Organizational Behavior

13th Edition
Stephen P. Robbins I Timothy A. Judge I Seema Sanghi

Iffat Sabir Chaudhry, PhD. Scholar, Lecturer
Management Sciences Dept, Preston University, Islamabad Email:

Ch 5: Perception and Individual Decision Making

1. 2. 3. 4. 5. 6. 7.

Perception & its Importance Factors influencing Perception Person Perception: Judgment About Others Link between Perception & Individual Decision Making How Decisions should be made How are Decisions actually made in Organization Ethics in Decision Making

1. Definition Perception is a process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.

What is its Importance? Understanding perception is important because peoples’ behavior is not based on reality but on their perception of reality.

2. Factors Influencing Perception
Three types of factors influence perception: 2.1 Factors in the Perceiver a. Attitudes b. Motives c. Interests d. Experience e. Expectations 2.2 Factors in the Situation a. Time b. Work Setting c. Social Setting

2.3 Factors in the Target a. Novelty c. Sounds e. Backgrounds g. Similarity

b. Motion d. Size f. Proximity

3. Person Perception: Making Judgments About Others
3.1 Attribution Theory

When individuals observe behavior, they attempt to determine whether it is internally or externally caused. Internally caused behavior is believed to be under the personal control of the individual. Externally caused behavior is seen as resulting from outside causes, the person having being forced into the behavior by the situation. The behavior attribution depends on three factors: i. Distinctiveness: display of different behaviors in different situations; unusual behavior. ii. Consensus: refers to similar behavior by various individuals in the same situation. iii. Consistency: repetition of the same response over time.

3. Person Perception: Making Judgments About Others
3.1 Attribution Theory

a. 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. b. Self-serving bias The tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factors.

3. Person Perception: Making Judgments About Others
3.2 Frequently Used Shortcuts in Judging Other a. 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. Stereotyping: Judging a person on the basis of our perception of the group to which the person belongs.
Ethnic Profiling: A form of stereotyping in which a group of individuals is singled out, typically on the basis of race or ethnicity, for intense inquiry, scrutinizing, or investigation.

b. c.


3. Person Perception: Making Judgments About Others
3.3 Frequently Used Shortcuts in Judging Other a. Employment Interview: Perceptual judgments have a major influence on a candidate’s assessment. b. Performance Expectations: We try to validate our perceptions of reality even when they are faulty. Self-Fulfilling Prophecy or Pygmalion Effect: A situation in which one person inaccurately perceives a second person and the resulting expectations cause the second person to behave in ways consistent with the original perception. c. Performance Evaluation: Perception has a major influence on an employee’s performance evaluation.

4. Link Between Perception and Individual Decision Making
a. Decisions: The choices made from among two or more alternatives. b. Problem: A discrepancy between some current state of affairs and some desired state.

5. How Should Decisions Be Made
5.1 The Rational Decision-Making: Making consistent, value-maximizing choices within specified constraints. a. Rational Decision Making Model: A decision-making model that describes how individuals must behave in order to maximize some outcome. b. Steps in the Rational Decision-Making Model: i. Define the problem. ii. Identify the decision criteria. iii. Allocate weights to the criteria. iv. Develop the alternatives. v. Evaluate the alternatives. vi. Select the best alternative. Assumptions of the Model i. Problem clarity. iii. Clear preferences. v. No time or cost constraints.


ii. Known options. iv. Constant preferences. vi. Maximum payoff.

5. How Should Decisions Be Made
5.2 Improving Creativity in Decision Making
a. b. c. Creativity: The ability to produce novel and useful ideas. Creative Potential: The inherent capacity to be creative. Three-Component Model of Creativity:

The proposition that individual creativity requires expertise, creative-thinking skills, and intrinsic task motivation.

6. How are Decisions Actually Made in Organizations
6.1 Bounded Rationality: Individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.

This happens because of limited capacity of the human mind to grasp complex problems entirely in order to meet the requirements of full rationality. Managers then behave rationally within the limits of the simplified model.

6. How are Decisions Actually Made in Organizations
6.2 Common Biases and Errors:
a. Overconfidence Bias: A tendency to overestimate one’s

performance and ability. b. Anchoring Bias: A tendency to fixate on initial information, from which we then fail to adequately adjust for subsequent information. c. Confirmation Bias: The tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgments. d. Availability Bias: The tendency for people to base their judgments on information that is readily available. e. Representative Bias: Assessing the likelihood of an occurrence by inappropriately considering the current situation as identical to ones in the past.

6. How are Decisions Actually Made in Organizations
6.2 Common Biases and Errors:
f. Escalation of Commitment: An increased commitment to a

previous decision in spite of negative information. g. Randomness Error: A tendency to create meaning out of a truly random pattern. h. Winner’s Curse: A decision-making dictum that argues that the winning participants in an auction typically pay too much for the winning item. i. Hindsight Bias: The tendency to believe falsely that we would have accurately predicted the outcome of an event, after that event is actually known.

6. How are Decisions Actually Made in Organizations
6.3 Intuition: Intuitive decision making is an unconscious process created out of distilled experience. It does not operate independently of rational analysis; in fact, the two approaches complement each other. It may be taken as extrasensory power or inherited personality trait.

6. How are Decisions Actually Made in Organizations
6.4 Individual Differences in Decision Making: a. Personality: Personality has an effect on decision making and various personality traits create tendencies for certain types of biases. Consciousness directly affects escalation of commitment; high self-esteem is positively correlated with self-serving bias. b. Gender: Women spend more time on rumination, which means over thinking about problems. Rumination decreases with increasing age.

6. How are Decisions Actually Made in Organizations
6.5 Organizational Constraints a. Performance evaluation b. Reward systems c. Formal regulations d. System-imposed time constraints e. Historical precedents 6.6 Cultural Differences The rational model does not take into account cultural differences. Cultures differ in many aspects, most important of which is the importance of rationality.

7. Ethics in Decision-Making
7.1 Three Ethical Decision Criteria:
a. Utilitarianism: Decisions are made to provide the greatest

good for the greatest number. b. Focus on Rights: Respecting and protecting the basic rights of individuals. Whistle-blowers are individuals who report unethical practices by their employer to outsiders. c. Focus on Justice: Individuals impose and enforce rules fairly and impartially for equitable distribution of benefits and costs to all. 7.2 Ethics and National Culture: ethics vary with national or community culture.

Q 1. Define perception. Discuss the perceiver, target & situational factors impacting perception.

Submission Deadline: Next class Submit in Handwritten

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