Perception and Individual Decision Making Chapter 5 Prentice Hall, 2001 Chapter 5

Learning Objectives Learn that two people can see the same thing and interpret it differently List the three determinants of attribution Describe how shortcuts can either assist or distort judgment Examine perception and decision-making Study the rational decision-making model Prentice Hall, 2001 Chapter 5

Learning Objectives Describe the actions of the boundedly rational decision maker Learn when individuals are most likely to use intuition in decision making Describe four styles of decision making Learn how heuristics bias decisions Contrast the three ethical decision criteria Prentice Hall, 2001 Chapter 5

What is Perception A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment Prentice Hall, 2001 Chapter 5

Factors That Influence Perception Situation Target Perceiver Prentice Hall, 2001 Chapter 5

The Perceiver Attitude Motives Interests Past experiences Expectations (stereotypes) Prentice Hall, 2001 Chapter 5

The Target Novelty Motion Sounds Size Background proximity Persons, objects and events that similar to each other tend to be grouped together Prentice Hall, 2001 Chapter 5

The Situation Time Work setting Social setting Prentice Hall, 2001 Chapter 5

Person Perception: making Judgments about Others Attribution Theory When individuals observe behavior, they attempt to determine whether it is internally or externally caused Distinctiveness Consensus Consistency Prentice Hall, 2001 Chapter 5

Theory and Individual Behavior Attribution of Cause Interpretation Observation Theory and Individual Behavior External Internal Distinctiveness Consensus Consistency High Low Prentice Hall, 2001 Chapter 5

Frequently Used Shortcuts When Judging Others Selective Perception Halo Effect Contrast Effect Projection Stereotyping Prentice Hall, 2001 Chapter 5

Perception Errors Fundamental attribution error Self-serving bias Tendency to underestimate external factors and overestimate internal factors Self-serving bias Tendency for individuals to attribute their own successes to internal factors rather than external factors (i.e., luck) Prentice Hall, 2001 Chapter 5

Judgmental errors Selective perception Halo effect Selectively interpret what they see on the basis of their interest, background , experience and attitudes Halo effect Drawing a general impression about an individual on the basis of a single characteristic Prentice Hall, 2001 Chapter 5

Perception Errors Contrast Effects Projection Stereotyping Evaluation of a person’s characteristics that are affected by comparisons with other people Projection Attributing one’s own characteristics to other people Stereotyping Judging someone on the basis of one’s perception of the group in which that person belongs Prentice Hall, 2001 Chapter 5

Specific Applications in Organizations Employment interview Performance expectations Self-fulfilling prophecy: expectations cause behaviors consistent with original perceptions Performance evaluation Employee effort More workers are fired for poor attitudes than for lack of ability Employee loyalty Prentice Hall, 2001 Chapter 5

Perception and Individual Decision Making Awareness and Recognition of Problems Perception and Individual Decision Making Interpretation and Evaluation of Information Prentice Hall, 2001 Chapter 5

Rational Model of Decision Making Problem Identify and Define Problem Develop Alternatives A1 A2 A3 A4 An Evaluate + Criteria Weight the Criteria T E C H Set Decision Choice Make Optimal Decision Prentice Hall, 2001 Chapter 5

Assumptions of the Model One: Problem Clarity Four: Constant Preferences Two: Known Options Five: No Constraints Three: Clear Preferences Six: Maximum Payoff Prentice Hall, 2001 Chapter 5

The Three Components of Creativity Expertise Creativity Task Motivation Creativity Skills Prentice Hall, 2001 Chapter 5

Bounded Rationality Constraints Solutions Time Resources/costs Information Solutions Acceptable, Satisfied, but may not optimal Prentice Hall, 2001 Chapter 5

A Model of Bounded Rationality Ascertain the Need for a Decision Select Criteria Identify a Limited Set of Alternatives Compare Alternatives Against Criteria Select the First “Good Enough” Choice Yes Simplify the Problem Expand Search for Alternatives A “Satisficing” Alternative Exists No Prentice Hall, 2001 Chapter 5

Intuitive Decision Making An unconscious process created out of distilled experience High uncertainty levels Little precedent Hard to predictable variables Limited facts Unclear sense of direction Analytical data is of little use Several plausible alternatives Time constraints Prentice Hall, 2001 Chapter 5

Two Important Decision-Making Phases Alternative Development Problem Identification Prentice Hall, 2001 Chapter 5

Making Choices in the Workplace Availability Heuristic Representative Escalation of Commitment Prentice Hall, 2001 Chapter 5

Making Choices Availability heuristic Representative The tendency for people to base their judgments on information that is readily available Representative Assessing the likelihood of an occurrence by matching it with a preexisting category Escalating commitment An increased commitment to a previous decision in spite of negative information Prentice Hall, 2001 Chapter 5

Decision-Making Styles Tolerance for Ambiguity High Analytic Conceptual Tolerance for Ambiguity Directive Behavioral Low Rational Way of Thinking Intuitive Prentice Hall, 2001 Chapter 5

Organizational Constraints Performance Evaluation Reward System Organizational Constraints Programmed Routines Historical Precedents Prentice Hall, 2001 Chapter 5

Cultural Differences Problem Identification The Value of Rationality Time Orientation Groups or Individuals Cultural Differences Prentice Hall, 2001 Chapter 5

Ethics in Decision-Making Utilitarian Rights Justice Prentice Hall, 2001 Chapter 5

Discussion Biases in decision making (p. 149) Ethical dilemma (p. 150) Video Case (p. 151) Prentice Hall, 2001 Chapter 5