5 1 Essentials of Organizational Behavior 11e Global
5 -1 Essentials of Organizational Behavior, 11/e Global Edition Stephen P. Robbins & Timothy A. Judge Chapter 5 Individual Perception and Decision-Making Copyright © 2012 Pearson Education
After studying this chapter, you should be able to: 5 -2 1. 2. 3. 4. 5. 6. Define perception, and explain the factors that influence it. Identify the shortcuts individuals use in making judgments about others. Explain the link between perception and decision making. List and explain the common decision biases or errors. Contrast the three ethical decision criteria. Define creativity, and discuss the three-component model of creativity. Copyright © 2012 Pearson Education
Perception 5 -3 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. Copyright © 2012 Pearson Education
Factors Influencing Perception 5 -4 Situatio n Perceiv er Target Percepti on Copyright © 2012 Pearson Education
5 -5 Person Perception: Attribution Theory Suggests that perceivers try to “attribute” the observed behavior to a type of cause: Internal – behavior is believed to be under the personal control of the individual External – the person is forced into the behavior by outside events/causes Copyright © 2012 Pearson Education
Determinants of Attribution 5 -6 Distinctiveness – whether an individual displays different behaviors in different situations (the uniqueness of the act) 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 Copyright © 2012 Pearson Education
Determination of Attribution 5 -7 Copyright © 2012 Pearson Education
5 -8 Attribution Errors Fundamental Attribution Error The tendency to underestimate the influence of external factors and overestimate that of internal factors. Self-Serving Bias Occurs when individuals overestimate their own (internal) influence on successes and overestimate the external influences on their failures. Copyright © 2012 Pearson Education
Shortcuts Used in Judging Others 5 -9 Selective Perception – a perceptual filtering process based on interests, background, and attitude. May allow observers to draw unwarranted conclusions from an ambiguous situation. Halo / Horn Effect – drawing a general impression based on a single characteristic. Halo – Positive / Horn – Negative 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. Copyright © 2012 Pearson Education
The Link Between Perception and Decision Making 5 -10 Individuals in organizations make decisions, choices from among two or more alternatives. Top managers determine their organization’s goals, what products or services to offer, how best to finance operations, or where to locate a new manufacturing plant. Middle- and lower-level managers set production schedules, select new employees, and decide how to allocate pay raises. Non-managerial employees decide how much effort to put forth at work and whether to comply with a request by the boss. Copyright © 2012 Pearson Education In recent years, organizations have been
The Link Between Perception and Decision Making 5 -11 Individual decision-making is an important part of organizational behavior. Decision making occurs as a reaction to a perceived problem. That is, a discrepancy exists between the current state of affairs and some desired state, requiring us to consider alternative courses of action. Perception influences: Awareness that a problem exists The interpretation and evaluation of information Copyright © 2012 Pearson Education Bias of analysis and conclusions
Rational Decision-Making Model 5 -12 1. 2. 3. 4. 5. 6. Define the problem. Identify the decision criteria. Allocate weights to the criteria. Develop the alternatives. Evaluate the alternatives. Select the best alternative. Seldom actually used: more of a goal than a practical method Copyright © 2012 Pearson Education
Rational Decision-Making Model 5 -13 1. Define the Problem: A problem is a gap between a desired state and an existing state To make decision to solve problems, managers must: Be aware of the gap Be motivated to reduce the gap Have the knowledge, skills, abilities, and resources to fix the problem 2. Identify Decision Criteria: Decision criteria are standards used to guide judgments and decisions Generally, the more criteria a solution meets, the better that solution will be 3. Weight the Criteria: Which criteria are more or less important? Absolute comparisons Each criterion is compared to a standard or ranked on its own merits Relative Comparisons Each criterion is compared directly to every other criterion 4. Generate alternatives courses of actions Successful problem solving requires thorough examination of challenges. Thus a manager should think through and investigate several alternative solutions to a single problem 5. Evaluating the alternatives: S- Strengths W-Weakness O- Opportunities T- Threats 6. Make a decision-Ranking: Brands Values Nokia Lumia Samsung S 5 Sony Xperia Copyright © 2012 Pearson Education Finally selecting the best alternative having highest rank IPhone 6 LG-G 3
Assumptions of the Model 5 -14 Complete knowledge of the situation All relevant options are known in an unbiased manner The decision-maker seeks the highest utility • • • Copyright © 2012 Pearson Education Problem clarity Known options Clear preferences Constant preferences No time or cost constraints Maximum payoff
Bounded Rationality 5 -15 The limited information-processing capability of human beings makes it impossible to assimilate and understand all the information necessary to optimize So most people respond to a complex problem by reducing it to a level at which they can readily understand it. Also many problems likely don’t have an optimal solution because they are too complicated to be broken down into the parameters of the rational decision-making model. So 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 Copyright © 2012 Pearson Education
