This document discusses factors that influence perception and decision-making. It describes how perception is shaped by attributes of the perceiver and target, as well as situational factors. Decision-making is bounded by limited rationality and information processing capabilities. Managers satisfice by choosing adequate solutions rather than optimal ones. Creativity plays a role in generating new alternatives, while biases and constraints can create barriers in the decision-making process.

1. Group: 01 Decision Making 1
Perception
• Behaviour of a system can not be known by just knowing the elements of
which the system is made up of. (Integrating Process and inter-
dependence on elements)
• Perception is a process by which individuals organize and interpret their
sensory impressions to give meaning to the environment/Elements.
• Individual behaviour is based on their perception of what is reality and
what is not.
• The environment as it is perceived is the behaviourally important
environment.

2. Group: 01 Decision Making 2
Factor Affecting Perception
A. Factors on the Receiver side:
• Attitude
• Motives
• Interest
• Experiences
• Expectations
B. Factors in Situations :
• Time
• Work Setting
• Social Setting

3. Group: 01 Decision Making 3
Factor Affecting Perception
C. Factors on the Target side:
• Motion
• Sounds
• Size
• Backgrounds
• Similarity

4. Group: 01 Decision Making 4
Bounded Rationality
• Herbert Simon recognized that decisions are not always logical and
rational.
• Logical and rational decisions need unambiguous problems, clear goals,
and complete information needed for the decision.
• As per Simon, the Decision Maker/Manager:
1. Use incomplete/imperfect information.
2. Constrained by bounded rationality
3. Satisfise (Choose the first solution alternative that satisfies the
decision criteria).

5. Group: 01 Decision Making 5
Bounded Rationality
• Bounded rationality represent the more realistic approach to how
decisions are being made by managers.
• Bounded rationality means that managers make decisions rationally but
are limited or bounded to the ability to process information. Managers are
unable to process the complete exhaustive list of alternatives.
• Managers have the time and ability to process only a limited amount of
information.
• As a result, Managers satisfice rather than maximize (Accepting solutions
that are good enough)

6. Group: 01 Decision Making 6
Satisficing
• The term "satisfice" was coined by American scientist and Noble-
laureate Herbert Simon in 1956.
• Satisficing means rather than conducting an exhaustive search for the best
possible alternative, decision-makers search only until they identify an
alternative that meets some minimum standards or a Good enough solution.
• Satisficing is a decision-making process that strives for adequate rather than
perfect results.
• A limitation of satisficing is that there is no strict definition of an adequate or
acceptable outcome.

7. Group: 01 Decision Making 7
Case Study
• Imagine the SIP Team of a
college floated the mentioned
message for Summer
Internship Program for 2023-
2024.
• Major Companies like Big
Four and other good
companies have not even
started any process for SIP
Applications.
• Owing to the time limit and
limited alternatives
candidates will have to
satisfice rather than

8. Group: 01 Decision Making 8
Role of Creativity in Decision Making
• Creativity means the ability and power to develop new ideas. It is vital for
decision-making. Creativity differentiates a good decision-maker from a
bad one.
• Creativity is required to develop alternatives, interpret information, enrich
possibilities, and imagine consequences.
• Creative thinking is directed towards ideas creation and results in the
generation of new ideas. Creativity’s major role is to develop alternatives
that can be used for evaluation.
• Creativity plays an important role in problems that are unique and non-
repetitive.

9. Group: 01 Decision Making 9
James Young’s Stages in Creative Process
1. Immersion: Gather raw material and information through background
research and immerse yourself in the problem.
2. Digestion: Taking the information, working it over, and wrestling with it in the
mind.
3. Incubation: Putting the problem out of your conscious mind and turning the
information over to the subconscious to do the work.
4. Illumination: The birth of an idea – the phenomenon, “Eureka! I have it!”
5. Verification: Studying the idea to see if it still looks good or solves the
problem, then shaping the idea to practical usefulness.

10. Group: 01 Decision Making 10
Barriers to Decision Making
• Bounded Rationality
• Satisficing
• Organizational Constraints:
1. Performance Evaluation: Managerial Evaluation Criteria
2. Reward System: Managers will make the decision with the greatest personal Pay-
off to them.
3. Formal Regulation: Limit the alternative choices of decision-making.
4. System-Imposed Time Constraints: Restrict the ability to gather and interpret
information
5. Historical Constraints: Past decisions may influence the current one’s.

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Barriers to Decision Making
• Biases:
1. Overconfidence Bias: To hold an unrealistic positive view about oneself. Being
too positive about a solution.
2. Immediate Gratification Bias: Desiring quick payoff from decisions.
3. Anchoring Effect: Failing to adjust for subsequent information. Deciding with
very limited data.
4. Selective Perception Bias: Selecting/Interpreting events that interest the
decision makers the most.
5. Confirmation Bias: Reaffirm the past choices and avoid contradictory
information.

12. Group: 01 Decision Making 12
Barriers to Decision Making
• Biases:
6. Framing Bias: Selecting & Highlighting some aspects of the situation and
excluding others.
7. Availability Bias: Considering events that are most recent on priority.
8. Representation Bias: Failing to adjust for subsequent information. Deciding with
very limited data.
9. Randomness Bias: Creating meaning out of random events.
10. Self-Serving Bias: Taking credit for success and blaming others for failure.

13. Group: 01 Decision Making 13
Barriers to Decision Making
• Individual Differences in Decision-Making:
1. Personality :
• Dutifulness sense in the decision maker is less likely to have biases.
• High self-esteem people are susceptive to self-serving bias.
2. Gender :
• Women/Females analyze decisions more than men. (Rumination)

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