Organizational Behavior – Session 1

Christine Gockel – SRH Berlin University of Applied Sciences

Organizational Behavior (= OB)

“The stellar universe is not so difficult of comprehension as the real actions of

other people.” (Marcel Proust)

“OB is the study of what people do in an organization and how their behavior
affects the organization’s performance.” (Robbins & Judge, 2016)
investigates the impact that individuals, groups, and structure have on behavior
within organizations,
for the purpose of applying such knowledge toward improving an organization’s
effectiveness.
Your Instructor: Christine Gockel, Ph.D.

christine.gockel@srh.de
PhD in Social/ Personality Psychology, Michigan State University
Since 2014 Professor of Work and Organizational Psychology

Work as business coach and communication trainer

Research on team effectiveness (leadership, knowledge, humor)
Topics and Times

1. Introduction; Individual Decision-Making (Oct. 13 & 14, 2022)

2. Emotions and Mood (Oct. 20 & 21, 2022)
--- Short Break: Relax ---
3. Team Dynamics and Leadership (Nov. 10, 2022; 9am – 6pm)
4. Diversity and Diversity Management (Nov. 11, 2022)
--- Short Break: Think about your papers ---
5. Individual consultations about your papers (Dec. 06, 2022)

Room: BSM_H.805 / B.8.8

Time: 9am – 1:15pm, unless indicated otherwise
Sources

Find these slides on MS Teams

Class is on CampusNet: ERP-MBA-GM-002 --
Organisational Behaviour

Read this book! (A previous edition is available in

the library under my name.)
ISBN-10 : 0134729323
ISBN-13 : 978-0134729329
Book Recommendations
Exam: Write a Paper

The goal of your paper is to apply your knowledge from class to solve a problem that
you have encountered in the workplace. This problem needs to be based on human
behavior.
Your paper needs to be 10-15 pages (text only) and formatted like a scientific paper,
including references. It is due four weeks after the final class meeting, which is Jan. 03,
2023.
For specific instructions, please see the handout tomorrow.
If you need help, please ask me.
Who Are You?

Please complete the following sentences

• I am…
• Before starting the MBA, I studied/worked in…
• I am here because…
Your Expectations for this Class

You have all collected experiences with online classes and/or hybrid classes in
the past.

Which expectations and hopes to you have for this class?

What should not happen in this class?

Please refer to the content and to class interactions.

Work in small groups of 2-3 people and post your group’s answers on Teams
(under the respective title).
Perception and Individual Decision-Making
Christine Gockel – SRH Berlin University of Applied Sciences
Overview

1. Perception
2. Person Perception
3. Decision Making
4. Biases and Errors in Decision Making
5. Influences on Decision Making
6. Ethical Decision Making
Perception
What is Perception?

Definition: perception is a process by which individuals organize and interpret their

sensory impressions in order to give meaning to their environment.
Why is this important to the study of organizational behavior?
— Because people’s behavior is based on their perception of what reality is, not on
reality itself
Factors that Influence Perception

When an individual looks at a target and attempts to interpret what he or she sees,
that interpretation is heavily influenced by:
— Personal characteristics of the individual perceiver
— Characteristics of the target
— Context
Factors that Influence Perception
Person Perception: Making Judgments
about Others
Attribution Theory

Attribution theory suggests that when we observe an individual’s behavior, we attempt

to determine whether it was internally or externally caused.
— Internally caused behaviors are those that are believed to be under the personal
control of the individual.
— Externally caused behavior is what we imagine the situation forced the individual to
do.
Attribution Theory

That determination depends largely on three factors:

— Distinctiveness refers to whether an individual displays different behaviors in
different situations.
— Consensus occurs if everyone who is faced with a similar situation responds in the
same way.
— Consistency in a person’s actions
Attribution Theory
Example

Michelle majors in mathematics. Since the beginning of the semester, she studies for
the algebra exam day and night. Her fellow students also study like crazy. However,
neither Michelle nor the others study much for the geometry exam.

Why does Michelle study

for the algebra exam?
Attribution Theory

Self-serving bias
— There is also a tendency for individuals to attribute their own successes to internal
factors, such as ability or effort, while putting the blame for failure on external
factors, such as luck.
Fundamental attribution error
— There is substantial evidence that we have a tendency to underestimate the
influence of external factors and overestimate the influence of internal or personal
factors.
Attribution Theory

But be careful! There are some errors that could be made with attributing internally or
externally
Cultural differences
— The evidence on cultural differences in perception is mixed, but most suggest there
are differences across cultures in the attributions people make.
— Differences in attribution tendencies don’t mean the basic concepts of attribution
and blame completely differ across cultures though.
Common Shortcuts in Judging Others

These “problems“ can be harmful to an organization, especially in employment

interviews, performance expectations, and performance evaluations.
Which shortcuts are most relevant in each area? How can you overcome them?
Common Shortcuts in Judging Others

