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Home Business Macroeconomic Bulletin

Rationalising Decisions: The Psychology of Making Sense of the Nonsensical

May 15, 2023
in Macroeconomic Bulletin, Top Stories
0
Rationalising Decisions: The Psychology of Making Sense of the Nonsensical
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As we strive to optimise decision-making efficiency, we must be mindful of illogical choices that may infiltrate our lives. How can we ensure that our decisions are optimised for success? Our cognitive processes tend to swiftly and unexpectedly justify a desire as soon as it becomes alluring.

However, it is prudent to note that appearances do not hold the utmost significance. On numerous occasions, I have found myself questioning the correctness of my actions, despite having meticulously compiled a multitude of compelling justifications in support of my decisions.

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Within the domain of human decision-making, one dominant force prevails in terms of its impact: the power of rationalisation. This inherent psychological mechanism enables us to reason and justify our actions, particularly those that may appear illogical or risky to external stakeholders.

UNDERSTANDING RATIONALISATION

The rationalisation process entails utilising sound logic to validate actions or sentiments that could be perceived as controversial. A rationalisation is when people consciously try to enhance their acceptability and even elevate their admiration of a decision before, during or after it is made. We must construct a sound and logical justification for conclusions that were initially arrived at through alternative mental methods.

Business people must avoid impulsive, high-risk business decisions that stem from greed or a desire for quick wealth. While we understand the appeal of potentially high returns, it is crucial to always make decisions based on a well-considered financial strategy.

RATIONALISING THROUGH SELF-DECEPTION

The possibility of self-deception is always considerable, leading to a distorted view of actuality. It is not always easy winning an argument against yourself. We must refrain from rationalising our imprudent choices as it impedes our capacity to learn from our errors and perpetuates a pattern of suboptimal decision-making.

A good example is the phenomenon of compulsive consumerism. Studies have shown that many individuals overspend on non-essential clothing and accessories and rationalise it by referring to future-readiness, economic growth, or personal branding. In this scenario, their implementation of rationalisation may impede their ability to recognise and address a potential compulsive buying behaviour.

THE ROLE OF RATIONALISATION IN CONSUMER BEHAVIOUR

Rationalisation holds significant sway over consumer behaviour. For example, a consumer may acquire a car surpassing their financial capacity and rationalise the decision by emphasising its exceptional safety features, state-of-the-art technology, or potential for augmented resale value. 

Businesses can leverage rationalisation to drive premium purchases and encourage consumers to prioritise long-term benefits over short-term costs. This presents a valuable opportunity for savvy marketers. But how does the consumer win if marketers only want you to keep reaching for your wallet? 

RATIONALISATION IN INTERPERSONAL RELATIONSHIPS

In interpersonal dynamics, rationalisation often occurs when individuals persist in engaging in harmful relationships. In some cases, individuals may continue to engage in an unhealthy relationship, rationalising their behaviour by highlighting their partner’s occasional acts of kindness or taking responsibility for any conflicts. We must avoid explaining in instances like this as it impedes individuals from taking the necessary actions to improve their situation or depart from a destructive relationship.

RATIONALISATION AND COGNITIVE DISSONANCE

The significance of rationalisation in addressing cognitive dissonance cannot be overstated. This principle is a cornerstone of the psychological theory presented by Leon Festinger in 1957. 

Cognitive dissonance is the psychological discomfort that arises when an individual’s actions are not aligned with their beliefs. Cognitive dissonance occurs when an individual experiences a distressing mental state due to conflicting attitudes, values, or viewpoints regarding the same subject. 

An exemplary illustration of this scenario is that of a smoker who, despite knowing very well that smoking culminates in lung cancer, persists in smoking to alleviate immediate stress, only to encounter remorse later. This emphasises a notable contradiction between an individual’s espoused principles and their spontaneous emotions or behaviours.

