The Role of Perception in Corporate Decision Making

Category: Decision Making
Last Updated: 08 Apr 2020
Pages: 5 Views: 250

Here is an office scenario wherein two senior executives are observing an employee who is a potential candidate for promotion:  At certain times, they both see the said employee just sitting on his chair, lounging, even minutes before the end of office hours.  Often chancing upon the employee during his idle time, Senior Executive A may see this as laziness on the employee’s part.  Senior Executive B views the situation, having kept track of prompt and quality reports done by the employee, as the employee being a fast worker who gets the job easily done and right, not as somebody who is just loafing around.

This is the fundamental nature of perception.  Senior Executive B saw the employee’s circumstances in another approach from that of Senior Executive A’s.  Even though they both examined the same situation, each one had a different view on it.  The outcome of this observation shall depend upon how the executives had perceived the candidate’s performance.  This is an illustration of how perception plays a part in making decisions on a work setting.  The employee’s likelihood of getting promoted relies on others’ diverse insights.


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Perception has a role when it comes to decision making on many business situations.  It can impact an organization’s behavior.  Also depending on every person’s background, traits, knowledge, and many other factors, perception can also shape ethical or moral decisions.


What is perception?  “Perception is the process we use to make sense out of our environment by selecting, organizing, and interpreting information from the environment” (Daft, 1997, p. 786).

People have varied outlooks on a particular situation in his/her own way.  “Perception depends not only on the physical stimuli but also on the stimuli’s relation to the surrounding field and on conditions within the individual.  The key word in the definition of perception is individual” (Kotler, 2000, p.173).

Impact on Organizational Behavior

Because of the different perceptions each individual has on a working atmosphere, it is a necessity for managers to have a profound knowledge of anticipating diversity between the different levels within their organization.  For example:  If a manager only sees his/her staff as a means to an end, just a functioning machine in getting the job done, like without incentives or further trainings, etc., with this kind of perception that the employees may get, how would the employees react to it?

There might be a number of them who would not think of it as an issue because they themselves may also only see their work as a means itself to meeting their own needs, financially speaking of earning a salary.  For some, they would like to be recognized and given value as employees, being humanely treated and could perceive their employers as insensitive to both their professional growth and personal welfare.

In this case, when this type of perception prevails, it could possibly lead to a chain reaction amongst the employees.  A possible impact could be that the organizational behavior (employees’ performance) is not being concerned about their company’s productivity since the management itself does not look after their issues.

How a person perceives others can greatly or minimally impact an organization either in a negative or positive way because people would act in response to it.

Another citable circumstance in an office setting with regards to perception and its impact on behavior is rumors.  For instance, there is a new employee who was highly recommended by an officer of the company.  Some may right away see this as special treatment being given on the said employee.  While others actually get facts and can see exceptional work being done on the new employee’s part.  Yet, with a number of gossip mongers existing on a work environment, they are going to talk about misleading details.  Now with those who may be unaware of what is actually going on, just basing the events on hearsay, they might perhaps bear some resentment on management or even give it a shot themselves on apple polishing.

“Individual perceptual awareness varies widely.  Recognizing the difference between what is perceived and what is real is a key element in diagnosing a situation” (Daft, 1997,p. 787).

Using Perceptive ‘Shortcuts’

Every now and then, several business matters call for immediate decisions.  Some may resort to using perceptive ‘shortcuts’ when judging others.  Positive effects may include a decision being done without delay and can move on to attend to other business matters at hand.  This could result to increase in productivity.  Negative effects consist of hastiness in judgment.  Without studying all the facts and details, one fails to take into account everything that needs to be considered which may be leaving out a factor that could have brought out a different turn of events.

The Real World

Before a decision is made in real world organizations, an issue is addressed by gathering necessary data or a proposal is prepared for a project they will undertake.  There is an open discussion in order to reach a consensus of opinion (i.e. meeting).  Advantages and disadvantages are weighed out (e.g. project to be considered, acquisition of office

equipment).  Strengths and weaknesses are pointed out (e.g. hiring of an applicant, promotion among ranks).  A good management first makes a thorough study then arrives at a more solid decision this way than in making hasty assessments.

Ethical/Moral Decisions

How we see things are based on several factors.  People’s views are different because each one has his/her own distinctive background.  What values and beliefs a person has can influence an ethical or moral decision he or she makes.  For example:  A sales agent who proposes to a Human Resources Head the availment of a pension plan for the company’s employees, is also suggesting a share in the commission that he would give to the HR Head when he approves the proposal.

If the HR Head perception of the agent’s offer is lucrative to his own pocket and does not see it as harmful to their corporation, viewing the agent’s approach as a normal sales tactic, then this shapes the moral decision he is about to make.  Clearly, this is against business ethics, undisclosed behind-the-scenes negotiations.  The employees, who are not aware of what had transpired between the sales agent and their HR Head, would naturally perceive the outlay in pension plan as a benefit for them.  Now if it was a different matter all together, with an honest HR Head who believes in hard work to earn a living, may see the sales agent as a dubious character and perhaps would choose not to deal with that agent anymore.

“Perception in itself does not always lead to an accurate picture of the environment” (Daft, 1997, p. 562).


Daft, R. L. (1997).  Management.  Pennsylvania:  The Dryden Press.

Kotler, P. (2000).  Marketing Management.  New Jersey:  Prentice-Hall, Inc.





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The Role of Perception in Corporate Decision Making. (2017, Mar 15). Retrieved from

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