Created by WS-71, 2015

Cognitive Dissonance—Essay 2


Cognitive dissonance is a well-known term in psychology and is defined as the state of having inconsistent thoughts, beliefs, or attitudes, especially as relating to behavioral decisions and attitude change (Oxford Dictionary). There are two main hypotheses regarding this phenomenon (Festinger, 1957): the existence of the dissonance will make the person try to get rid of it and achieve consonance; this psychological discomfort will motivate the person to avoid any information or situation which increase the dissonance.

Cognitive dissonance in Marketing

Since the theory by Festinger has been developed, researches have tried to find an applicable way to correlate it into real life, whilst yielding profits. This is a tool broadly used by marketers in order to understand the thought process of consumers and ways to influence it so it generates more sales. Since there are so many products available, customers usually get confused, which is generally known in the business world as “buyer’s remorse”. This happens as a result of a multitude of variations of one single product type, therefore people wonder if they made the right choice or whether there are better alternatives. Classification of products and differentiation from competitors are implemented so that the shopping experience becomes more favorable to the human mind.  

 

Kaish (1967) indicates that there are 3 kinds of goods a consumer typically encounters. Convenience goods are unimportant to the customer, therefore there is no dissonance associated with their purchase. Shopping goods are more significant and possess many conflicting characteristics, which negatively influence the satisfaction level linked with the acquisition, but a decision can be made with enough research. Finally, specialty goods are again important, but the dissonance stops the customer from making a confident and definite choice.

Before buying a certain product a person allegedly goes through six stages (Sharma, 2014). First, customer experiences problem recognition (awareness of need), then going through information search stage. After acknowledging the necessity, he/she evaluates the alternatives (rank/weight alternatives or resume search). Subsequently, the consumer has to make a decision and realize the actual purchase, which might differ from the above-mentioned decision. Finally, the person practices the post-purchase evaluation (outcome: satisfaction or dissatisfaction). This is the stage when the remorse might appear.

 

As dissonance is a psychological concept, its human nature to have certain hesitations about the validity of the decision. According to Hasan, Nasreen (2012), when the purchase decision is made in a rush, then the consumer would get more anxious over his/her decision, as compared to when he takes considerable time before making a purchase decision. Psychologists suggest that in order to avoid the so-called “buyer’s remorse”, we should do some research before buying something, don’t project too many expectations onto the product, not ignore outside information and try to question our beliefs and ideals.

The moral impact of the cognitive dissonance

A way of relating the cognitive dissonance to the daily life can be expressed by the biggest part of ones actions. People are powerful machines with pronounced minds that can create not only a self-operated life, but also a whole private world. By means of this, people are observed as being extremely influential not only in their private life, but also in the existence of the surrounding information.

 

On the one hand, this powerful tool that people were given in order to advance the mankind, can represent a great opportunity to develop his/her social abilities, but on the other hand, it can create mental unrests in his/her subconscious mind. As Sharon Linzey Georgianna stated, “As long as a person’s actions are consistent with his/her plausibility structure, there is no discrepancy between one’s actions and values” (Sharon, 1989, p60). This statement confirms the fact that there exists a crucial relation between the consistency of ones actions and the perceptual achievements as a result of the previously chosen decisions. Moreover, the co-existence of the plausible evaluations of one’s social interaction and the rationalized consistencies generate a positive association. In many cases, “individuals are not successful in rationalizing the inconsistencies to themselves” (Sharon, 1989, p92).

 

As a result of this discrepancy, there may take place a series of manipulating responses. Firstly, a person’s dissonance can evolve into a much bigger subconscious problem that may influence negatively his/her mental evolution. Secondly, the person can be influenced to “add a cognitive element which will incorporate the new action” (Sharon, 1989, p60). This way, the inconsistent thoughts change from a variable state to a certain one that further develops a convincing belief. Thirdly, the person can remove himself/herself from that uncertainty in order to avoid the private social unrest. This way, “it is easier to continue a new form of action”, and therefore, adopt a well-developed attitude towards the cognitive dissonance.

Cognitive dissonance in the organization.

Organizational Behavior (OB) is the study about how people, individuals, and groups act in organizations. Their decision-making process occur by taking a system approach. That interprets cognitive dissonance in terms of the whole group or organization, and whole social system. Its purpose is to increase the productivity of the entity by achieving organizational and objectives, objectives. Organizational behavior encompasses a wide range of topics, such as human behavior, leadership, decision-making, etc.

 

The cognitive dissonance in organizations encounter elements as: OD, work life, action learning, models, social systems and change. There are four frameworks that organizations operate: Autocratic, Custodial, Supportive, Collegial (Cunningham, Eberle, 1990).

  • Autocratic - This model invokes power and a managerial authority, The employees decisions are dependent on their bosses therefore the dissonance is minimal, reduced to staying in the team, following the commands, or leaving the team.
  • Custodial - In this model, cognitive dissonance is limited to what decision is more secure or brings more profit. The result of this method is a passive cooperation.
  • Supportive - This model implies the need of status and recognition of the employees. The decision-making process is oriented towards job performance and participation. Therefore there is a relatively high cognitive dissonance.
  • Collegial - This model is based on a partnership with managerial oriented teamwork. The decision-making process is based towards responsible behavior and discipline. The employees decisions are extremely self-actualized, therefore cognitive dissonance of the organization is high. It has its benefits and drawbacks.

