Chapter

Chapter55

Perception and
Individual Decision Making

ORGANIZATIONAL BEHAVIOR
S T E P H E N P. R O B B I N S
E L E V E N T H E D I T I O N
© 2005 Prentice Hall Inc. WWW.PRENHALL.COM/ROBBINS PowerPoint
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Cook
 After
After studying
studying this
this chapter,
OBJECTIVES
chapter,
you
you should
should be
be able
able to:
to:
1. Explain how two people can see the same
thing and interpret it differently.
2. List three determinants of attribution.
LEARNING

3. Describe how shortcuts can assist in or distort

our judgment of others.
4. Explain how perception affects the decision-
making process.
5. Outline the six steps in the rational decision-
making model.

© 2005 Prentice Hall Inc. All rights reserved. 5–2

 After
After studying
studying this
this chapter,
O B J E C T I V E S (cont’d)
chapter,
you
you should
should be
be able
able to:
to:
6. Describe the actions of a boundedly rational
decision maker.
7. Define heuristics and explain how they bias
decisions.
LEARNING

© 2005 Prentice Hall Inc. All rights reserved. 5–3

What
What Is
Is Perception,
Perception, and
and Why
Why Is
Is ItIt Important?
Important?

Perception
A process by which individuals
organize and interpret their
sensory impressions in order
to give meaning to their
environment.

••People’s
People’sbehavior
behaviorisisbased
basedon ontheir
their perception
perceptionof
ofwhat
what
reality
realityis,
is,not
noton
onreality
realityitself.
itself.

5–4
How
How do
do we
we perceive?
perceive?

5–5
 Factors
FactorsThat
That
Influence
Influence
Perception
Perception

E X H I B I T 5–1
E X H I B I T 5–1

© 2005 Prentice Hall Inc. All rights reserved. 5–6

 Attribution Theory
• How people assign causes to events…
• It involves perception about why things happen or why
people behave in the way they do.
• It explains how we make judgments about people at work.
• We make an attribution when we perceive and describe
other people’s actions and try to discover why they behaved
in the way they did.
© 2005 Prentice Hall Inc. All rights reserved. 5–7
 Criteria
Criteriafor
for deciding
decidingwhether
whetherbehaviour
behaviour isisattributable
attributableto
to
personal
personalrather
ratherthan
thanexternal
external(situational)
(situational)causes
causes
Reference: Kelly, H.H. (1967) Attribution theory in social psychology, in (ed) D.
Levine, Nebraska Symposium on Motivation, University of Nebraska Press, Lincoln,
NB

That
Thatdetermination
determinationdepends
dependslargely
largelyon onfour
fourfactors:
factors:
1.1.Distinctiveness:
Distinctiveness:The Thebehaviour
behaviourcan canbe bedistinguished
distinguishedfromfrom
the
thebehaviour
behaviour ofofother
otherpeople
peopleininsimilar
similarsituations.
situations.
2.2.Consensus:
Consensus:IfIfother
otherpeople
peopleagree
agreethatthatthe
thebehaviour
behaviourisis
governed
governedby bysome
somepersonal
personalcharacteristic.
characteristic.(i.e.,
(i.e.,response
responseisis
the
thesame
sameas asothers
othersto tosame
samesituation.)
situation.)
3.3.Consistency
Consistencyover overTime:
Time:Whether
Whetherthe thebehaviour
behaviourisis
repeated
repeated(i.e.,
(i.e.,responds
respondsininthe
thesame
sameway wayover
overtime.)
time.)
4.4.Consistency
Consistencyover overModality
Modality(i.e.,
(i.e.,the
themanner
mannerininwhich
which
things
thingsare
aredone):
done):Whether
Whetheror ornot
notthethebehaviour
behaviourisisrepeated
repeatedinin
different
differentsituations.
situations. 5–8
Attribution
AttributionTheory
Theory

5–9
 Errors
Errors and
and Biases
Biases in
in Attributions
Attributions

1. Fundamental Attribution Error

The tendency to underestimate the influence of
external factors and overestimate the influence of
internal factors when making judgments about the
behavior of others.

Example: Why a sales manager is prone to

attribute the poor performance of his sales
representatives to laziness rather than to the
innovative product line introduced by a competitor?
© 2005 Prentice Hall Inc. All rights reserved. 5–10
 Clarification…
Clarification…
Reference: Weiner, B. (1974) Achievement Motivation and Attribution
Theory, General Learning Press, New Jersey

Attribution theory is concerned with the way in which people

attribute success or failure to themselves. Research by
Weiner (1974) and others have indicated that when people
with high achievement needs have been successful they
ascribe this to internal factors such as their ‘ability’ and
‘efforts’.

High achievers tend to attribute failure to lack of effort and

not lack of ability.

Low achievers tend not to link success with effort but to

ascribe their failure to lack of ability. 5–11
 The
The Link
Link Between
Between Perceptions
Perceptions and
and Individual
Individual
Decision
Decision Making
Making

Problem
A perceived discrepancy
between the current state of
affairs and a desired state. Perception
Perception
of
ofthe
the
decision
decision
Decisions maker
maker
Choices made from among
alternatives developed from
data perceived as relevant.

