Midterm -1 27 th June- Class Time

1. Midterm -127th June- Class Time Covers Ch 1,2,3,4 20% MCQ 40% SQ 40% LQ

2. IOA- C2Jun 25-27

3. Chapter 5 Muslims are terrorist! Hindus are transferring assets to India Aborigines make trouble …….. Perception and Individual Decision Making

4. What Is Perception, and Why Is It Important? People’s behavior is based on their perception of what reality is, not on (objective) reality itself. Reality Behavior A great org. to work for

5. Factors Influencing Perception Personal Characteristics Context Relationship to background -Grouping Shape Distort

6. Person Perception: Making Judgments About Others • Judging: • Why people act the way they do? • What is causing it? Distinctiveness: shows different behaviors in different situations. Consensus: response is the same as others to same situation. Consistency: responds in the same way over time.

7. Attribution Theory Individual’s behavior Everyone’s behavior Individual’s action

8. Errors and Biases in Attributions Poor Sales Performance

9. Errors and Biases in Attributions …

10. Frequently Used Shortcuts in Judging Others • Comprehensive Case Study • Important problems Boss reprimand certain people and not others

11. Frequently Used Shortcuts in Judging Others • Halo Effect • Draw a general impression about others on the basis of a single attribute/characteristic • intelligence, appearance • an instructor, a student who comes in late in the first class • Contrast Effect • Contrast effects (can) distort perceptions • Do we evaluate a person in isolation? Or influenced by other persons we have recently encountered. • Interviewer sees a pool of job applicants.

12. Frequently Used Shortcuts in Judging Others- Stereotyping • Judge someone on the basis of our perception of the group to which he or she belongs • Generalization has advantages! • Success in the past • Women Vs. Men • Relocation, Childcare • Profiling- Arab descant! Balance

13. Shortcuts in Organizations • Employment Interview (1/10th Second, 4/5 mins) • Perceptual biases affect the accuracy of interviewers’ judgments • Performance Expectations • Behave according to Expectation (Students) • Self-fulfilling prophecy (pygmalion effect): The lower or higher performance of employees reflects preconceived leader expectations about employee capabilities. • Performance Evaluations (Promotion, Pay) • Appraisals are subjective perceptions. (Vs. Objective) • Assessment is a subjective judgment subject to perceptual distortion and bias • Employee Effort

14. The Link Between Perceptions and Individual Decision Making Empowerment make the issue even more critical Reaction Perceptions of the decision maker Is this a problem? What is acceptable ? Outcomes

16. Rational Decision-Making Model • Step follows in a logical/rational order • based on thinking through and weighing up the alternatives • Goal • Maximize outcome Assumptions • Problem clarity • Known options • Clear preferences • Constant preferences • No time or cost constraints • Maximum payoff Steps

17. 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. Optimize

18. Source: http://en.wikipedia.org/wiki/Rational_planning_model

19. How Are Decisions Actually Made in Organizations

20. How Are Decisions Actually Made in Organizations … Pitfalls • Identify problems • 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. • Engaging in incremental rather than unique problem solving through successive limited comparison of alternatives to the current alternative in effect.

21. Common Biases and Errors

22. Common Biases and Errors

23. Common Biases and Errors

24. Common Biases and Errors • 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 • 9/11 Prediction

26. Intuition

27. Making Choices …Individual Differences • Personality • Escalation of commitment • Facets of Conscientiousness • Achievement Striving • Forestall failure • Dutifulness • Best for the organization • Self serving bias • High self esteem • Gender • Rumination • Analyzing decision • Over-thinking • Age

28. Organizational Constraints Decision makers make action choices that are favored by the organization • Managers’ Decisions • Performance Evaluation (Evaluation criteria) • Division manager Vs. Negative information • Reward Systems • Risk aversion at GM (Low profile managers) • Formal Regulations • Rules and policies limit the alternative- Franchise • System-imposed Time Constraints • Deadlines- New product development • Historical Precedents • Past decisions influence current decisions- Budget

29. Ethics in Decision Making • Utilitarianism- Outcomes and consequences • Seeking the greatest good for the greatest number • Maximizing profit- firing decision (Questionable!) • Rights • Respecting and protecting basic rights of individuals • Protecting Whistle blowers • Justice • Imposing/enforcing rules fairly and impartially. • Equitable distribution of benefits and cost

30. Analyze situation and adjust decision Be aware of biases- limit their impact. Rational analysis with intuition –effective Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies Ways to Improve Decision Making Reducing Bias and Errors Novel and Useful Idea

31. Focus on goals. Clear goals Decision making easier Eliminate options inconsistent w/interests Look for information that disconfirms beliefs Considering ways we could be wrong we’re smarter than we actually are Don’t try create meaning off randomness/coincidence Increase your options. Number and diversity Reducing Bias and Errors Be Creative

32. The Three Components of Creativity

33. Chapter Check-Up: Perception • It’s your little sister’s senior school party, and she notices that everyone is wearing the same dress she has on! Which perceptual shortcut may be occurring? Availability Bias

34. Chapter Check-Up: Perception • If all of these perceptual shortcuts happen unconsciously, how can we keep the stereotypes we have from interfering with the way we work in group projects? • Identify two specific things you could do to help prevent stereotypes from inhibiting effective group relationships. Diversity Training

35. Decision Making … Example • Rashid has just discovered he is double registered for two classes at the same time and must make a decision about which one to take this semester. He considers the • professor teaching this semester • the time of the class, and • the classes his friends are taking. • when you can take each class again • costs and benefits for taking each this semester versus later next year. • He then makes his decision. You just engaged in _____________________ ?

36. IOA- C5July 4-5