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Prentice Hall, 2 001 Chapter 5 1 Perception and Individual Decision Making Chapter 5

Prentice Hall, 2001Chapter 51 Perception and Individual Decision Making Chapter 5

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Prentice Hall, 2001 Chapter 5 1

Perception and Individual Decision

MakingChapter 5

Prentice Hall, 2001 Chapter 5 2

Learning ObjectivesLearning Objectives

• Learn that two people can see the same

thing and interpret it differently

• List the three determinants of attribution

• Describe how shortcuts can either assist

or distort judgment

• Examine perception and decision-making

• Study the rational decision-making model

Prentice Hall, 2001 Chapter 5 3

Learning ObjectivesLearning Objectives

• Describe the actions of the boundedly

rational decision maker

• Learn when individuals are most likely to

use intuition in decision making

• Describe four styles of decision making

• Learn how heuristics bias decisions

• Contrast the three ethical decision criteria

Prentice Hall, 2001 Chapter 5 4

What is Perception

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

Prentice Hall, 2001 Chapter 5 5

Factors ThatFactors ThatInfluence PerceptionInfluence Perception

SituationSituationTargetTarget PerceiverPerceiver

Prentice Hall, 2001 Chapter 5 6

The Perceiver

• Attitude

• Motives

• Interests

• Past experiences

• Expectations (stereotypes)

Prentice Hall, 2001 Chapter 5 7

The Target

• Novelty• Motion• Sounds• Size• Background• proximity• Persons, objects and events that similar to

each other tend to be grouped together

Prentice Hall, 2001 Chapter 5 8

The Situation

• Time

• Work setting

• Social setting

Prentice Hall, 2001 Chapter 5 9

Person Perception: making Judgments about

Others• Attribution Theory–When individuals observe behavior,

they attempt to determine whether it is internally or externally caused• Distinctiveness• Consensus• Consistency

Prentice Hall, 2001 Chapter 5 10

Attribution of Cause

InterpretationObservation

Attribution Attribution

Theory andTheory and

IndividualIndividual

BehaviorBehavior

ExternalExternal

ExternalExternal

ExternalExternal

InternalInternal

InternalInternal

InternalInternal

DistinctivenessDistinctiveness

ConsensusConsensus

ConsistencyConsistency

HighHigh

LowLow

HighHigh

LowLow

HighHigh

LowLow

Prentice Hall, 2001 Chapter 5 11

ContrastContrastEffectEffect

ContrastContrastEffectEffect

SelectivePerceptionSelective

Perception

StereotypingStereotyping

Halo EffectHalo Effect

ProjectionProjection

Frequently Used Shortcuts When Judging Others

Prentice Hall, 2001 Chapter 5 12

Perception Errors

• Fundamental attribution error– Tendency to underestimate external

factors and overestimate internal factors

• Self-serving bias– Tendency for individuals to attribute

their own successes to internal factors rather than external factors (i.e., luck)

Prentice Hall, 2001 Chapter 5 13

Judgmental errors

• Selective perception– Selectively interpret what they see on

the basis of their interest, background , experience and attitudes

• Halo effect– Drawing a general impression about an

individual on the basis of a single characteristic

Prentice Hall, 2001 Chapter 5 14

Perception Errors

• Contrast Effects– Evaluation of a person’s characteristics that

are affected by comparisons with other people

• Projection– Attributing one’s own characteristics to other

people

• Stereotyping– Judging someone on the basis of one’s

perception of the group in which that person belongs

Prentice Hall, 2001 Chapter 5 15

Specific Applications in Specific Applications in OrganizationsOrganizations

• Employment interview

• Performance expectations

• Self-fulfilling prophecy: expectations cause behaviors

consistent with original perceptions

• Performance evaluation

• Employee effort

• More workers are fired for poor attitudes than for lack of ability

• Employee loyalty

Prentice Hall, 2001 Chapter 5 16

Interpretation andInterpretation andEvaluation of InformationEvaluation of Information

Awareness andAwareness andRecognition of ProblemsRecognition of Problems

Perception and Perception and Individual Decision MakingIndividual Decision Making

Prentice Hall, 2001 Chapter 5 17

Rational Model of

Decision Making

Problem

Identify andDefine Problem

DevelopAlternatives

A1

A2

A3

A4

An

EvaluateAlternatives

+

A1 A1

A2 A2

An An

Criteria

Weightthe Criteria

T E C H

Set DecisionCriteria

Choice

Make OptimalDecision

Prentice Hall, 2001 Chapter 5 18

Assumptions of the ModelAssumptions of the ModelAssumptions of the ModelAssumptions of the Model

