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Role of Perception in Decision Making

Perception plays an important role in decision making. A decision maker's perception of a problem or situation can impact the choices they make. Many factors can influence a person's perceptions, including biases, stereotypes, intuition, and personality. These perceptual factors then feed into the decision making process and can affect the outcomes. For example, a used car dealer may be negatively perceived by customers based on stereotypes of their profession, despite working hard to build trust, which makes it difficult for him to change perceptions and influence purchasing decisions. Overall, the document discusses how perception influences decision making, the cognitive shortcuts and biases that shape perception, and implications for organizational processes like performance reviews.

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687 views

Role of Perception in Decision Making

Perception plays an important role in decision making. A decision maker's perception of a problem or situation can impact the choices they make. Many factors can influence a person's perceptions, including biases, stereotypes, intuition, and personality. These perceptual factors then feed into the decision making process and can affect the outcomes. For example, a used car dealer may be negatively perceived by customers based on stereotypes of their profession, despite working hard to build trust, which makes it difficult for him to change perceptions and influence purchasing decisions. Overall, the document discusses how perception influences decision making, the cognitive shortcuts and biases that shape perception, and implications for organizational processes like performance reviews.

Uploaded by

Frick Tricks
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ROLE OF PERCEPTION IN

DECISION MAKING

31- Vidhi Malhotra


32- Harshit Maru
33- Ronak Meghwani
34- Shweta Mishra
35- Shubham Mural
35- Priyanka Nagotkar
ORGANIZE INTERPRET

PERCEPTION

MEANING TO THE
SENSORY IMPRESSIONS
ENVIRONMENT
THE LINK BETWEEN PERCEPTION AND
DECISION MAKING

PROBLEM
A perceived discrepancy between
current states of affairs and a desired
state Perception of the
decision maker

DECISION
Choices made from alternatives
developed from a data

OUTCOMES
FACTORS THAT AFFECT PERCEPTION AND DECISION
MAKING

Halo (Horns): People are drawing a general impression about an individual on the basis
of a single characteristic. This will negatively affect their decisions.

Stereotyping: It is judging someone on the basis of one’s perception of the group to


which that person belongs.

Intuitive Decision Making: Intuition is often used when there is a high level of
uncertainty

Overconfidence Bias: We tend to be overly optimistic especially when our intellect and
interpersonal abilities are low. This wrong perception will lead to wrong decisions.
Availability Bias: The tendency of people to base their judgments on information
readily available to them is enough to make the best decisions .

Personality: Many personal characters like conscientiousness and self-esteem may


affect perception and hence, affect decision making process.

Gender: Women tend to analyze decisions more than men. Women tend to analyze a
decision prior to and after the fact. This difference in length of thinking in problems
will lead to more accuracy in making decisions as well as much time consumed for
taking a decision by women.

Cultural Differences: There are differences in what problems to focus on, the depth
of analysis, importance of logic and rationality, and preference for individual vs. group
decision making.
ORGANIZATIONAL CONSTRAINTS

Performance Evaluation
Reward Systems
Formal Regulations
System imposed time constraints
Historical Precedents
ETHICS IN DECISION MAKING

Utilitarianism
• Decisions made based solely on the outcome
• Seeking the greatest good for the greatest number
• Dominant method for business people
Rights
• Decisions consistent with fundamental liberties and privileges
• Respecting and protecting basic rights of individuals such as whistleblowers
Justice
Imposing and enforcing rules fairly and impartially
Equitable distribution of benefits and costs
CASE STUDY
Mahesh loves what he does. He just isn’t crazy about how others see him. He is the owner of RR Automotive Sales, a used car
dealership in Karol Bagh, Delhi, with about 30 cars on his lot at any time.
Used car dealers deal with a pretty bad reputation, says Mahesh. Just why, he isn’t sure. He didn’t realize there was such a stigma
attached to used-car dealers until he opened his dealership in 1997. At Diwali, when family members would ask what I was
doing, I’d tell them, and they’d ask me why I’d want to do that?
Regardless of the public impression of used-car dealers, Mahesh loves his business. He enjoys being his own boss. He likes being
the sole salesman on his lot. He relishes the diversity of his workers. He does everything from buying the vehicles, to fixing
them up to sell, to helping buyers arrange financing. And, very importantly, he likes the opportunity to work with customers.
There are a thousand guys out there selling cars who are better at selling than I am, Mahesh says. I’m more interested in having
a relationship.
One of the Mahesh’s strengths is that he loves cars. It is in his blood, his father worked for a new-car dealer and frequently
traded the family’s cars. Mahesh believes his intimate knowledge of cars makes it easier from him to sell them. I can tell you
whether the car has 75% of its brake pad left or if the brake pads are new, because I did it.
To build a meaningful relationship with a customer, Mahesh has to overcome the stereotype of a used-car salesman. He thinks
this might be coming from the hard-sell techniques used by some in his business. I don’t think it would take a customer long to
get jaded if they arve out shopping for a car. That is a hard thing to overcome.
It is frustrating to Mahesh when potential customers see him as just another shady salesman. Because he works hard to build a
customer’s trust, it hurts him when he realizes that he has failed. Mahesh always feels that if a customer questions his integrity it
is hard for him to reply in affirmative. The conclusion is that Decision making and perceptions are not compatible always and
sometimes the perception alters the decision.
Problems
Negative reputation of his own self and his business
Lack of family support
General stereotype of society
Difficult to gain trust of customers

 What he should do?


Maintain Self motivation and of his employees
Use his in-depth knowledge about his car business to generate new CRM techniques
SPECIFIC SHORTCUT APPLICATIONS IN
ORGANIZATIONS

 Employment Interview
Perceptual judgement are often inaccurate and may affect the final employment decision.

 Performance Expectations
People attempt to validate their perceptions of reality, even when they are faulty.

 Performance Evaluations
Many subjective components are used in the evaluation of employees. This will affect decisions
taken in performance appraisal procedures in organizations.

 Employee Effort
Managers may tend to perceive the effort of their employees is not enough as they expect.
BIBLOGRAPHY

Organization Behaviour (15th Edition) by Stephen Robbins, Timothy Judge and


Niharika Vohra

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