Perception is how individuals organize and interpret sensory impressions to understand their environment. People's behavior is based on their perceived reality rather than objective reality. When judging others, people use attribution theory to determine if behaviors are internally or externally caused based on distinctiveness, consensus, and consistency. Common shortcuts in judging others include selective perception, halo effect, contrast effect, stereotyping, and projection. Decision making is influenced by perception and individual differences like personality, gender, abilities, and culture as well as organizational constraints like performance evaluations, rewards systems, and time pressures. Ethical decision making considers utilitarianism, respecting rights, and impartial justice. Improving decisions involves understanding biases, combining rational and intuitive thinking, and enhancing creativity.

1. PERCEPTION AND
INDIVIDUAL DECISION
MAKING

2. What is perception and why is it important?
• Perception : A process by which an individuals organize and interpret their
sensory impressions in order to give meaning to their environment
• People’s behavior is based on their perception of what reality is, not reality
itself.
• The world as it is perceived is the world that is behaviorally important.

3. Factors That Influence Perception:

4. Person Perception : Making Judgements About
Others
• Attribution theory : When people observe behavior , they attempt to
determine if it is internally or externally caused.
• This determination is based on the following factors:
1.Distinctiveness :Showing different behavior in different situations
2.Consensus :Responds in the same way as others to the same situation
3.Consistency : Responds in the same way over time

5. Attribution theory

6. Common shortcuts in judging others:
• Selective perception : people selectively interpret what they see on the basis
of one’s interests, background, experience, and attitudes.
• Halo effect :Drawing a general impression about an individual on the basis
of a single characteristic.

7. Common shortcuts in judging others(cont.)
• Contrast Effect: Evaluation of a person’s characteristics that is affected by
comparisons with other people recently encountered who rank higher or
lower on the same characteristics.
• Stereotyping : Judging someone on the basis of one’s perception of the
group to which that person belongs.
• Projection : Attributing one’s own characteristics to other people.

8. The link between perception and decision
making:

9. Assumptions of rational decision making
model:
• A decision making model that describes how individuals should behave to
maximize some outcome.

10. Common biases and errors :
• Overconfidence bias
• Anchoring bias
• Confirmation bias
• Availability bias
• Representative bias
• Winner’s curse
• Escalation of commitment
• Hindsight bias
• Randomness error

11. INFLUENCE OF DECISION MAKING:
Individual differences and organizational
constraints
• Individual differences:
1.Personality
2.Gender
3.Mental ability
4.Cultural differences

12. INFLUENCE ON DECISION MAKING : Individual
differences and organizational constraints(cont.)
• Organizational constraints:
1.Performance evaluation
2.Reward system
3.Formal regulations
4.System-imposed time constraints
5.Historical precedence

13. ETHICS IN DECISION MAKING
• Three ethical decision criteria:
1.Utilarianism: Decisions are made to provide the greatest good for the greatest
number.
2. Rights: Respecting and protecting basic rights of individuals such as
whistleblowers
3. Justice: Imposing and enforcing rules fairly and impartially

14. Ways to improve decision:
• 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 problems.