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Chapter 5


                     Perception and
                     Individual Decision
                     Making

              ORGANIZATIONAL BEHAVIOR
                            S T E P H E N P. R O B B I N S
                                E L E V E N T H   E D I T I O N
© 2005 Prentice Hall Inc.       WWW.PRENHALL.COM/ROBBINS          PowerPoint Presentation
All rights reserved.                                                     by Charlie Cook
What Is Perception, and Why Is It Important?
What Is Perception, and Why Is It Important?

 Perception
 A process by which
                            ••People’s behavior is
                               People’s behavior is
 individuals organize and     based on their
                               based on their
 interpret their sensory      perception of what
                               perception of what
 impressions in order to      reality is, not on
                               reality is, not on
 give meaning to their        reality itself.
                               reality itself.
 environment.
                            ••The world as it is
                               The world as it is
                              perceived is the world
                               perceived is the world
                              that is behaviorally
                               that is behaviorally
                              important.
                               important.
© 2005 Prentice Hall Inc.
All rights reserved.                              5–2
Person Perception: Making Judgments About
Person Perception: Making Judgments About
Others
Others

  Attribution Theory
  When individuals observe behavior, they attempt to
  determine whether it is internally or externally
  caused.

 Distinctiveness: shows different behaviors in different situations.
  Distinctiveness: shows different behaviors in different situations.
 Consensus: response is the same as others to same situation.
  Consensus: response is the same as others to same situation.
 Consistency: responds in the same way over time.
  Consistency: responds in the same way over time.



© 2005 Prentice Hall Inc.
All rights reserved.                                             5–3
Errors and Biases in Attributions
Errors and Biases in Attributions
 Fundamental Attribution Error
 The tendency to underestimate the influence of
 external factors and overestimate the influence of
 internal factors when making judgments about the
 behavior of others.




© 2005 Prentice Hall Inc.
All rights reserved.                                  5–4
Errors and Biases in Attributions (cont’d)
Errors and Biases in Attributions (cont’d)

 Self-Serving Bias
 The tendency for individuals to attribute their own
 successes to internal factors while putting the blame
 for failures on external factors.




© 2005 Prentice Hall Inc.
All rights reserved.                                5–5
Frequently Used Shortcuts in Judging Others
Frequently Used Shortcuts in Judging Others

  Selective Perception
  People selectively interpret what they see on the
  basis of their interests, background, experience,
  and attitudes.




© 2005 Prentice Hall Inc.
All rights reserved.                                  5–6
Frequently Used Shortcuts in Judging Others
Frequently Used Shortcuts in Judging Others

 Halo Effect
 Drawing a general impression about an individual on
 the basis of a single characteristic


 Contrast Effects
 Evaluation of a person’s characteristics that
 are affected by comparisons with other
 people recently encountered who rank higher
 or lower on the same characteristics.
© 2005 Prentice Hall Inc.
All rights reserved.                              5–7
Frequently Used Shortcuts in Judging Others
Frequently Used Shortcuts in Judging Others

 Projection
 Attributing one’s own characteristics to other people.


 Stereotyping
 Judging someone on the basis of one’s perception of
 the group to which that person belongs.




© 2005 Prentice Hall Inc.
All rights reserved.                                 5–8
Specific Applications in Organizations
Specific Applications in Organizations
 Employment Interview
   – Perceptual biases of raters affect the accuracy of
     interviewers’ judgments of applicants.
 Performance Expectations
   – Self-fulfilling prophecy (pygmalion effect): The lower or
     higher performance of employees reflects
     preconceived leader expectations about employee
     capabilities.
 Ethnic Profiling
   – A 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.
© 2005 Prentice Hall Inc.
All rights reserved.                                      5–9
Specific Applications in Organizations (cont’d)
Specific Applications in Organizations (cont’d)
 Performance Evaluations
   – Appraisals are often the subjective (judgmental)
     perceptions of appraisers of another employee’s job
     performance.
 Employee Effort
   – Assessment of individual effort is a subjective
     judgment subject to perceptual distortion and bias.




© 2005 Prentice Hall Inc.                                  5–
All rights reserved.                                       10
The Link Between Perceptions and Individual
The Link Between Perceptions and Individual
Decision Making
Decision Making

  Problem
  A perceived discrepancy
  between the current state of
  affairs and a desired state.   Perception
                                  Perception
                                    of the
                                     of the
                                  decision
                                   decision
 Decisions                         maker
                                    maker
 Choices made from among
 alternatives developed from
 data perceived as relevant.

