The document discusses several factors that influence perception and decision making, including selective perception, halo effects, projection, stereotyping, and perceptual biases. It also examines how intuition, biases, organizational constraints, cultural differences, and ethics can impact decision making. Finally, it provides some ways to improve decision making such as analyzing situations, limiting biases, combining rational and intuitive thinking, and focusing on goals to reduce errors.

1. Factors That Influence Perception

2. Frequently Used Shortcuts in Judging Others Selective Perception People selectively interpret what they see on the basis of their interests, background, experience, and attitudes.

3. Frequently Used Shortcuts in Judging Others Halo Effect Drawing a general impression about an individual on the basis of a single characteristic Contrast Effects Evaluation of a person’s characteristics that are affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics.

4. Frequently Used Shortcuts in Judging Others Projection Attributing one’s own characteristics to other people. Stereotyping Judging someone on the basis of one’s perception of the group to which that person belongs.

5. Specific Applications in Organizations Employment Interview Perceptual biases of raters 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. Ethnic Profiling A form of stereotyping in which a group of individuals is singled out—typically on the basis of race or ethnicity—for intensive inquiry, scrutinizing, or investigation.

6. Specific Applications in Organizations (cont’d) Performance Evaluations Appraisals are often the subjective (judgmental) perceptions of appraisers of another employee’s job performance. Employee Effort Assessment of individual effort is a subjective judgment subject to perceptual distortion and bias.

7. The Link Between Perceptions and Individual Decision Making 12 Perception of the decision maker Outcomes Problem A perceived discrepancy between the current state of affairs and a desired state. Decisions Choices made from among alternatives developed from data perceived as relevant.

8. Assumptions of the Rational Decision-Making Model Model Assumptions Problem clarity Known options Clear preferences Constant preferences No time or cost constraints Maximum payoff Rational Decision- Making Model Describes how individuals should behave in order to maximize some outcome.

9. Steps in the Rational Decision-Making Model Define the problem. Identify the decision criteria. Allocate weights to the criteria. Develop the alternatives. Evaluate the alternatives. Select the best alternative.

10. The Three Components of Creativity Creativity The ability to produce novel and useful ideas. Three-Component Model of Creativity Proposition that individual creativity requires expertise, creative-thinking skills, and intrinsic task motivation.

11. How Are Decisions Actually Made in Organizations Bounded Rationality Individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.

12. How Are Decisions Actually Made in Organizations (cont’d) 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 (solutions that are satisfactory and sufficient). Engaging in incremental rather than unique problem solving through successive limited comparison of alternatives to the current alternative in effect.

13. Common Biases and Errors Overconfidence Bias Believing too much in our own decision competencies. Anchoring Bias Fixating on early, first received information. Confirmation Bias Using only the facts that support our decision. Availability Bias Using information that is most readily at hand. Representative Bias Assessing the likelihood of an occurrence by trying to match it with a preexisting category.

14. Common Biases and Errors Escalation of Commitment Increasing commitment to a previous decision in spite of negative information. Randomness Error Trying to create meaning out of random events. Decision making becomes impaired when we try to create meaning out of random events. Hindsight Bias Falsely believing to have accurately predicted the outcome of an event, after that outcome is actually known.

15. Intuition Intuitive Decision Making An unconscious process created out of distilled experience. Conditions Favoring Intuitive Decision Making A high level of uncertainty exists There is little precedent to draw on Variables are less scientifically predictable “Facts” are limited Facts don’t clearly point the way Analytical data are of little use Several plausible alternative solutions exist Time is limited and pressing for the right decision

16. Individual Differences in Decision Making Decision Styles: Four different individual approached to decision making: People differ along two dimensions: Way of thinking Logical and rational Intuitive and Creative Tolerance for ambiguity Need to structure information in ways that minimize ambiguity. Ability to process many thoughts at the same time.

