Organizational

Organizational Behavior
Behavior
Eighteenth Edition, Global Edition

Chapter 5
Perception and Individual
Decision Making

Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.

“ WE DON’T SEE THINGS AS THEY

ARE, WE SEE THINGS AS WE ARE.”

ORGANIZATIONAL BEHAVIOR
S T E P H E N P. R O B B I N S
E L E V E N T H E D I T I O N
© 2005 Prentice Hall Inc. WWW.PRENHALL.COM/ROBBINS PowerPoint Presentation
All rights reserved. by Charlie Cook
What
What Is
Is Perception,
Perception, and
and Why
Why Is
Is ItIt Important?
Important?

Perception
A process by which
•• People’s
People’sbehavior
behaviorisisbasedbased
individuals organize and onontheir
theirperception
perceptionof ofwhat
what
interpret their sensory reality
realityis,
is,not
notononreality
realityitself.
itself.
impressions in order to
give meaning to their •• The
Theworld
worldasasititisisperceived
perceived
isisthe
theworld
worldthat
thatisis
environment.
behaviorally
behaviorallyimportant.
important.
Why
Why We
We Study
Study Perceptions
Perceptions
 To better understand how people make
attributions about events.
 We don’t see reality. We interpret what we see
and call it reality.
 The attribution process guides our behaviour,
regardless of the truth of the attribution.
 Factors
Factorsthat
that
Influence
Influence
Perception
Perception

E X H I B I T 5–1
E X H I B I T 5–1
Person
Person Perception:
Perception: Making
Making Judgments
Judgments About
About
Others
Others
Attribution Theory
When individuals observe
behavior, they attempt to
determine whether it is
internally or externally
caused.

Determination
Determinationdepends
dependson
onthree
threefactors:
factors:
Distinctiveness:
Distinctiveness:Shows
Showsdifferent
differentbehaviors
behaviorsinindifferent
different
situations.
situations.
Consensus:
Consensus:Response
Responseisisthe
thesame
sameasasothers
otherstotosame
samesituation.
situation.
Consistency:
Consistency:Responds
Respondsininthe
thesame
sameway
wayover
overtime.
time.
 Attribution
Attribution Theory
Theory

 Clarification of the differences between internal and

external causation
– Internally caused – those that are believed to be
under the personal control of the individual.
– Externally caused – resulting from outside causes.
Attribution
Attribution Theory
Theory
Attribution
Observation Interpretation of cause
High
(Seldom)
Distinctiveness External
(How often does the
person do this in
Internal
other situations?) Lo w
(Frequently)

High

Consensus (Frequently)
External
Individual (How often do other
behaviour people do this in
Internal
r na l
similar situations?)
Lo w
(Seldom)

High
(Frequently)
Consistency
Internal
(How often did the
person do this in
the past?) Lo w External
(Seldom)
Errors
Errors and
and Biases
Biases in
in Attributions
Attributions
Fundamental Attribution Error
The tendency to underestimate the
influence of external factors and
overestimate the influence of
internal factors when making
judgments about the behavior of
others In
Ingeneral,
general,wewetend
tendtoto
blame
blamethe
theperson
personfirst,
first,
not
notthe
thesituation.
situation.
Errors
Errors and
and Biases
Biases in
in Attributions
Attributions (cont’d)
(cont’d)
Self-Serving Bias Thought:
Thought:When
Whenstudents
students
get
getan
an“A”
“A”on
onananexam,
exam,
The tendency for individuals to they
theyoften
oftensay
saythey
they
attribute their own successes to studied
studiedhard.
hard.But
Butwhen
when
internal factors while putting the they
theydon’t
don’tdodowell,
well,how
how
blame for failures on external does
doesthe
theself-serving
self-servingbias
bias
factors come
comeinto
intoplay?
play?
Hint:
Hint:Whose
Whosefault
faultisisitit
usually
usuallywhen
whenananexam
examisis
“tough”?
“tough”?
Frequently
Frequently Used
Used Shortcuts
Shortcuts in
in Judging
Judging Others
Others

Selective Perception
People selectively interpret what they see on the basis
of their interests, background, experience, and
attitudes.
Frequently
Frequently Used
Used Shortcuts
Shortcuts in
in Judging
Judging Others
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
Frequently
Frequently Used
Used Shortcuts
Shortcuts in
in Judging
Judging Others
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
Specific
Specific Applications
Applications in
in Organizations
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
Specific
Specific Applications
Applications in
in Organizations
Organizations (cont’d)
(cont’d)

