Chapter 6 MGMT 306
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Exam 2 – CH 6, 9, 10, 4, 11 Organizational Behavior and Diversity Chapter 6 – Perception and Individual Decision Making Perception: is a process by which individuals organize and interpret sensory impressions in order to give meaning to their environments Factors that Influence Perception – these factors can come from the perceiver; in the object, or target, being perceived; or in the situation in which the perception is made. o When you look at a target, your interpretation of what you see is influenced by your personal characteristics (attitudes, personality, motives, interests, past experiences, and expectations). o The characteristics of the target like loud people, attractive or nonattractive people. o The context like at what time we see an object or event can influence our attention also like location, light, heat, or situational factors. Someone can dress up for a party and also wear same outfit to class; the person is the same just not the situation. Person Perception – making judgements about others – our perception and judgement of a person’s actions are influenced by the assumptions we make about the person’s state of mind Attribution Theory: explains the ways we judge people differently, depending on the meaning we attribute to a behavior. When observing, we attempt to determine whether it was internally or externally caused. o Determination depends on three factors: distinctiveness, consensus, and consistency o Internally caused behaviors are those an observer believes to be under the personal control of another individual o Externally caused behavior is what we imagine the situation forced the individual to do o Distinctiveness refers to an individual who displays different behaviors in different situations. We want to know if this behavior is unusual. o Consensus is everyone who faces a similar situation responds in the same way. If consensus is high it would mean external attribution. o Consistency is when the person responds the same way over time. The more consistent a behavior then we attribute to internal causes. o Fundamental attribution error: when we make judgements about the behavior of other people, we tend to underestimate the influence of external factors and overestimate the influence of internal or personal factors. o Self-serving bias: the tendency for individuals to attribute their own success to internal factors and put blame for failures on external factors. Common Shortcuts in Judging Others – allows us to form perceptions rapidly and provide valid data for making predictions. Can result in distortions. o Selective perception: any characteristic that makes a person, object, or event stand out will increase the probability that it will be perceived. Stands out more with our own interests, background, experience, and attitude. o Halo effect: impression of an individual based on a single characteristic, such as intelligence, sociability, or appearance. o Contrast effect: evaluations of a person’s characteristics that is affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics. o Stereotyping: when we judge someone on the basis of our perception of the group to which he or she belongs. Individual perception and decision making o Decisions: choices made from among two or more alternatives that are influenced by our perceptions. Requires us to interpret and evaluate. o Problems: discrepancies between the current state of affairs and some desired state. Decision Making in Organizations o Rational Decision Making Rational: characterized by making consistent, value-maximizing choices within specified constraints Rational decision-making model: describes how individuals should behave in order to maximize an outcome. Consists of six steps: (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 o Bounded Rationality: A process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity. o Intuition Intuitive decision making: the least rational way of making decisions. It is a nonconscious process created from distilled experience. A fast decision that engages the emotions. Common Bias and Errors in Decision Making – to minimize effort and avoid trade-offs, people tend to rely too heavily on experience, impulses, gut feelings, and rules of thumb. The following can be used to avoid bias and errors: focus on goals, look for information that disconfirms your beliefs, don’t try to create meaning out of random events, and increase your options. o Overconfidence bias – research points out that we are overconfident about our abilities and abilities of others, and that we are not aware of this bias. Individuals whose intellectual and interpersonal abilities are weakest are most likely to overestimate their performance and ability. The more optimistic, the less successful. o Anchoring bias: a tendency to fixate on initial information and fail to adequately adjust for subsequent information. o Confirmation bias: represents a case of selective perception – we seek out information that reaffirms our past choices, and we discount information that contradicts them. The information we gather is typically biased toward supporting views we already hold. o Availability bias: tendency to base judgements on information readily available. o Escalation of commitment: refers to our staying with a decision even if there is clear evidence its wrong. It occurs when individuals view themselves as responsible for the outcome. o Risk Aversion: tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff. o Hindsight bias: the tendency to believe falsely, after the outcome is known, that we would have accurately predicted it. Organizational Constraints on Decision Making o Performance evaluation - Managers are influenced by the criteria on which they are evaluated. o Reward systems - influences decision makers by suggesting which choices have better personal payoffs. o Formal regulation - Smaller organizations create rules and policies to program decisions and get individuals to act in the intended manner, thus, they limit decision choices. o System-imposed time constraints – Explicit deadlines can make it difficult, if not impossible, for managers to gather all the information before making a final choice. o Historical precedents – choices made today are largely a result of choices made over the years. Ethics in Decision Making o Utilitarianism: proposes making decisions solely on the basis of their outcomes to provoke the greatest good for the greatest number. It is consistent with goals such as efficiency, productivity, and high profits. o Rights in decision making means respecting and protecting the basic rights of individuals such as the right to privacy, free speech, and due process. This protects whistleblowers: employees who reveal an organization’s unethical practices to the press or government agencies, using their right to free speech. o Impose and enforce rules fairly and impartially to ensure justice or an equitable distribution of benefits and costs. o Behavioral ethics: an area of study that analyzes how people behave when confronted with ethical dilemmas. Creativity in Organizations o Creativity: the ability to produce novel and useful ideas. Novel ideas are different from what’s been done before but are appropriate for the problem. o Three-stage model of creativity: the core of the model is creative behavior, which has both causes (predictors of creative behavior) and effect (outcomes of creative behavior) o Creative behavior occurs in four steps: Problem formulation: the stage of creative behavior in which we identify a problem or opportunity that requires a solution as yet unknown. Information gathering: the stage of creative behavior when possible solutions to a problem incubate in an individual’s mind. Idea generation: the process of creative behavior in which we develop possible solutions to a problem from relevant information and knowledge. It is collaborative. Idea evaluation: the process of creative behavior in which we evaluate potential solutions to identify the best one. Innovation. o Causes of creative behavior Creative potential – smart people are more creative because they are better at solving complex problems. They also have a greater working memory where they can recall more information that is related to the task at hand. Traits include, openness, proactive personality, self-confidence, risk taking, tolerance for ambiguity, and perseverance. Expertise is the foundation for all creative work and thus is the single most important predictor of creative potential. Creative environment – motivation or intrinsic motivation is the desire to work on something because it’s interesting, exciting, satisfying, and challenging. It is valuable to work in an environment that rewards and recognizes creative work. Freedom from excessive rules encourages creativity: employees should have the freedom to decide what work is to be done and how to do it. o Creative Outcomes (Innovation) Ideas or solutions judged to be novel and useful by relevant stakeholders are creative outcomes.