classroom. In a classroom, we know that a solution to every problem defined here shall be provided, but that is not the case with the real world which is faced by the managers in an enterprise almost every day.  

Tim Hoiseth

Tim has background as is business psychologist and work sociologist with expertise in building organisations and teams to solve problems for the future. Tim has expertise in technology and the symbiosis between human interaction and technology in operational processes.

Human resources are the people who make up the workforce of an organization, business sector or economy. The total amount of «human capital» available. Technology can be seen as the collection of techniques, skills, methods and processes used in the production of goods or services. As a collected term human resource technology can be seen as the skills, techniques, methods and processes «human capital» is organized.

Core human resource management

Can be seen as the tools that help the management of human resource become easier. Making things easier for those responsible for the human resources. This includes skills, techniques, methods and processes that involves the general umbrella of HR services, hiring, firing, elements of the payroll and other processes.

When it comes to good core human resource management platforms they should have easy and user friendly modules. Should be able to track relevant relationships of the human capital and each individual in relation the the organization. Typical functions of these systems include making processes more automated, innovative and efficient. Mapping performance and discovering potential problems within the human capital at early stages.

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Recruiting and staffing

Bringing people in the door of an organization is a time demanding process that has many factors including both efficiency and quality. Automating these processes making them more efficient and at the same time also increasing quality is a challenge. Automated processes for hiring and recruiting is essential in meeting this challenge. bringing more efficient, digitally supported approaches to finding the best talent in the open market. Digital systems will keep track of big quantities of data and complex data management to a far better degree then what any human with a paper file can do. Features in these platforms help companies plug in detailed information about each candidate.

Talent management

Later in this process managing the talent is a important feature of most organizations. This includes technology that will have the functions of both finding and recruiting talent, managing performance, ongoing learning and development creating further skills. As well as compensation management. 

Workforce management

When people are hired the human capital in an organization needs to be managed. Technology to manage this allows organizations to see the big picture of managing teams of people towards results. This often includes systems for payroll, attendance, scheduling and forecasting events, labor budget, leave management, team work, project management and more.

Learning management

Managng the ongoing human capital training and skill development is important for any organization. This kind of technology support an organizations ability to retain the human capital while also improving the quality and productivity of product the human capital is producing. These technologies typically create the curriculum, deliver online training programs and track the training progress and results of the human capital in an organization. 

The future technology of human resources

We see a bigger and bigger pressence of data- driven human resource managment. For a very good reason, instead of moving forward in a vague environment of operational chaos. Human resource managers with the help of data driven technology will be able to make calls on particular metrics and alaytical platforms to make data- driven decitions.

The software driven platforms are all part of a digital set of tailored solutions that can help organizations to autmate complicated processes related to the management of the human capital. This technology allow both HR manager and the human capital to focus more on core operations and innovate.

HR technology is fundamentally changing how companies relate to their workers, as we continue into our profoundly data-centric and technical age.

Choosing the right technology in the chaos of possibilities is essential for a organizations success.

Tim Høiseth

Business psykolog, sosiolog

Bringing good ideas to the table is always a good quality to have. We have all had these genius people on our teams at times, and wish we also would be able to come up with creative and good ideas that impresses people. Creativity is not really a skill, some are by all means better at ideas then other. But did you know that spending considerable time on something will beat talent any day. So if you would like to be that creative person, you should start to enjoy and playing with your thoughts.

You probably know the myth of innovation as a sudden flash of insight that comes from nowhere. We read about that “aha” moment, or that light bulb turning on in the mind of some inventor or innovator, and this is true to an extent. Einstein really did get flashes of insight while shaving in the morning. However, he was of course working on the particular problems he had insight into, and he didn’t suddenly have ideas for new kitchen gadgets or movie plots.

Einsteins innovations, in other words, no matter how “sudden” the original ideas were, came from past and present mental work. It is like a singer who works at his craft for ten years and then becomes an “overnight success.” Innovative people only have “sudden” new ideas because they have habitually worked and thought in certain ways for some time. If you want to become an innovative thinker, then, why not start cultivating those mental habits? You dont have to be a great innovator to start, but to become one you have to start thinking of your ideas.

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Mental Habits Lead To Innovation

Problems can be opportunities. “Problem” may have a negative connotations, such as being a hassle or stressful, but any problem can lead to an innovation that improves our lives. Not knowing the time lead to clocks small enough to put on our wrists. Nasty diseases lead to sanitary sewer systems. Start looking for opportunity in every problem. Even a mundane problem like not having enough storage space could lead to a new innovation. You may just build a plywood floor in the attic, but you could invent a new type of outdoor storage unit.