 Performance Evaluations
– Appraisals are often the subjective (judgmental)
perceptions of appraisers of another employee’s job
performance.
 The
The Link
Link Between
Between Perceptions
Perceptions and
and
Individual
Individual Decision
Decision Making
Making

 Individuals make decisions – choosing from two or

more alternatives.
 Decision making occurs as a reaction to a problem.
– There is a discrepancy between some current state of
affairs and some desired state, requiring
consideration of alternative courses of action.
• One person’s problem is another’s satisfactory
state of affairs.
The
The Link
Link Between
Between Perceptions
Perceptions and
and
Individual
Individual Decision
Decision Making
Making

Problem
A perceived discrepancy
between the current state of
affairs and a desired state Perception
Perceptionofof
the
theDecision
Decision
Maker
Maker
Decisions
Choices made from among
alternatives developed from
data perceived as relevant

Outcomes
Rational
Rational Decision-making
Decision-making Model
Model

Rational Decision-
Model
ModelAssumptions
Assumptions
making Model
• • Problem
Problemclarity
clarity
Describes how individuals
• • Known
Knownoptions
options
should behave in order to
maximize some outcome • • Clear
Clearpreferences
preferences
• • Constant
Constantpreferences
preferences
• • No
Notime
timeororcost
costconstraints
constraints
• • Maximum
Maximumpayoff
payoff
Steps
Steps in
in the
the Rational
Rational Decision-making
Decision-making Model
Model

1. Define the problem.

2. Identify the decision criteria.
3. Allocate weights to the criteria.
4. Develop the alternatives.
5. Evaluate the alternatives.
6. Select the best alternative.
Assumptions
Assumptions of the Rational
of the Rational Decision-making
Decision-making
Model
Model
 Assumptions of the Rational Model
– The decision maker…
• Has complete information.
• Is able to identify all the relevant options in an
unbiased manner.
• Chooses the option with the highest utility.
 Most decisions in the real world don’t follow the
rational model.
 How
How Are
Are Decisions
Decisions Actually
Actually Made
Made in
in
Organizations?
Organizations?
Bounded Rationality
– Most people respond to a complex
problem by reducing it to a level at
which it can be readily understood.
• People satisfice – they seek
solutions that are satisfactory and
sufficient.
– Individuals operate within the
confines of bounded rationality.
• They construct simplified models
that extract the essential features.
.
How
How does
does bounded
bounded rationality
rationality work?
work?

– Once a problem is identified, the search for

criteria and options begins.
• A limited list of the more conspicuous
choices is identified.
• The decision maker then reviews the list,
looking for a solution that is “good enough.”
Intuition
Intuition

 Intuitive Decision Making

– An unconscious process
created out of distilled
experience. It occurs outside
conscious thought; it relies on
holistic associations, or links
between disparate pieces of
information, is fast, and is
affectively charged, meaning it
usually engages the emotions.
Intuition
Intuition

 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
 Common
Common Biases
Biases and
and Errors
Errors
 Overconfidence Bias
– Believing too much in our own ability to make good
decisions

 Anchoring Bias
– Using early, first received information as the basis for
making subsequent judgments

 Confirmation Bias
– Using only the facts that support our decision
Common
Common Biases
Biases and
and Errors
Errors
 Availability Bias
– Using information that is most readily at hand
• Recent
• Vivid
 Representative Bias
– “Mixing apples with oranges”
– Assessing the likelihood of an occurrence by trying to
match it with a preexisting category using only the facts
that support our decision
 Winner’s Curse
– Highest bidder pays too much
– Likelihood of “winner’s curse” increases with the
number of people in auction
Common
Common Biases
Biases and
and Errors
Errors
 Escalation of Commitment
– In spite of new negative information, commitment
actually increases

 Randomness Error
– Creating meaning out of random events

 Hindsight Bias
– Looking back, once the outcome has occurred, and
believing that you accurately predicted the outcome of
an event
 Reducing
Reducing Biases
Biases and
and Errors
Errors
Focus on Goals. Without goals, you can’t be rational, you
don’t know what information you need, you don’t know which
information is relevant and which is irrelevant, you’ll find it
difficult to choose between alternatives, and you’re far more
likely to experience regret over the choices you make. Clear
goals make decision making easier and help you eliminate
options that are inconsistent with your interests.

