Category: Behavioral Economics.

Decision making is an integral part of organizations. Taking the right decisions at the right time every time plays a crucial role in the success of the organization. However, taking the right decision every time requires clarity of thought and freeing oneself from various cognitive biases. Sometimes decision making involves making tough choices. In that process, you might have to make a decision that goes against your beliefs. There can also be beliefs that contradict each other. Taking decisions amidst these complexities can be difficult, as these situations can cause discomfort and impair your judgment due to cognitive dissonance. This article explores cognitive dissonance, a psychological phenomenon that affects decision making in such situations.

What is cognitive dissonance?

The human mind is extremely complex. The thought process of a person is not necessarily predictable. Decisions are taken by considering various factors. Sometimes, what needs to be done may not be in line with what one believes is the right thing to do. In that instance, wrong decisions can be made. But doing the wrong thing or believing in the wrong thing can cause discomfort to the person. Being so complex, the human mind can come up with coping mechanisms such as cognitive dissonance. Psychologist Leon Festinger came up with the theory of cognitive dissonance in 1957. Since then, it has been supported by a lot of research work, for 65 years.

Cognitive dissonance definition

Cognitive dissonance is the feeling of discomfort that is caused by holding two conflicting beliefs or values at the same time.

Cognitive Dissonance examples at work

There are several ways in which cognitive dissonance can affect decision making in an organization. It can have far reaching implications yet remain undetectable to the person who suffers from it. Following are some examples of how cognitive dissonance can affect your work.

  1. When doing an employee performance review, you may have to give a positive review and a hike to your least favorite team member based on their performance. But you may refrain from that and justify to yourself that the person does not deserve a good review, thinking back at events that are not related to the performance of the employee. In this case, it is a bad decision, which you justified to support your belief.

  2. When the team has set goals, you might disagree with the team, discard the team decision based on insights and discussion, and focus on priorities you believe to be the right ones. Here, you stubbornly act on your beliefs and produce outcomes that are not aligned with the team. This is cognitive dissonance.

  3. If you have a systemic problem in the organization – such as a lack of alignment to objectives- it points to the failures in implementing the goal-setting framework or internal communication. However, if the managers start to blame individuals, it means that cognitive dissonance is making them believe that individuals are causing a problem, though the evidence would point to an organization-wide problem. They would be clutching at straws instead of addressing a bigger problem. This can not only lead to failures across the organization but also lead to employee dissatisfaction and employee turnover.

  4. When an employee comes with excellent ideas to bring about some organizational changes, say by introducing green building concepts to achieve power savings. The conventional wisdom of leaders may lead them to believe that investing in green building concepts would be expensive and may not bring return of investment, and introducing goals to save power consumption can hurt productivity, as they equate effort/power consumption with quality. As a result, they may shelve the idea and stifle workplace innovations. Beyond this, it may make the employees feel that it is safer to conform to the views of the company leadership instead of coming up with ideas and suggestions. This can hurt the company in the long run.

  5. When you work hard to make a product, you will tend to believe in its potential, so you select a pricing strategy that asks customers to pay a premium for its first-of-the-kind features. Due to some issues, you delay the product launch. Suppose a competitor launches a similar product before you can launch the product. You may have to look into the pricing strategy again and revise it to avoid overshooting the price. But cognitive dissonance will make you firmly believe that your product will succeed, even if you don’t undercut the price of the competing product, just because of the effort you put into making the product. Market conditions have changed, and you are not changing your belief based on the facts. This can lead to failure and make a bad impression of your product on the customers.

  6. After you attend a training session on new best practices in your work, or after your organization adopts a new business system or framework that you need to work on within your daily routine, cognitive dissonance will make believe that existing practices, systems and frameworks are much better and that you can do work much better without changing them. This can lead to a lack of alignment, stagnant productivity, inability to adapt to what you learned, and failure to adapt to changing conditions in the organization. OKRs can help you drive progress in your organization through a number of initiatives. Your strategy to address various issues can be executed using this framework. When using OKRs, you need an agile software that helps you keep focus throughout your company and removes confusion in achieving important goals. You can get started on Profit.co completely free today and learn how to address cognitive dissonance effectively.


What causes cognitive dissonance? Six key psychological factors.

Numerous psychological factors cause cognitive dissonance, and the following are the key ones to look out for.

  1. Consistency of thought and action

    Being logical, rational beings, we do not like it when our beliefs and behavior are different. This quest for consistency makes us rationalize against inconsistency. As a result, you tend to deny evidence that contradicts your beliefs.

  2. Justifying beliefs to oneself

    When you have to take an action that is not consistent with your beliefs but cannot avoid it, you may justify the reasons for doing it in such a way that it makes your actions acceptable. For instance, when a suggestion comes from someone lower in the organizational hierarchy, you may reject it, as it contradicts your belief. However, if your team leader forces you to do it, you may justify that implementing it is the right thing to do this time and not when you rejected it in the past. This justification eases your discomfort.