Same goes for any problem, give it some creative thinking. Many of you who would come in here and read, maybe have a problem within your company. The complexity of today’s world is only increasing and it will continue to increase at a even faster rate. New technologies shake todays business world and many are shaken off the stage and disrupted away by others. Well this is a problem for many, but if you mange to see the opportunities within these problems. Then it is actually not a problem at all, it is a big opportunity for most. Start ups thrive these days, it have never been greater opportunities, maybe todays business need to learn a thing or two from the startup methodology and mentality?

Innovation begins with understanding the key elements. Metal, wood or glass are not key elements of a door to an innovator. A way to get in, a way to keep others out – these are key elements. Begin with these, and soon you’re imagining new ways to make a door. You could design a door that is opened by your voice (nice when your hands are full), or one that shuts and locks itself when anyone else approaches. Think of the key elements in things.

Attitude helps innovation. The creative problem-solving technique of concept-combination involves combining two ideas to see what new idea or product results. The crucial point is that you assume there will be a useful new idea. Starting with that assumption, your mind will work overtime to produce something. A shoe and a CD have nothing to do with each other, but it took just a minute to imagine a CD player with headphones that only plays the music correctly if a jogger maintains his ideal pace. When you assume there is something there you’ll often find something.

Playfulness helps innovation. A playful mind is a creative mind, and while high cognitive intelligence or high IQ as many would say, or any other forms of intelligence for that matter. Doesn’t correlate with creativity, put it together with playfulness, and you have an Einstein. Remember, he imagined himself riding on a beam of light in order to arrive at his theory of relativity. Why not start playing with ideas and things, in your mind and in your surroundings. Innovation should be fun.

Carry your ideas with you, enjoy the playfulness of thinking. Remember to take notes

Tim Høiseth

Business psykolog, sosiolog

Every Organisation has its goals. As a matter of fact, every group of people, guided by some mutual interest, has its goals. With no goals, there is no progress. And with no progress, there is no growth. That is the precise reason why proper goal setting is so relevant for every single Organisation which operates, in order to make profits and justify its existence. 

Goals are the “connective tissue” of organisational culture and strategy, meaning that there is no strategy without goals and vice versa. Strategic goals describe conditions and/or changes which organisation intend to accomplish in a long run. The most common goal of every organisation is making profits, but goals have to contain all the steps necessary for their achieving. 

Besides strategic goals, there is another type of goals, equally significant: specific or operative goals. They describe short term effects and changes that an organisation strives to accomplish. The most important feature of those goals is their smartness. Well, to be more precise, they have to be: 

– Specific or precisely defined, with no fuzzy and ambiguous formulations, which imply answering the questions who, what, where, when, which and why. 

– Measurable, with defined ways of tracking and measuring accomplishment, 

– Achievable / Agreed – meaning that goals are realistic, with all participants taking part in planning and implementation, 

– Realistic / Relevant, making goals not only achievable, but important and result-oriented, 

– Time-bound or with timeframe for achieving. 

Goals on different organisational levels 

Strategic goals are the broadest goals in entire organisation. Their accomplishment is a task for everyone involved. But, there are different organisational levels with their own goals, which are quite relevant for accomplishing the major ones. 

On a team level, there are goals that are shared among team members. Those goals are often specific and project-oriented, but their accomplishment must match with strategic goals. A team should operate as a unit with its own mission, which is congruent with strategy. 

But, there is a micro level which significantly contributes to the entire goal reaching strategy – a personal level. Every team contains individuals, and those individuals are people who have their own goals. When they do not see all those operative and strategic goals as their own goals, it may bring certain cloudiness into a team, and consequently, the entire Organisation. 

On a level of the single employee, adoption of organisational goals as their own is highly desirable and useful in both directions: an employee will be more motivated to strive for a team and organisational goal, and the individuals job satisfaction will be higher. On the bonus side, the organisation will be in the hands of people who truly care about its well-being. That makes a perfect scenario. So, is that perfection attainable? 

The importance of mutual organisational and personal goals 

There are certain preconditions which ought to be fulfilled in order to effectively adjust both organisational and personal goals. Knowing them may be quite helpful in recognising potential discrepancies between those goals, and preventing those discrepancies from further developing. 

• Motivation. Only duly motivated employees can perceive organisational goals as important as their own. Being motivated in such manner may be a matter of both extrinsic and intrinsic motivation, given the fact that both strongly impact behaviour. An extrinsically motivated person are motivated by outside influences, and may enjoy competing with others. Reaching the goal might be a reward for itself. Such a person may be an excellent driver for other participants. Intrinsic motivation is vastly influenced by seeing organisational goals as their own. Intrinsically motivated employees may have the needs to adapt those goals, because their motivation comes from the inside. If those goals are mutually incompatible, it becomes almost impossible for an intrinsically motivated person to stay on the task and to perform on best effort. Recognising the type of motivation for each employee may be a good starting point in adjusting organisational and personal goals. 

