Chapter 4

Perception and Individual

Decision Making

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Chapter Learning Objectives
 After studying this chapter, you should be able to:
 Define perception and explain the factors that influence it.
 Explain attribute theory and list the three determinants of attribution.
 Identify the shortcuts individuals use in making judgments about
others.
 Explain the link between perception and decision making.
 Apply the rational model of decision making and contrast it with
bounded rationality and intuition.
 List and explain the common decision biases or errors.
 Explain how individual differences and organizational constraints
affect decision making.

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What is Perception
A process by which individuals organize and
interpret their sensory impressions in order
to give meaning to their environment.

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Factors that influence perception

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 What is Perception
People’s behavior is based on their
perception of what reality is, not on reality
itself.

“How others see you isn’t

important, how you see
yourself means everything”

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What is Perception
The world as it is perceived is the world that
is behaviorally important.

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Attribution Theory: Judging Others
 Our perception and judgment of others is significantly
influenced by our assumptions of the other person’s
internal state.
 When individuals observe behavior, they attempt to
determine whether it is internally or externally caused.
• Internal causes are under that person’s control
• External causes are not under the person’s control
 Causation judged through:
 Distinctiveness
• Shows different behaviors in different situations
 Consensus
• Response is the same as others to same situation
 Consistency
• Responds in the same way over time

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Elements of Attribution Theory
Errors and Biases in Attributions
 Fundamental Attribution Error
 The tendency to underestimate the influence of external
factors and overestimate the influence of internal factors
when making judgments about the behavior of others
 We blame people first, not the situation

 Self-Serving Bias
 The tendency for individuals to attribute their own
successes to internal factors while putting the blame for
failures on external factors
 It is “our” success but “their” failure

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Frequently Used Shortcuts in Judging
Others
 Selective Perception – Nhận thức có chọn lọc
 People selectively interpret what they see on the basis of
their interests, background, experience, and attitudes
 Halo Effect – Hiệu ứng vầng hào quang/ Horn effect
 Drawing a general impression about an individual on the
basis of a single characteristic
 Contrast Effects – Hiệu ứng tương phản
 Evaluation of a person’s characteristics that are affected by
comparisons with other people recently encountered who
rank higher or lower on the same characteristics

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Another Shortcut: Stereotyping
Judging someone on the basis of one’s
perception of the group to which that person
belongs – a prevalent and often useful, if not
always accurate, generalization

Profiling
 A form of stereotyping in which members of a
group are singled out for intense scrutiny based
on a single, often racial, trait.

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Specific Shortcut Applications in
Organization
 Employment Interview
 Perceptual biases of raters affect the accuracy of interviewers’
judgments of applicants
 Formed in a single glance – 1/10 of a second!
 Performance Expectations
 Self-fulfilling prophecy (Pygmalion effect): The lower or higher
performance of employees reflects preconceived leader
expectations about employee capabilities
 Performance Evaluations
 Appraisals are often the subjective (judgmental) perceptions of
appraisers of another employee’s job performance
 Critical impact on employees

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Perceptions and Individual Decision
Making
Problem
 A perceived discrepancy between the current state of
affairs and a desired state
Decisions
 Choices made from among alternatives developed
from data
Perception Linkage:
 All elements of problem identification and the
decision-making process are influenced by perception.
• Problems must be recognized
• Data must be selected and evaluated

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Decision-Making Models in
Organizations
 Rational Decision Making
 The “perfect world” model: assumes complete
information, all options known, and maximum payoff
 Six-step decision-making process
 Bounded Reality
 The “real world” model: seeks satisfactory and sufficient
solutions from limited data and alternatives
 Intuition
 A non-conscious process created from distilled experience
that results in quick decisions
• Relies on holistic associations
• Affectively charged – engaging the emotions

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Decision-Making Models in
Organizations

Identify the Allocate

Define the
decision weights to the
problem
criteria criteria

Select the best Evaluate the Develop the

alternative alternatives alternatives

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Common Biases and Errors in
Decision Making
Overconfidence Confirmation
Anchoring Bias
Bias Bias

Escalation of Randomness
Availability Bias
Commitment Error

Risk Aversion Hindsight Bias

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Reducing Biases and Errors

Increase Your
Options = The
Don’t try to more
create meaning alternatives you
Look for out of random can generate,
information that events = and the more
Focus on Goals disconfirms your accepting that diverse those
to be rational beliefs= there are events alternatives, the
counteracting in life that are greater your
overconfidence outside your chance of
and the controls finding an
confirmation outstanding one.
and hindsight
biases

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Individual Differences in Decision
making
Personality

Cultural Decision
Making Gender
differences

Mental
Ability
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Organizational Constraints

System-
Performance Reward Formal imposed Historical
Evaluation Systems Regulations Time Precedents
Constraints

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Ethics in Decision Making
Utilitarianism – Thuyết vị lợi
• Decisions made based solely on the outcome
• Seeking the greatest good for the greatest number
• Dominant method for businesspeople
Rights - Đúng
• Decisions consistent with fundamental liberties and privileges
• Respecting and protecting basic rights of individuals such as
whistleblower

Justice – Công bằng

• Imposing and enforcing rules fairly and impartially
• Equitable distribution of benefits and costs

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Ethical Decision-Making Criteria
Assessed
• Utilitarianism
– Pro: Promotes efficiency and productivity
– Con: Can ignore individual rights, especially minorities
• Rights
– Pro: Protects individuals from harm; preserves rights
– Con: Creates an overly legalistic work environment
• Justice
– Pro: Protects the interests of weaker members
– Con: Encourages a sense of entitlement
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The three component model of
Creativity
Creativity: The ability
to produce novel and
useful ideas
Intrinsic
3 components: Task Expertise
Motivation
– Expertise: the foundation
– Creative-Thinking Skills: the
personality characteristics
associated with creativity Creative-
– Intrinsic Task Motivation: the Thinking Skills
desire to do the job because
of its characteristics

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