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Chapter SIX

Perception and

Individual Decision Making

What is the perceptual process?

Perception.

The process by which people select, organize, interpret, retrieve, and respond to information.

Perceptual information is gathered from:

Sight.

Hearing.

Touch.

Taste.

Smell.

information. – Perceptual information is gathered from: • Sight. • Hearing. • Touch. • Taste. •

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Person Perception: Making Judgments

About Others

Person Perception: Making Judgments About Others Distinctiveness: shows different behaviors in different situations.
Person Perception: Making Judgments About Others Distinctiveness: shows different behaviors in different situations.
Distinctiveness: shows different behaviors in different situations. Consensus: response is the same as others to
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. 4

Errors and Biases in Attributions

Errors and Biases in Attributions 6

Errors and Biases in Attributions

(cont’d)

Errors and Biases in Attributions (cont’d) 7
Errors and Biases in Attributions (cont’d) 7

Common shortcuts in judging others

Selective Perception

Halo effect

Stereo typing

Contrast effect

Common Shortcuts in Judging Others

Common Shortcuts in Judging Others 9

Common Shortcuts in Judging Others

Common Shortcuts in Judging Others 10
Common Shortcuts in Judging Others 10
Common Shortcuts in Judging Others 10

Common Shortcuts in Judging Others

Common Shortcuts in Judging Others 11
Common Shortcuts in Judging Others 11
Common Shortcuts in Judging Others 11

Specific Applications of shortcuts in

Organizations

Employment Interview

Perceptual biases affect the accuracy of

interviewers’ judgments of applicants.

Performance Expectations

Self-fulfilling prediction (Pygmalion effect ): The

lower or higher performance of employees reflects preconceived leader expectations about employee

capabilities.

Performance Evaluations

Appraisals are subjective perceptions

performance.

of

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The Link Between Perceptions and

Individual Decision Making

The Link Between Perceptions and Individual Decision Making Perceptions of the decision maker Outcomes 13

Perceptions of

the decision maker

The Link Between Perceptions and Individual Decision Making Perceptions of the decision maker Outcomes 13

Outcomes

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Decision Making in Organizations

Rational Decision-

Making Model

Describes how

individuals should behave in order to

maximize some

outcome.

Model Assumptions

Problem clarity

Known options

Clear preferences

Constant

preferences

No time or cost

constraints

 

Maximum payoff

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Common Bias and Errors in Decision

Making

• Overconfidence Bias
• Overconfidence Bias

Believing too much in our own decision competencies.

• Anchoring Bias
• Anchoring Bias

Fixating on early, first received information.

• Confirmation Bias
• Confirmation Bias

Using only the facts that support our decision.

• Availability Bias
• Availability Bias

Using information that is most readily at hand.16

Common Bias and Errors in Decision

Making

• Representative Bias
• Representative Bias

Assessing the likelihood of an occurrence by trying to match it with a preexisting category.

• Escalation of commitment
• Escalation of commitment

An increased commitment to a previous decision in spite of negative information.

• Randomness Error
• Randomness Error

The tendency of individuals to believe that they can predict the outcome of random events

Common Bias and Errors in Decision

Making

• Risk Aversion:
• Risk Aversion:

The tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher

expected payoff.

• Hindsight Bias
• Hindsight Bias

The tendency to believe falsely, after an

outcome of an event is actually known, that one would have accurately predicted that outcome

Individual Differences on Decision

Making

• Personality • Gender • Mental Ability • Cultural Differences
• Personality
• Gender
• Mental Ability
• Cultural Differences

Organizational Constraints on Decision Makers

•
Performance Evaluation
Performance Evaluation

Evaluation criteria influence the choice of actions.

•
Reward Systems
Reward Systems

Decision makers make action choices that are favored by the organization.

•
Formal Regulations
Formal Regulations

Organizational rules and policies limit the alternative choices of decision makers.

•
System-imposed Time Constraints
System-imposed Time Constraints

Organizations require decisions by specific deadlines.

•
Historical Precedents
Historical Precedents

Past decisions influence current decisions.

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Ethics in Decision Making

Ethical Decision Criteria

– Utilitarianism
– Utilitarianism

Decisions made based solely on the outcome

Seeking the greatest good for the greatest number

Dominant method for businesspeople

– Rights
– Rights

Decisions consistent with fundamental liberties and privileges

Respecting and protecting basic rights of individuals

such as whistleblowers

– Justice
– Justice

Imposing and enforcing rules fairly and impartially

Equitable distribution of benefits and costs

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Improving Creativity in Decision

Making

Creativity

Improving Creativity in Decision Making Creativity The ability to produce novel and useful ideas. Three-Component Model

The ability to produce novel and useful ideas.

Three-Component

Model of Creativity

Proposition that individual

creativity requires expertise,

creative-thinking skills, and intrinsic task motivation.

End

Of CHAPTER 6