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Strategic Decision-Making Under Uncertainty In Nigeria: Investigating The Role Of Cognitive Bias And Risk Management

Nwabuatu, Emmanuel Nnajiubah. Ph.D

Abstract

Strategic decision-making under uncertainty presents critical challenges for businesses, particularly in developing economies like Enugu State, Nigeria. This study explores the intricate interplay between cognitive biases, risk management practices, and their combined impact on strategic decision outcomes. Drawing on survey data from 200 businesses across various sectors, the findings reveal a pervasive influence of cognitive biasesconfirmation, availability, and overconfidence biases being the most pronouncedin decision-making processes. Despite the widespread adoption of formal risk management practices, limited integration of technological tools for risk analysis undermines their efficacy. The study identifies a statistically significant relationship between risk management practices and strategic decision-making outcomes, accounting for 96% of the variance. Furthermore, while risk management frameworks mitigate some cognitive biases, these biases often hinder their effective implementation. This research underscores the need for enhanced training to address biases and the adoption of advanced technologies to bolster risk management. It contributes to the growing discourse on the contextual factors shaping decision-making processes in regional business environments and provides actionable insights for improving strategic outcomes in uncertain conditions.

Keywords

Strategic Decision-MakingCognitive BiasesRisk Management PracticesUncertaintyEnugu StateBusiness Strategy

References

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