CHAPTER NO 5

PERCEPTION AND INDIVIDIAL DECISION MAKING

Perception:
It is the process by which people translate (by using mind) sensory impressions (through the

eyes, ears, tongue, nose and touch) into a logical view of the world around them.

What are the factors that help us translate sensory impressions?

A number of factors can operate to shape and sometimes distort perception. These factors reside

inside the perceiver, the target perceived or in the situation.

Factors in the Perceiver

 Attitudes
 Motives
 Interests
 Experience
 Expectations
Factors in the situation

 Time
 Work setting PERCEPTION
 Social setting

Factors in the target

 Novelty
 Motion
 Sounds
 Size
 background
 Proximity
 Similarity

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Factors in the perceiver:

I. Individuals’ personal characteristics: For example if you had some negative experience

with the police that police is corrupt so whenever you see a cop you would see him in

negative limelight irrespective of how good he is.

II. Characteristics of the target can also effect our perception. Loud voiced individuals are

likely to be more noticed than quiet ones. Targets that are different are seen in relation to

its surroundings not in isolation. People, who may be different like Chinese, are also seen

whether they have some similarities like ethics or eating habits.

III. The context in which we see events is also important. The time and location at which an

object is seen can influence perception. For example a person who is dressed well with

tie, shirt and coat will not catch your attention in a party but will attract if the he wears it

in class.

Attribution Theory:
How would about someone who comes late; whether it is his own mistake (internal) or that of

external factors like traffic, rain etc. To answer this vital question scientists have put forward the

attribution theory.

The attribution theory has three parts:

1. Distinctiveness: We should know how distinct the behavior is i.e., whether the individual

displays such rude behavior in other situations as well. For example the person who

comes late is the same individual who quarrels with his co workers and is lazy in

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 achieving his sales targets or is it this late coming in isolation and the individual is

otherwise nice. If the behavior is unusual it has a high distinction and is externally caused

i.e., beyond individuals control.

2. Consensus: If everyone faces the same situation i.e., they come late to the office then

there is a high consensus that something is wrong externally i.e. something may be wrong

with the manager that he is not a good disciplinarian or that company has a lenient policy

towards punctuality. So consensus tells us whether most employees display the same

behavior.

3. Consistency: i.e., does the individual come late most of the time. If there is high

consistency then it is internally caused that is the cause lies within the individual.

Attribution of
Observation Interpretation
cause
High
External

Low
Distinctiveness
Internal

High
Consensus External
Individual Behavior

Low
Internal
Consistency
High
Internal

Low
External

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Errors used in judging others:

1. Fundamental attribution error:

Fundamental attribution error is to put the blame solely on the individual irrespective of the fact

that the poor behavior was not in his/her control. For instance to put the blame on the individual

in not achieving the sales target. We attribute this to his laziness rather than the highly

competitive environment that is causing reduced sales.

2. Self serving bias:

Putting the cause of success on self rather than acknowledging the contributions by others and

putting blame on others rather than admitting ones mistakes. For example: The White House

declared “Mission Accomplished” when the Iraq war was going well. But when they could not

find the WMD’s and terrorism killed a number of soldiers the American Govt. blamed it on the

Intelligence failure that is the CIA.

3. Halo Effect

When we draw a general impression about an individual on the basis of a single characteristic a

halo effect is operating. This phenomenon frequently occurs when students apprise their

classroom instructor. Students may give prominence to a single trait such as giving of numbers

and allow their entire evaluation to be tainted by how they judge the instructor on that one trait.

Thus an instructor may be very knowledgeable but because he does not give good numbers,

students would probably give the instructor a low rating.

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 4. Contrast Effects:

A good example of how contrast effects the selection of candidates is seen in an interview. A

strong candidate is likely to receive a more favorable assessment if preceded by mediocre

applicants and a less favorable assessment if preceded by strong applicants like him.

5. Stereotyping:

A stereotype is a commonly held public belief about specific social groups, or types of

individuals. Stereotypes can be either positive ("black men are good at basketball") or negative

("women are bad drivers").It is true that most black men play basket ball quite nicely but this not

the rule but exceptions can be there. Similarly it is also true that women are not good drivers

because they don’t drive as much as men do but there are exceptions.