The shortcuts for judging others often allow us to make accurate perceptions rapidly
and provide valid data for making predictions.
However, they can and do sometimes result in significant distortions.
Selective perception
— Any characteristic that makes a person, object, or event stand out will increase the
probability that it will be perceived.
— Since we can’t observe everything going on about us, we engage in selective
perception.
Common Shortcuts in Judging Others

Halo effect
— The halo effect occurs when we draw a general impression on the basis of a single
characteristic.
— The reality of the halo effect was confirmed in a classic study. (S. E. Asch, 1946)
— Participants were given a list of traits, such as intelligent, skillful, practical, industrious,
determined, and warm, and were asked to evaluate the person to whom those traits
applied. When the word “warm” was substituted with “cold,” the subjects changed their
evaluation of the person.
Common Shortcuts in Judging Others

Contrast effects
— We do not evaluate a person in isolation. Our reaction to one person is influenced by
other persons we have recently encountered.
— Contrast effect can distort perception.
— For example, an interview situation in which one sees a pool of job applicants can distort
perception.
Common Shortcuts in Judging Others

Stereotyping—judging someone on the basis of our perception of the group to which

he or she belongs.
— Generalization is not without advantages. It is a means of simplifying a complex
world, and it permits us to maintain consistency.
— One problem of stereotypes is that they are widespread generalizations, though
they may not contain a shred of truth when applied to a particular person or
situation.
— We have to monitor ourselves to make sure we’re not unfairly applying a stereotype
in our evaluations and decisions.
Common Shortcuts in Judging Others

These “problems“ can be harmful to an organization, especially in employment

interviews, performance expectations, and performance evaluations.
Which shortcuts are most relevant in each area? How can you overcome them?
Overview

1. Perception
2. Person Perception
3. Decision Making
4. Biases and Errors in Decision Making
5. Influences on Decision Making
6. Ethical Decision Making
Decision-Making in Organizations
Decision Making in Organizations: Introduction

In organizational behavior, there are generally accepted constructs of decision making

that each of us employs to make determinations: rational decision making, bounded
rationality, and intuition.
There are times when one strategy may lead to a better outcome than another in a
given situation.
Rational Decision Making

We often think the best decision maker is rational and makes consistent, value-
maximizing choices within specified constraints
Rational decision-making model:
— Step 1: Define the problem.
— Step 2: Identify the decision criteria.
— Step 3: Allocate weights to the criteria.
— Step 4: Develop the alternatives.
— Step 5: Evaluate the alternatives.
— Step 6: Select the best alternative.
Rational Decision Making

What experiences have you made with irrational decision-making in your career?
Bounded Rationality

When faced with a complex problem, most people respond by reducing the problem to
a level at which it can be readily understood.
— People satisfice—they seek solutions that are satisfactory and sufficient.
Individuals operate within the confines of bounded rationality. They construct
simplified models that extract the essential features.
Bounded Rationality

How does bounded rationality work?

Identification of the
Problem

Search for criteria and

options
Limiting
factor: time
Limited to highly
List of satisficing
visible, tried-and
choices
proofed solutions
Review of the options
and decision
Intuition

Perhaps the least rational way of making decisions is intuitive decision making, an
unconscious process created from distilled experience.
It occurs outside conscious thought; it relies on holistic associations, or links between
disparate pieces of information; is fast; and is affectively charged, meaning it usually
engages the emotions.
Overview

1. Perception
2. Person Perception
3. Decision Making
4. Biases and Errors in Decision Making
5. Influences on Decision Making
6. Ethical Decision Making
Common Biases and Errors in
Decision-Making
Which number is next?

3–6–9–?
5 – 10 – 15 – ?
Overconfidence Bias and Confirmation Bias

Individuals whose intellectual and interpersonal abilities are weakest are most likely to
overestimate their performance and ability (Kruger & Dunning,1999).
The tendency to be too confident about their ideas might keep some from planning how
to avoid problems that arise.
Confirmation bias is a type of selective perception: we seek out information that
reaffirms past choices, and discount information that contradicts past judgments.
(Jonas et al., 2001)
Overconfidence Bias and Confirmation Bias

Individuals whose intellectual and interpersonal abilities are weakest are most likely to
overestimate their performance and ability (Kruger & Dunning,1999).
The tendency to be too confident about their ideas might keep some from planning how
to avoid problems that arise.
Confirmation bias is a type of selective perception: we seek out information that
reaffirms past choices, and discount information that contradicts past judgments.
(Jonas et al., 2001)

For next activity: need two groups

What is the correct answer?

1x2x3x4x5x6x7x8

or

8x7x6x5x4x3x2x1
Anchoring Bias

Anchoring bias involves fixating on initial information as a starting point and failing to
adequately adjust for subsequent information. (Simmons, LeBoeuf, and Nelson, 2010)
Anchors are widely used by people in advertising, management, politics, real estate,
and lawyers—where persuasion skills are important.
Any time a negotiation takes place, so does anchoring.
Anchoring Bias

1 x 2 x 3 x ... x 8 8 x 7 x 6 x ... x 1

=
40.320

Average estimate: Average estimate:

512 < 2.250

Anchoring Bias

Is this car worth more or less than...