• Responsibility. Seeing a goal as its own responsibility creates a completely different effect than seeing it as someone else’s. Scattered responsibility is a half-way solution. But, focusing each employee on a goal, with awareness about potential consequences for both organisation and each person responsible, may lead to stronger bond with organisational goals. This raises the question of motivation all over again, but responsibility may be the motivating factor for certain types of employees. What is important is that responsibility should be properly delegated within all people involved in accomplishing goals. If not, there is a risk for diffusion of responsibility, making no one feels truly responsible, which is a one-way ticket to failure. 

• Job satisfaction. Goal adjustment is more probable when the most of other relevant factors are in a service of job satisfaction. Properly motivated, appreciated and directed employees are a necessary ingredient for making productive, positive and goal striving atmosphere in a long run. High job satisfaction not only motivates and annuls effects of stress, but also has negative correlation with absenteeism and fluctuation, behaviours which might suggest that something is not quite right with the people management. Job satisfaction is valuable not only for adjusting the goals, but for preventing things and behaviours that may spoil working atmosphere and create unnecessary distractions from reaching goals. 

Shared goal-setting is a process. It cannot be done overnight, because it requires time, patience, involvement and focus. It even can be a process that might never come to an end. An organisation is like a living creature: it needs to be conceived, born and properly nourished. Only then it may growth, develop and become fully-grown. Even then, it reacts to its surrounding and always feels the effects of internal changes. An organisation is a dynamic system that is always in motion, which sometimes makes it quite unpredictable. But, as long as it is built on solid ground, and have strong focus, caring about all participants in its growth. It have chances to survive, even harsh time. Shared goal-setting is one of the important conditions, which should be carefully performed, with keeping a focus on main strategic goals, but with taking into consideration all the people who give valuable contribution to making it better and more successful. 

Tim Høiseth

Business psykolog, sosiolog

How do you use your strategy to manipulate your audience towards the behaviour you need?How do you use your social media, content, influencers, marketing strategy, advertisements. Or any other methods you have in your sleve to make an approach using the understanding of crowd psychology to your favour?

Public relations as the practice of managing the flow of information between an organisation and its public. How the organisation reaches its public, is of great importance to the organisation. As an organisational psychologist and sociologist, interested in human behaviour. I find many aspects of this interesting. And to be aware of these effects as a consumer for defensive purposes, is just as important as being able to use them as tools.

I will try my best to make stuff that is dry and boring for the average person, useful and interesting. We will look at some theories connected to the processes of how the organization reaches its public, and the cognitive factors connected to exposure of various information. How the social factors play an important role in PR and advertising, simple challenges faced for both PR and advertisement practitioners. Solutions and how the cognitive processes work when we as individuals are exposed to PR and advertisements.

Crowd psychology

Edward L. Bernays was by many considered as the first public relation professional who also was recognized as a theorist. He was Sigmund Freud’s nephew, and many of his ideas were drawn from Freud’s theories on illogical motives that shape human behaviour, motivations that arrive from the subconscious, along with other theories, specially in crowd psychology.

Crowd psychology is concerned with the behaviour and thought processes of individual crowd members, and the crowd as a whole. Bernays successfully used these theories to manipulate crowds mainly for commercial reasons, but he was also involved in influencing crowds of political matter. One of his most famous case studies was to overcome the taboo of women smoking in public, by doing that increasing consumers. This maybe one of the biggest industrial taboos at that time. He did that by using news and not advertisement, showing successful women smoking in public. Women smoking at that time, was negatively viewed.

The news at that time, a very trustful media along the unsuspecting public. It has a positive view as a trustful a true source of information. Something the news in these decades haven’t been able to enjoy at the same extent. He also used the effect of “third party authorities” to get trough his message. The leader of a crowd has a big influence on it group. By influencing the leaders of a social group either by their conscious or unconscious cooperation, you automatically influence the group they sway. These are among techniques that involves psychology as a tool for public relations practitioners. Something that can take in use methods to understand, and influence the public. This article will explain the basics of how these factors influence the individual. 

Mental schemas and PR 

To be able to process the huge information flow we as individuals receive at all time at a conscious state. Our brain categorise this information by putting the information we process into mental schemas. This is a form of categorisation, where we create a collection of information received, and categorise its similarities. A mental shortcut for faster being able to gather up and process information on facing similarities, then create motivation towards it and finally behaviour. Our brain is in the business of saving power, and being able to react fast. And will always be interested in shortcuts to make decisions on behaviour.

As an example lets look at a familiar object, a chair. Where the first meeting with a chair, in childhood. It is not obvious what a chair is, or the use for the chair. But when learning more about the chair, and the more meetings with different chair. The schemas of chair in our brain, gathers a concept. It is then easier at later stages to identify a chair and differences in chairs the richer the schema is. Schemas can be positive or negative loaded in the association of it. This depending on the emotions connected to it. Social schemas work in the same way, we categorise people, behaviour, personalities and even ourselves in schemas where we later can take a shortcut and gather the information received earlier when needed. 

