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Ch. 6 Perception and Individual Decision Making

by: Alora Lornklang

Ch. 6 Perception and Individual Decision Making MGMT 3720

Marketplace > University of North Texas > Business > MGMT 3720 > Ch 6 Perception and Individual Decision Making
Alora Lornklang
GPA 3.5

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About this Document

These notes will cover the learning objectives and vocabulary for Chapter 6 of the textbook.
Organizational Behavior
Dr. James D. Powell
Class Notes
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This 7 page Class Notes was uploaded by Alora Lornklang on Saturday February 27, 2016. The Class Notes belongs to MGMT 3720 at University of North Texas taught by Dr. James D. Powell in Spring 2016. Since its upload, it has received 69 views. For similar materials see Organizational Behavior in Business at University of North Texas.


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Date Created: 02/27/16
MGMT 3720 Organizational Behavior Chapter Review Chapter 6: Perception and Individual decision making 1. Define perception, and explain the factors that influence it.  a. Perception: i. A process by which individuals organize and interpret their  sensory impressions in order to give meaning to their environment. b. Factors can reside in the perceiver, situation, or target c. Factors in the Perceiver i. Attitudes v  ii. Motives iii. Interests iv. Experience  v. Expectations  d. Factors in the situation i. Time ii. Work setting iii. Social setting e. Factors in the target i. Novelty  ii. Motion  iii. Sounds iv. Size  v. Background vi. Proximity vii. Similarity 2. Explain attribution theory, and list the three determinants of attribution.  a. Attribution theory: i. An attempt to determine whether an individual’s behavior is  internally or externally caused.  ii. That determination depends largely on three factors: 1. Distinctiveness, consensus, and consistency iii. Distinctiveness refers to whether an individual displays different  behaviors in different situations.  iv. If everyone who faces a similar situation responds in the same  way, we can say the behavior shows consensus.  v. Consistency: Does a person respond the same way over time? vi. Internally caused behaviors are those an observer believes to be  under the personal behavioral control of another individual vii. Externally caused behavior is what we imagine the situation forced the individual to do. viii. The Fundamental attribution error  1. The tendency to underestimate the influence of external  factors and overestimate the influence of internal factors  when making judgments about the behavior of others.  ix. Self Serving Bias 1. The tendency for individuals to attribute their own successes to internal factors and put the blame for failures on external factors.  3. Identify the shortcuts individuals use in making judgments about others.  a. Selective Perception i. The tendency to selectively interpret what one sees on the basis of  one’s interests, background, experience, and attitudes.  b. Halo effect: i. The tendency to draw a general impression about an individual on  the basis of a single characteristic.  c. Contrast effect i. Evaluation of a person’s characteristics that is affected by  comparisons with other people recently encountered who rank  higher or lower on the same characteristics.  d. Stereotyping: i. Judging someone on the basis of one’s perception of the group to  which that person belongs.  e. Specific applications of shortcuts in organizations i. Employment interview ii. Performance expectations  iii. Performance evaluation f. Self­fulfilling prophecy:  i. A situation in which a person inaccurately perceives a second  person, and the resulting expectations cause the second person to  behave in ways consistent with the original perception.  1. AKA Pygmalion effect  4. Explain the link between perception and decision making a. Decisions i. Choices made from among two or more alternatives b. Problem i. A discrepancy between the current state of affairs and some  desired state.  c. Every decision requires us to interpret and evaluate data from multiple  sources that we need to screen, process and interpret. Our perceptions will  tell us which data are relevant to the decision and which are not.  5. Contrast the rational model of decision making with bounded rationality and  intuition.  a. Rational i. Characterized by making consistent, value­maximizing choices  within specified constraints.  b. Rational decision­making model  i. A decision­making model that describes how individuals should  behave in order to maximize some outcome.  1. Define the problem 2. Identify the decision criteria 3. Allocate weights to the criteria 4. Develop the alternatives 5. Evaluate the alternatives 6. Select the best alternative ii. Most decisions don’t follow the rational model c. Bounded rationality  i. A process of making decisions by constructing simplified models  that extract the essential features from problems without capturing  all their complexity.  ii. Most problems don’t have an optimal solution because they are too complicated to fit the rational decision­making model, so people  satisfice; they seek solutions that are satisfactory and sufficient.  iii. The solution represents a satisficing choice—the first acceptable  one we encounter—rather than an optimal one.  d. Intuitive decision making i. An unconscious process created out of distilled experience ii. Intuitive decision making occurs outside the conscious thought;  relies on holistic associations, or links between disparate pieces of  information; is fast; and is affectively charged, meaning it engages  the emotions.  