Chapter Robbins & Judge Organizational Behavior 14th Edition i JJead tommy Decision Making Kelli J. Schutte ‘william Jewel College Copyright © 2011 Pearso 64fo) o) MMU MeO \cle > Chapter 6 > Perception: what is, Factors that influence perception > Attribution Theory > The rational model, bounded rationality, and intuition > Common biases and errors in decision making — Skip: randomness error, risk aversion, hindsight bias > Ethics: Three ethical decision criteria > Improving creativity in decision making IGopyriaht © 2011 Pearson Education, Inc. publishing as Prentice HallWhat is eption? ® XK 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 Teality is, not on reality itself. > The world as it is perceived is the world that is behaviorally important. [Gepyright © 2011 Pearson Education, Inc. publishing as Prentice HallFactors that Influence Perception Factors in the perceiver * Attitudes * Motives * Interests * Experience ° Expectations Factors in the situation v * Time - —_—<__ Perception * Work setting PB * Social setting 4 Factors in the target Novelty Motion Sounds ize Background Proximity Sc ia [Gepyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 64Attribution Theory: Judging 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 under the person’s control > 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 [Gepyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 6sLRM e) Naa a Observation ————— Interpretation ————» Individual behavior — High re # Distinctiveness t—> Consensus — Consistency — low —> High low al High low Attribution of cause External Internal External Internal Internal ExternalErrors and Biases in 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 ~ Itis “our” success but “their” failure Eopyright © 2011 Pearson Education, inc. publishing as Prentice Hall 67Decision-Making Models in Organizations > Rational Decision Making ~ The “perfect world” model Assumes: * complete information, all options known, and maximum payoff — Six-step decision-making process; 1. Define the problem 4. Develop alternatives 2. Id. The decision criteria 5. Evaluate alternatives 3. Allocate weights to criteria 6. Select best alternative Peres) [Gepyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 68py=re Making Models in Organiza » Bounded Reality — The “real world” model: seeks satisfactory and sufficient solutions from limited data and alternatives — Why limited data? + People respond to complex problems by “reducing” it to a level they can understand * We construct “simplified” models > Intuition A non-conscious process created from distilled experience that results in quick decisions * Relies on holistic associations, its fast * Affectively charged — engaging the emotions ~ “form of reasoning that is based on years of experience and learning” Copyright © 2011 Pearson Education, inc. publishing as Prentice Hall 69eceelare aig Common } 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 Eapyright © 2011 Pearson Education, inc. publishing as Prentice Hall 610e Common Decision-Making Errors > Escalation of Commitment ~ Increasing commitment to a decision in spite of evidence that it is wrong — especially if responsible for the decision! — Perhaps they have invested too much time, resources, energy ~ Determined to prove they were right [Gepyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 641Ethics in Decision Making > Ethical Decision Criteria ~ Utilitarianism * Decisions made based solely on the outcome * Seeking the greatest good for the greatest number + Dominant method for businesspeople Rights * Decisions consistent with fundamental liberties and privileges * Respecting and protecting basic rights of individuals such as whistleblowers — Justice * Imposing and enforcing rules fairly and impartially * Equitable distribution of benefits and costs * Unions tend to support this criteria © 2011 Pearson Education, Inc.Ethical Decision-Making Criteria Assessed > Utilitarianism — Pro: Promotes efficiency and productivity Con: Can ignore individual rights, especially minorities > Rights — Pro: Protects individuals from harm; preserves rights Con: Creates an overly legalistic work environment » Justice — Pro: Protects the interests of weaker members Con: Encourages a sense of entitlement iImproving Creativity in Decision Making > Creat ~ The ability to produce novel and useful ideas > Who has the greatest creative potential? — Those who score high in Openness to Experience ~ People who are intelligent, independent, self-confident, risk- taking, have an internal locus of control, tolerant of ambiguity, low need for structure, and who persevere in the face of frustration ame CQ eh S . OS Ue Eopyright © 2011 Pearson Education, inc. publishing as Prentice Hall 14The Three Component Model of Creativity Proposition that individual creativity results from a mixture of three components sbitea ite BETS \< Motivation — Expertise is the foundation — Creative-Thinking Skills are the personality characteristics z Greate associated with creativity Thinking Skills Intrinsic Task Motivation is the desire to do the job because of its characteristics [Gepyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 615