Robbins eob9 inst_ppt_04

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Robbins eob9 inst_ppt_04

  1. 1. Perception and Individual Decision Making Chapter 4 Essentials of Organizational Behavior, 9/e Stephen P. Robbins/Timothy A. Judge
  2. 2. After studying this chapter, you should be able to: <ul><li>Explain how two people can see the same thing and interpret it differently. </li></ul><ul><li>List three determinants of attribution. </li></ul><ul><li>Describe how shortcuts can assist in or distort our judgment of others. </li></ul><ul><li>Explain how perception affects the decision-making model. </li></ul><ul><li>Outline the six steps in the rational decision-making model. </li></ul>
  3. 3. After studying this chapter, you should be able to: <ul><li>Describe the actions of the boundedly rational decision maker. </li></ul><ul><li>List and explain the common decision biases or errors. </li></ul><ul><li>Identify the conditions in which individuals are most likely to use intuition in decision making. </li></ul><ul><li>Contrast the three ethical decision criteria. </li></ul>
  4. 4. Perception <ul><li>A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment. </li></ul><ul><li>The world as it is perceived is the world that is behaviorally important. </li></ul>
  5. 5. Factors Influencing Perception
  6. 6. Attribution Theory <ul><li>Suggests that when we observe an individual’s behavior, we attempt to determine whether it was internally or externally caused </li></ul><ul><ul><li>Internally – believed to be under the personal control of the individual </li></ul></ul><ul><ul><li>Externally – resulting from outside causes </li></ul></ul>
  7. 7. Determinants of Attribution <ul><li>Distinctiveness – whether an individual displays different behaviors in different situations </li></ul><ul><li>Consensus – if everyone who faces a similar situation responds in the same way </li></ul><ul><li>Consistency – does the person respond the same way over time </li></ul>
  8. 8. Determination of Attribution
  9. 9. Attribution Errors <ul><li>Fundamental Attribution Error – when we make judgments about the behavior of others, we tend to underestimate external influence and overestimate internal influence </li></ul><ul><li>Self-serving Bias – we tend to attribute our own success to internal factors and put the blame for failure on external factors </li></ul>
  10. 10. Shortcuts used in Judging Others <ul><li>Selective Perception – a characteristic that makes someone stand out in our mind will increase the probability that it will be perceived </li></ul><ul><li>Halo Effect – drawing a general impression based on a single characteristic </li></ul><ul><li>Contrast Effects – our reaction is influenced by others we have recently encountered </li></ul><ul><li>Projection – the tendency to attribute our own characteristics to other people </li></ul><ul><li>Stereotyping – judging someone on the basis of our perception of the group to which they belong </li></ul>
  11. 11. Link between Perception and Decision Making <ul><li>Decision making occurs as a reaction to a problem </li></ul><ul><li>Perception influences: </li></ul><ul><ul><li>Awareness that a problem exists </li></ul></ul><ul><ul><li>The interpretation and evaluation of information </li></ul></ul><ul><ul><li>Bias of analysis and conclusions </li></ul></ul>
  12. 12. Rational Decision-Making Model
  13. 13. Assumptions of the Model <ul><li>The problem is clear and unambiguous </li></ul><ul><li>Options are known </li></ul><ul><li>Clear preferences </li></ul><ul><li>Constant preferences </li></ul><ul><li>No time or cost constraints </li></ul><ul><li>Maximum payoff </li></ul>
  14. 14. Creativity in Decision Making <ul><li>The ability to produce novel and useful ideas </li></ul><ul><li>Importance is: </li></ul><ul><ul><li>Better understand the problem </li></ul></ul><ul><ul><li>See problems others can’t see </li></ul></ul><ul><ul><li>Identify all viable alternatives </li></ul></ul><ul><ul><li>Identify alternatives that aren’t readily apparent </li></ul></ul>
  15. 15. Three-Component Model of Creativity
  16. 16. Bounded Rationality <ul><li>The limited information-processing capability of human beings makes it impossible to assimilate and understand all the information necessary to optimize </li></ul><ul><li>So people seek solutions that are satisfactory and sufficient, rather than optimal </li></ul><ul><li>Bounded rationality is constructing simplified models that extract the essential features from problems without capturing all their complexity </li></ul>