 

Although  there are different models, there is not only one in most of the organizations, but a mix of them.  The autocratic model has it’s beginnings in the industrial revolution. The autocratic managers operate mostly on McGregor’s Theory X. The other models are based in McGregor’s Theory Y. These models evolved during time, creating the basics of cognitive dissonance in the organization. Worth mentioning, that there is no best model, but the most suitable is different cases.

Cognitive dissonance in relationships

When holding two conflicting beliefs, a pretty awkward feeling appears. This feeling describes the concept of cognitive dissonance, which means that there is a gap between the beliefs and behaviors of a person, and something has to be changed in order to avoid or reduce the dissonance.

People have the possibility to confront with the cognitive dissonance in many areas of life. The specific representation of this phenomenon can be observed while the behavior of a person is confronting with his/her attitudes that contribute to his/her self-image. This fact affects our relationships because our personality depends a lot on our values and on the things that really matter for us.

When it comes to the question of finding a partner, subconsciously we create a system of expectations that a partner has to fit with. In this circumstances one is more likely to face a dissonance, because the person he/she chose might not fit with all the expectations. The person has two alternatives in this case, simply break up the relationship or to revise his/her beliefs if the chosen person fits more of his expectations, this could be a solution for eliminating the dissonance.

We all are more likely to think that our lives are constantly getting better, and the decisions made by us lead to a more successful result. Justifying our choices with reasons is more comfortable for us. In order to be happy with our decision, every time we start a new relationship we tend to feel that our new partner has way more positive qualities than the previous partners. In an evolutionary context, cognitive dissonance was probably an important attribute because it enabled us to protect our identity and follow through decisions but it might be unhelpful in any kind of relationship misunderstanding. Our unwillingness to accept that we might be at fault causes no end of problems, but awareness, and being able to recognize the small daily hypocrisies

Cognitive dissonance in financials

Cognitive Dissonance appears in all aspects of our lives. Regarding money aspect, there are two main spheres: how people spend their money and how they invest their money. As an example, there can be situation, when a person buys a new version of apple iPhone. The phone person has up to that point still works perfectly well, so there are no notable problems and it is only about, say, a year old. So the rational way to go would be to keep the old phone while it still works and a person is happy with it. And when the person actually needed to get a new phone, he/she could buy it. So the person would have the added benefit of postponing the unavoidable cost of a new phone, and by holding out, he/she might wait long enough for another new version of iPhone or another good phone model. The benefits of not buying the new iPhone conflicted with the person’s strong desire to buy the coolest new device. Eventually, person persuades himself/ herself, that the old phone was likely to break soon (though it wasn’t) and the new iPhone has so many cool features that it is worth it (to some extent true). That rationalization is what person needs to resolve the contradiction between those two thoughts.

 

This cognitive dissonance formed during spending money can lead to anxiety causing the purchase (“I know I shouldn’t but…”), also guilt and shame subsequently (“I probably shouldn’t have spent that much money on that”). The way people resolve those feelings is justifying it. Typical justifications used are: “I have been thinking about buying it for a while”, “It was on sale”, “I deserve something new and shiny”, etc… Being able to advocate our actions (whether there are strong arguments or not) eases that guilt and we are free to enjoy what we have bought, even if in the long run that decision is proven to be the wrong one.

 

Moreover, there are not only our spending choices that can provoke cognitive dissonance. It also can frequently be observable in our investment choices. William Goetzmann and Nadav Peles wrote a paper published in the Journal of Financial Research entitled “Cognitive Dissonance and Mutual Fund Investors”. In this paper writers attempted to find out why investors continue to stay with poorly performing funds, though logically they should move their money somewhere else. In the past, this behavior had been attributed to different factors, such as poor research, high transaction costs, general irrationality, etc. While not completely cancelling the influence of those factors, they analyzed possible psychological explanations for that behavior. They provided a survey among two groups of mutual fund investors, and discovered that even the most respected and well-informed investors tend to alter their perception of the past poor performance of their investments. Cognitive dissonance is all about people reconsidering their attitudes towards a certain idea attempting to settle logical contradictions. When there appears an opportunity to make those reconsideration, investors usually take it, thereby making themselves feel a greater comfort about their decision, which allows them to hold to the poorly performing fund for a longer time.

Conclusion

To sum up, we would like to say that such a phenomenon as cognitive dissonance may occur in completely different spheres of human life.

 

Cognitive dissonance is a state characterized by a clash in the mind of conflicting knowledge, beliefs, behavior with respect to some object or phenomenon. According to the theory of cognitive dissonance (Leon Festinger), this state does not satisfy the person and creates an unconscious desire to make the system of their knowledge and belief coherent and consistent.

The problem is that in attempting to resolve the cognitive dissonance, people are frequently involved not in search for truth, but collecting formal knowledge and motives. Thus, many people cope with internal contradictions, using the first more or less appropriate justification.

The basic essence of dissonance theory, which we have described, is quite simple and short form is as follows:

  • There may be dissonant relationships or relationships of discrepancy between cognitive elements.
  • The emergence of dissonance is the desire to reduce unpleasant state of mind and try to avoid its further occurrence.
  • The manifestations of this desire are not only changing behavior and attitudes to judgment or object, dissonance spawned, but also intended searching for new information and views on it.