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Copyright © 2012 Pearson Education

Chapter 5

Ind ividual Percep t ion and

Decision-Making

5-1

Essentials of

Organizational Behavior , 11/eGlobal Edition

Stephen P. Robbins & Timothy A. Judge




After studying this chapter, you should be

able to:5-2

1. Define perception, and explain the factors that

influence it.

2. Identify the shortcuts individuals use in making

judgments about others.3. Explain the link between perception and decision

making.

4. List and explain the common decision biases or

errors.5. Contrast the three ethical decision criteria.

6. Define creativity, and discuss the three-component

model of creativity.




Perception5-3

A 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.




Factors Influencing Perception5-4




Person Perception: Attribution

Theory5-5

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 individual

External – the person is forced into the behavior

by outside events/causes




Determinants of Attribution5-6

Distinctiveness – whether an individual displaysdifferent behaviors in different situations (theuniqueness of the act)

Consensus – does everyone who faces a similarsituation respond in the same way as theindividual did

Consistency – does the person respond the sameway over time




Determination of Attribution5-7




Attribution Errors5-8

Fundamental Attribution Error

The tendency to underestimate the influence of external

factors and overestimate that of internal factors.

Self-Serving Bias

Occurs when individuals overestimate their own (internal)

influence on successes and overestimate the external

influences on their failures.




Shortcuts Used in Judging Others

5-9

Selective Perception – a perceptual filtering processbased on interests, background, and attitude. May allowobservers to draw unwarranted conclusions from anambiguous situation.

Halo Effect – drawing a general impression based on asingle characteristic.

Contrast Effects – our reaction is influenced by otherswe have recently encountered (the context of theobservation).

Stereotyping – judging someone on the basis of theperception of the group to which they belong.




The Link Between Perception and Decision

Making5-10

Decision making occurs as a reaction to aperceived problem

Perception influences:

Awareness that a problem exists The interpretation and evaluation of information

Bias of analysis and conclusions




Rational Decision-Making Model

5-11

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.

Seldom actually used: more of a goal than a

practical method




Assumptions of the Model5-12

Complete knowledge of the situation

All relevant options are known in an

unbiased manner

The decision-maker seeks the highest utility




Bounded Rationality5-13

The 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




Decision Making in Bounded

Rationality5-14

Simpler than rational decision making, composed

of three steps:

1. Limited search for criteria and alternatives – familiar criteria and easily found alternatives

2. Limited review of alternatives – focus

alternatives, similar to those already in effect

3. Satisficing – selecting the first alternative that is“good enough”




Intuitive Decision Making5-15

An non-conscious process

created out of distilled

experience Increases with experience

Can be a powerful complement

to rational analysis in decisionmaking




Common Biases and Errors5-16

Overconfidence Bias

As managers and employees become moreknowledgeable about an issue, the less likely they are todisplay overconfidence

Anchoring Bias

A tendency to fixate on initial information and fail toadequately adjust for subsequent information

Confirmation BiasSeeking out information that reaffirms our past choicesand discounting information that contradicts past

judgments




Common Biases and Errors5-17

Availability Bias

The tendency to base judgments on information that is readilyavailable

Escalation of Commitment

Staying with a decision even when there is clear evidence thatit is wrong

Risk Aversion

Preferring a sure thing over a risky outcome

Hindsight Bias

The tendency to believe falsely that we could have accuratelypredicted the outcome of an event after that outcome is alreadyknown




Organizational Constraints on Decision

Making5-18

Performance evaluations

Reward systems

Formal regulations

Self-imposed time constraints

Historical precedents




Ethical Frameworks for Decision

Making5-19

Utilitarian

Provide the greatest good for the

greatest number

Rights

make decisions consistent with

fundamental liberties and

privileges

Justice

impose and enforce rules fairly

and impartially so that there is

equal distribution of benefits and

costs




Creativity in Decision Making5-20

The ability to produce novel

and useful ideas

Helps people to:

Better understand the problem

See problems others can’t see

Identify all viable alternatives

Identify alternatives that aren’treadily apparent




Three-Component Model of Creativity

5-21

Expertise

IntrinsicTask

Motivation

Creative-

ThinkingSkills




Global Implications

5-22

Attributions:

Cross-cultural differences exist – especially in

collectivist traditionsDecision Making:

Cultural background of the decision maker can

have significant influence on decisions made

Ethics: No global ethical standards exist

Need organizational-level guidance




Implications for Managers5-23

Perception:

To increase productivity, influence workers’

perceptions of their jobs

To improve decision making:1. Analyze the situation

2. Adjust your decision approach

3. Be aware of biases and minimize their impact4. Combine rational analysis with intuition

5. Try to enhance your creativity




Keep in Mind… 5-24

1. People have inherent biases in

perception and decision making Understanding those biases allows for better

prediction of behavior

2. Biases can be helpful Managers must determine when the bias may

be counterproductive

3. Creativity aids in decision making Helps to appraise, understand, and identify

problems




Summary5-25

1. Defined perception and explained the factors thatinfluence it.

2. Identified the shortcuts individuals use in making

judgments about others.3. Explained the link between perception and decision-making.

4. Listed and explained the common decision biases or

errors.5. Contrasted the three ethical decision criteria.

6. Defined creativity and discussed the three-componentmodel of creativity.




5-26

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