what is organizational...

Chapter 5

Perceptual Process

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Learning Objectives

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1 Explain the factors that influence perception.

2 Describe attribution theory.

3 Explain the link between perception and decision making.

4 Contrast the rational model of decision making with bounded rationality and intuition.

5 Explain how individual differences and organizational constraints affect decision making.

6 Contrast the three ethical decision criteria.

7 Describe the three-stage model of creativity.

What is Perception?

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Perception

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

People’s behavior is based on their perception of what reality is, not on reality itself

What is Perception?

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Factors that Influence Perception

Perception

Novelty – Motion – Sounds – Size

– Background – Proximity -

Similarity

Time – Work setting – Social

setting

Attitudes – Motives –Interests –

Experience - Expectations

Factors in the targetFactors in the situation

Factors in the perceiver

Person Perception: Making Judgments

About Others

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Attribution Theory

An attempt to determine whether an individual’s behavior is internally or externally caused


About Others

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The Attribution Process

Observation

of Behavior

Distinctiveness

Consensus

Consistency

Internal or

External

Causes

Observation Interpretation Attribution of Cause

Different behavior in different

situations

Consensus with others behavior

The same behavior every time

IE

IE

EI

LH

LH

LH


About Others

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Attribution Errors and Biases

Fundamental

Attribution Error

The tendency to underestimate the influence of external factors andoverestimate the influence of internal factors when making judgments aboutthe behavior of others

We blame people first, not the situation

Self-Serving BiasThe tendency for individuals to attribute their own successes to internalfactors while putting the blame for failures on external factors

It is “our” success but “their” failure


About Others

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Common Shortcuts in Judging Others

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

Halo EffectDrawing a general impression about an individual on the basis of a singlecharacteristic

Contrast EffectsEvaluation of a person’s characteristics that are affected by comparisonswith other people recently encountered who rank higher or lower on thesame characteristics

StereotypingJudging someone on the basis of one’s perception of the group to whichthat person belongs – a prevalent and often useful, if not always accurate,generalization

ProfilingA form of stereotyping in which members of a group are singled out forintense scrutiny based on a single, often racial, trait


About Others

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Specific Applications of Shortcuts in Organizations

Employment Interviews - Performance Expectations - Performance Evaluations … etc.

The Link Between Perception and

Individual Decision Making

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Decision Choices made from among alternatives

ProblemA perceived discrepancy between the current state of affairs and a desiredstate

Decision making occurs as a reaction to a problem

No problem no need to make decision

No alternatives no decision

Perception LinkageAll elements of problem identification and the decision making process areinfluenced by perception (interpret and evaluate information)

Problems must be recognized - Data must be selected and evaluated

Decision Making in Organizations

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Decision Making Models

1Rational DecisionMaking Model

A decision-making model that describes how individuals shouldbehave in order to maximize some outcome.

Six-step decision-making process

The “perfect world” model: assumes complete information, all options known, and maximumpayoff

Rational: Characterized by making consistent, value-maximizing choices within specifiedconstraints.

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


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Decision Making Models

2Bounded RationalDecision MakingModel

A process of making decisions by constructing simplified models thatextract the essential features from problems without capturing alltheir complexity.

The “real world” model: seeks satisfactory and sufficient solutions from limited data andalternatives

3Intuitive DecisionMaking Model

A non-conscious process created from distilled experience

Results in quick decisions - Relies on holistic associations - Affectively charged “engaging the emotions”


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Common Biases and Errors in Decision Making

Overconfidence BiasBelieving too much in our own ability to make good decisions – especiallywhen outside of own expertise

Anchoring biasA tendency to fixate on initial information, from which one then fails toadequately adjust for subsequent information.

Confirmation BiasThe tendency to seek out information that reaffirms past choices and todiscount information that contradicts past judgments.

Availability BiasThe tendency for people to base their judgments on information that isreadily available to them.