Outcomes

© 2005 Prentice Hall Inc. All rights reserved. 5–12

 Assumptions
Assumptions of
of the
the Rational
Rational Decision-Making
Decision-Making
Model
Model

Rational Decision- Model

ModelAssumptions
Assumptions
Making Model
•• Problem
Problemclarity
clarity
Describes how
•• Known
Knownoptions
options
individuals should
behave in order to •• Clear
Clearpreferences
preferences
maximize some •• Constant
outcome. Constant
preferences
preferences
•• No
Notime
timeor
orcost
cost
constraints
constraints
•• Maximum
Maximumpayoff
payoff
© 2005 Prentice Hall Inc. All rights reserved. 5–13
 Steps
Steps in
in the
the Rational
Rational Decision-Making
Decision-Making Model
Model

1. Define the problem.

2. Identify the decision criteria.
3. Allocate weights to the criteria.
4. Develop the alternatives.
5. Evaluate the alternatives.
6. Select the best alternative.

© 2005 Prentice Hall Inc. All rights reserved. 5–14

 The
The Three
Three Components
Components of
of Creativity
Creativity
Creativity
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.

Source: T.M. Amabile, “Motivating Creativity in Organizations,”

California Management Review, Fall 1997, p. 43. E X H I B I T 5–4
E X H I B I T 5–4

© 2005 Prentice Hall Inc. All rights reserved. 5–15

 Bounded
Bounded Rationality
Rationality (BR)
(BR)

The extent to which people behave rationally is limited by

their capacity to understand the complexities of the
situation they are in and their emotional reactions to it.
Your home assignment…
Q. What is the knowledge construct (or contribution) of
the following literature towards BR?
 Miller, S.; Hickson, D.J.; and Wilson, D.C. (1999) Decision-making
in organizations, in (ed.) S. R. Clegg, C. Hardy and WR Nord,
Managing Organizations: Current issues, Sage, London
 Harrison, R. (2005) Learning and Development, 4th Edition, CIPD,
London

© 2005 Prentice Hall Inc. All rights reserved. 5–16

 Common
Common Biases
Biases and
and Errors
Errors
 Overconfidence Bias
– Believing too much in our own decision competencies.
 Anchoring Bias
– Fixating on early, first received information.
 Confirmation Bias
– Using only the facts that support our decision.
 Availability Bias
– Using information that is most readily at hand.
 Representative Bias
– Assessing the likelihood of an occurrence by trying to
match it with a preexisting category.

© 2005 Prentice Hall Inc. All rights reserved. 5–17

 Common
Common Biases
Biases and
and Errors
Errors
 Escalation of Commitment
– Increasing commitment to a previous decision in spite of
negative information.
 Randomness Error
– Trying to create meaning out of random events by falling
prey to a false sense of control or superstitions.
 Hindsight Bias (a.k.a. knew-it-all-along effect; creeping
determinism)
– Hindsight = ability to see, after the event, what should have
been done
– is the inclination to see events that have already occurred as
being more predictable than they were before they took
place.
– Falsely believing to have accurately predicted the outcome of
an event, after that outcome is actually known.
© 2005 Prentice Hall Inc. All rights reserved. 5–18
 Schizophrenia [skit-suh-free-nee-uh, -freen-yuh] is an
example of a disorder that directly affects the
hindsight bias. The hindsight bias has a stronger
effect on schizophrenic individuals compared to
individuals from the general public.
 Also called Dementia Praecox [pree-koks]. a severe
mental disorder characterized by some, but not
necessarily all, of the following features: emotional
blunting, intellectual deterioration, social isolation,
disorganized speech and behavior, delusions, and
hallucinations.
 A state characterized by the coexistence of
contradictory or incompatible elements.
© 2005 Prentice Hall Inc. All rights reserved. 5–19
Dementia
Dementia Praecox
Praecox

5–20
 Schizophrenia
Schizophrenia (a.k.a.
(a.k.a. Dementia
Dementia Praecox)
Praecox)
 Schizophrenia is a psychological disorder, thought to be
caused by imbalances in brain chemistry, which involves
delusions and faulty perceptions of the world. People
suffering from schizophrenia often hear voices in their head
and have delusions of grandeur. It's not uncommon for
people with schizophrenia to believe that they are Jesus or
other prominent figures.

 There are several types of schizophrenia including

disorganized, catatonic, paranoid, undifferentiated, and
residual.

 See also: http://www.alleydog.com/glossary/psychology-

glossary.php
5–21
 Decision-Style
Decision-Style Model
Model

Source: A.J. Rowe and J.D. Boulgarides, Managerial Decision

E X H I B I T 5–5
Making, (Upper Saddle River, NJ: Prentice Hall, 1992), p. 29. E X H I B I T 5–5

5–22