ROLE

ROLE OF
OF PERCEPTION
PERCEPTION IN
IN DECISION
DECISION MAKING
MAKING

BY
BY
SATHWIK
SATHWIKREDDY
REDDYNIMMA
NIMMA
Section
Section––CC
Roll
RollNo
No--10334
10334
What
What isis Perception?
Perception?
 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
Attribution Theory:
Theory: Judging
Judging Others
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 – 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.
Elements
Elements of
of Attribution
Attribution Theory
Theory
Errors
Errors and
and Biases
Biases in
in Attributions
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
Frequently
Frequently Used
Used Shortcuts
Shortcuts in
in Judging
Judging Others
Others
 Selective Perception
– People selectively interpret what they see
on the basis of their interests,
background, experience, and attitudes
 Halo Effect
– Drawing a general impression about an
individual on the basis of a single
characteristic
 Contrast Effects
– 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
Another
Another Shortcut:
Shortcut: Stereotyping
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.
Decision-Making
Decision-Making Models
Models in
in Organizations
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
Common
CommonBiases
Biasesand
andErrors
Errorsin
inDecision-Making
Decision-Making
 Overconfidence Bias
– Believing too much in our own ability to make good
decisions – especially when outside of own expertise
 Anchoring Bias
– Using early, first received information as the basis for
making subsequent judgments
 Confirmation Bias
– Selecting and using only facts that support our decision
 Availability Bias
– Emphasizing information that is most readily at hand
• Recent
• Vivid
Ethics
Ethics in
in Decision
Decision Making
Making
 Ethical Decision Criteria
– Utilitarianism
• Decisions made based solely on the outcome
• Seeking the greatest good for the greatest number
• Dominant method for businesspeople
– Whistle-Blowers
• This criterion is to focus on rights
• These whistle-blowers report unethical practices by their
employer to outsiders
– Justice
• Imposing and enforcing rules fairly and impartially
• Equitable distribution of benefits and costs
Perception
Perception and
and Individual
Individual Decision
Decision Making
Making

 The decision taken by an individual is a complex

process involving the intake of data, screening,
interpreting and evaluation of data, based on
perceptions of individuals.

 Which data is relevant to the take decision and which is

not will depend on the perceptions of decision makers.

 The individual decision makers perceptual process will

have a large bearing on the final outcome.
 Individual
Individual Differences
Differences in
in Decision-Making
Decision-Making
 Personality
– Conscientiousness may effect escalation of commitment
• Achievement-strivers are likely to increase commitment
• Dutiful people are less like to have this bias
– Self-Esteem
• High self-esteem people are susceptible to self-serving bias

 Gender
• Women analyze decisions more than men –
rumination
• Women are twice as likely to develop
depression
• Differences develop early
 Role
Roleof
ofPerception
Perceptionin
inDecision
DecisionMaking
Making
Process
Process

 All decisions require perceptual processes to extract

factual information.

 The perception of a situation is central to the decision

making process.

 People make decisions every day, every hour and every

minute based on the perceptions they interpret.
Memory
Memory and
and Expertise
Expertise

 The quality of perception can be improved by

recognizing that a present situation is related to
experiences from the past, and then using information
learned during these past experiences to inform the
present.
 Perception
Perception and
and Decision
Decision Making
Making in
in
Organizations
Organizations
Managers should have the following in order to obtain
accurate perceptions

 Spot light perception

 Floodlight perception

To make effective decisions a manager must not only

perceive but understand other people.
Leadership:
Leadership: Perception
Perception and
and Decision
Decision Making
Making

 Not considering facts – Bad perception

 Analyzing the information in a timely manner – Good

perception

 Good listening Skills

Conclusion
Conclusion

Perception in Decision-making is based on a person’s

internal understanding of reality rather than reality
itself.
THANK YOU