1. Organizational Behavior (MGT-502) Lecture-12

2. Summary of Lecture-11

3. Attribution The Process through which individuals attempt to determine the causes of others behavior

4. Fundamental Attribution Error The tendency to attribute others’ actions to internal causes (e.g their traits) while largely ignoring external factors that also may have influenced their behavior.

5. Frequently Used Shortcuts in Judging Others Selective Perception –People selectively interpret what they see on the basis of their interest, background, experience, and attitudes. Halo Effect –A general impression about an individual is based on a single positive characteristic. Contrast Effects –Evaluations of a person’s characteristics that are affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics. Projection –Attributing one’s own characteristics to other people Stereotyping –Judging someone on the basis of the group to which he/she belongs.

6. Impression Management Self-presentation Is the process by which people attempt to manage or control the perceptions other form of them.

7. Today’s Topics

8. Perception & Decision Making

9. The Link Between Perceptions and Individual Decision Making Perceptions of the decision maker Outcomes Problem: A discrepancy between some current state of affairs and some desired state. Decisions: The choices made from among two or more alternatives.

10. Rational Decision-Making Model A decision-making model that describes how individuals should behave in order to maximize some outcomes.

11. One: Problem Clarity One: Problem Clarity Four: Constant Preferences Four: Constant Preferences Five: No Constraints Five: No Constraints Two: Known Options Two: Known Options Three: Clear Preferences Three: Clear Preferences Six: Maximum Payoff Six: Maximum Payoff Assumptions of the Rational Decision-Making Model

12. Steps in the Rational Decision-Making Model 1.Define the problem. 2.Identify the decision criteria. 3.Allocate weights to the criteria. 4.Develop the alternatives. 5.Evaluate the alternatives. 6.Select the best alternative.

13. Rational Model of Decision Making Problem Identify and Define Problem Develop Alternatives A1A1 A2A2 A3A3 A4A4 AnAn Evaluate Alternatives + A1A1 A1A1 A2A2 A2A2 AnAn AnAn Criteria Weight the Criteria T E C H Set Decision Criteria Choice Make Optimal Decision

14. Problem Solving Vs Decision Making –Problem solving: finding the root cause of a deviation (cause analysis) –Decision making: choosing from alternative courses of action (choice analysis) Problem solvingDecision making

15. Alternatives to Rational Decision- Making Bounded Rationality Intuitive Decision-making Decision-Making by Objection The Garbage Can Model

16. Bounded Rationality Scan the Environment Design Possible Solutions Choose from among available alternatives (Satisfice)

17. Intuitive Decision-Making Rely on Experience (“Gut Feeling”) Intuitive Model Use Personal Assessment (Compatibility Test)

18. Decision-Making by Objection Don’t make matters worse. Form rough description of acceptable resolution. Propose a course of action. Secure objections - they set the boundaries. Repeat process, creating several courses of action.

19. The Garbage Can Model Problems and solutions change. Problems and solutions often present themselves simultaneously. Pair problems and solutions.

20. The Garbage Can Model Problem A Problem C Solution Y Solution X Problem B Solution Z Problem A Solution X + SolutionsProblems

21. How are Decisions Actually Made in Organizations Bounded Rationality –individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity. Intuitive Decision Making –An unconscious process created out of distilled experience.

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

23. Intuitive Decision Making u High uncertainty levels u Little precedent u Hard to predictable variables u Limited facts u Unclear sense of direction u Analytical data is of little use u Several plausible alternatives u Time constraints

24. Decision-Making Styles Research on decision styles has identified four different individual approaches to making decisions. –Directive Style -- people using this style have a low tolerance for ambiguity and seek rationality. –Analytic Style -- people using this style have a much greater tolerance for ambiguity than do directive decision makers. –Conceptual Style -- people tend to be very broad in their outlook and consider many alternatives –Behavioral Style -- people who tend to work well with others.

25. Decision-Style Model Analytical BehavioralDirective Conceptual Low High RationalIntuitive Way of Thinking Tolerance for Ambiguity

26. The Skill Triangle Task Skills Interpersonal Skills Decision- making Skills

27. Organizational Constraints on Decision Makers Performance Evaluation –Evaluation criteria influence the choice of actions. Reward Systems –Decision makers make action choices that are favored by the organization. Formal Regulations –Organizational rules and policies limit the alternative choices of decision makers. System-imposed Time Constraints –Organizations require decisions by specific deadlines. Historical Precedents –Past decisions influence current decisions.

28. Cultural Differences in Decision Making Problems selected Time orientation Importance of logic and rationality Belief in the ability of people to solve problems Preference for collect decision making

29. Ethics in Decision Making Utilitarianism –Seeking the greatest good for the greatest number. Rights –Respecting and protecting basic rights of individuals. Justice Imposing and enforcing rules fairly and impartially.

30. Ethics in Decision Making Ethics and National Culture –There are no global ethical standards.

31. Factors Affecting Ethical Decision-Making Behavior Stage of moral development Ethical decision-making behavior Organizational environment Locus of control

32. Criteria of Decision Effectiveness Quality Timeliness Acceptance Ethical Appropriateness

33. Alternative Development Problem Identification Two Important Decision-Making Phases

34. Types of Managerial Decisions Programmed vs. Nonprogrammed Strategic vs. Operational Top-Down vs. Worker-Empowered

35. Methods of Improving Decision Making in Organizations Human-based Methods Computer-based Methods Brainstorming Nominal Group Technique Delphi Method

36. Let’s stop it here

37. Summary

38. Perception & Decision Making

39. Rational Decision-Making Model A decision-making model that describes how individuals should behave in order to maximize some outcomes.

40. Alternatives to Rational Decision- Making Bounded Rationality Intuitive Decision-making Decision-Making by Objection The Garbage Can Model

41. How are Decisions Actually Made in Organizations Bounded Rationality –individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity. Intuitive Decision Making –An unconscious process created out of distilled experience.

42. Ethics in Decision Making Utilitarianism –Seeking the greatest good for the greatest number. Rights –Respecting and protecting basic rights of individuals. Justice Imposing and enforcing rules fairly and impartially.

43. Methods of Improving Decision Making in Organizations Human-based Methods Computer-based Methods Brainstorming Nominal Group Technique Delphi Method

44. Next….

45. Motivation A state of mind, desire, energy or interest that translates into action.

46. Organizational Behavior (MGT-502) Lecture-12