One:One:

Problem ClarityProblem ClarityOne:One:

Problem ClarityProblem ClarityFour:Four:

Constant PreferencesConstant PreferencesFour:Four:

Constant PreferencesConstant Preferences

Five:Five:

No ConstraintsNo Constraints Five:Five:

No ConstraintsNo Constraints Two:Two:

Known OptionsKnown OptionsTwo:Two:

Known OptionsKnown Options

Three:Three:

Clear PreferencesClear PreferencesThree:Three:

Clear PreferencesClear PreferencesSix:Six:

Maximum PayoffMaximum PayoffSix:Six:

Maximum PayoffMaximum Payoff

Prentice Hall, 2001 Chapter 5 19

The Three Components of The Three Components of Creativity Creativity

Expertise

TaskMotivation

CreativitySkills

Creativity

Prentice Hall, 2001 Chapter 5 20

Bounded Rationality

• Constraints– Time– Resources/costs– Information

• Solutions– Acceptable, Satisfied, but may not

optimal

Prentice Hall, 2001 Chapter 5 21

A Model of Bounded A Model of Bounded RationalityRationality

AscertainAscertainthe Need the Need

for a Decisionfor a Decision

SimplifySimplifythe Problemthe Problem

SelectSelectCriteriaCriteria

Identify aIdentify aLimited Set Limited Set

of Alternativesof Alternatives

CompareCompareAlternativesAlternatives

Against CriteriaAgainst Criteria

ExpandExpandSearch forSearch for

AlternativesAlternatives

Select theSelect theFirst “GoodFirst “Good

Enough” ChoiceEnough” Choice

A “Satisficing”A “Satisficing”AlternativeAlternative

ExistsExists

YesNo

Prentice Hall, 2001 Chapter 5 22

Intuitive Decision MakingAn unconscious process created out of

distilled experience High uncertainty levels Little precedent Hard to predictable variables Limited facts Unclear sense of direction Analytical data is of little use Several plausible alternatives Time constraints

Prentice Hall, 2001 Chapter 5 23

AlternativeAlternativeDevelopmentDevelopmentAlternativeAlternative

DevelopmentDevelopmentProblemProblem

IdentificationIdentificationProblemProblem

IdentificationIdentification

Two Important Two Important Decision-Making Decision-Making

PhasesPhases

Two Important Two Important Decision-Making Decision-Making

PhasesPhases

Prentice Hall, 2001 Chapter 5 24

Making Choices in the Making Choices in the WorkplaceWorkplace

AvailabilityAvailabilityHeuristicHeuristic

AvailabilityAvailabilityHeuristicHeuristic

RepresentativeHeuristic

RepresentativeHeuristic

Escalation ofEscalation ofCommitmentCommitmentEscalation ofEscalation ofCommitmentCommitment

Prentice Hall, 2001 Chapter 5 25

Making Choices

• Availability heuristic– The tendency for people to base their

judgments on information that is readily available

• Representative– Assessing the likelihood of an occurrence by

matching it with a preexisting category

• Escalating commitment– An increased commitment to a previous

decision in spite of negative information

Prentice Hall, 2001 Chapter 5 26

Analytic Conceptual

BehavioralDirective

Rational IntuitiveWay of Thinking

High

Low

To

lera

nce

fo

r A

mb

igu

ity

Decision-Making StylesDecision-Making Styles

Prentice Hall, 2001 Chapter 5 27

Organizational Organizational ConstraintsConstraints

RewardRewardSystemSystem

HistoricalHistoricalPrecedentsPrecedents

ProgrammedProgrammedRoutinesRoutines

PerformancePerformanceEvaluationEvaluation

Prentice Hall, 2001 Chapter 5 28

ProblemProblemIdentificationIdentification

The Value ofThe Value ofRationalityRationality

TimeTimeOrientationOrientation

Groups orGroups orIndividualsIndividuals

CulturalCulturalDifferencesDifferences

Prentice Hall, 2001 Chapter 5 29

Ethics in Decision-Making

Utilitarian Rights

Justice

Prentice Hall, 2001 Chapter 5 30

Discussion

• Biases in decision making (p. 149)

• Ethical dilemma (p. 150)

• Video Case (p. 151)