Organizational Behavior Chapter 5 Summary

Chapter 5 Perception is a process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment. •People’s behavior is based on their perception of what reality is, not on reality itself. •The world as it is perceived is the world that is behaviorally important. Attribution Theory: Judging Others Our perception and judgment of others are significantly influenced by our assumptions of the other people’s internal states.

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 – person forced to act in that way. 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. Errors and Biases in Attributions

Fundamental Attribution Error – Blame on people first, then situation. Self Serving Bias – If won, it’s our success, if failed, their fault. Selective Perception – selectively interpret what they see on basis of their interest, background, exp and attitude. Halo/Devil Effect – draw general impression on one of their trait. XX?? Contrast Effect -- evaluation of someone’s characteristics that are affected by comparing with other who rank higher or lower on the same characteristic Another Shortcut: Stereotyping

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Profiling – form of stereotyping which member of a group based on a single, usually racial traits Specific Shortcut Applications in Organization Employment Interviews – perceptual biases raters affect the accuracy of interviewers’ judgments, formed in a glance, 1/10 of a second Performance Expectation Self-fulfilling prophecy (Pygmalion effect) -- lower or higher expectation of leader leads to productivity of employees, critical impact for employees. Perception and Individual Decision Making Problem is a perceived discrepancy between the current state of affairs and esired state Decisions are made from among alternatives developed from data Therefore, problems must be recognized and data must be selected and evaluated. Decision Making Models in Organizations Rational Decision Making – the “perfect world” model, assumes complete information, all options known and max payoff Bounded Reality – “real world” model, seek satisfactory and sufficient solutions from limited data and alternatives Intuition – a non-conscious process created from distilled exp that results in quick decision. (usually are good decisions) Common Biases and Errors in Decision-Making:

Overconfidence Bias – believing too much in own ability to make good decision, especially outside of own expertise Anchoring Bias -- Using early, first received info as basis for making subsequent judgments Confirmation Bias – selecting and using only facts that support our decision Availability Bias -- emphasizing info that mostly readily at hand Escalation of Commitment – Increasing commitment to a decision in spite of evidence that it’s wrong Randomness Error – creating meaning out of random event, superstitions Winner’s Curse – higher bidder pay too much due to overestimation Hindsight Bias – believe it could be accurately predicted beforehand after outcome is known Individual Differences in Decision Making Personality: Conscientiousness may affect escalation of commitment. Achievement strivers are likely to increase commitment, while dutiful people are less to have this bias. High self-esteem people are susceptible to self-serving bias. Gender: Women analyze decisions more than men (rumination), and twice likely to develop depression. These differences develop early. Organizational Constraints

Performance Evaluation – managerial evaluation criteria influence actions Reword Systems – managers will make the decision with the greatest personal payoff for them Formal Regulation – limit the alternative choices of decision makers System-imposed Time Constraints—Restrict ability to gather or evaluate info Historical Precedents – past decision influence current decisions Ethics in Decision Making Ethical Decision Criteria Utilitarianism – decisions made based solely on the outcome, seek the greatest good for greatest number, mostly used by business people. Pro: promote efficiency and productivity Con: ignore individual rights, esp. minority Rights – decision consistent with fundamental liberties and privileges, respect and protects rights of individuals Pro: protect individual from harm, preserve rights

Con: create overly legalistic work environment Justice – imposing and enforcing the rules fairly and impartially, equitable distribution of benefit and costs Pro: protect the interests of weaker members Con: sense of entitlement rises Improving Creativity in Decision Making: Creativity – ability to produce novel and useful ideas. People who score high in “Openness to Exp”, intelligent, independent, self-confident, risk-taking, have an internal locus-of-control, tolerant of ambiguity, low need for structure and preserve the frustration face The Three-Component Model of Creativity – proposition that individual creativity results from a mixture of three components Expertise – foundation

Creative – Thinking Skills – personality characteristics associated with creaticity Intrinsic Task Motivation – The desire to do the job because of its characteristics Global Implications Attributions – cultural differences in the ways people attribute cause to observed behavior Decision Making – no research on the topic, assumption of “no difference” and based on awareness of cultural differences in traits that affect decision making, this assumption suspect Ethics – No global ethical standards exist, Asian countries tend not to see ethical issues in “black and white” but as shades of gray. Global Companies need global standards for managers.

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