Chapter 5: Perception and Individual Decision Making - Notes
What is Perception?
Perception is the process by which individuals organize and interpret their sensory impressions to give meaning to their
environment. In OB, its crucial because people act based on what they perceive, not on objective reality.
Example (OB class): Two students perceive a strict teacher differently one sees discipline, another sees hostility.
Factors Influencing Perception
1. Perceiver: Attitudes, motives, interests, experience, expectations.
2. Target: Novelty, motion, sounds, size, background, proximity, similarity.
3. Situation: Time, work setting, social setting.
Example: A manager might judge a late employee differently based on whether its Monday morning or a regular Friday.
Attribution Theory
People try to explain others' behavior by attributing causes:
- Internal: Behavior due to personal traits.
- External: Due to the situation.
Determinants: Distinctiveness, Consensus, Consistency.
Example: If a classmate always submits work late, you may think they are lazy (internal), unless others are late too
(external).
Attribution Errors
- Fundamental Attribution Error: Overestimating internal factors in others.
- Self-Serving Bias: Success = internal; failure = external.
Example: A student blames a poor grade on a teacher (external) but credits a good grade to hard work (internal).
Chapter 5: Perception and Individual Decision Making - Notes
Perceptual Shortcuts
- Selective Perception: Seeing what you want to see.
- Halo Effect: One good trait overshadows others.
- Contrast Effects: Comparing people with others recently encountered.
- Projection: Attributing your own traits to others.
- Stereotyping: Judging based on group membership.
Example: Assuming a quiet student is shy in group tasks due to stereotyping.
Applications in Organizations
- Interview Biases: First impressions can distort judgment.
- Performance Expectations: Pygmalion effect high expectations lead to better performance.
- Ethnic Profiling: Judging based on ethnicity or race.
- Evaluations and Effort: Subjective and biased perception affects appraisals.
Perception and Decision Making
Perception influences how problems are identified and solved. Decisions depend on how data is perceived, not just on
reality.
Example: A student may avoid group work if they perceive peers as lazy, even if its not true.
Rational Decision-Making Model
Steps:
1. Define the problem
2. Identify criteria
3. Weight the criteria
4. Develop alternatives
5. Evaluate alternatives
6. Select best option
Chapter 5: Perception and Individual Decision Making - Notes
Assumes logical, structured decision-making, which isnt always realistic.
Bounded Rationality and Satisficing
- Bounded Rationality: People simplify decisions due to limited info/time.
- Satisficing: Settling for a good-enough option instead of the best one.
Example: Choosing the first suitable OB topic for an assignment rather than the best possible one.
Decision-Making Biases
- Overconfidence Bias, Anchoring, Confirmation, Availability, Representativeness.
- Escalation of Commitment, Randomness Error, Hindsight Bias.
Example: Believing you predicted the exam questions after seeing the paper (Hindsight Bias).
Intuition in Decision Making
- Based on past experiences.
- Used in uncertain or complex scenarios.
Example: Trusting your gut in choosing a group leader.
Decision Styles
1. Directive
2. Analytical
3. Conceptual
4. Behavioral
Each has a different way of gathering information and evaluating alternatives.
Chapter 5: Perception and Individual Decision Making - Notes
Organizational and Cultural Constraints
- Evaluation systems, reward structures, rules, time constraints, and history all affect decisions.
- Culture affects how decisions are made (individual vs collective).
Ethics in Decision Making
- Utilitarianism: Greatest good.
- Rights: Respect individual rights.
- Justice: Fair treatment.
Example: Deciding to report a cheating classmate considers ethics of fairness vs loyalty.
Improving Decision Making
- Adjust style to situation
- Be aware of biases
- Combine logic and intuition
- Encourage creativity
- Increase options
Example: Brainstorming unusual solutions before choosing one in a team task.