                                 Outcomes
© 2005 Prentice Hall Inc.                      5–
All rights reserved.                           11
Assumptions of the Rational Decision-Making
Assumptions of the Rational Decision-Making
Model
Model

 Rational Decision-         Model Assumptions
                             Model Assumptions
 Making Model
                            •• Problem clarity
                                Problem clarity
 Describes how
                            ••   Known options
                                 Known options
 individuals should
 behave in order to         ••   Clear preferences
                                 Clear preferences
 maximize some              •• Constant
 outcome.                       Constant
                               preferences
                                preferences
                            •• No time or cost
                                No time or cost
                               constraints
                                constraints
                            •• Maximum payoff
                                Maximum payoff
© 2005 Prentice Hall Inc.                         5–
All rights reserved.                              12
The Three Components of Creativity
The Three Components of Creativity
 Creativity
 The ability to produce novel and useful ideas.

 Three-Component
 Model of Creativity
 Proposition that individual creativity requires
 expertise, creative-thinking skills, and intrinsic task
 motivation.



© 2005 Prentice Hall Inc.                                  5–
All rights reserved.                                       13
How Are Decisions Actually Made in
How Are Decisions Actually Made in
Organizations
Organizations

 Bounded Rationality
 Individuals make decisions by constructing simplified
 models that extract the essential features from
 problems without capturing all their complexity.




© 2005 Prentice Hall Inc.                           5–
All rights reserved.                                14
How Are Decisions Actually Made in
How Are Decisions Actually Made in
Organizations (cont’d)
Organizations (cont’d)
 How/Why problems are identified
   – Visibility over importance of problem
       • Attention-catching, high profile problems
       • Desire to “solve problems”
   – Self-interest (if problem concerns decision maker)
 Alternative Development
   – Satisficing: seeking the first alternative that solves
     problem.
   – Engaging in incremental rather than unique problem
     solving through successive limited comparison of
     alternatives to the current alternative in effect.
© 2005 Prentice Hall Inc.                                 5–
All rights reserved.                                      15
Common Biases and Errors
Common Biases and Errors
 Overconfidence Bias
   – Believing too much in our own decision competencies.
 Anchoring Bias
   – Fixating on early, first received information.
 Confirmation Bias
   – Using only the facts that support our decision.
 Availability Bias
   – Using information that is most readily at hand.
 Representative Bias
   – Assessing the likelihood of an occurrence by trying to
     match it with a preexisting category.
© 2005 Prentice Hall Inc.                               5–
All rights reserved.                                    16
Common Biases and Errors
Common Biases and Errors
 Escalation of Commitment
   – Increasing commitment to a previous decision in spite
     of negative information.
 Randomness Error
   – Trying to create meaning out of random events by
     falling prey to a false sense of control or superstitions.
 Hindsight Bias
   – Falsely believing to have accurately predicted the
     outcome of an event, after that outcome is actually
     known.



© 2005 Prentice Hall Inc.                                   5–
All rights reserved.                                        17
Intuition
 Intuition
 Intuitive Decision Making
   – An unconscious process created out of distilled
     experience.
 Conditions Favoring Intuitive Decision Making
   –   A high level of uncertainty exists
   –   There is little precedent to draw on
   –   Variables are less scientifically predictable
   –   “Facts” are limited
   –   Facts don’t clearly point the way
   –   Analytical data are of little use
   –   Several plausible alternative solutions exist
   –   Time is limited and pressing for the right decision
© 2005 Prentice Hall Inc.                                    5–
All rights reserved.                                         18
Organizational Constraints on Decision Makers
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.
© 2005 Prentice Hall Inc.                                   5–
All rights reserved.                                        19
Cultural Differences in Decision Making
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




© 2005 Prentice Hall Inc.                           5–
All rights reserved.                                20
Ethics in Decision Making
Ethics in Decision Making
 Ethical Decision Criteria
   – Utilitarianism
       • Seeking the greatest good for the greatest number.
   – Rights
       • Respecting and protecting basic rights of individuals
         such as whistleblowers.
   – Justice
       • Imposing and enforcing rules fairly and impartially.