6. Describe the common decision biases or errors.  a. Overconfidence Bias  i. We tend to be overconfident about our abilities and the abilities of  others; also, we are not usually aware of this bias ii. Individuals whose intellectual and interpersonal abilities are the  weakest are most likely to overestimate their performance and  ability.  iii. There’s a negative relationship between entrepreneurs’ optimism  and performance of their new ventures.  b. Anchoring Bias  i. A tendency to fixate on initial information, from which one then  fails to adequately adjust for subsequent information.  c. Confirmation Bias i. The tendency to seek out information that reaffirms past choices  and to discount information that contradicts past judgments d. Availability Bias i. The tendency for people to base their judgments on information  that is readily available to them e. Escalation of commitment i. An increased commitment to a previous decision in spite of  negative information  f. Randomness error  i. The tendency of individuals to believe that they can predict the  outcome of random events.  g. Risk Aversion  i. The tendency to prefer a sure gain of a moderate amount over a  riskier outcome, even if the riskier outcome might have a higher  payoff.  h. Hindsight bias i. The tendency to believe falsely, after an outcome of an event is  actually known, that one would have accurately predicted that  outcome.  7. Explain how individual differences and organizational constraints affect  decision­making.   a .     Individual Differences b. Personality i. Conscientiousness may affect escalation of commitment  ii. High self­esteem are strongly motivated to maintain it, so they use  the self­serving bias to preserve it.  c. Gender  i. Rumination refers to reflecting at length (overthinking problems) ii. Women spend more time analyzing the past, present, and future.  iii. Can lead to careful consideration of problems and choices or make  problems harder to solve, increase regret over past decisions, and  increase depression.  d. Mental Ability i. People with higher levels of mental ability are able to process  information more quickly ii. Smart people are just as likely to fall prey to anchoring,  overconfidence, and escalation of commitment e. Cultural differences i. We need to recognize that the cultural background of a decision  maker can significantly influence the selection of problems, the  depth of analysis, the importance placed on logic and rationality,  and whether organizational decisions should be made  autocratically by an individual manager or collectively in groups.   f .     Organizational Constraints g. Performance Evaluation  i. Managers are influenced by the criteria on which they are  evaluated h. Reward system i. The organization’s rewards system influences decision makers by  suggesting which choices have better personal payoffs.  i. Formal regulations i. All but the smallest organizations create rules and policies to  program decisions and get individuals to act in the intended  manner: in doing so, they limit decision choices j. System­Imposed Time Constraints i. Almost all important decisions come with a deadline k. Historical Precedents i. Decisions aren’t made in a vacuum; they have a context.  ii. Individual decisions are points in a stream of choice; those made in the past are like ghosts that haunt and constrain current choices. 8. Contrast the three ethical decision criteria.  a. 1) Utilitarianism i. a system in which decisions are made to provide the greatest good  for the greatest number ii. Promotes efficiency and productivity, but sidelines the rights of  some individuals, particularly those with minority representation b. 2) Make decisions consistent with fundamental liberties and privileges, as  set forth in documents such as the Bill of Rights.  i. Whistle blowers 1. Individuals who report unethical practices by their  employer to outsiders.  ii. The use of rights protects individuals from injury and is consistent  with freedom and privacy, but it can create a legalistic  environment that hinders productivity and efficiency.  c. 3) To impose and enforce rules fairly and impartially to ensure justice or  an equitable distribution of benefits and costs.  i. A focus on justice protects the interests of the underrepresented  and less powerful, but it can encourage a sense of entitlement that  reduces risk taking, innovation, and productivity.  d. Behavioral Ethics i. Analyzing how people actually behave when confronted with  ethical dilemmas.  9. Define creativity, and describe the three­stage model of creativity.  a. Creativity i. The ability to produce novel and useful ideas.  ii. Creativity allows the decision maker to fully appraise and  understand problems, including seeing problems others can’t see.  b. Three­stage model of creativity  i. The proposition that creativity involves three stages: causes  (creative potential and creative environment), creative behavior,  and creative outcomes (innovation).  c. Creative behavior i. Occurs in 4 steps:  1. Problem Formulation  The stage of creative behavior which involved  identifying problem or opportunity that requires a  solution that is as yet unknown 2. Information  a. The stage of creative behavior when possible  solutions to a problem incubate in individual’s  mind.  3. Idea generation a. The process of creative behavior that involves  developing possible solutions to a problem from  relevant information and knowledge.  4. Idea evaluation  a. The process of creative behavior involving the  evaluation of potential solutions to problems to  identify the best one. 


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