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  •   Fadhilla Sandra Adjie

  •   Alvanov Z. Mansoor

  •   Sony Rustiadi

  •   Ira Fachira

Abstract

In seeking differentiation value, Small Medium Enterprises tend to have limitations which hinder their way in developing the business strategy. As an SME that has established its two-year business operation—Kopi Bon is being analyzed and investigated from the perspective of behavioral economics’ Planning Fallacy—as it shows that the planning process is filled with distortion made from judgments as a result of behavioral biases. The study revealed how cognitive biases that involve planning fallacy as a supporting theory influences the company’s decision-making process—where later could be affected to the decision making in terms of operational activities which comprises of the quality of products and services, to the company’s branding. Also, the study reveals how understanding planning fallacy would make improvement towards business strategy to survive within the pandemic of COVID-19.

Keywords: Planning Fallacy, Small Medium Enterprises, Decision Making, Cognitive Biases, COVID-19

References

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H. H Friedman (2017). Cognitive Biases that Interfere with Critical Thinking and Scientific Reasoning: A Course Module. Brooklyn College of the City University of New York.

Yagoda, B. (2018). The Cognitive Biases Tricking Your Brain. Retrieved from: https://thetheatlantic.com/magazine/archive/2018/09/cognitive-bias/565775/.

The Decision Lab.com (2021), Planning fallacy - Biases & Heuristics.

Retrieved from: https://thedecisionlab.com/biases/planning-fallacy/#:~:text=The%20Sydney%20Opera%20House%20is,complete%20than%20was%20originally%20planned.

R. Buehler, D. Griffin, and J. Peetz. (2010). The Planning Fallacy: Cognitive, Motivational, and Social Origins, Journal of Advances in Experimental Social Psychology, 43 pp. 17.

Kadence Report (2020). Cognitive Biases Explaining Irrational Behaviours Worldwide. Retrieved from https://kadence.com/cognitive-biases-explaining-irrational-behaviours-worldwide/.

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How to Cite
Adjie, F. S., Mansoor, A. Z., Rustiadi, S., & Fachira, I. (2021). Understanding the Perspective of Behavioral Economics’ Planning Fallacy in Improving Business Strategy for Kopi Bon. European Journal of Business and Management Research, 6(3), 124-128. https://doi.org/10.24018/ejbmr.2021.6.3.873