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Chapter 6 Perception and Decision Process

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20 views

Chapter 6 Perception and Decision Process

Uploaded by

cf2z9wdshy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Perception and Decision

Process
Chapter 6
Learning Outcomes
• Define perception, and explain the factors that influence it
• Explain attribution theory, and describe the common shortcuts
used in judging others
• Explain the link between perception and decision making
• Contrast the rational model of decision making with bounded
rationality and intuition
• Identify the common decision biases or errors
• Explain how individual differences and organisational
constraints affect decision making
• Contrast the three ethical decision criteria
• Define creativity, and describe the three-stage model of
creativity
What is
perception
• A process by which individuals
organise and interpret sensory
impressions in order to give
meaning to their environment
• Perception can be substantially
different from objective reality
(why?)

People have inherent biases in how they see others (perception)


and in how they make decisions (decision making)
We can better understand people by understanding these biases
Factors that influence
perception
• A number of factors can shape and sometimes distort
perception
• They can reside in the perceiver ; the object being
perceived
OR
• In the situation in which the perception is made

https://youtu.be/lLnbOzaQudQ?si=EmCUUhrEPG_6TBjm
Person perception: making
judgements about others
• Person perception is the most common
perception concept relevant to OB
• Attribution Theory
• By observing people, we attempt to explain
their behaviour
• Our perceptions and judgements of a
person’s actions are influenced by the
assumptions we make about that person’s
state of mind
• Therefore, attribution theory tries to explain
the ways we judge people differently,
depending on the meaning we attribute to a
behaviour
• It suggests that when we observe an
individual's behaviour , we attempt to
determine whether it was internally or
externally caused.
Person perception:
making judgements
about others

• Attribution Theory cont..


• Determination is dependent largely on three
factors:
• Distinctiveness
• Consensus
• Consistency
Person perception:
Making judgements about others

• Internally caused behaviours are those an


observer believes to be under the control of
another individual
• Externally caused behaviour is what we imagine
the situation forced the individual to do
• Distinctiveness refers to whether an individual
displays different behaviours in different
situations
• If everyone who faces a similar situation responds
in the same way, the behaviour shows consensus
• Responding the same way over time refers to the
consistency of displayed behaviour
Attribution theory
Attribution theory

• Findings from attribution theory


research is that errors or biases distort
attribution
• Fundamental attribution error – the
tendency to underestimate the
influence of external factors and
overestimate the influence of internal
factors when making judgements about
the behaviour of others
• Self-serving bias- accepting positive
feedback and rejecting negative
feedback
Selective perception

• Selectively interpreting what you see on the basis of


Common shortcuts your own interests, background, experience and
attitudes
in
judging others Halo effect

• Drawing a general impression about an individual on the


basis of a single characteristic

Contrast effect

• Evaluation of a person’s characteristics that are affected


by comparisons with other people recently encountered
who rank higher or lower on the same characteristics

Stereotyping

• Judging someone on the basis of one’s perception of the


group to which that person belongs
Decision making in an
organisation
• Decision making occurs as a reaction to a problem
• Problem
• a perceived discrepancy between the current state of affairs and a desired state
• Decisions
• Choices made from among alternatives developed from data perceived as relevant

= perception of the decision maker = OUTCOMES


• Describes how individuals should behave in
order to maximise outcome
Assumptio • Model assumptions and steps in the rational
n of the decision-making model
• Define the problem ( problem clarity)
rational • Identify the decision criteria (known options)
decision- • Allocate weights to the criteria ( clear
preferences)
making • Develop the alternatives ( constant preferences)
model • Evaluate the alternatives ( no time or cost
constraints)
• Select the best alternative ( maximum payoff)
• The human mind cannot always formulate
Bounded and solve complex problems with full
rationality rationality, we operate within the confines of
bounded rationality
• Intuitive decision making
• an unconscious process created out of
distilled experience
• Conditions favouring intuitive decision making

Intuitio • A high level of uncertainty exists


• There is little precedent to draw on
• Variables are less scientifically predictable

n • “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
Overconfidence bias

• We tend to overconfident about our abilities and about the


abilities of others, and that we are usually not aware of
this bias

Common Anchoring Bias

biases and • Using early, first received information as the basis for
making subsequent judgments
errors in
decision
Confirmation bias

• Selecting and using only facts that support our decision


making
Availability Bias

• Emphazsing information that is most readily at hand


• Recent
• Vivid
• increasing commitment to a decision
Escalation despite evidence that the information
commitment is incorrect

More Randomness • Creating meaning out of random events

common error – superstitions

decision-
making Winner's
• Highest bidder pays too much dues to
value overestimation

errors curse • Likelihood increases with the number


of people in auction

• After an outcome is already known,


Hindsight believing it could have been accurately
Bias predicted beforehand
Reducing bias and errors

1 2 3 4
Focus on goals Look for Don’t try to Increase your
information that create meaning options
disconfirms your out of random
beliefs events
Organisational constraints on
decision making
Performance evaluation Managerial evaluation criteria influence actions

Managers will make decision with the greatest


Reward systems
person payoff for them

Formal regulations Limit the alternative choices of decision makers

System-imposed time constraints Restrict ability to gather or evaluate information

Historical precedents Past decisions influence current decisions


Ethical decision criteria
• Utilitarianism
• Decisions made based solely on the outcome
• Seeking the greatest good for the greatest

Ethical
number
• Dominant method for businesspeople
• Rights
decision • Decisions consistent with fundamental liberties
and privileges
making • Respecting and protecting basic rights of
individuals such as whistle-blower's
• Justice
• Imposing and enforcing rules fairly and
impartially
• Equitable distribution of benefits and costs
Utilitarianism

• Pro: promotes efficiency and productivity

Ethical • Con: can ignore individual rights, especially


minorities

decision- Rights

making • Pro: protects individuals from harm, preserves


rights
criteria • Con: creates an overlay legalistic work environment

assessed Justice

• Pro: protect the interests of weaker members


• Con: encourages a sense of entitlement
Improvin Creativity

g • The ability to produce novel and useful ideas

creativity Who has the greatest creative potential

• Those who score high in Openness to experience


in • People who are intelligent independ, self-confident,
risk taking, have an internal locus of control,
decision tolerant of ambiguity, low need for structure, and
who persevere in the face of frustration

making
Expertise is the foundation
The three-
component
Creative thinking skills are the
model of personality characteristics
creativity associated with creativity

Intrinsic task motivation is the


desire to do the job because of its
characteristics
The
three-
stage
model of
creativity
Attributions

• There are cultural differences in the ways


people attribute cause to observed behaviour

Global Decision Making

implicatio • Based on our awareness of cultural differences


in traits that affect decision making
ns
Ethics

• Global companies need global standards for


manager
Perception

• People act based on how they view their world


• What exists is not as important as what is
believed
Managerial • Managers must also manage perception

implication Individual decision making

s • Most use bounded rationality


• Combine traditional methods with intuition and
creativity for better decisions
• Analyse the situation and adjust to culture and
organisational reward criteria
• Be aware of and minimise biases

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