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Organizational Behavior13th Edition

Stephen P. Robbins I Timothy A. Judge I Seema Sanghi

Iffat Sabir Chaudhry, PhD. Scholar,LecturerManagement Sciences Dept, Preston University, Islamabad

Email: ch.iffat@yahoo.com

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Ch 5: Perception and Individual Decision Making

1. Perception & its Importance2. Factors influencing Perception

3. Person Perception: Judgment About Others4. Link between Perception & Individual Decision Making5. How Decisions should be made6. How are Decisions actually made in Organization7. Ethics in Decision Making

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Perception

1. Definition

Perception is a process by which individuals organize andinterpret their sensory impressions in order to give meaningto their environment.

What is its Importance?

Understanding perception is important because peoplesbehavior is not based on reality but on their perception of

reality.

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2. Factors Influencing Perception

Three types of factors influence perception:

2.1 Factors in the Perceivera. Attitudes b. Motivesc. Interests d. Experience

e. Expectations

2.2 Factors in the Situationa. Time b. Work Settingc. Social Setting

2.3 Factors in the Targeta. Novelty b. Motionc. Sounds d. Sizee. Backgrounds f. Proximity

g. Similarity

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3. Person Perception:

Making Judgments About Others

3.1 Attribution Theory

When individuals observe behavior, they attempt to determinewhether it is internally or externally caused.Internallycaused behavior is believed to be under the personal control

of the individual.Externallycaused behavior is seen as resulting from outside causes,the person having being forced into the behavior by the situation.

The behavior attribution depends on three factors:

i. Distinctiveness: display of different behaviors in differentsituations; unusual behavior.

ii. Consensus: refers to similar behavior by various individuals inthe same situation.

iii. Consistency: repetition of the same response over time.

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3. Person Perception:

Making Judgments About Others

3.1 Attribution Theory

a. Fundamental Attribution Error

The tendency to underestimate the influence of external factors andoverestimate the influence of internal factors when makingjudgments about the behavior of others.

b. Self-serving bias

The tendency for individuals to attribute their own successes to

internal factors while putting the blame for failures on externalfactors.

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3.2 Frequently Used Shortcuts in Judging Other

a. Selective Perception: People selectively interpret what they seeon the basis of their interests, background, experience, and

attitudes.b. Halo Effect: Drawing a general impression about an individual

on the basis of a single characteristic.

c. Contrast Effects: Evaluation of a persons characteristics thatare affected by comparisons with other people recently

encountered who rank higher or lower on the same characteristics.d. Stereotyping: Judging a person on the basis of our perception of

the group to which the person belongs.

Ethnic Profiling:A form of stereotyping in which a group ofindividuals is singled out, typically on the basis of race or ethnicity, for

intense inquiry, scrutinizing, or investigation.

3. Person Perception:

Making Judgments About Others

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3.3 Frequently Used Shortcuts in Judging Other

a. Employment Interview: Perceptual judgments have a majorinfluence on a candidates assessment.

b. Performance Expectations: We try to validate our perceptions ofreality even when they are faulty.Self-Fulfilling Prophecy or Pygmalion Effect: A situation in

which one person inaccurately perceives a second person and theresulting expectations cause the second person to behave in waysconsistent with the original perception.

c. Performance Evaluation: Perception has a major influence on anemployees performance evaluation.

3. Person Perception:

Making Judgments About Others

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4. Link Between Perception and Individual DecisionMaking

a. Decisions: The choices made from among two or morealternatives.

b. Problem:A discrepancy between some current state of affairsand some desired state.

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5. How Should Decisions Be Made

5.1 The Rational Decision-Making:Making consistent, value-maximizing choices within specifiedconstraints.

a. Rational Decision Making Model:A decision-making model thatdescribes how individuals must behave in order to maximize some

outcome.

b. Steps in the Rational Decision-Making Model:

i. Define the problem. ii. Identify the decision criteria.

iii. Allocate weights to the criteria. iv. Develop the alternatives.

v. Evaluate the alternatives. vi. Select the best alternative.

c. Assumptions of the Model

i. Problem clarity. ii. Known options.

iii. Clear preferences. iv. Constant preferences.

v. No time or cost constraints. vi. Maximum payoff.

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5.2 Improving Creativity in Decision Making

a. Creativity:The ability to produce novel and useful ideas.

b. Creative Potential:The inherent capacity to be creative.

c. Three-Component Model of Creativity:

The proposition that individual creativity requires expertise,creative-thinking skills, and intrinsic task motivation.

5. How Should Decisions Be Made

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6. How are Decisions Actually Made in Organizations

6.1 Bounded Rationality:

Individuals make decisions by constructing simplified modelsthat extract the essential features from problems withoutcapturing all their complexity.

This happens because of limited capacity of the human mindto grasp complex problems entirely in order to meet therequirements of full rationality. Managers then behaverationally within the limits of the simplified model.

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6.2 Common Biases and Errors:

a. Overconfidence Bias:A tendency to overestimate onesperformance and ability.

b. Anchoring Bias:A tendency to fixate on initial information,from which we then fail to adequately adjust for subsequentinformation.

c. Confirmation Bias:The tendency to seek out information thatreaffirms past choices and to discount information thatcontradicts past judgments.

d. Availability Bias:The tendency for people to base theirjudgments on information that is readily available.

e. Representative Bias:Assessing the likelihood of an occurrenceby inappropriately considering the current situation asidentical to ones in the past.

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6.2 Common Biases and Errors:

f. Escalation of Commitment: An increased commitment to aprevious decision in spite of negative information.

g. Randomness Error:A tendency to create meaning out of atruly random pattern.

h. Winners Curse: A decision-making dictum that argues thatthe winning participants in an auction typically pay toomuch for the winning item.

i. Hindsight Bias: The tendency to believe falsely that we wouldhave accurately predicted the outcome of an event, after thatevent is actually known.

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6.3 Intuition:

Intuitive decision making is an unconscious process createdout of distilled experience. It does not operateindependently of rational analysis; in fact, the twoapproaches complement each other. It may be taken asextrasensory power or inherited personality trait.

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6.4 Individual Differences in Decision Making:

a. Personality: Personality has an effect on decisionmaking and various personality traits create tendencies for

certain types of biases. Consciousness directly affectsescalation of commitment; high self-esteem is positivelycorrelated with self-serving bias.

b. Gender: Women spend more time on rumination,which means over thinking about problems. Ruminationdecreases with increasing age.

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6.5 Organizational Constraints

a. Performance evaluation

b. Reward systems

c. Formal regulations

d. System-imposed time constraintse. Historical precedents

6.6 Cultural Differences

The rational model does not take into account culturaldifferences. Cultures differ in many aspects, most importantof which is the importance of rationality.

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7.1 Three Ethical Decision Criteria:

a. Utilitarianism:Decisions are made to provide the greatestgood for the greatest number.

b. Focus on Rights: Respecting and protecting the basic rights ofindividuals. Whistle-blowers are individuals who reportunethical practices by their employer to outsiders.

c. Focus on Justice: Individuals impose and enforce rules fairlyand impartially for equitable distribution of benefits andcosts to all.

7.2 Ethics and National Culture: ethics vary with national orcommunity culture.

7. Ethics in Decision-Making

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Assignment-5

Q 1. Define perception. Discuss the perceiver,target & situational factors impacting

perception.

Submission Deadline: Next classSubmit in Handwritten