Group 10

Phạm Châu Thuý Kiều – BABAWE19066

Nguyễn Hoài My – BABAWE19150
Hoàng Thị Trà My – BABAWE19180
Dương Tiến Tài – BABAWE19125

Chapter 6: Perception and individual decision making

6-1. Explain the factors that influence perception
Perception: a process by which individuals organize and interpret their sensory impressions in
order to give meaning to their environment. People’s behaviour is based on their perception of
what reality is, not on reality itself. The world as it is perceived is the world that is behaviourally
important.

A number of factors operate to shape and sometimes distort perception. These factors can
reside in the perceiver, the target or the situation in which the perception is made.

6-2. Describe attribution theory

Attribution theory: an attempt to determine whether an individual’s behaviour is internally or
externally caused. Internally caused behaviours are those we believe to be under the personal
control of the individual. External caused behaviour is what we imagine the situation forced the
individual to do. That determination depends largely on three factors:
1. Distinctiveness: refers to whether an individual displays different behaviours in different
situations.
2. Consensus: if everyone who faces a similar situation responds in the same way.
3. Consistency: does the person respond the same way over time?

Errors or biases distort attributions.

 Fundamental attribution error: tendency to underestimate influence of external factors
and overestimate influence of internal factors when making judgments about behavior
of others: We blame people first, not situation
 Self-serving bias: The tendency for individuals to attribute their own successes to
internal factors while putting the blame for failures on external factors: It is “our”
success but “their” failure

6-3. Explain the link between perception and decision making

Individuals in organizations make decisions: they make choices from among two or more
alternatives. Individual decision making is an important part of organizational behaviour. But
how individuals in organizations make decisions and the quality of their final choices are largely
influenced by their perceptions.

Decision making occurs as a reaction to a problem: a discrepancy between the current state of
affair and some desired state. The awareness that a problem exists and whether a decision
needs to be made is a perceptual issue.
6-4. Contrast the rational model of decision making with bounded rationalith and intuition
- Problem identification and decision making process are influenced by perception
- Rational decision-making model A decision-making model that describes how individuals
should behave in order to maximize some outcome - “Perfect way of solving problems “.
It consists of 6 steps:
1. Define the problem 4. Develop the alternatives
2. Identify the decision criteria 5. Evaluate the alternatives
3. Allocate weights to the criteria 6. Select the best alternative

- 4 assumptions of the model: well-defined problem, clear criteria, complete information

and stable preferences
- Bounded rationality process: of making simplified models for complex problems –
people want to be rational but their analytic ability and time is constrained. Bounded
rationality involves taking shortcuts to make quasi-rational decisions.
- Intuitive decision making: unconscious process created out of distilled experience

Common biases and errors in decision making

 Availability shortcut
- Anchoring bias: using early, first received information as the basis for making subsequent
judgments
- Availability bias: basing decisions on information that is already gathered
 Self-enhancement: we want to feel good about ourselves
- Overconfidence bias: we overestimate our abilities and knowledge in decision making
- Confirmation bias: selecting and using only facts that support our decision
- Escalation of commitment: increase commitment to a previous decision in spite of negative
info
- Egocentric accounting: occurs when people claim more responsibility for themselves for the
results of a joint action than an outside observer would credit them – occurs at work and at
home
- Better than average effect: endency for people to evaluate themselves as better than average
 Illusion of control
- Randomness error: tendency to believe that one can predict random events
- Winner’s curse: Winner always pays too much for the winning item in an auction
- Hindsight bias: after an outcome is already known, believing it could have been accurately
predicted beforehand

6-5. Explain how individual differences and organizational constraints affect decision making
Individual differences create deviations from the rational model.
- Personality: two facets of conscientiousness, namely achievement striving and dutifulness,
have opposite effects on escalation of commitment.
- Gender: overall, the evidence indicates that women analyse decisions more than men do.

Organizations can constrain decision makers, creating deviations from the rational model.
- Performance evaluation: managers are influenced in decision-making by criteria by their later
evaluation
- Reward systems: reward system in an organization influences decision-making
- Formal regulations: decisions which are made have to fit to regulations and rules
- System-imposed time constraints: deadlines influence decision making
- Historical precedents: today’s choice is influenced by past choices

6-6. Contrast the three ethical decision criteria

 Utilitarianism: decisions are made to get greatest good for greatest number: (+)
efficiency, productivity (-) ignoring rights of individuals
 Rights: respecting and protecting basis rights of individuals (e.g. Whistle-blowers): (+)
gives individual freedom, rights (-) law- bases environment hinders productivity
 Justice: Imposing and enforcing rules fairly and impartially: (+) protects rights of
underrepresented (-) creates sense of entitlement, reduces risk taking

6-7. Describe the three-stage model of creativity

Three component model of creativity: The proportion that individual creativity requires
- Expertise (is the foundation)
- Task Motivation (is the desire to do the job because of its characteristics)
- Creative thinking skills (are the personality characteristics associated with creativity)