Social identity as a tool

Social identity theory states that as individuals we have a concept of the self, and our belongings to relevant social groups. This individual desire is a key aspect in PR and in the tool of advertising. Individuals often tend to pre-judge others by how they identify with them, using their schemas to do so. Where individuals or groups similar to how they identify the concept of themselves are often more positively viewed, and social groups they do not identify themselves with tend to be viewed more negatively.

People place themselves in various groups depending on many factors, all from age, gender, socio-economic status or other factors. Understanding this in- group effect where individuals tend to favour a group they identify themselves with, and discriminate against out- groups they do not identify themselves with And as well as the understanding of schemas, is a very useful tool for understanding how PR reaches people and the cognitive effect of advertising. The stronger identification with the sub- culture that the in- group represents. The higher chance the individual have of adapting the in- groups culture and behaviour. This is the effect you want to use, when you use a crowds social identity as a tool.

Using desires for Schema creation

Optimal distinctiveness theory states that individuals have a need, for the achievement of both identifying themselves with a group. But at the same time has the need for uniqueness. This creating a struggle for equilibrium between social integration and uniqueness within social groups. Optimal distinctiveness theory suggests that individuals are constantly re- adjusting themselves to achieve this need to be different, and at the same time the need to be similar. 

A PR practitioner can use this effect in shaping peoples schemas, creating negative or positive emotions towards the concept he represents. Creating schemas for people positively or negatively charged. Doing this by using the in- group and out- group effect to inform what is the norm of the in- group, and the favoured behaviour. Or identifying the out- group on what is not the norm. 

By doing this it is possible to create a culture for how the groups individuals self-concept is identified, within the in- group values. Creating for example consumer behaviour towards a certain product, or attitude change campaigns. Referring to the individuals need of equilibrium between social integration and uniqueness in the social group, the PR practitioner can use this opposing concepts that brings out the schemas of uniqueness in the social group. 

One way is using the tool of advertising, for example social media, content, influencer effects and much more to shape the individuals schema with the idea that the concept is associated with this equilibrium. For example a clothing brand that will show integration within the group, but also mirror uniqueness and high status within the group. By having good taste and being able to afford these kind of products. On the other side of the equilibrium we find the need for folding in more with the rest of the group. Where the PR practitioner can present schemas of popular behaviour where the individual is motivated to follow the behaviour patters since “everyone” else does so. For example donation for charity along with everyone else in the in- group. 

This is off course a very basic introduction to the use of these tools.

Tim Hoiseth

Tim has background as is business psychologist and work sociologist with expertise in building organisations and teams to solve problems for the future. Tim has expertise in technology and the symbiosis between human interaction and technology in operational processes.

We often see celebrities in advertisement, for a very good reason, as role models for in- group cultures they have a huge influence factor on individuals who identify themselves in the same in- group. They have a great influence on what is accepted, and not accepted as a social norm.

The content of an advertisement can be loaded in an informative, persuasive or influential way.

As a first step in developing an advertising campaign, marketers need to decide what precisely they want to influence with their advertisement or commercial. If they want to improve brand awareness or would like to persuade people to buy a particular product. 

If their persuasive aim is to get the consumer to buy a particular product, they should use various methods and techniques. As such to put forward a suggestion, the methods developed by Fishbein and Ajzen, to assess whether the targeted behaviour is mainly determined by attitudes, subjective norms or perceived behavioural control. 

It is no use in trying to persuade people of the positive qualities of a product, if they are unlikely to buy it because their partners or other family members do not want them to buy it. People who are close to each other are normatively influenced by these subjective norms, which is normative social pressure.

Or even if the consumer cannot afford what is advertised for. This perceived behavioural control of the ease or difficulty preforming a task, interferes with the cost/benefit approach of an individual. (This I will later mentioned, you can find other articles in the cognitive section within business psychology below.)

As an example we can look at the area of food choice, the subjective norms within a family has strong impact on the families food preference, also the lack of skills in preparing specific dishes. Even when it comes to seafood’s health advantage, seafood is often not bought because of family dislike.

A Scandinavian study suggests the reason is often because, the persons responsible for cooking often do not know how to prepare seafood dishes (Scholderer & Trondsen, 2008). As we also now see an increase in food distributors favouring content that also teach people to make food, such as recipes, food blogs, how to videos and food shows. A good example of creating content, and at the same time informing the consumer how to consume. 