© 2005 Prentice Hall Inc.                                        5–
All rights reserved.                                             21
Ethics in Decision Making
Ethics in Decision Making
 Ethics and National Culture
   – There 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.




© 2005 Prentice Hall Inc.                               5–
All rights reserved.                                    22
Ways to Improve Decision Making
Ways to Improve Decision Making
1. Analyze the situation and adjust your decision
   making style to fit the situation.
2. Be aware of biases and try to limit their impact.
3. Combine rational analysis with intuition to
   increase decision-making effectiveness.
4. Don’t assume that your specific decision style is
   appropriate to every situation.
5. Enhance personal creativity by looking for novel
   solutions or seeing problems in new ways, and
   using analogies.
© 2005 Prentice Hall Inc.                         5–
All rights reserved.                              23

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Ob11 05st

  • 1. Chapter 5 Perception and Individual Decision Making ORGANIZATIONAL BEHAVIOR S T E P H E N P. R O B B I N S E L E V E N T H E D I T I O N © 2005 Prentice Hall Inc. WWW.PRENHALL.COM/ROBBINS PowerPoint Presentation All rights reserved. by Charlie Cook
  • 2. What Is Perception, and Why Is It Important? What Is Perception, and Why Is It Important? Perception A process by which ••People’s behavior is People’s behavior is individuals organize and based on their based on their interpret their sensory perception of what perception of what impressions in order to reality is, not on reality is, not on give meaning to their reality itself. reality itself. environment. ••The world as it is The world as it is perceived is the world perceived is the world that is behaviorally that is behaviorally important. important. © 2005 Prentice Hall Inc. All rights reserved. 5–2
  • 3. Person Perception: Making Judgments About Person Perception: Making Judgments About Others Others Attribution Theory When individuals observe behavior, they attempt to determine whether it is internally or externally caused. Distinctiveness: shows different behaviors in different situations. Distinctiveness: shows different behaviors in different situations. Consensus: response is the same as others to same situation. Consensus: response is the same as others to same situation. Consistency: responds in the same way over time. Consistency: responds in the same way over time. © 2005 Prentice Hall Inc. All rights reserved. 5–3
  • 4. Errors and Biases in Attributions Errors and Biases in Attributions Fundamental Attribution Error The tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgments about the behavior of others. © 2005 Prentice Hall Inc. All rights reserved. 5–4
  • 5. Errors and Biases in Attributions (cont’d) Errors and Biases in Attributions (cont’d) Self-Serving Bias The tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factors. © 2005 Prentice Hall Inc. All rights reserved. 5–5
  • 6. Frequently Used Shortcuts in Judging Others Frequently Used Shortcuts in Judging Others Selective Perception People selectively interpret what they see on the basis of their interests, background, experience, and attitudes. © 2005 Prentice Hall Inc. All rights reserved. 5–6
  • 7. Frequently Used Shortcuts in Judging Others Frequently Used Shortcuts in Judging Others Halo Effect Drawing a general impression about an individual on the basis of a single characteristic Contrast Effects Evaluation of a person’s characteristics that are affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics. © 2005 Prentice Hall Inc. All rights reserved. 5–7
  • 8. Frequently Used Shortcuts in Judging Others Frequently Used Shortcuts in Judging Others Projection Attributing one’s own characteristics to other people. Stereotyping Judging someone on the basis of one’s perception of the group to which that person belongs. © 2005 Prentice Hall Inc. All rights reserved. 5–8
  • 9. Specific Applications in Organizations Specific Applications in Organizations  Employment Interview – Perceptual biases of raters affect the accuracy of interviewers’ judgments of applicants.  Performance Expectations – Self-fulfilling prophecy (pygmalion effect): The lower or higher performance of employees reflects preconceived leader expectations about employee capabilities.  Ethnic Profiling – A 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. © 2005 Prentice Hall Inc. All rights reserved. 5–9
  • 10. Specific Applications in Organizations (cont’d) Specific Applications in Organizations (cont’d)  Performance Evaluations – Appraisals are often the subjective (judgmental) perceptions of appraisers of another employee’s job performance.  Employee Effort – Assessment of individual effort is a subjective judgment subject to perceptual distortion and bias. © 2005 Prentice Hall Inc. 5– All rights reserved. 10
