Professional Documents
Culture Documents
Chapter 7
Chapter 7
Explain how two people can see the same thing and interpret it differently.
List the three determinants of attribution.
Describe how shortcuts can assist in or distort our judgment of others.
Explain how perception affects the decision-making process.
Outline the six steps in the rational decision-making model.
Describe the actions of the boundedly rational decision maker.
List and explain eight (8) common decision biases or errors.
Identify the conditions in which individuals are most likely to use intuition in
decision making.
Describe four styles of decision making.
Contrast the three ethical decision criteria
Perception
What is Perception?
A process by which individuals organize and interpret their sensory impressions in order
to give meaning to their environment.
Why is it Important?
Because people’s behavior is based on their perception of what reality is, not on reality
itself. The world that is perceived is the world that is behaviorally important.
· The Target – novelty, motions, sounds, size, background, proximity, similarity
Person Perception: Making Judgments About Others
Attribution Theory
Self-Serving Bias
– The tendency for individuals to attribute their own successes to internal factors
while putting the blame for failures on external factors.
- Selective Perception
– People selectively interpret what they see on the basis of their interest,
background, experience, and attitudes.
- Halo Effect
- Contrast Effects
- Projection
- Stereotyping
– Judging someone on the basis of one’s perception of the group to which that
person belongs.
- Employment interview
– Early impressions are very important! Perceptual judgments are often
inaccurate! (Another reason we should use structured interviews!)
- Performance Expectations
– People attempt to validate their perceptions of reality – even when they are
faulty! Self-fulfilling prophecy (Pygmalion Effect) is based on the notion that
expectations can determine behavior – this is a very powerful managerial
technique!
- Performance Evaluations
The Link Between Perception and Individual Decision Making
Decisions = Choosing between 2 or more alternatives
Problems = A discrepancy between some current state of affairs and some desired
state
How should we make decisions in organizations?
· Define the problem.
Assumptions of the Rational Decision-Making Model
- Problem Clarity-
- Known Options-
– The decision-maker can identify all relevant criteria and viable alternatives.
- Clear Preferences-
– Rationality assumes that the criteria and alternatives can be ranked and
weighted.
- Constant Preferences-
– Specific decision criteria are constant and that the weights assigned to them
are stable over time.
– Full information is available because there are no time or cost constraints.
-Maximum Payoff-
– The choice alternative will yield the highest perceived value.
How can we improve creativity in decision making?
– You can produce novel and useful ideas by emphasizing the three component
model of creativity: 1) expertise, 2) creative-thinking skills, and 3) intrinsic task
motivation
So, how are decisions actually made in organizations?
· Bounded Rationality
– Intuition is often used when there is a high level of uncertainty, there is little
precedent to go on, when the variable in question are less predictable, when
“facts” are limited, these facts don’t lead you in one particular direction, data is of
little use, when there are several plausible choices, and there is time pressure
Problem Identification
- Problems that are visible tend to have a higher probability of being selected than ones
that are important. Why?
Alternative Development
– Many successive limited comparisons rather than calculating value for each
alternative.
– This approach makes it unnecessary for the decision maker to thoroughly
examine an alternative and its consequences.
– Thus the decision makers steps are small and limited to comparisons of the
current or familiar options.
Common Biases & Errors
- We tend to “take shortcuts” in decision making and this allows error and bias to
enter our decisions. Common biases and errors include:
– Confirmation Bias – We tend to seek out info that reaffirms our past
choices and we discount info that contradicts our past judgments.
– Directive Style -- people using this style have a low tolerance for ambiguity and
seek rationality.
– Analytic Style -- people using this style have a much greater tolerance for
ambiguity than do directive decision makers.
– Conceptual Style -- people tend to be very broad in their outlook and consider
many alternatives
These are based on our tolerance for ambiguity and way of thinking.
Gender: Women tend to analyze decisions more than men. Women tend to analyze a
decision prior to and after the fact. This rumination (reflecting at length) difference is
largest in the earlier stages of life and adulthood.
Organizational Constraints
· Performance Evaluations
· Reward Systems
· Formal Regulations
· System-Imposed Time Constraints
· Historical Precedents
Cultural Differences
– There are differences in what problems to focus on, the depth of analysis,
importance of logic and rationality, and preference for individual vs. group
decision making
What about Ethics in Decision Making?
- An individual can use three different criteria in framing or making ethical choices.
Each has advantages and disadvantages…
– Utilitarian criterion -- Decisions are made solely on the basis of their outcomes
or consequences. The greatest good for the greatest number.
· There are NO global ethical standards
· Most issues are not “black and white” (i.e., easy to say as being “right” or “wrong”)
- Perception
– Individuals behave based not on the way their external environment actually is
but, rather, on what they see or believe it to be.
– Evidence suggests that what individuals perceive from their work situation will
influence their productivity more than will the situation itself.
– Absenteeism, turnover, and job satisfaction are also reactions to the
individual’s perceptions.
– Under some decision situations, people follow the rational decision-making
model. However, this doesn’t happen very often…
• Don’t assume that your specific decision style is appropriate for every job.