When buying expensive goods such as cars, furniture or even houses. Perceived behaviour control might often occur, the control beliefs will often concern financing. Sometimes people also fear that they are unable to make the right choice due to lack of knowledge. For example, lack of knowledge about wine or computers might prevent people from buying these goods, even if they would like to do so. Making it clear about affordable ways to pay, and easy accessible information will increase the chance of the individual calculating it as a beneficial situation, and will be more likely to show purchase behaviour. 

The advertisement practitioner should target the behavioural outcome, if it is normative or control beliefs or a combination, identifying the beliefs of those the advertisement targets. The beliefs towards the product are different in those who own the advertised product category, or subscribe to similar services then those who do not intend to consume the product at all. Such beliefs are likely to strongly influence the purchasing decision, and can be important to identify. 

As an example some people stay with an expensive phone company instead of changing to a cheaper one, because of lack of knowledge resulting in the worry that changing company will involve a great deal of effort and also result in a disruption in their phone service. Im sure you can recognise yourself in some similar behaviour?

By persuading people by offering a better deal will rarely be effective. Convincing them that the changeover would be easy and without risk of disruption, at the same time cheaper, could increase the chances of reaching the individuals cost/ benefit approach toward the situation in favour of the advertisements purpose. A focus on one of the factors would most likely not persuade to change company. These are among few and simple approaches in making a successful advertisement. 

In the cognitive section below, we will go shortly in on the cognitive effects these techniques have on an individual. 

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Cognitive factors in PR, advertising and marketing

An advertisement works in the way that it affects with the individuals concept of the self, and the desire and need for social acceptance in its own social groups or in- groups. By referring to peoples self concept, and what their inner desires are. As mentioned earlier schemas are the way the brain stores and sorts information, as mental shortcuts. Negative or positive emotions loaded towards the schemas created or connected to the schemas as a reward/punishment system, creating a individual value system. 

What is important to the individual? Awareness of what generates positive emotions. Social factors are of importance to most individuals, social acceptance and belonging is of a great benefit in this reward system. Therefore also high in value on the individuals value system. Normative and persuasive influence therefore affects the individuals motivations and behaviour. Doing so by seeking social acceptance, and belonging to the various groups the individuals concept of self identifies itself with. The individual then unconsciously measure the existing schemas developed. Seeing costs and benefits of the new information received. Based on schemas already existing, and the value system the individual makes a decision by calculating potential benefits and costs related to what is valuable for the individual. Calculating on the potential highest outcome of positive emotions, based on the existing schemas of experience. 

When receiving information, this information can be received in different ways. And it is this cognitive approach thats targeted when manipulating people, especially in PR, advertisement and marketing approaches. Understanding Normative and persuasive influence, mental schemas and the mental shortcuts is essential.

Mental shortcut processing: Central and peripheral

As an example to the theoretical approach above, we can see an example in the purchase of a car. It is a expensive investment for most individuals, and therefore also has a high level of potential risks in the outcome of benefits upon purchase. If the individual has a desire for owning a car, and sees an advertisement connected to his desire. He is more likely to follow the central route of information which requires higher level of involvement, time and energy spent on processing the information. Often processing information of facts, and the use of logics to make a decision upon costs and benefits involved. This mental processing route often leads to more permanent attitude change. 

If low level of interest, individuals tend to take the peripheral route of information. It requires less energy spent on processing the information. And instead of looking at facts, the individual tend to be more focused on superficial cues, like colours, music connected to the message or an attractive speaker. Most of the peripheral route are more temporary in attitude change. Either of these routes calculated via the individuals idea of what is valuable to the person, with the approach of cost and benefits depending on the mental schemas. And will motivate the individual towards behaviour of investing in the product or not.

Using and understanding these among many other factors of crowd psychology, and how your and others decision making behaviour operates. That is essential to manipulate others. And also central to understand how to not getting manipulated. Understanding normative and persuasive influence, and mental shortcuts our brain does to process information. Could be a very good fundament to understand in your strategies in reaching out in marketing, advertisement and PR.

Tim Høiseth

Business psykolog, sosiolog

The understanding of how our mind works, and how behaviour arise from this have been discussed since the begging of civilisation. In todays world we are mainly interested in how to use this understanding in business, right? Marketing, decision making, work force dynamic, team- building, communication, politics and all the stuff we do today. We all know somewhat how our mind is put together, at least we think so. We look at tools, analysis and understandings of various things. But often forget to look at the flaws and cracks, that makes us so vulnerable. We are affected unconsciously by it every day. 

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What will we look at?

• How can you use these biases, or flaws in our mind to manipulate others. 
• Or how to be aware of them, so you avoid getting involuntarily influenced.

That is up to you how you would like to use this information. But either way where your intentions are, I advice you to read and share. Ill try to not use so many advanced science words, and make it as easy for people from other professions to understand as possible.

How you rely too heavily on one piece of information in decision making

How do we tend to rely too heavily on an initial piece of information? During your decision making, many processes take action, and sometimes errors occur in this process. With various outcome. I am relating real life business with common cognitive bias effects, feel free to read trough all the related articles.

