Bias in Business

What is Bias in Business?

There are various types of bias in business. This article is specifically focused on the bias that impacts a business’s planning and direction.

An implicit or unconscious bias that automatically seeps into a person’s behavior and evolves over time. Business people are usually unaware of their bias because they wholeheartedly believe in their viewpoints and act on them with the purest of intentions.

Unfortunately, bias limits opportunities and diminishes advancement and improvement for the business. It is not uncommon for owners and executives to develop a belief that they are best suited to decide the course of action, leading them to seek opinions and suggestions which confirm their notions and beliefs. 

Confirmation Bias

Biased Information Search

People search for evidence in ways that support their hypotheses or theories. They phrase questions in a one-sided way (i.e. affirmative manner) that will assist in obtaining evidence consistent with their hypothesis or preference.

For example, they will conduct online searches that include terms aligned with their beliefs. Such as “why is X better than Y?” instead of “what is the difference between X vs Y?”

Biased Interpretation

How evidence is interpreted is hindered by existing beliefs. People will typically evaluate evidence that is aligned with their beliefs differently than evidence that challenges their preconceptions.

Biased Memory

People tend to selectively remember or recall information that confirms their beliefs. People seek and remember evidence that supports their views.

It is possible that information confirming prior beliefs is stored in the memory, while contradictory evidence is not.

Confirmation Bias in Business Diagram

What Causes Confirmation Bias?

Confirmation bias exists because of several reasons

  • It is an efficient way to process information
  • It supports their ego
  • It minimizes cognitive dissonance

Processing Information

We are exposed to limitless information daily, which confuses the mind and limits memory. Confirmation bias provides an efficient way to process information which reduces the stress and pressure felt by information overload.

We would have to critically evaluate every piece of information available to reach an unbiased perspective. Which is essentially impossible, therefore we tend to look for information that supports our desired conclusion.


Generally, ego increases with status. Which leads to difficulty admitting fault or accepting an opposing view. Confirmation bias helps protect their viewpoint and increases their confidence. Avoiding challenges and seeking reinforcement effect people’s thoughts and reactions differently. Exposure to disconfirming information results in negative emotions, something that is nonexistent when seeking reinforcing evidence.

Cognitive Dissonance

Cognitive dissonance is the state of having inconsistent thoughts, beliefs, or attitudes, especially as relating to behavioral decisions and attitude change. This causes psychological stress and triggers a feeling of uneasiness.

People adapt to confirmation bias by avoiding information that is contradictory to their views and seeking evidence confirming their beliefs to avoid that stress and uneasiness.


The Implications of Confirmation Bias in Business

Confirmation bias consistently shapes the way we look for and interpret information that influences the direction of a business and its overall prosperity. This bias deters and potentially prohibits gathering information objectively. Limiting the course of action to the path chosen by the person presenting the business case or the choice of the executive decision maker.

When trying to determine the right course of action people tend to look for information confirming their perspectives on different strategies and courses of action, while ignoring any information contradictory to their views.

This subjective manner of obtaining information can lead to overconfidence in a certain course, especially if it is aligned with the existing course.  Causing leaders and influencers to overlook important information, thus influencing the organization’s prosperity and potentially its sustainability.

Confirmation bias also affects employment diversity because preconceived ideas about different social groups can introduce discrimination and unconsciously impact the recruitment process.

Existing beliefs of a certain group being more competent than the other is the reason why particular races and gender are represented the most in companies today. This bias can hamper the company’s attempt to diversify its workforce.

To avoid being susceptible to confirmation bias, start questioning your research methods and sources used to obtain their information.

Expanding the types of sources used in searching for information could provide different aspects of a particular topic and offer levels of credibility.

  • Read entire articles, rather than forming conclusions based on the headlines and pictures. – Search for credible evidence presented in the article.
  • Analyze if the statements being asserted are backed up by trustworthy evidence (tracking the source of evidence could prove credibility).
  • Encourage yourself and others to gather information in a conscious manner.

Confirmation bias occurs when people tend to look for information that is confirming their beliefs/hypothesis, but this bias can be reduced by taking into alternative hypotheses and their consequences.

Considering the possibility of beliefs/hypotheses other than one’s own could help you gather information in a more dynamic manner (rather than a one-sided way).