  3. Social Pressure

    Conforming to the beliefs and behaviors of society has been a part of human psychology in an attempt to adapt and fit in. This has helped humans to avoid criticism and confrontation, especially against those who have power and authority over them. This social pressure makes it hard for humans to change their beliefs and behaviors even when presented with new information or evidence that contradicts them.

  4. Inability to accept change

    Some habits, beliefs and behaviors are deeply ingrained in the human mindset and hard to change. Changing views can cause severe discomfort to some; sometimes, changing thoughts and behavior may seem like conceding defeat, which may cause denial and reluctance to accept changes.

  5. Denying change can be comforting

    Sometimes, maintaining the status quo can be comforting for some people. For instance, if a successful business’s scope is gradually decreasing, it will be hard for the leadership to abandon what they are currently doing and diversify their business. Even when the sales and profits are going down, cognitive dissonance will have the company leadership believe that there is still potential in the current business, just because they found success in the past and denying the lack of future potential comforts them. Investing more in dying businesses results from having a false sense of security and faith in the market, as denial comforts them.

  6. Effort justification

    Cognitive dissonance is also caused by justifying your efforts to make something. The effort put into action can make one over-value and rationalize it, even if it is not as impactful. This is because we equate effort with quality; to believe that anything created with a lot of effort must be proportionally good, consistent with the amount of effort put into making it. For instance, when you assign two teams to come up with a product design and prototype, incorporating the innovations of your R&D team, during the pitch, if you suffer from cognitive dissonance, you may over-value the output of the team that has worked long hours and spent more resources compared to that of the other team, whose product is superior.

8 reasons why is it important to overcome cognitive dissonance?

Cognitive dissonance can have severe repercussions in organizations. When you have cognitive dissonance,

  1. You won’t be able to reconcile your beliefs, creating stress and discomfort.
  2. You will defend your choices no matter what.
  3. You will often try to address the discomfort by changing your beliefs or behaviors to align with each other.
  4. You will justify your actions even when you know they are wrong, even if no one asks you to justify them.
  5. You will manage to hold on to your conflicting beliefs, ideas and values by convincing yourself with false notions.
  6. You may make wrong decisions and passionately reject any criticism.
  7. You will reject ideas and evidence, just because they make you uncomfortable, even if they are true.
  8. You will try to minimize or neglect the serious implications of your decisions.

wisdom is tolerance of cognitive dissonance

Robert Thurman

5 ways you can avoid cognitive dissonance.

Overcoming cognitive dissonance can be a long process, as it is hard to recognize it oneself and work towards addressing it. However, overcoming cognitive dissonance can be beneficial in the long run, and it is worth making an effort. Following are some of the ways in which you can reduce and overcome cognitive dissonance.

  1. Base your decision on facts

    As with cognitive biases and other psychological phenomena that affect decision making, cognitive dissonance can be avoided if you stop yourself from acting on instincts and beliefs and start looking for more information and data to support your decisions. Data-driven decision making is indispensable for organizations today. Learning to make decisions based on concrete facts and evidence goes a long way in helping you make progress in your career and excel in your work, in addition to overcoming cognitive dissonance.

  2. Seek external support

    While you can consciously address cognitive dissonance, it can be hard to detect and understand. So, you can opt for support from experts. Organizations can also organize counseling and training on decision making to help employees overcome cognitive dissonance and other biases that hinder them from making sound decisions in their day-to-day work.

  3. Look into yourself, and make a note of your discomforts

    Cognitive dissonance can cause discomfort when you act against your beliefs and try to justify your beliefs to align them with actions you did not want to take. You can make note of these instances, study them later, explore the root causes for these discomforts and discuss with trusted friends and colleagues about them to determine if you could have done something differently on those occasions.

  4. Develop acceptance that you could be wrong on occasions

    Cognitive dissonance arises from the inability to accept your beliefs, ideas, and actions that can be potentially incorrect. Developing a mindset of acceptance is essential to address cognitive dissonance. This can be achieved by developing openness to change of opinions, ideas, and beliefs upon getting new information that contradicts them. You can also listen to alternative views, consider multiple opinions, and analyze them objectively.

  5. Become more self aware and understand the consequences of your behavior

    It is essential to become mindful of what you think and act, how you feel while making decisions and what causes discomfort. Only when you are self aware and when you understand your thought process, you can address the problems in it. It is also important to analyze the potential consequences of your decisions. When faulty decisions based on stubbornly held beliefs can have repercussions far and wide within an organization, the potential impact of your decisions needs to be subjected to scrutiny and analyzed objectively. Developing these qualities can help address cognitive dissonance.


Cognitive dissonance can seriously impair judgment and affect decisions impacting individuals, teams, and the organization. It can cause friction, disagreements, and team arguments, affecting alignment and productivity. Some decisions can snowball into far reaching repercussions that can cause lasting harm. So it is indispensable to understand cognitive dissonance and make a serious effort to overcome it. So, it is crucial for organizations to carefully consider how and where they want to address this seemingly non intrusive psychological aspect that can potentially inform all decision making. Book a free demo with our team to learn more about how OKR software can help with decision making and optimize your organization’s performance!

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