  17. 17. Common Biases and Errors <ul><li>Overconfidence Bias – As managers and employees become more knowledgeable about an issue, the less likely they are to display overconfidence </li></ul><ul><li>Anchoring Bias – a tendency to fixate on initial information and fail to adequately adjust for subsequent information </li></ul><ul><li>Confirmation Bias – seeking out information that reaffirms our past choices and discounting information that contradicts past judgments </li></ul>
  18. 18. Common Biases and Errors <ul><li>Availability Bias – the tendency to base judgments on information that is readily available </li></ul><ul><li>Representative Bias – the tendency to assess the likelihood of an occurrence by inappropriately considering the current situation as identical to past situations </li></ul><ul><li>Escalation of Commitment – staying with a decision even when there is clear evidence that it is wrong </li></ul>
  19. 19. Common Biases and Errors <ul><li>Randomness Error – the tendency to believe that we can predict the outcome of random events </li></ul><ul><li>Hindsight Bias – the tendency to believe falsely that we accurately predicted the outcome of an event after that outcome is actually known </li></ul>
  20. 20. Intuitive Decision Making <ul><li>An unconscious process created out of distilled experience </li></ul><ul><li>Complements rational analysis </li></ul><ul><li>Can be a powerful force in decision making </li></ul>
  21. 21. When is Intuitive Decision Making Used? <ul><li>A high level of uncertainty exists </li></ul><ul><li>There is little precedent to draw on </li></ul><ul><li>Variables are less scientifically predictable </li></ul><ul><li>“ Facts” are limited </li></ul><ul><li>Facts don’t clearly point the way </li></ul><ul><li>Analytical data are of little use </li></ul><ul><li>There are several plausible alternatives with good arguments for each </li></ul><ul><li>Time is limited and there is pressure to come up with the right decision </li></ul>
  22. 22. Individual Differences <ul><li>Personality – specific facets of conscientiousness affect escalation of commitment </li></ul><ul><li>Gender – Females are more likely to carefully consider problems and choices but also overanalyze and rehash the decision once it is made </li></ul>
  23. 23. Organizational Constraints <ul><li>Performance Evaluation </li></ul><ul><li>Reward Systems </li></ul><ul><li>Formal Regulations </li></ul><ul><li>System-Imposed Time Constraints </li></ul><ul><li>Historical Precedents </li></ul>
  24. 24. Cultural Differences <ul><li>Culture of decision maker influences: </li></ul><ul><ul><li>Time orientation </li></ul></ul><ul><ul><li>Importance of rationality </li></ul></ul><ul><ul><li>Belief in the ability of people to solve problems </li></ul></ul><ul><ul><li>Preference for collective decision making </li></ul></ul>
  25. 25. Criteria used in making ethical choices <ul><li>Utilitarian – provide the greatest good for the greatest number </li></ul><ul><li>Rights focus – make decisions consistent with fundamental liberties and privileges </li></ul><ul><li>Justice focus – impose and enforce rules fairly and impartially so that there is equal distribution of benefits and costs </li></ul>
  26. 26. Implications for Managers <ul><li>To influence productivity, assess workers perceptions of their jobs </li></ul><ul><li>To improve decision making: </li></ul><ul><ul><li>Analyze the situation </li></ul></ul><ul><ul><li>Be aware of biases and minimize their impact </li></ul></ul><ul><ul><li>Combine rational analysis with intuition </li></ul></ul><ul><ul><li>Try to enhance your creativity </li></ul></ul>
  27. 27. Summary <ul><li>Explained how two people can see the same thing and interpret it differently. </li></ul><ul><li>Listed three determinants of attribution. </li></ul><ul><li>Described how shortcuts can assist in or distort our judgment of others. </li></ul><ul><li>Explained how perception affects the decision-making model. </li></ul><ul><li>Outlined the six steps in the rational decision-making model. </li></ul>
  28. 28. Summary <ul><li>Described the actions of the boundedly rational decision maker. </li></ul><ul><li>Listed and explained the common decision biases or errors. </li></ul><ul><li>Identified the conditions in which individuals are most likely to use intuition in decision making. </li></ul><ul><li>Contrasted the three ethical decision criteria. </li></ul>

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