CHAPTER 5: PERCEPTION AND INDIVIDUAL DECISION MAKING

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CHAPTER 5 PERCEPTION AND INDIVIDUAL DECISION
MAKING

• Ms. Long
• MGT 3320
• CMSU

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AFTER STUDYING THIS CHAPTER,YOU SHOULD BE ABLE
TO

1. Explain how two people can see the same thing and
   interpret it differently.
2. List three determinants of attribution.
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.

L E A R N I N G O B J E C T I V E S
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AFTER STUDYING THIS CHAPTER,YOU SHOULD BE ABLE
TO

1. Describe the action of a boundedly rational
   decision maker.
2. Identify the conditions in which individuals are
   most likely to use intuition in decision making.
3. Describe four styles of decision making.
4. Define heuristics and explain how they bias
   decisions.
5. Contrast the three ethical decision criteria.

L E A R N I N G O B J E C T I V E S (contd)
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What Is Perception, and Why Is It Important?

• Peoples behavior is based on their perception of
  what reality is, not on reality itself.
• The world as it is perceived is the world that is
  behaviorally important.

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Factors ThatInfluence Perception
5-1
E X H I B I T
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Person Perception Making Judgments About Others
Distinctiveness shows different behaviors in
different situations. Consensus response is the
same as others to same situation. Consistency
responds in the same way over time.
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Attribution Theory
5-2
E X H I B I T
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Errors and Biases in Attributions
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Errors and Biases in Attributions (contd)
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Frequently Used Shortcuts in Judging Others
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Frequently Used Shortcuts in Judging Others
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Frequently Used Shortcuts in Judging Others
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Specific Applications in Organizations

• Employment Interview
• Perceptual biases affect the accuracy of
  interviewers judgments of applicants.
• Performance Expectations
• Self-fulfilling prophecy (pygmalion effect) The
  lower or higher performance of employees reflects
  preconceived leader expectations about employee
  capabilities.
• Performance Evaluations
• Appraisals are subjective perceptions of
  performance.
• Employee Effort
• Assessment of individual effort is a subjective
  judgment subject to perceptual distortion and
  bias.

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The Link Between Perceptions and Individual
Decision Making
Perceptions of the decision maker
Outcomes
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Assumptions of the Rational Decision-Making Model

1. Problem clarity
2. Known options
3. Clear preferences
4. Constant preferences
5. No time or cost constraints
6. Maximum payoff

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Steps in the Rational Decision-Making Model
5-3
E X H I B I T
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The Three Components of Creativity
5-4
E X H I B I T
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How Are Decisions Actually Made in Organizations
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How Are Decisions Actually Made in Organizations
(contd)

• How/Why problems are identified
• Visibility over importance of problem
• Attention-catching, high profile problems
• Desire to solve problems
• Self-interest (if problem concerns decision
  maker)
• Alternative Development
• Satisficing seeking the first alternative that
  solves problem.
• Engaging in incremental rather than unique
  problem solving through successive limited
  comparison of alternatives to the current
  alternative in effect.

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Making Choices
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Making Choices
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Decision-Style Model
5-5
E X H I B I T
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Organizational Constraints on Decision Makers

• Performance Evaluation
• Evaluation criteria influence the choice of
  actions.
• Reward Systems
• Decision makers make action choices that are
  favored by the organization.
• Formal Regulations
• Organizational rules and policies limit the
  alternative choices of decision makers.
• System-imposed Time Constraints
• Organizations require decisions by specific
  deadlines.
• Historical Precedents
• Past decisions influence current decisions.

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Cultural Differences in Decision Making

• Problems selected
• Time orientation
• Importance of logic and rationality
• Belief in the ability of people to solve problems
• Preference for collect decision making

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Ethics in Decision Making

• Ethical Decision Criteria
• Utilitarianism
• Seeking the greatest good for the greatest
  number.
• Rights
• Respecting and protecting basic rights of
  individuals.
• Justice
• Imposing and enforcing rules fairly and
  impartially.

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Ethics in Decision Making

• Ethics and National Culture
• There are no global ethical standards.
• The ethical principles of global organizations
  that reflect and respect local cultural norms are
  necessary for high standards and consistent
  practices.