5 -16 Decision Making in Bounded Rationality Simpler than rational decision making, composed of three steps: 1. 2. 3. Limited search for criteria and alternatives – familiar criteria and easily found alternatives Limited review of alternatives – focus alternatives, similar to those already in effect Satisficing – selecting the first alternative that is “good enough” Copyright © 2012 Pearson Education
Intuitive Decision Making 5 -17 An non-conscious process created out of distilled experience Increases with experience Can be a powerful complement to rational analysis in decision making Perhaps the least rational way of making decisions is to rely on intuition. Copyright © 2012 Pearson Education
Common Biases and Errors 5 -18 Overconfidence Bias: As managers and employees become more knowledgeable about an issue, the less likely they are to display overconfidence. For example, in some quizzes, people rate their answers as "99% certain" but are wrong 40% of the time; 82% of the drivers surveyed feel they are in the top 30% of safe drivers Anchoring Bias: A tendency to fixate on initial information and fail to adequately adjust for subsequent information. Anchoring describes the common human tendency to rely too heavily, or "anchor, " on one trait or piece of information when making decisions. For example, As a person looks to buy a used car, he or she may focus excessively on the odometer reading and model year of the car, and use those criteria as a basis for evaluating the value of the car, rather than considering how well the engine or the transmission is maintained; Job seekers often fall into this trap by focusing on a desired salary while ignoring other aspects of the job offer such as additional benefits, fit with Copyright © 2012 Pearson Education the job, and working environment.
Common Biases and Errors 5 -19 Confirmation Bias (also called myside bias or verification bias) : Seeking out information that reaffirms our past choices and discounting information that contradicts past judgments. It is a tendency of people to favor information that confirms their beliefs. Availability Bias: The tendency to base judgments on information that is readily available. For instance, many people have a fear of flying. Although traveling in commercial aircraft is statistically safer than driving a vehicle, aircraft accidents get much more attention. The media coverage of an air disaster causes individuals the risk of flying and under state the risk of driving. Escalation of Commitment: Staying with a decision even when there is clear evidence that it is wrong. For example, bidding war / dollar auction; price wars. Copyright © 2012 Pearson Education
Common Biases and Errors 5 -20 Risk Aversion: Preferring a sure thing over a risky outcome. The general tendency to be afraid of taking risks even when they also carry substantial potential gain Hindsight Bias: I Knew Things Would Turn Out That Way The tendency to believe falsely that we could have accurately predicted the outcome of an event after that outcome is already known. The hindsight bias creates the illusion that the prediction of an uncertain event is easier than it really is when the event is viewed in retrospect, after its outcome is known. Once we learn the upshot of an uncertain situation, such as which team won a football game or in which direction prices moved, subsequent to a TA pattern, we tend to forget how uncertain we really were prior to knowing the outcome. Copyright © 2012 Pearson Education
Organizational Constraints on Decision Making 5 -21 Performance evaluations Reward systems Formal regulations Self-imposed time constraints Historical precedents Copyright © 2012 Pearson Education
Ethical Frameworks for Decision Making 5 -22 Utilitarian 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 Copyright © 2012 Pearson Education
Creativity in Decision Making 5 -23 The ability to produce novel and useful ideas Helps people to: Better understand the problem See problems others can’t see Identify all viable alternatives Identify alternatives that aren’t readily apparent Copyright © 2012 Pearson Education
Three-Component Model of Creativity 5 -24 Expertise Creative. Thinking Skills Copyright © 2012 Pearson Education Intrinsic Task Motivatio n
Global Implications 5 -25 Attributions: Cross-cultural differences exist – especially in collectivist traditions Decision Making: Cultural background of the decision maker can have significant influence on decisions made Ethics: No global ethical standards exist Need organizational-level guidance Copyright © 2012 Pearson Education
Implications for Managers 5 -26 Perception: To increase productivity, influence workers’ perceptions of their jobs To improve decision making: Analyze the situation 2. Adjust your decision approach 3. Be aware of biases and minimize their impact 4. Combine rational analysis with intuition 5. Try to enhance your creativity 1. Copyright © 2012 Pearson Education
Keep in Mind… 5 -27 1. People have inherent biases in perception and decision making 2. Biases can be helpful 3. Understanding those biases allows for better prediction of behavior Managers must determine when the bias may be counterproductive Creativity aids in decision making Helps to appraise, understand, and identify problems Copyright © 2012 Pearson Education
Summary 5 -28 1. Defined perception and explained the factors that influence it. 2. Identified the shortcuts individuals use in making judgments about others. 3. Explained the link between perception and decisionmaking. 4. Listed and explained the common decision biases or errors. 5. Contrasted the three ethical decision criteria. 6. Defined creativity and discussed the three-component model of creativity. Copyright © 2012 Pearson Education
5 -29 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education
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