... 2.800 DM? ... 5.000 DM?

Estimate Estimate
2.520 DM < 3.563 DM
Availability Bias and Escalation of Commitment

Availability bias is the tendency for people to base judgments on information that is
readily available. (Tversky & Kahneman,1982)
Example

Write down 6 examples when you behaved confidently.

versus

Write down 12 examples when you behaved confidently.

Availability Heuristic

Self-assessment of confidence

7
6,3 6,2
6
5,2 5,2
5
6 examples
4
12 examples
3

1
Confident Lack of
behavior confident behavior
Examples for...
Availability Bias and Escalation of Commitment

Availability bias is the tendency for people to base judgments on information that is
readily available. (Tversky & Kahneman,1982)
Escalation of commitment occurs when we stay with a decision even when there is
clear evidence that it’s wrong. (Staw, 1981)
When is escalation most likely to occur?
— Evidence indicates it occurs when individuals view themselves as responsible for the
outcome.
How to Benefit from Heuristics

Choose one heuristic and explain how you will apply it in your life for your benefit
— In which situation will you choose…
— which heuristic?
— What exactly will you do?
— How do you expect others to react? Why?
Debate: Check Lists
Influences on Decision Making:
Individual Differences and
Organizational Constraints
Influences on Decision Making: Individual
Differences

Specific facets of conscientiousness—rather than the broad trait itself—may affect

escalation of commitment. (Moon et al., 2003)
— Achievement-striving
— Dutifulness

People with high self-esteem are strongly motivated to maintain it, so they use the self-
serving bias to preserve it. (Campbell & Sedikides, 1999)
Influences on Decision Making: Individual
Differences

Gender
— Rumination refers to reflecting at length. In decision making, it means over-
thinking about problems.
— Evidence indicates that women analyze decisions more than men. (Nole-
Hoeksema, Larson and Grayson, 1999)
Mental Ability
— Higher mental ability decreases the chance of common decision making.
(Stanovich & West, 2008)
Cultural Differences

• The rational model makes no acknowledgment of cultural differences, nor does the
bulk of OB research literature on decision making.
• Cultures differ in their time orientation, the importance of rationality, their belief in
the ability of people to solve problems, and their preference for collective decision
making.
• While rationality is valued in North America and Europe, that’s not true elsewhere in
the world.
Cultural Differences

• Some cultures emphasize solving problems, while others focus on accepting

situations as they are.
• Because problem-solving managers believe they can and should change situations
to their benefit, U.S. managers might identify a problem long before their Thai or
Indonesian counterparts would choose to recognize it.
• Decision making by Japanese managers is much more group-oriented than in the
United States.
Organizational Constraints

Performance evaluation
— Managers are strongly influenced in their decision making by the criteria by which
they are evaluated.
Reward systems
— The organization’s reward system influences decision makers by suggesting to them
what choices are preferable in terms of personal payoff.
Organizational Constraints

Formal regulations
— Organizations create rules, policies, procedures, and other formalized regulations to
standardize the behavior of their members.

System-imposed time constraints

— Organizations impose deadlines on decisions.
— Such conditions often make it difficult, if not impossible, for managers to gather all
the information before making a final choice.
Organizational Constraints

Historical precedents
— Decisions have a context. Individual decisions are more accurately characterized as
points in a stream of decisions.
— Decisions made in the past are ghosts that continually haunt current choices. It is
common knowledge that the largest determining factor of the size of any given
year’s budget is last year’s budget.
Discussion: Multicultural Experiences

In small groups, discuss how members from your home country approach decisions.
Give specific examples.
And how do you personally approach decisions – as a foreigner living in Germany?
When you compare your assessments: When can multiculturalism be beneficial? When
not?
Ethical Decision Making
Ethical Decision Making: Three Decision Criteria

Utilitarianism—decisions are made solely on the basis of their outcomes or

consequences.
Focus on rights—calls on individuals to make decisions consistent with fundamental
liberties and privileges as set forth in documents such as the Bill of Rights.
A third criterion is to impose and enforce rules fairly and impartially to ensure justice or
an equitable distribution of benefits and costs.
The Truth about Lying

People lie – everyday. And you do, too. However, organizations and societies might be
better of if individuals lied less.
In small groups, collect situations when you think lying is acceptable.
Would you lie to protect your job? … or to move ahead?
If you differ in your assessments in the group: Why is that the case?
Finally, what could prevent you from lying?
Summary
Overview

1. Perception
2. Person Perception
3. Decision Making
4. Biases and Errors in Decision Making
5. Influences on Decision Making
6. Ethical Decision Making
Summary

− Individuals base their behavior not on the way their external environment actually is,
but rather on the way they see it or believe it to be.
− An understanding of the way people make decisions can help us explain and predict
behavior, but few important decisions are simple or unambiguous enough for the
rational model’s assumptions to apply.
− We find individuals looking for solutions that satisfice rather than optimize, injecting
biases and prejudices into the decision process, and relying on intuition.
Thanks!

christine.gockel@srh.de