$$$Warm$Up$Exercise$$Please$READ$the$MiniJcase$

Mini$Case$Study$$Iden0fy$Shortcuts$&$Biases$

Alexander$was$interviewing$several$candidates$for$an$open$
posi0on$in$the$marke0ng$department.$As$he$walked$into$the$
interview$room,$he$got$a$quick$glimpse$of$two$candidates.$
Mark,$one$candidate,$was$dressed$for$success$in$an$
immaculate$suit$and$0e.$His$hair$was$perfectly$groomed,$and$
he$had$a$slight$tan.$Annabelle,$the$other$candidate,$wore$a$
very$conserva0ve$pantsuit$and$at$shoes.$She$had$on$liIle$
makeup$and$she$carried$a$large,$wellJworn$handbag.$AKer$
just$a$few$seconds,$Alexander$had$assessed$each$candidate.$
Mark$is$a$goJgeIer,$he$said.$Probably$single$and$ambi0ous.$
Hell$work$hard,$but$he$may$quickly$see$me$as$an$obstacle$to$
his$success.$Annabelle,$however,$is$a$typical$mom.$Shell$show$
up$on$0me$and$complete$the$work,$but$shell$be$out$the$door$
at$ve$on$the$dot$to$get$home$to$her$family.$

Mini$Case$Study$$Iden0fy$Shortcuts$&$Biases$
1. Do$you$agree$with$Manager$Alexanders$
judgments?$$Why$or$why$not?$
2. How$accurate$do$you$think$Alexanders$
judgment$is?$$

iPRS$

Chapter 6 Perceptions &

Individual Decision Making

AIribu0on$Errors$
Fundamental
____________________"Error"!

The$tendency$to$underes0mate$the$inuence$
of$external$factors$and$overes0mate$that$of$
internal$factors$when$making$judgments$on$
others$behavior$e.g.$sales$performance$
Self-serving
________________"Bias"!

$Occurs$when$individuals$aIribute$their$own$
successes$to$internal$factors$and$put$the$blame$
for$failures$on$external$factors$e.g.$eort$vs$
luck$

3J5$

Common$Shortcuts$Used$in$Judging$Others$

Selective
___________!Percep(on!$a$perceptual$ltering$
process$based$on$interests,$background,$and$
a^tude.$$May$allow$observers$to$draw$unwarranted$
conclusions$from$an$ambiguous$situa0on.$
Halo
______!Eect!$drawing$a$general$impression$based$
on$a$single$characteris0c.$

Contrast
__________!Eects!$our$reac0on$is$inuenced$by$
others$we$have$recently$encountered$(the$context$of
the$observa0on).$

Stereotyping$$judging$someone$on$the$basis$of$the$
percep0on$of$the$group$to$which$they$belong.$
OB!Applica(on:!e.g.$Employee$Interview;$
Performance$evalua0on$

3J6$

Team$Discussion$
Has$Alexander$used$any$one$of$the$following$
shortcuts$in$evalua0ng$the$candidates?$
1. Selec0ve$Percep0on$
2. Halo$Eect$
3. Contrast$Eect$
4. Stereotyping$

Common$Biases$and$Judgment$Errors$in$
Decision$Making$$

hIps://www.youtube.com/watch?v=cAbdmV3VOwA$

$
Common!Biases!and!Errors!in!Decision!Making
Overconfidence
1.!_______________!Bias!

As$managers$and$employees$become$more$
knowledgeable$about$an$issue,$the$less$likely$they$
are$to$display$overcondence$
Anchoring
2.!_____________!Bias!

A$tendency$to$xate$on$ini0al$informa0on$and$fail$
to$adequately$adjust$for$subsequent$informa0on$
Confirmation
3.!________________!Bias!

