Perception and individual decision making • HALO EFFECT - Drawing a general impression

based on SINGLE characteristics .

Perception - ( Kung magaling Yung nauna , Yung nauna
- Process which individual organized and na Ang magiging basis or standard of
interpret their sensory impressions in order to judgement)
give meaning to their environment
• CONTRACTS EFFECTS – Our reaction is
FACTORS INFLUENCING PERCEPTION influenced by others we have recently encountered
( the context of observation)
1. ATTRIBUTION THEORY- Reason why you - hinahanap Ang faulty or mga Mali instead of
make decision Tama sa actions
- suggests that perceivers try to attribute the
observed behavior to a type of cause: • STEREOTYPING – Judging someone on the basis
Internal – behavior under personal control of the Perception of the group which they belong

External – person is forced into the behavior by

outside events / causes 2. THE LINK BETWEEN PERCEPTION AND
DECISION MAKING

DETERMINANTS OF ATTRIBUTION A. Rational Decision – Making Model

a) Distinctiveness – individual displays different - Model is seldom actually used ,
behavior in different situations ( uniqueness of the - It’s more of a goal than a practical method
act - Model assumes a perfect world in order to
make decision
High Distinctiveness – External - Assumes that a perfect world in order to make
decisions. It assumes that there is complete
Low Distinctiveness – Internal information, that every option has been
b) Consensus – does everyone who faces similar identified and that there is a maximum payoff.
situation respond in the way as the individual did ( i. Define the problem
being part of the trend) ii. Identify the decision criteria
iii. Allocate weights to the criteria
High consensus – External iv. Develop the alternatives
v. Evaluate the alternatives
Low consensus – internal
vi. Select the best alternative
c) Consistency- does the person respond the same
way over time B. Bounded Rationality
- The limited information-processing capability
High Consistency – internal of human beings makes it impossible to
Low consistency – External assimilate and understand all the information
necessary to optimize.
- People seek solutions that are satisfactory
ATTRIBUTION ERROR and sufficient, rather than optimal (they
• Fundamental Attribution Error – tendency to “satisfice”).
underestimate the influence of external factors and - Bounded rationality is constructing simplified
overestimate that of internal factors models that extract the essential features from
problems without capturing all their complexity
• Self – Servjng Bias – individuals overestimate their
own internal influence on successes and Simpler than rational decision making, decision
overestimate the external influences in their making under bounded rationality is composed of
failures. (Narcissist and supremacy) Blaming others three steps:
on failures
1. Limited search for criteria and alternatives
– familiar criteria and easily found alternatives
SHORTCUT USED IN JUDGING OTHERS
2. Limited review of alternatives – focus on
• SELECTIVE PERCEPTION – perceptual filtering alternatives, similar to those already in effect
process based in interest background and attitude
3. Satisficing – selecting the first alternative that
is “good enough”
C. Intuitive Decision Making ▪ Justice- Impose and enforce rules fairly and
- The third model is based on intuition. impartially so that there is equal distribution of
- This is the non-conscious process that occurs benefits and costs
as a result of experiences that result in quick
decisions
• 1. Increases with experience
• 2. Can be a powerful complement to rational 5.CREATIVITY IN ORGANIZATIONS
analysis in decision making Better decisions are those that incorporate novel and
useful ideas, or creativity. An organization will tend to
make better decisions when creative people are
3.COMMON BIASES AND ERRORS IN involved in the process. So, it is important to identify
DECISION-MAKING people who have that creative potential. Some of the
methods and theories identified in earlier chapters can
1. Overconfidence Bias help in this process. For example, those who score high
- As managers and employees become more in openness to experience tend to be more creative.
knowledgeable about an issue, the less likely
they are to display overconfidence CREATIVITY - The ability to produce novel and useful
2. Anchoring Bias ideas Helps people:
- A tendency to fixate on initial information and • See problems others can’t see
fail to adequately adjust for subsequent • Better understand the problem
information • Identify all viable alternatives
3. Confirmation Bias • Identify alternatives that aren’t readily apparent
- Seeking out information that reaffirms our past
choices and discounting information that Three-Stage Model of Creativity
contradicts past judgments
Creative behavior occurs in four steps, each of which
4. Availability Bias
leads to the next. Problem formulation, information
- Basing judgments on information that is readily
gathering, idea generation, and idea evaluation.
available
5. Escalation of Commitment Steps:
- Staying with a decision even when there is clear
evidence that it is wrong 1. Problem formulation: identify a problem or
6. Risk Aversion opportunity that requires a solution as yet unknown
- Preferring a sure thing over a risky outcome 2. Information gathering possible solutions incubate in
7. Hindsight Bias an individual’s mind
- Believing falsely that we could have predicted
the outcome of an event after that outcome is 3. Idea generation: develop possible solutions from
already known relevant information and knowledge
4. Idea evaluation: evaluate potential solutions and
identify the best one Cause of creative behavior:
4.Organizational Constraints on Decision
✓ Creative potential- Expertise is the single most
Making important predictor of creative potential
✓ Creative environment- Motivation and
Managers shape their decisions on performance
Rewards and recognition
evaluations, reward systems, and formal regulations.
They also base decisions on system imposed time Off-the-wall solutions are creative only if they help solve
constraints and historical precedents. All these factors the problem. Creative ideas do not implement
may influence the decisions that are made. themselves; translating them into creative outcomes is
a social process that requires utilizing other concepts
Ethical Frameworks for Decision Making
addressed in the text.
▪ Utilitarianism - Provide the greatest good for
CREATIVE CAUSES- CREATIVE BEHAVIOR
the greatest number (PANLAHAT)
(STEPS)- CREATIVE OUTCOMES
▪ Rights- Make decisions consistent with
fundamental liberties and privileges