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OB_UG_2002 GSM 1
Perception and Decision Making
Hui WANGGuanghua School of Management
Peking University Email: wanghui@gsm.pku.edu.cn
Tel: 62753645 9 Oct. 2002
OB_UG_2002 GSM 2
Issues for Today What is Perception, and Why is it Important? Factors Influencing Perception Person Perception: Making Judgments about
Others The Link between Perception and Individual
Decision Making How should Decisions be Made? How are Decisions Actually Made in
Organizations? How to Improve Quality of Decision?
OB_UG_2002 GSM 3
Perception What is Perception?
A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.
Why is it Important? Because people’s behavior is based on
their perception of what reality is, not on reality itself.
The world that is perceived is the world that is behaviorally important.
OB_UG_2002 GSM 4
Factors Influencing Perception
Perceiver: The person trying to interpret some observation that he or she has just made.
Target: Whatever the perceiver is trying to make sense of.
Situation: The context in which the perception takes place.
OB_UG_2002 GSM 5
Factors in the Perceiver•Schema•Motives•Interests•Experience•Expectations
Factors in the Perceiver•Schema•Motives•Interests•Experience•Expectations
Factors in the situation•Time•Work setting•Social setting
Factors in the situation•Time•Work setting•Social setting
Factors in the target•Novelty•Motion•Sounds•Size•Background•Proximity
Factors in the target•Novelty•Motion•Sounds•Size•Background•Proximity
PerceptionPerception
OB_UG_2002 GSM 6
Characteristics of the Perceiver That Affect Perception
OB_UG_2002 GSM 7
Schemas
Schemas: Abstract knowledge structures that are stored in memory and make possible the organization and interpretation of information about targets of perception.
OB_UG_2002 GSM 8
Motivational State and Mood
Motivational State: The needs, values, and desires of a perceiver at the time of perception.
Mood: How a perceiver feels at the time of perception.
OB_UG_2002 GSM 9
Interpersonal Perception Emotion and Feeling Behaviors Personality
Past Experience Sibling
Impression Management First Impression
OB_UG_2002 GSM 10
Perceptual Judgment Experimentby P.R.Wilson (1968)
Information Average Estimated Height
1. A student 5’ 9.9” 2. Demonstrator 5’ 10.4”3. Lecturer 5’ 10.9”4. Senior Lecturer 5’ 11.6”5. Professor Jones 6’ 0.3”
OB_UG_2002 GSM 11
Perception Biases and Problems
Selective Perception Halo Effect Contrast Effects Projection Stereotyping
OB_UG_2002 GSM 12
Selective Perception
selectively interpret what see based on own interests, background, experience, and attitudes.
Dearborn & Simon (1958)
OB_UG_2002 GSM 13
Halo Effect
The perceiver’s general impression of a target distorts his or her perception of the target on specific dimensions.
Dion (1972)’s Experiment
OB_UG_2002 GSM 14
Contrast Effects
The perceiver’s perceptions of others distort the perceiver’s perception of a target.
深陷的双眼证明内心的仇恨,突出的下巴证明沿犯罪的道路走到底的决心;
深陷的双眼表明思想的深度,突出的下巴表明在知识的道路上克服困难的意志力。
OB_UG_2002 GSM 15
Projection
attribute own characteristics to others.
Schiffenbauer (1974)
OB_UG_2002 GSM 16
Stereotyping
judge someone on the basis of the perception of the group to which they belong instead of their own characteristics.
OB_UG_2002 GSM 17
Specific Applications in Organization
Employee interview Performance expectation
Self-fulfilling prophecy or pygmalion effect: When one person inaccurately perceives a second person and the resulting expectations cause the second person to have in ways consistent with the original perception.
Employee evaluation
OB_UG_2002 GSM 18
Attribution Theory
When individuals observe behavior, they attempt to determine whether it is internally or externally caused.
Heider (1957) Weiner (1974) Kelley (1967)
OB_UG_2002 GSM 19
Types of Attributions
OB_UG_2002 GSM 20
Internal vs. External and Stable vs. unstable
Internal External
Stable Ability Task Difficulty
Unstable Effort Luck
OB_UG_2002 GSM 21
Attribution of Cause
InterpretationObservation
Attribution Attribution
Theory andTheory and
IndividualIndividual
BehaviorBehavior
ExternalExternal
ExternalExternal
ExternalExternal
InternalInternal
InternalInternal
InternalInternal
DistinctivenessDistinctiveness
ConsensusConsensus
ConsistencyConsistency
HighHigh
HighHigh
HighHigh
LowLow
HighHigh
LowLow
OB_UG_2002 GSM 22
Sources of Information
Internal attribution if low consensus, low distinctness, high consistency
External attribution if high consensus, high distinctness, high consistency
OB_UG_2002 GSM 23
Attributional Biases
Fundamental attribution error - the tendency to over-attribute behavior to internal rather than external causes.
Actor-observer effect - the tendency to attribute the behavior of others to internal causes and to attribute one’s own behavior to external causes.
OB_UG_2002 GSM 24
Attributional Bias
Self-serving attribution - the tendency to:
perceive own success as internal and failures as external.
perceive others success as external, and failure as internal
take credit for successes and avoid blame for failures.
OB_UG_2002 GSM 25
Decision Making
The process by which members of an organization choose a specific course of action to respond to both problems and opportunities.