Look for Information That Disconfirms Your Beliefs. One

of the most effective means for counteracting overconfidence
and the confirmation and hindsight biases is to actively look
for information that contradicts your beliefs and assumptions.
When we overtly consider various ways we could be wrong,
we challenge our tendencies to think we’re smarter than we
actually are.
 Reducing
Reducing Biases
Biases and
and Errors
Errors
Don’t Try to Create Meaning out of Random Events. The
educated mind has been trained to look for cause-and-effect
relationships. When something happens, we ask why. And when
we can’t find reasons, we often invent them. You have to accept
that there are events in life that are outside your control. Ask
yourself if patterns can be meaningfully explained or whether
they are merely coincidence. Don’t attempt to create meaning
out of coincidence.

Increase Your Options. No matter how many options you’ve

identified, your final choice can be no better than the best of the
option set you’ve selected. This argues for increasing your
decision alternatives and for using creativity in developing a wide
range of diverse choices. The more alternatives you can
generate, and the more diverse those alternatives, the greater
your chance of finding an outstanding one.
Individual
Individual Differences
Differences in
in Decision
Decision Making
Making

– Personality
• Conscientiousness
• High self-esteem
– Gender
• Rumination
– Mental Ability
– Cultural Differences
Organizational
Organizational Constraints
Constraints on
on Decision
Decision Makers
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
Cultural
Cultural Differences
Differences in
in Decision
Decision Making
Making
 Problems selected
 Time orientation
 Importance of logic and rationality
 Belief in the ability of people to solve problems
 Preference for collective decision making
Ethics
Ethics in
in Decision
Decision Making
Making
 Ethical Decision Criteria
– Utilitarianism
• Decisions made based solely on the outcome
• Seeking the greatest good for the greatest number
• Dominant method for businesspeople
– 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
Ethical
Ethical Decision-Making
Decision-Making Criteria
Criteria Assessed
Assessed
 Utilitarianism
– Pro: Promotes efficiency and productivity
– Con: Can ignore individual rights, especially minorities
 Rights
– Pro: Protects individuals from harm, preserves rights
– Con: Creates an overly legalistic work environment
 Justice
– Pro: Protects the interests of weaker members
– Con: Encourages a sense of entitlement
Ethics
Ethics in
in Decision
Decision Making
Making
 Ethics and National Culture
– There are no global ethical standards.
– The ethical principles of global organizations that
reflect and respect local cultural norms are necessary
for high standards and consistent practices.
Improving
Improving Creativity
Creativity in
in Decision
Decision Making
Making
 Creativity
– The ability to produce novel and useful ideas
 Who has the greatest creative potential?
– Those who score high in Openness to Experience
– People who are intelligent, independent, self-confident,
risk-taking, have an internal locus-of-control, tolerant of
ambiguity, low need for structure, and who persevere
in the face of frustration
 The
The Three
Three Components
Components of
of Creativity
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

E X H I B I T 5–4
Source: T.M. Amabile, “Motivating Creativity in Organizations,” California Management Review, Fall 1997, p. 43.
E X H I B I T 5–4
The
The Three-Component
Three-Component Model
Model of
of Creativity
Creativity
Proposition that individual creativity results from
a mixture of three components
• Expertise
– This is the foundation
• Creative-Thinking Skills
– The personality characteristics associated with
creativity
• Intrinsic Task Motivation
– The desire to do the job because of its
characteristics
Three-Stage
Three-Stage Model
Model of
of Creativity
Creativity in
in
Organizations
Organizations
 Global
Global Implications
Implications
 Attributions
– There are cultural differences in the ways people
attribute cause to observed behavior
 Decision-Making
– No research on the topic: assumption of “no difference”
– Based on our awareness of cultural differences in traits
that affect decision making, this assumption is suspect
 Ethics
– No global ethical standards exist
– Asian countries tend not to see ethical issues in “black
and white” but as shades of gray
– Global companies need global standards for managers
Summary
Summary and
and Managerial
Managerial Implications
Implications
 Perception:
– People act based on how they view their world
– What exists is not as important as what is believed
– Managers must also manage perception

 Individual Decision Making

– Most use bounded rationality: they satisfice
– Combine traditional methods with intuition and
creativity for better decisions
• Analyze the situation and adjust to culture and
organizational reward criteria
• Be aware of, and minimize, biases