17. Individual Differences in Decision Making DIRECTIVE DECISION-MAKING STYLE Low Tolerance + Rational Characteristics of the Directive Style Focuses on tasks and technical problems Considers facts, rules, and procedures Acquires information through hunches and by using short reports with limited data Evaluates information by using intuition, experience, and rules Has a low tolerance for ambiguity and needs structure

18. Individual Differences in Decision Making Others May Perceive Your Style As Rigid Impersonal Simplistic Autocratic Best Organizational Fit Structured, goal-oriented, such as in bureaucracies, or where power and authority are important

19. Individual Differences in Decision Making Typical Leadership Style Characteristics of Those with a Directive Decision-Making Style Practical and authoritarian Impersonal social orientation Needs power and status Is forceful Dislikes committees and group discussions Completes tasks quickly Action and results oriented Motivated by situations with measurable achievement potential, tangible rewards

20. Individual Differences in Decision Making ANALYTICAL DECISION-MAKING STYLE High Tolerance + Rational Characteristics of the Analytical Style Focuses on tasks and technical problems, taking a logical approach Considers every aspect of a given problem Acquires information by careful analysis, using a large amount of data Evaluates information through abstract thinking, avoiding incomplete data Has a high tolerance for ambiguity and is innovative in solving problems

21. Individual Differences in Decision Making Others May Perceive Your Style As Dogmatic Overcontrolling Impersonal Too careful, abstract, or mathematical Sometimes too slow Best Organizational Fit Impersonal; where planning or solving complex problems is important, such as in science, engineering, etc.

22. Individual Differences in Decision Making Typical Leadership Style Characteristics of Those with an Analytical Decision-Making Style Intellectual, ingenious Wants control Impersonal social orientation Skilled in organizing facts and establishing controls Prefers limited control by others Completes tasks by applying rigorous analysis and preparing elaborate, detailed plans Motivated by complex situations with variety and challenge Wants to be able to predict outcomes

23. Individual Differences in Decision Making CONCEPTUAL DECISION-MAKING STYLE High Tolerance + Intuitive Characteristics of the Conceptual Style Focuses on people and the broad aspects of a problem Considers many options and possibilities Acquires information by using intuition and discussion with others Evaluates information by integrating diverse data and applying judgment Has a high tolerance for ambiguity, takes risks and is very creative

24. Individual Differences in Decision Making Others May Perceive Your Style As Too idealistic Slow, indecisive Difficult to control Best Organizational Fit Loose, decentralized settings; informal and simple organization

25. Individual Differences in Decision Making Typical Leadership Style Characteristics of Those with a Conceptual Decision-Making Style Insightful and enthusiastic Very personal social orientation Shows concern for others' views Smoothes over difficulties; is well liked Completes tasks by using intuition Seeks new ideas; is adaptive and flexible Motivated by recognition from others Wants independence; enjoys achieving personal goals

26. Individual Differences in Decision Making BEHAVIORAL DECISION-MAKING STYLE Low Tolerance + Intuitive Characteristics of the Behavioral Style Focuses on people and social aspects of the work situation Considers the well-being of others Acquires information by listening and interacting with others Evaluates information by using feelings and instincts Has a low tolerance for ambiguity

27. Individual Differences in Decision Making Others May Perceive Your Style As Too concerned about others Wishy-washy Can't make hard decisions Can't say no Best Organizational Fit Well-designed, people-oriented collegial settings

28. Typical Leadership Style Characteristics of Those with a Behavioral Decision-Making Style Sociable Friendly Supportive Interpersonal social orientation Has a talent for building teams and encouraging participation Action oriented Holds meetings Motivated to seek acceptance by peers and avoid conflict

29. 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.

30. 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

31. Ethics in Decision Making Ethical Decision Criteria Utilitarianism Seeking the greatest good for the greatest number. Rights Respecting and protecting basic rights of individuals such as whistleblowers. Justice Imposing and enforcing rules fairly and impartially.

32. Ways to Improve Decision Making Analyze the situation and adjust your decision making style to fit the situation. Be aware of biases and try to limit their impact. Combine rational analysis with intuition to increase decision-making effectiveness. Don’t assume that your specific decision style is appropriate to every situation. Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies.

33. Toward Reducing Bias and Errors Focus on goals. Clear goals make decision making easier and help to eliminate options inconsistent with your interests. Look for information that disconfirms beliefs. Overtly considering ways we could be wrong challenges our tendencies to think we’re smarter than we actually are. Don’t try to create meaning out of random events. Don’t attempt to create meaning out of coincidence. Increase your options. The number and diversity of alternatives generated increases the chance of finding an outstanding one.