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Chapter 3 Perception & Individual Decision Making

Chapter 3 Perception & Individual Decision Making. Individuals & Perception. Perception : Process by which we organize and interpret our sensory input to give our environment meaning . (The world we perceive is the world that’s meaningful and important.). Managers and Perception.

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Chapter 3 Perception & Individual Decision Making

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  1. Chapter 3Perception & Individual Decision Making

  2. Individuals & Perception Perception:Process by which we organize and interpret our sensory input to give our environment meaning. (The world we perceive is the world that’s meaningful and important.)

  3. Managers and Perception Mgmt. jobs require (among other things): • Observing people and situations • Gathering and interpreting information • Making decisions based on: • factual information (ideal) • subjective interpretations (reality)

  4. The Three Stages of Perception Stage 1: Attention Stage 2: Organization Stage 3: Judgment and Interpretation

  5. Stage 1: Attention Perceptual Filters Selective Attention Salient Cues

  6. Stage 2: Organization The Use of Schemas Positive Aspects? Negative Aspects?

  7. Stage 3: Judgment and Interpretation The Attribution Process Internal (or Personal) External (or Situational)

  8. Biases(or “shortcuts” to judging) • Attribution (self-serving bias) • Stereotyping • Selectivity, Contrast • Halo (and Horn) • Projection • Similar-to-me • Primacy, Recency

  9. Management ActivitiesAffected by Perceptual Biases • Interviews • Hiring • Training • Raises • Promotions • Discipline • Performance Evaluations • (anything requiring info. processing!)

  10. Forces Working to IncreaseBiases • Need for Consistency: We unconsciously push for “data” that confirm our assumptions and beliefs; we “force” information to fit expectations. • Phenomenal Absolutism: “What I see is objective reality; what you see is perceived bias.” • Channeling: Self-reinforcing cycle (we perceive people a certain way and never give them a chance to show otherwise; we thus always see them how we perceived them). • Pygmalion Effect: Self-fulfilling prophecy (we perceive people a certain way, treat them accordingly and they become what we believed them to be (i.e., they develop the very KSAOs, etc.)

  11. Strategies to Decrease Biases • Recognition:The first step is to admit you don’t objectivelysee “reality”(ask: “What else could be true?”) • Awareness:What are the areas in which your biases typically operate? What are your implicit cognitive schema? What are your culturally-based mental models? • Support:Ask for reminders, solicit help and seek for open and honest feedback. • Contact:Spend time with people from groups you stereotype and actively seek all the “disconfirming” evidence you can (avoid the “exception” hypothesis).

  12. Link betweenPerception and Decision Making • Decision making occurs as a reaction to a problem situation • Perception influences: • Awareness that a problem exists • Interpretation and evaluation of information • Bias in analyses and conclusions

  13. Individual Decision Making What makes a decision “good”? • Follows a “rational” process • Achieves the intended goal or objective • It is ethical (or morally sound)

  14. Rational Decision-Making Model 1. Define the Problem 4. Develop Alternatives 2. Identify the Criteria 5. Evaluate Alternatives 3. Weight the Criteria 6. Select “Best” Option

  15. Assumptions of theRational Decision-Making Model • Managers have complete info. about: • the situation • the alternatives • the consequences • Managers want to make “best” decision • There are clear and constant preferences • There’s no interference from perceptual biases or interpersonal conflicts • There are no time or cost constraints

  16. Bounded Rationality Model Attention Task and Situation Constraints Organization Interpretation and Judgment Behaviors Bounded Rationality (or, the quest to “suffice”)

  17. Implications of Bounded Rationality • Limited info-processing capabilities means use of all information to optimize, is impossible. • Limited list of criteria, based on more obvious choices. • We quickly accept satisficing choices (first acceptable), rather than “work” for optimal. • All biases from human perception readily come into play.

  18. Intuition and Decision Making Intuition: Unconscious process created out of deep expertise, resulting in rapid decisions with apparently very limited info. When do we typically see effective Intuitionused? • High uncertainty exists • Little precedent to draw on • Variables are less predictable • Facts/data are limited • Facts/data don’t clearly point the way • Analytical data of little use • Several plausible solutions to choose from • Limited time with high pressure for right decision (effective use of the above assumes high expertise)

  19. Common Decision-Making Individual Biases/Errors • Escalation of commitment • Overconfidence bias • Anchoring bias • Confirmation bias • Availability bias • Representative bias • Randomness error • Hindsight bias • Attribution/Self-serving bias

  20. Common Organization-Level Constraints • Performance evaluations • Reward/punishment systems • Formal regulations and policies • System-imposed time and resource constraints • Historical precedents

  21. Three Components of Creativity CreativitySkills Expertise Creativity TaskMotivation

  22. Characteristics of Creative People • Self-confidence and perseverance in the face of obstacles • Willingness to take risks • Openness to new experiences (“lateral” thinkers) and a willingness to grow • Tolerant with ambiguity

  23. Org. Factors Affecting Creativity • Attitudes toward divergent views, opinions and questioning • Cultural value placed on tradition and conformity versus innovation • Leadership attitudes toward dissent • Degree of formality in org. structures • Acceptance of risk and failure

  24. Org. Factors Impeding Creativity • Expected evaluation • Surveillance • External motivators • Competition • Constrained choice

  25. Impact of Cultural Differences • Cultural background significantly influences: • Selection of problems • What constitutes “acceptable” criteria • Depth of analysis • Importance placed on logic and rationality • Whether decisions should be made: • Autocratically (by one person, manager), or • Collectively (by groups)

  26. Implications for Managers Six suggestions to improve decision making: • Analyze the situation and adjust to the national culture and criteria of the organization • Be aware of, and work past, your personal biases • Recognize that your specific decision style is *not* always appropriate for every job or situation • Combine rational analysis with intuition • Use creativity-enhancing techniques • Be prepared to take a stand for your ethics/beliefs

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