HND – 6. Perception & Individual Decision Making

HND – 6. Perception & Individual Decision Making Lim SeiKee @ cK

Perception • A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment. • Individuals may look at the same thing, yet perceive it differently.

FACTORS IN THE PERCEIVER • Attitudes • Motives • Interests • Experience • Expectations • FACTORS IN THE TARGET • Motion • Sounds • Size • Background • Similarity PERCEPTION • FACTORS IN THE SITUATION • Time • Work setting • Social setting

Attribution theory • When individuals observe behavior, they attempt to determine whether it is internally or externally caused. • Depends on: • Distinctiveness – displays different behaviors in different situations • Consensus – everyone with a similar situation responds in the same way • Consistency – respond the same way over time

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. • Self-serving bias – the tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factors.

Shortcuts in judging others • Selective perceptions • Halo effect • Contrast effect • Projection • Stereotyping • Self-fulfilling prophecy • Profiling

Selective perception – people selectively interpret what they see on the basis of their interests, background, experience and attitudes. • Halo effect – drawing a general impression about an individual on the basis of a single characteristics. • Contrast effect – evaluation of a persno’s characteristics that are affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics.

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. • Self-fulfilling prophecy – a situation in which one person inaccurately perceives a second person and the resulting expectations cause the second person to behave in ways consistent with the original perceptions. • Profiling – a group of individuals is singled out – typically on the basis of race or ethnicity – for intensive inquiry or investigation.

Decisions – the choices made from among two or more alternatives • Problem – a discrepancy between some current state of affairs and some desired state

Rational decision-making process • Making consistent, value-maximizing choices within specified constraints. • Rational decision-making model – a decision-making model that describes how individuals should behave in order to maximize some outcome. • Defining the problem • Identify the decision criteria • Allocate weights to the criteria • Develop the alternatives • Evaluate the alternatives • Select the best alternative

Assumptions of the model • Problem clarity • Known options • Clear preferences • Constant preferences • No time or cost constraints • Maximum payoff

Improving creativity in Decision Making • Creativity – the ability to produce useful ideas • Ideas that are different from what’s been done before but that are also appropriate to the problem or opportunity presented.

Three-component model of creativity • Proposes that individual creativity requires expertise, creative-thinking skills and intrinsic task motivation • Expertise – foundation for all creative work • Creative-thinking skills – personality characteristics associated with creativity. • Intrinsic task motivation - desire to work on something

Decisions in organizations • Bounded Rationality – individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity

Common biases and errors • Overconfidence bias • Anchoring bias • Confirmation bias • Availability bias • Representative bias • Escalation of Commitment bias • Randomness Error • Hindsight bias

Overconfidence bias – ‘no problem in judgment and decision making’ • Anchoring bias – a tendency to fixate on initial information as a starting point. • Confirmation bias – a specific case of selective perception; we seek out information that reaffirms our past choices, and we discount information that contradicts past judgments. • Availability bias – the tendency for people to base their judgments on information that is readily available to them

Representative bias – assessing the likelihood of an occurrence by trying to match it with a preexisting category. • Escalation of Commitment Error – an increased commitment to a previous decision in spite of negative information. • Randomness Error – difficulty dealing with chance. • Hindsight bias – the tendency for us to believe falsely that we’d have accurately predicted the outcome of an event, after that outcome is actually known.

Intuition • Intuitive decision making – an unconscious process created out of distilled experience. • Eight conditions for intuitive decision making – • When high level of uncertainty exists • When there is little precedent to draw on • When variables are less scientifically predictable • When ‘facts’ are limited • When facts don’t clearly point the way • When analytical data are of little use • When there are several plausible alternative solutions from which to choose • When time is limited and there is pressure

Decision making style • Directive – low tolerance for ambiguity and seek rationality • Analytic – greater tolerance for ambiguity • Conceptual – tend to use data from multiple sources and consider many alternatives • Behavioral – strong concern for the people in the organization and their development

Ethical decision criteria • Utilitarianism – decisions are made to provide the greatest good for the greatest number • Whistle-blowers – individuals who report unethical practices by their employer to outsiders • Justice – impose and enforce rules fairly so that there is an equitable distribution of benefits and costs.

HND – 6. Perception & Individual Decision Making