Seeking$out$informa0on$that$rearms$our$past$
choices$and$discoun0ng$informa0on$that$
contradicts$past$judgments$

Common$Biases$and$Errors$
Availability
4.!______________!Bias!$
$$$The$tendency$to$base$judgments$on$
informa0on$that$is$readily$available$

5.!Escala(on!of!Commitment!!
$$$Staying$with$a$decision$even$when$there$is$
clear$evidence$that$it$is$wrong$

6.!Randomness!error!
$$$The$tendency$of$individuals$to$believe$that$$$$$$$
$$$they$can$predict$the$outcome$of$random$$
$$$events$
3J10$

Common$Biases$and$Errors$
averse
7.!Risk!___________!

The$tendency$to$prefer$a$sure$gain$of$a$
moderate$amount$over$a$riskier$outcome,$even$
if$the$riskier$outcome$might$have$a$higher$
expected$payo.$
hindsight
8.!__________!Bias!

The$tendency$to$believe$falsely$that$we$could$
have$accurately$predicted$the$outcome$of$an$
event$aKer$that$outcome$is$already$known$
$

AKer$studying$this$chapter,$you$should$be$able$to:$
1. Dene$Percep&on$and$explain$the$factors$that$
inuence$it.$
2. Explain$AIribu0on$Theory$and$AIribu0on$Errors.$
3. Iden0fy$the$Shortcuts$individuals$use$in$making$
judgments$about$others.$
4. Biases$&$Errors$in$Decision$Making:$List$and$explain$
the$common$decision$Biases$&$Errors.$$$
5. Ethics$&$Decision$Making:$Contrast$the$three$Ethical$
Decision$Criteria.$
6. Crea0vity$&$Decision$Making:$Dene$crea&vity$and$
discuss$the$ThreeJStage$Model$of$Crea0vity.$
3J12$

Three$Ethical$Decision$
Criteria$
1.!U(litarianism!(e.g.$Car$recall)$

The$outcome$provides$the$greatest$good$for$
the$greatest$number$
Rights
2.!________!
(e.g.$right$of$free$Speech)$

make$decisions$consistent$with$fundamental$
liber0es$and$privileges$
Justice
3.!_________$
(e.g.$Same$wage)$

impose$and$enforce$rules$fairly$and$impar0ally$
so$that$there$is$equal$distribu0on$of$benets$
and$costs$

Decision$Making$&$Crea0vity$

What$is$Crea0vity?$
.
useful
novel
The.ability.to.produce.______
.and._______
.
ideas..

Examples$in$Business$
LOreal$puts$managers$through$crea0ve$
exercises$such$as$cooking$or$making$music$
$
University$of$Chicago$requires$MBA$students$
to$make$short$movies$about$their$experiences$

What$is$Crea0vity?$3JStage$Model$
Crea(ve!Poten(al!

problem
_______!

information
____!!

environment
Crea(ve!___________!

idea
_____!

Evaluate!

Crea(ve!Outcomes!
Novelty!

Usefulness!

Team$Discussion$
1. In$your$team,$discuss$whats$one$thing$youd$
like$to$change$at$UST$and$thus$to$make$a$
collec0ve$decision$on$crea0ng$something$
new?$$
2. Use$the$ThreeJStage$Model$of$Crea0vity$to$
explain$the$Crea0ve$Outcome;$Crea0ve$
Behaviors$and$Causes$of$Crea0ve$behaviors.$
3. Share$your$ideas$with$the$class.$

Crea0vity$&$Decision$Making$
$Crea0vity$allows$decision$maker$to$fully$
appraise$and$understanding$$problems,$
problems
see
including$_______!_______others!cant!see.$
$

Ques0ons$for$Next$Lecture$
1.$What$is$Communica0on$and$$the$
Communica0on!Process?$
2.$What$are$downward,!upward,!and!lateral!
communica0on?!Can$you$provide$examples$for$
each?$
3.$What$are$the$common$barriers$to$eec0ve$
communica0on?$
4.$Can$you$iden0fy$some$poten0al$problems$in$
crossS!cultural!communica0on?$$

Reminder:.Movie.due.today.(29/9).

No$Class$on$Thursday$(Oct$1)$
See$you$next$Tuesday!$
$