So how do you make decisions based too heavily on one piece of information? This effect occurs when we place to much importance to one single aspect of an event, this causing an error in being able to accurately predicting the value of a future outcome.

Once the value of this aspect/ information is set, all future negotiations, arguments, estimates, etc. are discussed in relation to the anchor. Often the first offer, or information that comes on the table. This bias occurs when interpreting future information using this information.

So how does this apply to business?

The anchoring effect has many uses. I would say in general communication, and especially negotiation it is a great tool. It is good to take in use to achieve what you want, in combination with other negotiation methods. And being aware of the effect in your own mind, can save you some “bucks” in your negotiations.

Negotiation:

People tend to be attached to the first piece of information they hear.

For example, the initial price offered for a project or purchasing of a company, set either before or at the start of the negotiations, sets an arbitrary focal point for all following discussions. Prices discussed in negotiations that are lower than the anchor may seem reasonable, perhaps even cheap to the buyer. Even if prices are still relatively higher than the actual market value, when we are biased we can tend to focus to much on the anchor. Taking in use this effect can for many be game changer.

If you negotiate salary, who ever makes the first offer has established the reasonable possibilities in each persons mind. So any offer there after will automatically be compared to the anchor.

We are often thought that we should never make an opening offer in negotiation. But the fun thing is that much research point to that the one who makes the first offer, often gets out of the negotiation with the best offer.

Best of luck in you negotiations.

Tim Hoiseth

Tim has background as is business psychologist and work sociologist with expertise in building organisations and teams to solve problems for the future. Tim has expertise in technology and the symbiosis between human interaction and technology in operational processes.

The typical viewpoint, and an overall thought around our behaviour as humans, are that we are «rational beings». I bet you heard that before. We make decisions and behave in ways that benefit us. All the way from the conscious decisions to the unconscious ones. We are in the interest of doing behaviour that should max out on advantage and utility and minimise risk and cost towards what we value.

But the question would be, are we as humans really “rational beings»? I can assure you that we are not as rational as we would like to think we are, maybe not rational at all. And there is plenty of evidence that can be put forward as proof of that.

Just look at how we buy, consume and invest. How we communicate and influence each other. Cognitive biases are everywhere, in almost every setting we can encounter. There comes up some bias we experience, and have in connection almost any situation.

We all have cognitive biases, and they make us do bad or stupid decisions, behave irrational and not connected with reality in our decisions. Do inaccurate judgements, on even the things we know to our fingertips. Even in some cases it may result in a total blindness or distortion of reality. Where our perception, or how we experience the world. Well…we see things that simply aren’t there.

Business psychology: How to manipulate your audience to buy from you

How do you use your strategy to manipulate your audience towards the behaviour you need?How do you use your social ...

Read More

Business psychology: How to influence an audience?

We often see celebrities in advertisement, for a very good reason, as role models for in- group cultures they have ...

Read More

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The understanding of how our mind works, and how behaviour arise from this have been discussed since the begging of ...

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How do you reach to missing, or lack of information in you decision making process? Before you read further in ...

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So in a workplace setting, how can we prevent these kind of effects from ruining everyones good mood? 

1. Awareness. Being aware of the effects of cognitive biases and that they exist is essential to how you cope with them. Either way how you use them. Being aware of how they affect you, and others is a key element in knowing how to distort your thinking. And reduce the damaging impact of the biases. An advice is to learn as much you can from cognitive biases, and recognise them in yourself and others. Maybe even read my articles on cognitive biases related to business and workplaces here on Linkedin (You can find a list of them in the article collection).
2. Collaboration. As you maybe have noticed, it is far easier to see mistakes in others then yourself. So when you are in meeting or making decisions in general, look for them in others. Are they biased in their decision-making process somehow? Not that you have to look for mistakes in each other, that doesn’t make any good decisions. But simply being aware and collaborate to make the best decisions, that is a great tool. There are plenty of ways on how to communicate this in a good and professional way, to make the best decisions for your businesses. 
3. Questions. Learn how to ask questions to uncover the presence of cognitive biases. Use you understanding of cognitive biases to ask yourself, and others the right questions. Questions that will enlighten you if there are any cognitive biases present. Remember: The right questions have the power to challenge judgement and conclusion. The simple word «why» has greater power then you think.
4. Framework of decision making. By establishing a solid framework and process of decision making in your organisation you limit chances of cognitive bias. That being said, brainstorming is a great way of getting great ideas. But not often as good when it comes to making the decisions themselves. Creative thinking, something that is very popular when it comes to finding good and innovative solutions in today’s business. And a viable tool to make decision options. This free thinking has potential to fire up some cognitive biases. So the final decisions on the options found in the brainstorming process, should follow established frameworks of decision making.

