Chapter 6 OB

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Copyright © 2017 Pearson Education, Inc.

Perception andIndividual

Decision MakingDr. Ong Lin Dar


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What is Perception?

Perception is a process by which individuals organize

and interpret their sensory impressions in order to give

meaning to their environment.

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Each person experiences and interpretsthe world differently from others.

People’s behaviors are based on their perception of what reality is(what they see or believe it to be), not on reality itself.


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Factors That InfuencePerception

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Attribution TheoryAttribution theory suggests that when we observe an individual’s

behavior, we attempt to determine whether it was internally or externallycaused.

etermination depends on three !actors"

# istinctiveness -- the person’s behavior in other situations

# $onsensus % how others would behave in same situation

# $onsistency -- the person’s behavior in the past

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Perception thatbehavior is causedby person’s ownmotivation or ability

nternal!ttributio

n

"#ternal!ttributio

nPerception thatbehavior is caused by

situation or ate $$beyond person’s

control


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Attribution Theory

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Internal attribution ore!ternal attribution?

'uppose an employee is ma(ing poor-)uality products one

day on a particular machine.

************* attributions are made when+.

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%he employee also ma&es poor$'uality products onother machines

Distinctivenessigh*Low

Other employees produce good"#uality products on

this machine

+onsensus

igh*Low %he employee usually ma&es poor"#uality productson this machine

+onsistencyigh*Low


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Internal attribution ore!ternal attribution?

'uppose an employee is ma(ing poor-)uality products one

day on a particular machine.

************* attributions are made when+.

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%he employee ma&es good"#uality products onother machines

Distinctivenessigh*Low

Other employees have recently had 'uality

problems on this machine

+onsensus

igh*Low %he employee ma&es good #uality products onthis machine in the past

+onsistencyigh*Low


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Attribution $rrors

Fundamenta attribution error occurs when we ignore the in!luence o! external !actors and

overemphasize the in!luence o! internal or personal !actors.

e are more li(ely to thin( cowor(ers arrive late !or wor( becausethey aren’t motivated than because o! environmental constraints

/such as tra!!ic congestion0.

1xplanation"

bservers can’t easily see the external !actors.

eople li(e to thin( that human beings /not the situation0 are the

prime sources o! their behaviour.

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Attribution $rrors

!e"#ser$ing bias ttributing our successes to internal !actors and our !ailures to external

!actors /such as bad luc(0

e ta(e credit !or our success but blame others or situations !or

!ailure.

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%o&&on 'iases

elective Perception

alo e-ect

+ontrast "-ects

tereotype


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%o&&on (hortcuts in )udging *thers

!eecti$e perception ny characteristic that ma(es a person, ob8ect, or

event stand out will increase the probability that it

will be perceived.

'ince we can’t observe everything going on aroundus, we engage in selective perception.

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%ao e""ect ccurs when our general impression o! a person,

usually based on a single characteristic, distorts our

perceptions o! the person.

9! a colleague doesn’t complete tas(s on time, wetend to view his other traits un!avorably.

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Contrast e""ects e do not evaluate a person in isolation. ur reaction to one person is in!luenced by other

persons we have recently encountered.

:or example, a 6; &< /229cm0 bas(etball player will

ma(e an average man o! 5; < /175 cm0 loo( short.

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!tereotyping =udging someone on the basis o! our

perception o! the group to which he or she

belongs.

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Applications o (hortcuts in*rgani+ations

1mployment 9nterview9nterviewers generally draw early impressions that

become very )uic(ly entrenched.

'tudies indicate that most interviewers’ decisions

change very little a!ter the !irst !our or !ive minutes

o! the interview.

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er!ormance 1xpectations

!e"#"u"iing prophecy

1xpectations about another person cause that

person to act in a way that is consistent with those

expectations

1xpectations become reality.

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(el"Ful,lling Prophecy%ycle

'upervisor

!orms

expectations

1xpectations

a!!ect supervisor’s

behavior

'upervisor’s

behavior a!!ects

employee

1mployee’s

behavior matches

expectations

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er!ormance 1valuation n employee’s per!ormance appraisal is very much

dependent upon the perceptual process.

>any 8obs are evaluated in sub8ective terms.

'ub8ective measures are problematic because o!

selective perception, contrast e!!ects, halo e!!ects,

and so on.

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Decision Making

9ndividuals ma(e decisions % choosing !rom

two or more alternatives.

ecision ma(ing occurs as a reaction to aprobem.

roblem" deviation between ?what is< and

?what ought to be<

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-ational Model o DecisionMaking

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-ational Model o DecisionMaking

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>ost decisions in the real world don’t !ollow the rational model.

e!ine how a decision ma(er shoud ma(e decisions


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Decision Making Models

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>ost decisions in the real world don’t !ollow the rationalmodel.

