The Impact of Individual and Organizational Biases on Risk Resistance and Management Styles in Multi-Shareholder Corporations: A Case Study of the Challenger Disaster

Risk assistance ability is always based on degree of sophistication and applicability of the management style, and based on this, an indispensable factor that in the business management mode is biases. According to the research, most the papers introducing type and functions of biases in their theory, however, few of them make an analysis on the affect of biases on corporation’s performance with a realistic case. The main goal for this article to excavate and identify the underlying biases hinting behind those theories and explain the relationship between biases and the corporate risk-bearing ability. The content will mainly focus on which and how individual biases and group biases affect corporate managing modes, as well as further researching the effect on risk-resistance ability by using the Challenger disaster as a case study to better understand the interrelated and inseparable relationship between individual and organizational biases with management mode and risk assistance ability of a multi-shareholders corporation. The paper will split the analysis in several dimensions: conceptual interpretation of different biases, how biases affect the decision making in the case study, how the drawbacks in management styles affect the effectiveness of corporate risk resistance capacity and how can they be demonstrated with the Challenger disaster. This article will also summarize and clarify the major biases affecting business decision-making and suggest modifications to the management of a multi-party holding company.