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Perception and Individual Decision Making
Perception and Individual Decision Making
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Learning Objectives
Define perception and explain the factors that influence it.
Apply the rationale model of decision making and contrast it with bounded
rationality and intuition.
Perception
A 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 reality is, not on reality itself
The world as it is perceived is the world that is behaviorally important
Attribution of
Observation Interpretation
Cause
Distinctiveness
(High or Low)
People selectively interpret what they see on the basis of their interests,
Selective Perception background, experience, and attitudes
Judging someone on the basis of one’s perception of the group to which that
Stereotyping person belongs – a prevalent and often useful, if not always accurate,
generalization
A form of stereotyping in which members of a group are singled out for intense
Profiling scrutiny based on a single, often racial, trait
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Person Perception: Making Judgments
About Others
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The Link Between Perception and
Individual Decision Making
All elements of problem identification and the decision making process are
Perception Linkage influenced by perception
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Decision Making in Organizations
Rational Decision- The “perfect world” model: assumes complete information, all options known,
Making and maximum payoff
The “real world” model: seeks satisfactory and sufficient solutions from
Bounded Reality limited data and alternatives
Believing too much in our own ability to make good decisions – especially
Overconfidence Bias when outside of own expertise
Using early, first received information as the basis for making subsequent
Anchoring Bias judgments
Confirmation Bias Selecting and using only facts that support our decision
Availability Bias Emphasizing information that is most readily at hand (Recent – Vivid)
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Decision Making in Organizations
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Decision Making in Organizations
Individual Differences
Organizational Constraints
Performance Evaluation
Reward Systems
Formal Regulations
Historical Precedents 13
What About Ethics in Decision Making?
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Protects the interests of weaker
Encourages a sense of entitlement
members
What About Ethics in Decision Making?
Creativity
Creativity Potential
Those who score high in openness to experience, 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
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What About Ethics in Decision Making?
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Global Implications
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