Tim Høiseth

Business psykolog, sosiolog

How do you reach to missing, or lack of information in you decision making process? Before you read further in this article, please take a few seconds to make up your mind of how you yourself think you would react and make decisions, if you were missing information to make the decision. See later on if you recognise yourself in what is written, and compare that with you original thought of how you thought you would react.The interesting fact is that we tend to select decisions where the possible outcome of what we favour is known, rather than decisions on options where the probability of the outcome is unknown.Does that make sense? Or should I explain why this is a cognitive bias, and how this applies to your decision making process in your business? Read further and I will.

If we look at how most people invest as an example. Lets se this from various perspectives of how average people save or «invest». Someone who can be considered risk averse tend to put their money into «safe» investments such as government bonds or placing the money on their bank account etc.. The money can’t disappear there right? Even they lose value, but that a different story. They place their investments in these «safe» returns, rater then other more risky, but profitable investments such as stocks and funds. Why is this? Even the stock market carries the potential to give significantly more return over time.The reason for this is that the preferred outcome is known. We know that the chances are great that you will get interest rates, and some returns on you investments by placing them in «safe» investments. We know that outcome as a certainty. Even we know that stocks and funds give a greater return over time, this is a uncertain outcome. And placing money on the bank or in government bonds, everyone knows that the profit get eaten by inflation. But we as humans think in the way that: «Better a devil you know then one you don’t»

We are therefore more likely to invest our time and money, in a safe outcome we already know the outcome of. Rather than an outcome we dont know. Even we know the result has a greater chance of better return to choose otherwise. So naturally you avoid doing things, or make choices you know less about. In other words, when you have lack of information.

The result is avoidance to try new things, and a limited ability to recognise long- term benefits of riskier decisions compared to smaller gains from «safer» choices, due to lack of information connected to it.The ambiguity effect is often fear driven. Something i am sure you recognise yourself in, we all experience this effect to some degree. We have a strange ability to fill in the knowledge gaps with fear. You might recognise yourself in that if you think back at various events in your life, or current experiences. We sometimes fill the gaps of knowledge, incomplete or unclear information with the worst possible scenarios we can imagine. And usually the truth is far less frightening. I am sure you recognise yourself in this to some degree.As mentioned before , we often use heuristics or schemas to sort information. This often lead us to seek out the missing pieces of information. Often, information that can not be found. You experience this effect when you can not find that part of information. And this is a totally natural process we are programmed to experience.

So how does this apply to business?

I am sure you already have some cases you have thought trough that have made this bias affect you somehow. Maybe GDPR, the biggest hyped up thing for most businesses in 2018 is a good example. Most people feel their heart hit double, just by seeing a advertisement about it. So as an example, many cyber security and other related companies have taken good use of this effect for what it is worth. Manipulation on lack of knowledge, by filling in the gaps of information. Getting sales on mainly using peoples bias of fear, making sure to “inform”. So that people are manipulated to go for the known outcome of behaviour. Innovation:We see many companies being forced to restructure, all from their business model, internal structure, employee structure and sometimes even their whole product. The world is changing, big changes creates many big «what if» effects. Being aware of various effect this have for you and your workforce is important.Leadership and workplace effects:Feedback is important for a variety of reasons. But on feedback on work done by people in a team or workplace. This effect has important factors. If you are buzzy, it may be tempting to not give any attention to give feedback, it is delivered after all, right? Job done! Giving feedback on tasks done is important in a workplace setting. Leaving employees «hanging» with the gap in knowledge if the work they did is good enough, can cause ambiguity bias effects in employees. It is a lot of gaps to fill with uncertainty for employees who dont get feedback. Causing problems further down the line.Marketing:This effect should for sure be considered by you guys doing marketing strategies. If a potential buyer know less about your company then they do of your competitors company. They are cognitively biased, more likely to go to your competitor. For the simple reason that they will feel more informed, and will be less effected by this bias. So when putting together your marketing strategy, remember to have focus on information, to ensure that you will not get victim of this bias effect in your clients or consumers.Startups:I am sure some of you startup people can relate to this bias, startups are risky. Many things can go wrong, and you actually have no, or little information of how the outcome will be. If so, you are in risk of this cognitive bias effect.Investments:As already stated above as an example, I am sure you will re- consider how you evaluate risk. If you recognised yourself, maybe you will also do decisions otherwise in the future. 

How to fight the ambiguity effect at your workplace?

An advise to bring further is to fill the knowledge gaps, in yourself and others. What do I mean by that? You are now aware of this cognitive effect, that in itself is enough knowledge to be able to be more resistant. So the best tool to fight this is communication, if you are uncertain of something. Ask! If you yourself have supervisors, ask for feedback or clarification when you come across this effect.If you are a leader, make the direction clear, give feedback and ask if your team have any questions. Or need any further help from you. Give information about changes, provide details, fill in the gaps of the people in your team. It may seem unnecessary, but having this relation to people can be one of the cores to generate trust as a leader.