How decisions should be made:

The Rational Decision Making Model:

1. Identifying a problem or opportunity:

A problem is any discrepancy between the current state and the desired state. For example you

are unable to achieve sales. Here we have a problem.

2. Gathering information:

Here you can do SWOT (Strengths’, Weaknesses, Opportunities and Threats) analysis and gather

first hand information about the company and the problem. You can also do PEST analysis i.e.,

looks into the Political, Economical, Social and Technological issues underlying the problem.

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3. Analyzing the situation

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 4. Developing options

Develop possible alternatives to increasing sales like.

I. Build customer loyalty.

II. Enter into strategic alliances with companies that have a customer base similar to yours.

III. Outsource

IV. Get rid of under-performing employees.

V. Consider hiring a public relations firm.

5. Evaluate the options:

Give weightage to each option like:

I. Build customer loyalty. 60

II. Enter into strategic alliances with 25

companies that have a customer

III. Outsource
base similar to yours. 30

IV. Get rid of under-performing 10

employees.
V. Consider hiring a public relations 20

firm.

6. Select a preferred alternative:

Chose the alternative that best suits you.

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7. Act on the decision:

Follow through on the best decision chosen.

Creativity:

“Creativity can be defined as the ability to produce novel and useful ideas”.

These ideas are different from what has been done before and are helpful to solving the problem

at hand.

Three Component Model of Creativity:

Creativity Skills
Expertise

Creativity

Task Motivation

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This model is helpful in enhancing creativity. It has three parts:

1. Expertise: Creativity is enhanced when individuals have the skills, knowledge, in their

field since a long time. For example: Bill Gates spent his youth working on the Operating

System (Windows) and later founded his own company (Microsoft). So he has lots of

expertise in his field.

2. Creative Thinking Skills: Research shows that we are more creative when we’re in

good moods, so if we need to be creative we should do things that make us happy.

Perhaps that is listening to music we enjoy, eating foods we like, watching funny movies,

or socializing with others. There is evidence that suggests that being around others who

are creative can actually make us more inspired, especially if we’re creativity stuck.

Similarly the use of analogies can also help in increasing our creativity. Alexander

Graham, Bell used the analogy of ear when inventing the phone. He used a thin flexible

metal sheet that mimicked the ear drum (delicate thin membrane).

3. Intrinsic motivation:

This is the desire to work on something because it’s interesting; challenging irrespective

of how much it pays us at the end of the day. Creative people love their work so much so

that they become obsessed. Artists are good example. Great painters have no limit to their

work e.g. Picasso. They can start working in the middle of the night or anytime they feel

like painting.

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Common Biases and Errors:

1. Anchoring Bias:

Anchoring is a term used in psychology to describe the common human tendency to rely too

heavily, or "anchor," on one trait or piece of information when making decisions.

Take, for example, a person looking to buy a used car - they may focus excessively on the

odometer reading and the year of the car, and use those criteria as a basis for evaluating the value

of the car, rather than considering how well the engine or the transmission is maintained.

2. Pygmalion Effect or Rosenthal effect :

It has evolved to characterize the fact that an individual’s behavior is determined by other

people’s expectations. In other words, if a manager expects big things from you then he will

encourage you at every moment. But if he wants to people to behave minimally, then he will

have low expectations.

A study was taken with 105 soldiers in the Israeli Defense 15 week combat command course.

The four instructors were told that one third of combatants had high potential, one- third normal

potential (mediocre), and the potential of last one third was unknown. So the trainees who were

told that the group had high potential performed well with positive attitude, and had respect for

the leader while those who were told that the group was mediocre performed below expectations.

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 3. Profiling:

It is a form of stereotyping in which a group of individuals is singled out-typically on the basis of

ethnicity-for intensive inquiry. In Britain people from Ireland are often looked upon with

suspicions. And in Israel, every Arab is seen as a militant.

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