Presentation on theme: "What Is Perception, and Why Is It Important?"— Presentation transcript:
0 and Individual Decision Making Chapter FIVEPerceptionand Individual Decision Making
1 What Is Perception, and Why Is It Important? A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.People’s behavior is based on their perception of what reality is, not on reality itself.The world as it is perceived is the world that is behaviorally important.
2 Factors that Influence Perception E X H I B I T 5–1
3 Person Perception: Making Judgments About Others Attribution TheoryWhen individuals observe behavior, they attempt to determine whether it is internally or externally caused.Distinctiveness: Shows different behaviors in different situations.Consensus: Response is the same as others to same situation.Consistency: Responds in the same way over time.
5 Errors and Biases in Attributions Fundamental Attribution ErrorThe tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgments about the behavior of othersIn general, we tend to blame the person first, not the situation.
6 Errors and Biases in Attributions (cont’d) Self-Serving BiasThe tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factorsThought: When students get an “A” on an exam, they often say they studied hard. But when they don’t do well, how does the self-serving bias come into play?Hint: Whose fault is it usually when an exam is “tough”?
7 Frequently Used Shortcuts in Judging Others Selective PerceptionPeople selectively interpret what they see on the basis of their interests, background, experience, and attitudes.
8 Frequently Used Shortcuts in Judging Others Halo EffectDrawing a general impression about an individual on the basis of a single characteristicContrast EffectsEvaluation of a person’s characteristics that are affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics
9 Frequently Used Shortcuts in Judging Others ProjectionAttributing one’s own characteristics to other peopleStereotypingJudging someone on the basis of one’s perception of the group to which that person belongs
10 Specific Applications in Organizations Employment InterviewPerceptual biases of raters affect the accuracy of interviewers’ judgments of applicantsPerformance ExpectationsSelf-fulfilling prophecy (Pygmalion effect): The lower or higher performance of employees reflects preconceived leader expectations about employee capabilities.Ethnic ProfilingA form of stereotyping in which a group of individuals is singled out—typically on the basis of race or ethnicity—for intensive inquiry, scrutinizing, or investigation
11 Specific Applications in Organizations (cont’d) Performance EvaluationsAppraisals are often the subjective (judgmental) perceptions of appraisers of another employee’s job performance.
12 The Link Between Perceptions and Individual Decision Making Problem A perceived discrepancy between the current state of affairs and a desired statePerception of the Decision MakerDecisions Choices made from among alternatives developed from data perceived as relevantOutcomes
13 Assumptions of the Rational Decision-making Model Describes how individuals should behave in order to maximize some outcomeModel AssumptionsProblem clarityKnown optionsClear preferencesConstant preferencesNo time or cost constraintsMaximum payoff
14 Steps in the 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.E X H I B I T 5–3
15 The Three Components of Creativity The ability to produce novel and useful ideasThree-Component Model of CreativityProposition that individual creativity requires expertise, creative-thinking skills, and intrinsic task motivationE X H I B I T 5–4Source: T.M. Amabile, “Motivating Creativity in Organizations,” California Management Review, Fall 1997, p. 43.
16 How Are Decisions Actually Made in Organizations? Bounded RationalityIndividuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.
17 How Are Decisions Actually Made in Organizations? (cont’d) How/Why problems are IdentifiedVisibility over importance of problemAttention-catching, high profile problemsDesire to “solve problems”Self-interest (if problem concerns decision maker)Alternative DevelopmentSatisficing: seeking the first alternative that solves problemEngaging in incremental rather than unique problem solving through successive limited comparison of alternatives to the current alternative in effect
18 Common Biases and Errors Overconfidence BiasBelieving too much in our own ability to make good decisionsAnchoring BiasUsing early, first received information as the basis for making subsequent judgmentsConfirmation BiasUsing only the facts that support our decision
19 Common Biases and Errors Availability BiasUsing information that is most readily at handRecentVividRepresentative Bias“Mixing apples with oranges”Assessing the likelihood of an occurrence by trying to match it with a preexisting category using only the facts that support our decisionWinner’s CurseHighest bidder pays too muchLikelihood of “winner’s curse” increases with the number of people in auction
20 Common Biases and Errors Escalation of CommitmentIn spite of new negative information, commitment actually increasesRandomness ErrorCreating meaning out of random eventsHindsight BiasLooking back, once the outcome has occurred, and believing that you accurately predicted the outcome of an event
21 Intuition Intuitive Decision Making An unconscious process created out of distilled experienceConditions Favoring Intuitive Decision MakingA 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 useSeveral plausible alternative solutions existTime is limited and pressing for the right decision
22 Individual Differences in Decision Making PersonalityAspects of conscientiousness and escalation of commitmentSelf Esteem High self serving biasGenderWomen tend to analyze decisions more than men.Source: A.J. Rowe and J.D. Boulgarides, Managerial Decision Making, (Upper Saddle River, NJ: Prentice Hall, 1992), p. 29.
