1. Perception attribution and individual decision making
Interactive lecture III
Jolanta Babiak
Winter semester 2018/2019

2. Perception Ascribing meaning to the environment
Sensory impressions
Organizing and interpreting
Ascribing meaning to the environment

3. Why is perception important to OB?
Peoples’ behavior is based on their perception of what reality is, not on reality itself

4. Factors that influence perception
Factors in the situation
- Time
- Work setting
- Social setting
Factors in the perceiver
- Attitudes
- Motives
- Interests
- Experience
- Expectations
Perception
Factors in the target
- Novelty
- Motion
- Sounds
- Size
- Background
- Proximity
- Similarity

5. Making judgments about others
Person Perception
Making judgments about others
We have beliefs, expectations, or motives that’s why when we observe people we try to explain why they behave in certain ways. Our perceptions
and judgments will therefore be heavily influenced by the assumptions we make about that person internal state.

6. Attribution theory Judgments we make Meanings we attribute
Observed behavior of another person
1. Distinctiveness
2. Consensus
3. Consistency
Judgments we make
Meanings we attribute
We determine the source of causation of that behavior
Internal vs
External causes

7. Attribution theory
observation
interpretation
Attribution of cause

8. Differences between internal vs external causation
Internally caused behavior
Externally caused behavior
Under the control of the individual
Employee is late for work: he was partying and then overslept
Colleague is gaining weight: he is socializing a lot and overeating
Manager is in tensed mood: he wants to evoke fear in us purposefully
What the situation forced the individual to do
Employee is late for work: must have run into tied up traffic due to some accident on the way
Colleague is gaining weight: could have some health issues, maybe thyroid
Manager is in tensed mood: he must have been under fire during yesterday’s board meeting

9. Three determining factors: (1) Distinctiveness
Behavior is unusual
External attribution
Behavior is usual
Internal attribution

10. Three determining factors: (2) Consensus
High consensus: others behaved in similar fashion
External attribution
Low consensus: behavior stands out from among others in a similar situation
Internal attribution

11. Three determining factors: (3) Consistency
Does the person responds in the same way over time? If not…
External attribution
If yes
Internal attribution

12. Most important finding: fundamental attribution error
While making judgments about the behavior of other people
We tend to overestimate the effects of internal factors; e.g. sales dropped recently - my sales agents are just lazy
We tend to underestimate the effects of the external factors; sales dropped recently – it cannot be the innovative product introduced by the competitor

13. Most important finding: fundamental attribution error
While making judgments about our own behavior
We tend to attribute our own success to internal factors; e.g. ability, effort
We tend to blame failure on the external factors; e.g. bad luck, poor performance of others

14. Fundamental attribution error: cultural differences
non-Western managers are less likely to use self-serving bias: tend to assume responsibility for failure
Asian cultures: group-based attributions – more likely to blame institutions or whole organizations
Western cultures – individuals should get blame or praise

15. Shortcuts in judging others: selective perception
Interests
Background
Experience
Attitudes
Other information

16. Shortcuts in judging others: halo effect
We draw a general impression about an individual on the basis of a single characteristic; here: appearance

17. Shortcuts in judging others: contrast effect
Our reaction is influenced by other persons we have recently encountered; attention: job interviews

18. Shortcuts in judging others: stereotyping
Less difficult to deal with unmanageable number of stimuli if we use heuristics
Problem occurs when we generalize inaccurately or too much
We usually stereotype based on:
Gender
Age
Race
Religion
Ethnicity
Weight
Stereotypes operate emotionally and often below the level of conscious awareness

19. Specific applications of shortcuts in Organizations
Employment interview
We form impressions of others within tenth of a second: first glance
Good applicant: absence of negative characteristics
Performance expectations
Self-fulfilling prophecy: one’s behavior is determined by others’ expectations
Expectations become reality
Performance evaluations
Depend on the perceptual process: subjective
Some are luckily evaluated objectively: sales people

20. How is perception linked to decision making process
Every individual makes decisions
Managers make many! decisions every single day
Top managers: determine organization’s goals, what products to offer, how best to finance operations, where to locate new manufacturing plant
Middle managers: set production schedules, select new employees, how to allocate pay raises
Lower-level managers: how to resolve a conflict between two new employees, when to seek advice from upper management, how best to explain coworkers scope, money and time constraints for the new project
Non managerial employees make decisions about their effort , engagement and compliance with boss’s request

21. Decision making – important part of organizational behavior
Nonmanagerial staff gets empowered with decision making authority (historically reserved for managers)
They way individuals make decisions is based on their thinking style and problem solving style
Quality of choices in decision making is influenced by perception processes
Decision making occurs as a reaction to a problem

22. To make or not to make a decision – perceptual process
Decisions require interpretation and evaluation of information
Decisions require to screen, process and choose relevant data
Decisions require development of alternatives and evaluation of their strengths and weaknesses
Perceptual distortions can bias analysis and conclusions

23. Rational decision making model
Define the problem
Identify the decision criteria
Allocate weights to the criteria
Develop the alternatives
Evaluate the alternatives
Select the best alternative

24. Role of intuition in decision making
Intuitive decision making – unconscious process created from experience
Occurs outside conscious thought
Relies on holistic associations
It is fast and affectively charged
Least rational way of decision making, but not necessarily wrong
It is highly complex and developed form of reasoning that is based on years of experience and learning
Intuition can improve overall decision making process

25. Common biases and errors in decision making process (1) overconfidence
Can produce catastrophic results
Being 100 percent sure of an outcome equals to ca. 70% accuracy
Studies show that individuals overestimate their intellectual and interpersonal abilities
the more entrepreneurs are optimistic about their new venture the less successful it becomes
new investors overestimate their skills and the quality of information they have

26. Common biases and errors in decision making process (2) anchoring bias
Fixation on initial information
Failure to adjust to subsequent information
Reason: our mind emphasizes first information it receives
Anchors are widely used by persuasion masters: marketing specialists, politicians, managers, legal workers, realtors
During negotiations anchoring takes place as well

27. Common biases and errors in decision making process (3) confirmation
We gather information selectively not objectively
Confirmation bias is a case of selective perception: we seek information that is in line with what we already know, or with our preconceived views e.g. our past choices; we rather omit information which is incongruent with it
We select information that support our views and we give it too much attention in comparison to contradictory views
When we strongly believe in our opinion we are mostly prone to confirmation bias

28. Common biases and errors in decision making process (4) availability
Example: overstating the risk of flying and understating the risk of driving
Availability bias is tendency to base judgements on information readily available
The availability bias can explain errors managers make when performing performance reviews: more weight is given to recent employee behavior

29. Bibliography
Gerrig, R. J., Zimbardo, P. G. (2010). Psychology and life. New Jersey: Person education, Inc.
Robbins, S. P., Judge, T. A. (2013). Organizational behavior. New Jersey: Person education, Inc.
Whetten, D. A., Cameron K. S. (2011). Developing Management Skills. New Jersey: Person education, Inc