>anagers ma(e decisions rationally but are limited /or

bounded0 by their ability to process in!ormation.

https"@@www.youtube.com@watchAvBr74zuwiw

https://www.youtube.com/watch?v=rP4P1zuwDiwhttps://www.youtube.com/watch?v=rP4P1zuwDiwhttps://www.youtube.com/watch?v=rP4P1zuwDiw


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'ounded -ationality

Describes how managers actually ma&e decisions in comple# situations

Due to time limitations, managers can use and process only a limited amount ofinformation for decision$ma&ing and therefore must satis,ce

(atis,cing $$choose the rst solution that can solve the problem even thoughbetter solutions may e#ist


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Intuition

Intuiti$e decision ma&ing occurs outside consciousthoughtC it relies on holistic associations, or lin(s between

disparate pieces o! in!ormation, is !ast, and is a!!ectively

charged, meaning it usually engages the emotions.

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%o&&on 'iases and $rrorsin Decision Making

'$ercon"idence (ias) eople thin( they

(now more than they do, and it costs themD

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Anchoring (ias) !ixating on initial in!ormation as a starting

point and !ailing to ade)uately ad8ust !or subse)uent

in!ormation.

Eendency to rely too heavily, or Fanchor,F on one trait or piece o!

in!ormation when ma(ing decisions.

:or example, a person loo(ing to buy a used car - they may

!ocus excessively on the odometer reading and the year o! the

car, and use those criteria as a basis !or evaluating the value o!

the car, rather than considering how well the engine or thetransmission is maintained.

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Con"irmation (ias)

# type o! selective perception.

# 'ee( out in!ormation that rea!!irms past choices, and ignore

in!ormation that contradicts past 8udgments.

# :or example, suppose an investor hears a rumor that a company is

on the verge o! declaring ban(ruptcy. Gased on that in!ormation, the

investor is considering selling the stoc(.

# hen he goes online to read the latest news about the company, he

tends to read only the stories that con!irm the li(ely ban(ruptcy scenarioand he misses a story about the new product the company 8ust

launched that is expected to per!orm extremely well.

# 9nstead o! holding the stoc(, he sells it at a substantial loss 8ust be!ore it

turns around and climbs to an all-time high.

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A$aiabiity (ias) tendency !or people to base

8udgments on in!ormation that is readily available.

:or example, since lottery organisers heavilypromote the 8ac(pot winners, people are continually

hearing about those who’ve won big.

n the other hand they hear almost nothing about

the vast ma8ority o! people who haven’t won a bean. 'o people assume they are much more li(ely to win

the lottery than they really are.

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Escaation o" Commitment) staying with adecision even when there is clear evidence that

it’s wrong.

*andomness Error) our tendency to believe we

can predict the outcome o! random events.

e turn our imaginary into superstitious. Tiger woods often wears a red shirt during final round because he

won many tournaments wearing red shirts.

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*is& A$ersion) the tendency to pre!er a sure thing

instead o! a ris(y outcome.

>ost managers appear to be especially ris( averse,

perhaps because they don’t want to lose

everything they’ve wor(ed so hard to achieve.

%indsight (ias) the tendency to believe !alsely that

one has accurately predicted the outcome o! an event,

a!ter that outcome is actually (nown.

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Individual Di.erences ersonality

# chievement-oriented people hate to !ail, so they escalate their

commitment, hoping to !orestall !ailure.# uti!ul people, by contrast, are more inclined to do what they see as best

!or the organization.

Hender

# 1vidence indicates that women analyze decisions more than men.

>ental bility

# people with higher levels o! mental ability are less susceptible to common

decision errors

$ultural i!!erences

# hile rationality is valued in Iorth merica, that’s not true elsewhere in the

world.

# ecision ma(ing by =apanese managers is much more group-oriented than in

the Jnited 'tates.

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*rgani+ational %onstraints

er!ormance 1valuation 'ystems Keward 'ystems

:ormal Kegulations

'ystem-9mposed Eime $onstraints /deadlines on

decisions0 Listorical recedents

# ecisions made in the past are ghosts, which

continually haunt current choices.

# :or example, it is common (nowledge that thelargest determining !actor o! the size o! any given

year’s budget is last year’s budget.

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escr e e ree


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escr e e ree"(tage

Model o %reativityCreati$ity is the ability to produce novel anduse!ul ideas.

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escr e e ree


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escr e e ree"(tage

Model o %reativity

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I&plications or


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I&plications orManagersGehavior !ollows perception, so to in!luence

behavior at wor(, assess how people perceive

their wor(.

>a(e better decisions by recognizing

perceptual biases and decision-ma(ing errors

we tend to commit.

Mearning about these problems doesn’t alwaysprevent us !rom ma(ing mista(es, but it does

help.

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I&plications or


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I&plications orManagers d8ust your decision-ma(ing approach to the

national culture you’re operating in and to the

criteria your organization values.

9! you’re in a country that doesn’t value

rationality, don’t !eel compelled to !ollow therational decision-ma(ing model or to try to

ma(e your decisions appear rational.

d8ust your decision approach to ensure

compatibility with the organizational culture.

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I&plications or


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I&plications orManagers$ombine rational analysis with intuition. Ehese are not

con!licting approaches to decision ma(ing.# Gy using both, you can actually improve your decision

ma(ing e!!ectiveness.

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I&plications or


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C i ht © 2017 P Ed ti I

I&plications orManagersEry to enhance your creativity.

# ctively loo( !or novel solutions to problems, attempt to see

problems in new ways, use analogies, and hire creative

talent.

#Ery to remove wor( and organizational barriers that mightimpede your creativity.

Chapter 6 OB

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