Tim Hoiseth

Tim has background as is business psychologist and work sociologist with expertise in building organisations and teams to solve problems for the future. Tim has expertise in technology and the symbiosis between human interaction and technology in operational processes.

Menneskelige egenskaper er fulle av overraskelser. En av de interessante elementene er måten vi er motiverte til å gjøre arbeid. Hvis du virkelig vil vite mer om motivasjon, bør du vurdere følgende to motstridende spørsmål:

1) Når du belønner noen, får du mer aktivitet ut av den personen enn du forventet?

2) Når du straffer noen, får du mindre av denne personen?

For å komme til kjernen av dette gjennomførte M.I.T et studie på en stor gruppe studenter og presenterte en rekke utfordringer som ville utfordre deres fysiske og mentale evne.

De mentale testene inkluderte tallspill, minnespill, løse ordoppgaver, Sudoku etc.

De fysiske evnetestene inkluderte å kaste en ball i kurven osv.

For å få en bedre ytelse ga de deltakerne tre nivåer av belønning. Belønningen var som følger: Hvis de uansett kan komme seg gjennom oppgaven, vil de få en liten økonomisk belønning. Hvis de klarte å få et minimumsnivå, vil de få bedre premiepenger. Hvis de presterer utmerket, vil de få en solid belønning i form av penger.

Hva var resultatet?

1) Så lenge oppgaven forble mekanisk, var de motivert av strategien mot at jo høyere lønnen var, øker sjansen for å prestere godt. De ble også fascinert av bonusbelønningen.

2) Men så snart de fikk en mental evne-test for å sjekke deres kognitive ferdigheter, utførte de resulterende dårlig selvom en inspirasjon til en enorm belønning var tilstede.

Er det ikke overraskende?

Mange økonomer og lærde fra andre fagområder vil vurdere det andre punktet på denne måten – når vi overgår vår kognitive evne, til stor overraskelse, vil fordeler som disse ikke høres lenger. Dette er motsatt av kunnskap som er relatert til hvordan vi ser på atferd.

Med en gang belønningen ble endret, til at den utøveren med leves resultat vil få penger som tilsvarer to ukers lønn, den utøveren med gjennomsnitlig resultat vil få pengene som tilsvarer en månedslønn, og den beste utøveren vil få lønnen tilsvarer to måneder. Ikke overraskende fikk den høyeste belønningen den dårligste ytelsen totalt. Høyere insentiver førte fortsatt til dårlig ytelse.

Fakta er at det ikke er overraskende. En rekke psykologer, sosiologer og andre lærde mener at hvis oppgaven er enkel, som om du gjør A, får du B, uten tvil vil folk prestere bra. Hvis de må følge et sett med regler, den typiske gulrot- og pinne-tilnærmingen, desto bedre. Men når det gjelder et arbeid som krever tenking, analyse, konseptualisering osv., Da faller selv de høyeste økonomiske belønningene flatt.

Penger er en av de største motivatorene generelt i samfunnet. Folk vil ikke jobbe hvis de ikke er fornøyd med betalingspakken. Regelen er at du betaler folk nok, slik at de bare trenger å tenke på arbeidet. Basert på dette som et faktum, er det tre faktorer som kan føre til bedre ytelse og selvtilfredsstillelse.

1) Autonomi – der folk fikser arbeidsretning selv. Hvis du vil holde dine ansatte engasjert i lederoppgaver, gi dem autonomien til å jobbe. Ikke manipulere og kontroller hvert eneste trinn.

2) Mestring – Trangen til å utvikle egene ferdigheter til å gjøre bedre arbeid. For eksempel er det en hel haug med teknisk sofistikerte mennesker over hele kloden. Mennesker som har en god jobb, som lager noe og gir det ut gratis, som Wikipedia, Linux og mange mange flere “open source-løsninger” osv. Spørsmålet er hvordan, og hvorfor? Svaret er at hvis du mestrer en ferdighet, kan du bidra enormt ikke kun for deg selv, men til fordel for de andre ofte med mestring som en motivasjon.

3) Formål – Organisasjoner arbeider med et bestemt formål, slik at de kan få bedre ytelse. Men faktum er at når formålet blir fremmedgjort til fordel for profitt, vil det føre en dårlig ytelse i retur. Når du har et formål drevet av noe annet, får en trangen til å gjøre noe bedre og annerledes om en identifiserer seg selv med formålet.

Så når en organisasjon kan kombinere autonomi, mestring og formål og behandle ansatte som et menneske, vil det ofte ikke være behov for ekstra motivasjon.

Tim Høiseth

Business psykolog, sosiolog

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