OB_UG_2002 GSM 26
The Decision-Making Process
Rational Model of Decision Making
Bounded Rationality Implicit Favorite Model Intuitive Model
OB_UG_2002 GSM 27
Rational Model of Decision Making
A prescriptive approach based on the assumptions that the decision maker has all the necessary information and will choose the best possible solution or response.
OB_UG_2002 GSM 28
Rational Model of
Decision Making
Problem
Identify andDefine Problem
DevelopAlternatives
A1
A2
A3
A4
An
EvaluateAlternatives
+
A1 A1
A2 A2
An An
Criteria
Weightthe Criteria
T E C H
Set DecisionCriteria
Choice
Make OptimalDecision
OB_UG_2002 GSM 29
Assumptions of the Rational Model
Problem clarity. Known options. Clear preferences. Constant preferences. No time or cost constraints. People choose maximum payoff. People have very high computational
abilities
OB_UG_2002 GSM 30
Bounded Rationality
Bounded Rationality: People’s ability to reason is constrained by the limitations of the human mind itself. If a problem is too complicated people simplify it and use satisficing
Satisficing: Searching for and choosing the first acceptable response or solution, not necessarily the best possible one.
OB_UG_2002 GSM 31
Implicit Favorite Model Early in the decision process,
decision maker implicitly selects a preferred alternative. Then the rest of the decision process is essentially a decision confirmation exercise, where the decision makers makes sure his/her implicit favorite is indeed the “right” choice.
OB_UG_2002 GSM 32
Intuitive Model
an unconscious process created out of distilled experience.
intuition is often based on accumulated experiences which allow one to recognize patterns.
Main problem: since the criteria are not open to examination, intuition is often strongly influenced by perceptual biases.
OB_UG_2002 GSM 33
Intuitive Decision Making most common under conditions of
High uncertainty levels Little precedent Hard to predictable variables Limited facts Unclear sense of direction Analytical data is of little use Several plausible alternatives Time constraints
OB_UG_2002 GSM 34
Exercise(2): Decision Making
Introduction Individual Judgment Group Judgment Difference between You and Expert Difference between Your Group
and Expert Summary
OB_UG_2002 GSM 35
Sources of Error in Decision Making
Perceptual Biases Heuristics
Availability Representitiveness Anchoring
Escalation of Commitment
OB_UG_2002 GSM 36
Heuristics:
Rules of thumb that simplify decision making.
OB_UG_2002 GSM 37
Heuristics and the Biases They May Lead To
OB_UG_2002 GSM 38
Availability Heuristic The rule of thumb that says an
event that is easy to remember is likely to have occurred more frequently than an event that is difficult to remember.
Potential bias is overestimating the frequency of vivid, extreme, or recent events and causes.
OB_UG_2002 GSM 39
Availability Biases
Vividness and Recency individuals judge events that are
easier to remember to be more numerous than events that are difficult to remember
OB_UG_2002 GSM 40
Representativeness Heuristic
The rule of thumb that says similar kinds of events that happened in the past are a good predictor of the likelihood of an upcoming event.
Potential bias is failure to take into account base rates and overestimating the likelihood of rare events.
OB_UG_2002 GSM 41
Representativeness Biases
Insensitivity to base rates individuals tend to ignore base rates in
assessing the likelihood of events when other descriptive information is present, even if that other information is irrelevant
OB_UG_2002 GSM 42
Anchoring and Adjustment Heuristic
The rule of thumb that says that decisions about how big or small an amount should be/ can be made by making adjustments from some initial amount.
Potential bias is inappropriate decisions when initial amounts are too high or too low.
OB_UG_2002 GSM 43
Anchoring and Adjustment Biases
Insufficient anchor adjustment individuals make estimates for values
based on some initial value, even when the initial value is irrelevant
Overconfidence individuals tend to be overconfident
of the infallibility of their judgements when answering difficult questions
OB_UG_2002 GSM 44
One Additional Biases
Hindsight Bias after finding out the correct outcome
of an event, individuals tend to overestimate the extent to which they would have predicted that outcome
OB_UG_2002 GSM 45
Escalation of Commitment
Increased commitment to a previous decision in spite of negative information
The tendency to invest additional time, money, or effort into what are essentially bad decisions or unproductive courses of action.
OB_UG_2002 GSM 46
The Three Components of Creativity The Three Components of Creativity
Expertise
TaskMotivation
CreativitySkills
Creativity
OB_UG_2002 GSM 47
Analytic Conceptual
BehavioralDirective
Rational IntuitiveWay of Thinking
High
Low
To
lera
nce
fo
r A
mb
igu
ity
Decision-Making StylesDecision-Making Styles
OB_UG_2002 GSM 48
Summary and Implications for Managers
Perception Individuals behave based not on the way their
external environment actually is but, rather, on what they see or believe it to be.
What individuals perceive from their work situation will influence their productivity more than will the situation itself.
Absenteeism, turnover, and job satisfaction are also reactions to the individual’s perceptions.
OB_UG_2002 GSM 49
Summary and Implications for Managers
Individual Decision Making Individuals think and reason before they act. Under some decision situations, people follow the
rational decision-making model. What can managers do to improve their decision
making? Analyze the situation. Be aware of biases. Combine rational analysis with intuition. Don’t assume that your specific decision style is
appropriate for every job. Use creativity-stimulation techniques.
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