THE UPSIDE OF RATIONALISATION

Although rationalising may have its drawbacks, it can also yield positive outcomes. At times, utilising coping mechanisms can aid in managing decisions that have yielded unforeseen or unfavourable results. Identifying silver linings or takeaways from seemingly indelicate choices is imperative for preserving one’s mental health and avoiding remorse or self-blame. 

Consider an individual who decides to start a business venture that ultimately results in its downfall. The decision could be rationalised by emphasising the valuable lessons and experiences gained during the process, which will benefit future business endeavours. Implementing rationalisation can protect against adverse sentiments and aid individuals’ ability to manage life’s obstacles and succeed in subsequent efforts.

RATIONALISATION IN DECISION-MAKING PROCESSES

In the realm of decision-making, rationalisation is paramount in both individual and organisational choices. In the business world, it’s common to observe rationalisation when a risky decision results in unfavourable consequences. The leadership team must consider external factors and market fluctuations that may have impacted our outcomes while also considering any potential missteps in decision-making or strategic planning.

Implementing rationalisation measures may hinder productive critical analysis and learning opportunities within the organisation. But on the other hand, acknowledging this inclination towards rationalisation can promote a deliberate decision-making process, inspiring individuals and teams to take responsibility for their decisions and derive insights from their results.

RATIONALISATION AND MORAL CHOICES

The impact of rationalisation on our ethical decision-making cannot be overlooked. When individuals behave in a manner that contradicts their moral or ethical principles, they frequently use rationalisation to justify their conduct and mitigate unease.

In certain circumstances, an individual who upholds honesty as a core value may justify their decision to deceive by perceiving it as a necessary measure to avert harm or as a well-intentioned ‘white lie’. Grasping this facet of rationalisation can heighten our moral consciousness and motivate us to align our actions with our principles.

THE IMPACT OF RATIONALISATION ON MENTAL HEALTH

While short-term rationalisation may offer a viable solution, prolonged or excessive rationalisation can harm one’s mental well-being. Also, failure to acknowledge genuine emotions or problematic behaviour can result in heightened stress, anxiety, or other mental health concerns over an extended duration.

Individuals with social anxiety may opt out of social gatherings and justify their choice by expressing a preference for solitude or portraying social events as lacking substance and enjoyment. While it may provide momentary solace, it can hinder their ability to confront their social anxiety and pursue practical assistance.

IN SUMMARY AND TO WRAP UP

Teams must thoroughly analyse the data and evaluate all feasible options to implement the most effective strategy to achieve our goals and maximise profitability. The human psyche’s ability to justify indelicate choices is a complex aspect. 

Although there may be adverse effects, leveraging this approach can also be a valuable asset in navigating the intricacies of existence. Identifying rationalisation occurrences is crucial to validating the integrity of our choices, fostering individual development, and enhancing future decision-making capabilities.

As we steer through the decision-making process, let’s balance our rationalisation. Then, we can strategically leverage this psychological instrument by comprehensively grasping the advantages and disadvantages. Acknowledging the process of rationalising an unsound decision is the initial stride towards gaining wisdom from our errors, enhancing our proficiency for decision-making, and ultimately leading to a more reflective and genuine existence.

I hope you found this article to be an enjoyable read. Your feedback is highly valued and appreciated. I welcome your suggestions for topics that you would like me to address or provide insights on. You can schedule a meeting with me at your convenience through my Calendly at calendly.com/maxwellampong. Alternatively, you may connect with me through various channels accessible on my Linktree page at https://linktr.ee/themax.

Wishing you a highly productive and successful week ahead!

♕ —- ♕ —- ♕ —- ♕ —- ♕

Dr. Maxwell Ampong is the CEO at Maxwell Investments Group, a leading agro-commodities trading firm, an Honorary Curator at the Ghana National Museum, member and Official Business Advisor with Ghana’s largest agricultural trade union under the nation’s Trade Union Congress (TUC), Executive Ambassador at the Zongo & Inner-Cities Development Secretariat (ZICDS), and an avid writer about relevant economic topics and general perspective pieces.
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