23 Organizational Constraints on Decision Makers Performance EvaluationEvaluation criteria influence the choice of actionsReward SystemsDecision makers make action choices that are favored by the organizationFormal RegulationsOrganizational rules and policies limit the alternative choices of decision makersSystem-imposed Time ConstraintsOrganizations require decisions by specific deadlinesHistorical PrecedentsPast decisions influence current decisions
24 Cultural Differences in Decision Making Problems selectedTime orientationImportance of logic and rationalityBelief in the ability of people to solve problemsPreference for collective decision making
25 Ethics in Decision Making Ethical Decision CriteriaUtilitarianismSeeking the greatest good for the greatest numberRightsRespecting and protecting basic rights of individuals such as whistleblowersJusticeImposing and enforcing rules fairly and impartially
26 Ethics in Decision Making Ethics and National CultureThere are no global ethical standards.The ethical principles of global organizations that reflect and respect local cultural norms are necessary for high standards and consistent practices.
27 Ways to Improve Decision Making Analyze the situation and adjust your decision making style to fit the situation.Be aware of biases and try to limit their impact.Combine rational analysis with intuition to increase decision-making effectiveness.Don’t assume that your specific decision style is appropriate to every situation.Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies.
28 Toward Reducing Bias and Errors Focus on goals.Clear goals make decision making easier and help to eliminate options inconsistent with your interests.Look for information that disconfirms beliefs.Overtly considering ways we could be wrong challenges our tendencies to think we’re smarter than we actually are.Don’t try to create meaning out of random events.Don’t attempt to create meaning out of coincidence.Increase your options.The number and diversity of alternatives generated increase the chance of finding an outstanding one.Source: S.P. Robbins, Decide & Conquer: Making Winning Decisions and Taking Control of Your Life (Upper Saddle River, NJ: Financial Times/Prentice Hall, 2004), pp. 164–68.E X H I B I T 5–5
29 Chapter Check-up: Perception It’s your little sister’s senior Prom night, and she notices that everyone is wearing the same dress she has on! Which perceptual shortcut may be occurring?Escalation of commitmentRepresentative biasAvailability biasHindsight bias
30 Chapter Check-up: Perception It’s your little sister’s senior Prom night, and she notices that everyone is wearing the same dress she has on! Which perceptual shortcut may be occurring?Escalation of commitmentRepresentative biasAvailability biasHindsight biasDiscuss with your neighbor what the answer would be if your sister came home and said “I just knew that everyone would buy that dress!”
31 Chapter Check-up: Perception If all of these perceptual shortcuts happen un-consciously, how can we keep the stereotypes we have from interfering with the way we work in group projects? Identify two specific things you could do to help prevent stereotypes from inhibiting effective group relationships. Discuss with a neighbor.
32 Chapter Check-up: Decision Making Michael has just discovered he is registered for two classes at the same time and must make a decision about which one to take this semester. He considers the professor teaching this semester, the time of the class, and the classes his friends are taking. He then considers his options for when he can take each class again, as well as the costs and benefits for taking each this semester versus later next year. He then makes his decision. Michael has just engaged in what?
33 Chapter Check-up: Decision Making In making his decision, Michael forgot to consider the implications of the color of paint in the room where each class was being offered. Given that room color can influence mood, which can influence performance, why didn’t Michael consider it?
34 rational decision making model, Chapter Check-up: Decision MakingMichael engaged in therational decision making model,and didn’t consider the paint color of the rooms because he operates under the confines ofbounded rationality.
35 Chapter Check-up: What biases might have affected Martha Stewart’s judgment? Discuss with a classmate.