Presentation on theme: "Perception and Individual Decision Making"— Presentation transcript:
1 Perception and Individual Decision Making Essentials of Organizational Behavior, 9/eStephen P. Robbins/Timothy A. JudgeChapter 4Perception and Individual Decision Making
2 After studying this chapter, you should be able to: Explain how two people can see the same thing and interpret it differently.List three determinants of attribution.Describe how shortcuts can assist in or distort our judgment of others.Explain how perception affects the decision-making model.Outline the six steps in the rational decision-making model.
3 After studying this chapter, you should be able to: Describe the actions of the boundedly rational decision maker.List and explain the common decision biases or errors.Identify the conditions in which individuals are most likely to use intuition in decision making.Contrast the three ethical decision criteria.
4 PerceptionA process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.The world as it is perceived is the world that is behaviorally important.
6 Attribution TheorySuggests that when we observe an individual’s behavior, we attempt to determine whether it was internally or externally causedInternally – believed to be under the personal control of the individualExternally – resulting from outside causes
7 Determinants of Attribution Distinctiveness – whether an individual displays different behaviors in different situationsConsensus – if everyone who faces a similar situation responds in the same wayConsistency – does the person respond the same way over time
9 Attribution ErrorsFundamental Attribution Error – when we make judgments about the behavior of others, we tend to underestimate external influence and overestimate internal influenceSelf-serving Bias – we tend to attribute our own success to internal factors and put the blame for failure on external factors
10 Shortcuts used in Judging Others Selective Perception – a characteristic that makes someone stand out in our mind will increase the probability that it will be perceivedHalo Effect – drawing a general impression based on a single characteristicContrast Effects – our reaction is influenced by others we have recently encounteredProjection – the tendency to attribute our own characteristics to other peopleStereotyping – judging someone on the basis of our perception of the group to which they belong
11 Link between Perception and Decision Making Decision making occurs as a reaction to a problemPerception influences:Awareness that a problem existsThe interpretation and evaluation of informationBias of analysis and conclusions
13 Assumptions of the Model The problem is clear and unambiguousOptions are knownClear preferencesConstant preferencesNo time or cost constraintsMaximum payoff
14 Creativity in Decision Making The ability to produce novel and useful ideasImportance is:Better understand the problemSee problems others can’t seeIdentify all viable alternativesIdentify alternatives that aren’t readily apparent
16 Bounded RationalityThe limited information-processing capability of human beings makes it impossible to assimilate and understand all the information necessary to optimizeSo people seek solutions that are satisfactory and sufficient, rather than optimalBounded rationality is constructing simplified models that extract the essential features from problems without capturing all their complexity
17 Common Biases and Errors Overconfidence Bias – As managers and employees become more knowledgeable about an issue, the less likely they are to display overconfidenceAnchoring Bias – a tendency to fixate on initial information and fail to adequately adjust for subsequent informationConfirmation Bias – seeking out information that reaffirms our past choices and discounting information that contradicts past judgments
18 Common Biases and Errors Availability Bias – the tendency to base judgments on information that is readily availableRepresentative Bias – the tendency to assess the likelihood of an occurrence by inappropriately considering the current situation as identical to past situationsEscalation of Commitment – staying with a decision even when there is clear evidence that it is wrong
19 Common Biases and Errors Randomness Error – the tendency to believe that we can predict the outcome of random eventsHindsight Bias – the tendency to believe falsely that we accurately predicted the outcome of an event after that outcome is actually known
20 Intuitive Decision Making An unconscious process created out of distilled experienceComplements rational analysisCan be a powerful force in decision making
21 When is Intuitive Decision Making Used? A high level of uncertainty existsThere is little precedent to draw onVariables are less scientifically predictable“Facts” are limitedFacts don’t clearly point the wayAnalytical data are of little useThere are several plausible alternatives with good arguments for eachTime is limited and there is pressure to come up with the right decision
22 Individual Differences Personality – specific facets of conscientiousness affect escalation of commitmentGender – Females are more likely to carefully consider problems and choices but also overanalyze and rehash the decision once it is made
23 Organizational Constraints Performance EvaluationReward SystemsFormal RegulationsSystem-Imposed Time ConstraintsHistorical Precedents
24 Cultural Differences Culture of decision maker influences: Time orientationImportance of rationalityBelief in the ability of people to solve problemsPreference for collective decision making
25 Criteria used in making ethical choices Utilitarian – provide the greatest good for the greatest numberRights focus – make decisions consistent with fundamental liberties and privilegesJustice focus – impose and enforce rules fairly and impartially so that there is equal distribution of benefits and costs
26 Implications for Managers To influence productivity, assess workers perceptions of their jobsTo improve decision making:Analyze the situationBe aware of biases and minimize their impactCombine rational analysis with intuitionTry to enhance your creativity
27 SummaryExplained how two people can see the same thing and interpret it differently.Listed three determinants of attribution.Described how shortcuts can assist in or distort our judgment of others.Explained how perception affects the decision-making model.Outlined the six steps in the rational decision-making model.
28 SummaryDescribed the actions of the boundedly rational decision maker.Listed and explained the common decision biases or errors.Identified the conditions in which individuals are most likely to use intuition in decision making.Contrasted the three ethical decision criteria.