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Common Biases and Errors in Decision Making

Escalation ofCommitment

An increased commitment to a previous decision in spite of negativeinformation.

Randomness ErrorThe tendency of individuals to believe that they can predict the outcome ofrandom events.

Risk AversionThe tendency to prefer a sure gain of a moderate amount over a riskieroutcome, even if the riskier outcome might have a higher expected payoff.

Hindsight BiasThe tendency to believe falsely, after an outcome of an event is actuallyknown, that one would have accurately predicted that outcome.

Influences on Decision Making: Individual

Differences and Organizational Constraints

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Individual Differences

1 Personality

Conscientiousness may effect escalation of commitment

Achievement strivers (oriented) are likely to increase commitment. Also, more susceptible

to hindsight bias

Dutiful people are less likely to have this biasHigh self-esteem people are susceptible to

self-serving bias

2 GenderDecision making by men and women is about

equal in quality

while women become more empathetic and their decision making improves

In stressful situations men become more egocentric and make more risky decisions



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Individual Differences

1 General Mental Ability

Employees with high level of mental ability are quick, more able to solve problems, learn

faster

Still the fall in errors like anchoring bias, overconfidence, and escalation of

commitment

But they are better able to avoid logical errors

2 Cultural DifferencesThere are probably important cultural

differences in decision making, but not yet much research to identify them

Cultures differ in their time orientation, the importance of rationality, their belief in the ability of people to solve problems, and their preference for collective decision making.



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Organizational Constraints

1 Performance evaluation systems

2 Reward systems

3 Formal regulations

4 System imposed time constraints

5 Historical precedents

What About Ethics in Decision Making?

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Three Ethical Decision Criteria

1 Utilitarianism

2 Rights

3 Justice

A system in which decisions are made to provide the greatest good for thegreatest number (Decisions made based solely on the outcome).

Promotes efficiency and productivity

Can ignore individual rights, especially minorities

Decisions consistent with fundamental liberties and privileges

Protects individuals from harm, preserves rights

Creates an overly legalistic work environment

Imposing and enforcing rules fairly and impartially

Protects the interests of weaker members

Encourages a sense of entitlement

High

Productivity

Less

Productivity

Low risk taking

What About Ethics in Decision Making?

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Choosing between Criteria

CSR is now beginning to make good business sense, folding ethics into utilitarian computations.

Behavioral Ethics

Analyzing how people actually behave when confronted with ethical dilemmas.

Lying

Lying is deadly to decision making

Creativity, Creative Decision Making,

and Innovation in Organizations

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Creativity

The ability to produce novel and useful ideas



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Three Stage Model of Creativity

Stage - 1 Causes of Creative Behavior

Stage - 2 Creative Behavior

Stage - 3 Creative Outcomes (Innovation)

Creative Potential Creative Environment

Problem formulation - Information gathering - Idea generation - Idea evaluation

Novelty Usefulness



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Causes of Creative Behavior

a Intelligence and Creativity b Personality and Creativity

c Expertise and Creativity d Ethics and Creativity

1 Creativity Potential

Those who score high in openness to experience, intelligent, independent, creative thinking skills, self-confident, risk-taking, have an internal locus-of-control, tolerant of ambiguity, low

need for structure, intrinsic task motivation, and who persevere in the face of frustration … etc.



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Causes of Creative Behavior

2 Creative Environment

Intrinsic task motivation (the desire to do the job because of its characteristics), environment

that rewards and recognizes creative work, foster the free flow of ideas, structural empowerment,

psychological empowerment, diversity … etc.



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Creative Behavior

1 Problem formulation

2 Information gathering

3 Idea generation

4 Idea evaluation



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Creative Outcomes (Innovation)

Creative Outcomes Ideas or solutions judged to be novel and useful by relevant stakeholders

Novelty itself does not generate a creative outcome if it isn’t useful.

Thus, solutions are creative only if they help solve the problem.

Novelty and usefulness are complementary to each other

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