  • 11. The Link Between Perceptions and Individual The Link Between Perceptions and Individual Decision Making Decision Making Problem A perceived discrepancy between the current state of affairs and a desired state. Perception Perception of the of the decision decision Decisions maker maker Choices made from among alternatives developed from data perceived as relevant. Outcomes © 2005 Prentice Hall Inc. 5– All rights reserved. 11
  • 12. Assumptions of the Rational Decision-Making Assumptions of the Rational Decision-Making Model Model Rational Decision- Model Assumptions Model Assumptions Making Model •• Problem clarity Problem clarity Describes how •• Known options Known options individuals should behave in order to •• Clear preferences Clear preferences maximize some •• Constant outcome. Constant preferences preferences •• No time or cost No time or cost constraints constraints •• Maximum payoff Maximum payoff © 2005 Prentice Hall Inc. 5– All rights reserved. 12
  • 13. The Three Components of Creativity The Three Components of Creativity Creativity The ability to produce novel and useful ideas. Three-Component Model of Creativity Proposition that individual creativity requires expertise, creative-thinking skills, and intrinsic task motivation. © 2005 Prentice Hall Inc. 5– All rights reserved. 13
  • 14. How Are Decisions Actually Made in How Are Decisions Actually Made in Organizations Organizations Bounded Rationality Individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity. © 2005 Prentice Hall Inc. 5– All rights reserved. 14
  • 15. How Are Decisions Actually Made in How Are Decisions Actually Made in Organizations (cont’d) Organizations (cont’d)  How/Why problems are identified – Visibility over importance of problem • Attention-catching, high profile problems • Desire to “solve problems” – Self-interest (if problem concerns decision maker)  Alternative Development – Satisficing: seeking the first alternative that solves problem. – Engaging in incremental rather than unique problem solving through successive limited comparison of alternatives to the current alternative in effect. © 2005 Prentice Hall Inc. 5– All rights reserved. 15
  • 16. Common Biases and Errors Common Biases and Errors  Overconfidence Bias – Believing too much in our own decision competencies.  Anchoring Bias – Fixating on early, first received information.  Confirmation Bias – Using only the facts that support our decision.  Availability Bias – Using information that is most readily at hand.  Representative Bias – Assessing the likelihood of an occurrence by trying to match it with a preexisting category. © 2005 Prentice Hall Inc. 5– All rights reserved. 16
  • 17. Common Biases and Errors Common Biases and Errors  Escalation of Commitment – Increasing commitment to a previous decision in spite of negative information.  Randomness Error – Trying to create meaning out of random events by falling prey to a false sense of control or superstitions.  Hindsight Bias – Falsely believing to have accurately predicted the outcome of an event, after that outcome is actually known. © 2005 Prentice Hall Inc. 5– All rights reserved. 17
  • 18. Intuition Intuition  Intuitive Decision Making – An unconscious process created out of distilled experience.  Conditions Favoring Intuitive Decision Making – A high level of uncertainty exists – There is little precedent to draw on – Variables are less scientifically predictable – “Facts” are limited – Facts don’t clearly point the way – Analytical data are of little use – Several plausible alternative solutions exist – Time is limited and pressing for the right decision © 2005 Prentice Hall Inc. 5– All rights reserved. 18
  • 19. Organizational Constraints on Decision Makers 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. © 2005 Prentice Hall Inc. 5– All rights reserved. 19
  • 20. Cultural Differences in Decision Making 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 © 2005 Prentice Hall Inc. 5– All rights reserved. 20
  • 21. Ethics in Decision Making Ethics in Decision Making  Ethical Decision Criteria – Utilitarianism • Seeking the greatest good for the greatest number. – Rights • Respecting and protecting basic rights of individuals such as whistleblowers. – Justice • Imposing and enforcing rules fairly and impartially. © 2005 Prentice Hall Inc. 5– All rights reserved. 21
  • 22. Ethics in Decision Making Ethics in Decision Making  Ethics and National Culture – There 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. © 2005 Prentice Hall Inc. 5– All rights reserved. 22
  • 23. Ways to Improve Decision Making Ways to Improve Decision Making 1. Analyze the situation and adjust your decision making style to fit the situation. 2. Be aware of biases and try to limit their impact. 3. Combine rational analysis with intuition to increase decision-making effectiveness. 4. Don’t assume that your specific decision style is appropriate to every situation. 5. Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies. © 2005 Prentice Hall Inc. 5– All rights reserved. 23