midterm -1 27 th june- class time

Adeyl Khan, Faculty, BBA, NSU

Midterm -127th June- Class Time

Covers Ch 1,2,3,420% MCQ

40% SQ40% LQ

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IOA- C2Jun 25-27

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Chapter 5 Perception and

Individual Decision Making

Muslims are terrorist!Hindus are transferring assets to India

Aborigines make trouble……..


What Is Perception, and Why Is It Important?

People’s behavior is based on their perception of what reality is, not on (objective) reality itself.

Reality Behavior

A great org. to work for


Factors Influencing Perception

Shape

Distort

PersonalCharacteristi

cs

Relationship to

background-Grouping

Context


Person Perception: Making Judgments About Others

Judging: Why people act the

way they do? What is causing it?

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.


Attribution Theory

Individual’s behavior

Everyone’s behavior

Individual’s action


Errors and Biases in Attributions

Poor Sales Performance


Errors and Biases in Attributions …


Frequently Used Shortcuts in Judging Others

Boss reprimand certain people and not others

Comprehensive Case Study- Important

problems


Frequently Used Shortcuts in Judging OthersHalo Effect

Draw a general impression about others on the basis of a single attribute/characteristic intelligence, appearance an instructor, a student who comes in

late in the first class Contrast Effect

Contrast effects (can) distort perceptions

Do we evaluate a person in isolation? Or influenced by other persons we have recently encountered.

Interviewer sees a pool of job applicants.

HP CEO- Fiorina

• Articulate, decisive, charismatic … Vs. unproven, egotistical, inflexible

Children, Animal and

You


Frequently Used Shortcuts in Judging Others- StereotypingJudge someone on the basis of

our perception of the group to which he or she belongs Generalization has

advantages! Success in the past

Women Vs. Men Relocation, Childcare

Profiling- Arab descant! Balance


Shortcuts in Organizations Employment Interview (1/10th Second, 4/5 mins)

Perceptual biases affect the accuracy of interviewers’ judgments

Performance Expectations Behave according to Expectation (Students) Self-fulfilling prophecy (pygmalion effect): The lower or

higher performance of employees reflects preconceived leader expectations about employee capabilities.

Performance Evaluations (Promotion, Pay) Appraisals are subjective perceptions. (Vs. Objective)

Assessment is a subjective judgment subject to perceptual distortion and bias

Employee Effort

Errors•Selective•Halo•Contrast


The Link Between Perceptions and Individual Decision Making

Outcomes

Reaction

Is this a problem?What is acceptable ?

Empowerment make the issue

even more critical

Perceptions of the decision maker

Adeyl Khan, Faculty, BBA, NSU15


Rational Decision-Making ModelStep follows in a

logical/rational order based on thinking

through and weighing up the alternatives

Goal Maximize outcome

1. Problem clarity2. Known options3. Clear preferences4. Constant preferences5. No time or cost

constraints6. Maximum payoff

Assumptions

Steps


Steps in the Rational Decision-Making Model

1. Define the problem.2. Identify the decision criteria.3. Allocate weights to the criteria.4. Develop the alternatives.5. Evaluate the alternatives.6. Select the best alternative.

Optimize


Source: http://en.wikipedia.org/wiki/Rational_planning_model


How Are Decisions Actually Made in Organizations


How Are Decisions Actually Made in Organizations … Identify problems

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.

Pitfalls


Common Biases and ErrorsOverconfidence Bias

• Believing too much in our own ability to make good decisions.

Anchoring Bias

• Using early, first received information as the basis for making subsequent judgments.

Confirmation Bias

• Using only the facts that support our decision.


Common Biases and ErrorsAvailability Bias

• Using information that is most readily at hand.• Recent , Vivid

Representative 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 decision.

Winner’s Curse

• Highest bidder pays too much• Likelihood of “winner’s curse” increases with the number of people in auction.


Common Biases and Errors


Common Biases and ErrorsRandomness Error

Creating meaning out of random eventsHindsight Bias

Looking back, once the outcome has occurred, and believing that you accurately predicted the outcome of an event 9/11 Prediction


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


Making Choices …Individual DifferencesPersonality

Escalation of commitment Facets of Conscientiousness

Achievement Striving Forestall failure

Dutifulness Best for the organization

Self serving bias High self esteem

Errors•Bounded Rationality•Common Biases & Errors•Intuition

Gender Rumination Analyzing decision Over-thinking Age


Organizational Constraints Managers’ Decisions

Performance Evaluation (Evaluation criteria) Division manager Vs. Negative information

Reward Systems Risk aversion at GM (Low profile

managers)Formal Regulations

Rules and policies limit the alternative- Franchise

System-imposed Time Constraints Deadlines- New product development

Historical Precedents Past decisions influence current decisions-

Budget

Decision makers make action choices that are favored by the organization


Ethics in Decision MakingUtilitarianism- Outcomes and

consequences Seeking the greatest good for the greatest

number Maximizing profit- firing decision

(Questionable!)Rights

Respecting and protecting basic rights of individuals

Protecting Whistle blowersJustice

Imposing/enforcing rules fairly and impartially.

Equitable distribution of benefits and cost


Ways to Improve Decision Making

Analyze situation and adjust decisionBe aware of biases- limit their impact.Rational analysis with intuition –effectiveEnhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies

Novel and Useful Idea

Reducing Bias

and Errors


Reducing Bias and Errors

Focus on goals. Clear goals

Decision making easier Eliminate options inconsistent w/interests

Look for information that disconfirms beliefs Considering ways we could be wrong

we’re smarter than we actually areDon’t try create meaning off randomness/coincidenceIncrease your options.

Number and diversity

Be Creative


The Three Components of Creativity


Chapter Check-Up: PerceptionIt’s your little sister’s senior school party,

and she notices that everyone is wearing the same dress she has on! Which perceptual shortcut may be occurring?

Escalation of commitment

Representative bias

Availability Bias

Hindsight Bias

Availability Bias


Chapter Check-Up: Perception If all of these perceptual shortcuts happen

unconsciously, 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.

Diversity Training


Decision Making … ExampleRashid has just discovered he is double

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. when you can take each class again costs and benefits for taking each this

semester versus later next year. He then makes his decision. You just

engaged in _____________________ ?


IOA- C5July 4-5

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midterm -1 27 th june- class time

Documents

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