Presentation on theme: "Chapter 3 Perception and Individual Decision Making"— Presentation transcript:
1 Chapter 3 Perception and Individual Decision Making Essentials ofOrganizational Behavior, 10/eStephen P. Robbins & Timothy A. JudgeChapter 3Perception and Individual Decision Making
2 After studying this chapter, you should be able to: Define perception and explain the factors that influence it.Identify the shortcuts individuals use in making judgments about others.Explain the link between perception and decision making.List and explain the common decision biases or errors.Contrast the three ethical decision criteria.Define creativity and discuss the three-component model of creativity.
3 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.
5 Person Perception: Attribution Theory Suggests that perceivers try to “attribute” the observed behavior to a type of cause:Internal – behavior is believed to be under the personal control of the individualExternal –the person is forced into the behavior by outside events/causes
6 Determinants of Attribution Distinctiveness – whether an individual displays different behaviors in different situations (the uniqueness of the act) Consensus – does everyone who faces a similar situation respond in the same way as the individual did Consistency – does the person respond the same way over time
8 Attribution Errors Fundamental Attribution Error Self-Serving Bias The tendency to underestimate the influence of external factors and overestimate that of internal factors.Self-Serving BiasOccurs when individuals overestimate their own (internal) influence on successes and overestimate the external influences on their failures.
9 Shortcuts Used in Judging Others Selective Perception – a perceptual filtering process based on interests, background, and attitude. May allow observers to draw unwarranted conclusions from an ambiguous situation.Halo Effect – drawing a general impression based on a single characteristic.Contrast Effects – our reaction is influenced by others we have recently encountered (the context of the observation).Stereotyping – judging someone on the basis of the perception of the group to which they belong.
10 The Link Between Perception and Decision Making Decision making occurs as a reaction to a perceived problemPerception influences:Awareness that a problem existsThe interpretation and evaluation of informationBias of analysis and conclusions
11 Rational Decision-Making Model Define the problem.Identify the decision criteria.Allocate weights to the criteria.Develop the alternatives.Evaluate the alternatives.Select the best alternative.Seldom actually used: more of a goal than a practical method
12 Assumptions of the Model Complete knowledge of the situationAll relevant options are known in an unbiased mannerThe decision-maker seeks the highest utility
13 Bounded RationalityThe limited information-processing capability of human beings makes it impossible to assimilate and understand all the information necessary to optimize So people seek solutions that are satisfactory and sufficient, rather than optimal (they “satisfice”) Bounded rationality is constructing simplified models that extract the essential features from problems without capturing all their complexity
14 Decision Making in Bounded Rationality Simpler than rational decision making, composed of three steps:Limited search for criteria and alternatives – familiar criteria and easily found alternativesLimited review of alternatives – focus alternatives, similar to those already in effectSatisficing – selecting the first alternative that is “good enough”
15 Intuitive Decision Making An non-conscious process created out of distilled experienceIncreases with experienceCan be a powerful complement to rational analysis in decision making
16 Common Biases and Errors Overconfidence BiasAs managers and employees become more knowledgeable about an issue, the less likely they are to display overconfidenceAnchoring BiasA tendency to fixate on initial information and fail to adequately adjust for subsequent informationConfirmation BiasSeeking out information that reaffirms our past choices and discounting information that contradicts past judgments
17 Common Biases and Errors Availability BiasThe tendency to base judgments on information that is readily availableEscalation of CommitmentStaying with a decision even when there is clear evidence that it is wrongHindsight BiasThe tendency to believe falsely that we could have accurately predicted the outcome of an event after that outcome is already known
18 Organizational Constraints on Decision Making Performance evaluationsReward systemsFormal regulationsSelf-imposed time constraintsHistorical precedents
19 Ethical Frameworks for Decision Making UtilitarianProvide the greatest good for the greatest numberRightsmake decisions consistent with fundamental liberties and privilegesJusticeimpose and enforce rules fairly and impartially so that there is equal distribution of benefits and costs
20 Creativity in Decision Making The ability to produce novel and useful ideasHelps people to:Better understand the problemSee problems others can’t seeIdentify all viable alternativesIdentify alternatives that aren’t readily apparent
21 Three-Component Model of Creativity ExpertiseIntrinsic Task MotivationCreative-Thinking Skills
22 Global Implications Attributions: Decision Making: Ethics: Cross-cultural differences exist – especially in collectivist traditionsDecision Making:Cultural background of the decision maker can have significant influence on decisions madeEthics:No global ethical standards existNeed organizational-level guidance
23 Implications for Managers Perception:To increase productivity, influence workers’ perceptions of their jobsTo improve decision making:Analyze the situationAdjust your decision approachBe aware of biases and minimize their impactCombine rational analysis with intuitionTry to enhance your creativity
24 Keep in Mind…People have inherent biases in perception and decision makingUnderstanding those biases allows for better prediction of behaviorBiases can be helpfulManagers must determine when the bias may be counterproductiveCreativity aids in decision makingHelps to appraise, understand, and identify problems
25 SummaryDefined perception and explained the factors that influence it.Identified the shortcuts individuals use in making judgments about others.Explained the link between perception and decision-making.Listed and explained the common decision biases or errors.Contrasted the three ethical decision criteria.Defined creativity and discussed the three-component model of creativity.