Essentials of Organizational Behavior

1.

Essentials of Organizational Behavior
Fifteenth Edition
Chapter 6
Perception and Individual
Decision Making
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2.

What is Perception?
Learning Objective 6.1
• Perception: a process by which individuals
organize and interpret their sensory impressions
in order to give meaning to their environment
• The world as it is perceived is the world that is
behaviorally important
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3.

Factors that Influence Perception
• Factors the influence perception include
– The perceiver: your personal characteristics
– The target: characteristics of the target
– The context: situational factors
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4.

Person Perception: Making Judgments
About Others
Learning Objective 6.2
• Person perceptions: perceptions we form about
each other
• Attribution Theory: an attempt to explain the
ways we judge people differently, depending on
the meaning we attribute to a behavior
• Internal and External Causation
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5.

Distinctiveness, Consensus, and
Consistency
• Distinctiveness – whether an individual displays
different behaviors in different situations
• Consensus – does everyone who faces a similar
situation respond in the same way as the
individual did?
• Consistency – does the person respond the same
way over time?
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6.

Attribution Theory (Exhibit 6-1)
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7.

Errors and Biases
• Fundamental attribution error:
– Tendency to underestimate the influence of external
factors and overestimate the influence of internal
factors
• Self-serving bias: occurs when individuals
overestimate their own (internal) influence on
successes and overestimate the external
influences on their failures
• Cultural differences exist
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8.

Common Shortcuts in Judging Others
(1 of 2)
• Selective Perception: selectively interpret based
on interests, background, and attitude
• Halo and Horns Effects: drawing a general
impression based on a single characteristic
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9.

Common Shortcuts in Judging Others
(2 of 2)
• Contrast Effects: our reaction is influenced by
others we have recently encountered (the context
of the observation)
• Stereotyping: judging someone on the basis of
the perception of the group to which they belong
• Threat of technological unemployment: AI taking
over jobs
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10.

The Link Between Perception and
Decision Making
Learning Objective 6.3
• Decision making occurs as a reaction to a
perceived problem
• Discrepancy between the current state and a desired
state
• Decisions: choices from among two or more
alternatives
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11.

Decision Making in Organizations
Learning Objective 6.4
• Approaches to decision making
– Rational decision making
– Bounded rationality
– Intuition
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12.

Rational Decision-Making Model
• Rational decision-making 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
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13.

Bounded Rationality
• The limited information-processing capability of
human beings makes it impossible to assimilate
and understand all the information necessary to
optimize
– People seek solutions that are satisfactory and
sufficient, rather than optimal (they “satisfice”)
• Bounded rationality is constructing simplified
models that extract the essential features from
problems without capturing all their complexity
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14.

Intuition
• Intuitive decision making: a non-conscious
process created out of distilled experience
– Least rational decision-making model
– Affectively charged
– Can be a powerful complement to rational analysis in
decision making
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15.

Common Biases and Errors in Decision
Making (1 of 2)
• Overconfidence Bias: a tendency to be
overconfident about our own abilities or the abilities of
others
• Anchoring Bias: a tendency to fixate on initial
information and fail to adequately adjust for
subsequent information
• Confirmation Bias: seeking out information that
reaffirms our past choices and discounting information
that contradicts past judgments
• Availability Bias: basing judgments on readily
available information
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16.

Common Biases and Errors in Decision
Making (2 of 2)
• Escalation of Commitment: staying with a
decision even when there is clear evidence that it
is wrong
• Randomness Error: our tendency to believe we
can predict the outcome of random events
• Risk Aversion: preferring a sure gain of a
moderate amount over a riskier outcome
• Hindsight Bias: believing falsely that we could
have predicted the outcome of an event after that
outcome is already known
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17.

Influences on Decision Making: Individual
Differences & Organizational Constraints
Learning Objective 6.5
• Individual differences
• Personality
• Gender
• General mental ability
• Cultural differences
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18.

Organizational Constraints on Decision
Making
• Performance evaluation systems
• Reward systems
• Formal regulations
• System-imposed time constraints
• Historical precedents
• Decision making in times of crisis
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19.

Ethics in Decision Making (1 of 2)
Learning Objective 6.6
• Three Ethical Decision Criteria
• Utilitarianism
– Provide the greatest good for the greatest number
• Rights
– Make decisions consistent with fundamental liberties and
privileges
• Justice
– Impose and enforce rules fairly and impartially so that there is
equal distribution of benefits and costs
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20.

Ethics in Decision Making (2 of 2)
• Choosing between criteria
• Behavioral ethics
– Analyzing how people actually behave when
confronted with ethical dilemmas
• Lying
– Deadly to decision making
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21.

Creativity and Innovation in Organizations
Learning Objective 6.7
• Creativity: the ability to produce novel and useful
ideas
• Helps people:
– See problems others can’t see
– Better fully understand problems
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22.

Three-Stage Model of Creativity in
Organizations (Exhibit 6-4)
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23.

Creative Behavior
Steps:
1. Problem formulation: identify a problem or
opportunity that requires a solution as yet
unknown
2. Information gathering: possible solutions
incubate in an individual’s mind
3. Idea generation: develop possible solutions
from relevant information and knowledge
4. Idea evaluation: evaluate potential solutions
and identify the best one
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24.

Causes of Creative Behavior
• Creative potential:
• Intelligence and creativity
• Personality and creativity
• Expertise and creativity
• Ethics and creativity
• Creative environment
– Motivation
– Rewards and recognition
– Jobs with clear innovative expectations
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25.

Creative Outcomes (Innovation)
• Creative outcomes: ideas or solutions judged to
be novel and useful by relevant stakeholders
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26.

Implications for Managers
• Behavior follows perception, so to influence behavior at
work, assess how people perceive their work.
• Make better decisions by recognizing perceptual biases
and decision-making errors we tend to commit.
• Adjust your decision-making approach to the national
culture you’re operating in and to the criteria your
organization values.
• Combine rational analysis with intuition.
• Try to enhance your creativity.
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