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Organizational Behavior 5. Prof. Luo, Fan. Management School, Wuhan University of Technology Email: 5. Perception and Decision Making. (1) Effect factors of Perception (2) Making Judgments About Others. Perception. (3) Common Biases and Errors

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Organizational behavior 5

Organizational Behavior 5

Prof. Luo, Fan

Management School,

Wuhan University of Technology


5 perception and decision making
5. Perception and Decision Making

  • (1)Effect factors of Perception

  • (2)Making Judgments About Others


  • (3)Common Biases and Errors

  • (4) Ways to Improve Decision Making

Decision Making

Content Title

Company Logo

Teaching plan
Teaching Plan


Help the students understanding the effect factors of perception and cultural differences in decision making.

Teaching Emphases

Effect Factors of Perception; Common Biases and Errors of Decision Making

Learning difficulty

The Shortcuts in Judging; How to Improve Decision Making


Lecture; Case discussion; Team training

Case impression of a new student
Case: Impression of a New Student

Susan is a new MBA student.

How about the classmates’ first impression?

Different impression:

“She is beautiful.”

“She is self-importance.”

“She is quiet and introversive.”

“She is stuffy and old-fashioned.”

“She is studious.”

What is perception
What is Perception?

  • 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.

  • Perception

  • A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.

1 effect factors of perception
(1) Effect factors of Perception

Subject factors

  • Attitudes

  • Motivation

  • Interests

  • Experience

  • Expectation

Percept factors
Percept factors

Effect factors of Perception

  • The character of the percept

  • The relation between the percept and background

  • Combination of the percept


Effect factors of Perception

  • Time

  • Job environment

  • Social environment

Social perception
Social Perception

  • Individual —— Individual

  • Individual ——Group

  • Individual ——Organization

  • Individual —— Ego

  • Individual —— Relationship

  • Group —— Individual

  • Group —— Group

2 making judgments about others
(2) Making Judgments About Others

  • Attribution Theory

  • When individuals observe behavior, they attempt to determine whether it is internally or externally caused.

  • 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.

Attribution theory

Making Judgments About Others

Attribution Theory

Errors and biases in attributions
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

In general, we tend to blame the person first, not the situation.

Errors and biases in attributions cont d
Errors and Biases in Attributions (cont’d)

  • Self-Serving Bias

  • The tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factors

  • Thought: When students get an “A” on an exam, they often say they studied hard. But when they don’t do well, how does the self-serving bias come into play?

  • Hint: Whose fault is it usually when an exam is “tough”?

Frequently used shortcuts in judging others
Frequently Used Shortcuts in Judging Others

  • Selective Perception

  • People selectively interpret what they see on the basis of their interests, background, experience, and attitudes.

Frequently used shortcuts in judging others1
Frequently Used Shortcuts in Judging Others

  • 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

Frequently used shortcuts in judging others2
Frequently Used Shortcuts in Judging Others

  • Projection

  • Attributing one’s own characteristics to other people

  • Stereotyping

  • Judging someone on the basis of one’s perception of the group to which that person belongs


  • Why did the professor mistake his help for murder?

  • What are the effect factors of Perception?

  • How is a shout of the little girl?

  • How about a witness?

  • Are you always correct when you have different viewpoints?

The effect factors of perception


  • Attitudes, motivation, Experience


  • Blood all of the ground, positions;

  • behaviors----take by the throat; bump the head;

  • (Similar, continuous principle)


  • Time----evening

  • The somber corner of a supermarket

The shortcuts in judging

Organization applications

  • Employment interview

  • Performance expectations

    • Self-fulfilling prophecy (SFP)

    • Also referred to as the Pygmalion effect

    • Expectations shape our attitudes and behaviors toward others

    • Which in turn affect how others behave and perform (example: Theory X and Y)

    • Implications for motivation and performance


  • Objective: to apply perception theory and issues to organizational examples

  • Discussion focus:

    • How has perception influenced communication?

    • Had an impact on peer relationships?

    • Employee-manager relationships

Specific applications in organizations
SpecificApplicationsin Organizations

Employment Interview

  • Perceptual biases of raters affect the accuracy of interviewers’ judgments of applicants

    Performance Expectations

  • Self-fulfilling prophecy (Pygmalion effect): The lower or higher performance of employees reflects preconceived leader expectations about employee capabilities.

    Ethnic Profiling

  • A form of stereotyping in which a group of individuals is singled out—typically on the basis of race or ethnicity—for intensive inquiry, scrutinizing, or investigation

The link between perceptions and individual decision making
The Link Between Perceptions and Individual Decision Making

  • ProblemA perceived discrepancy between the current state of affairs and a desired state

  • Perception of the Decision Maker

  • DecisionsChoices made from among alternatives developed from data perceived as relevant


Assumptions of the rational decision making model
Assumptions of the Rational Decision-making Model

  • Rational Decision-making Model

  • Describes how individuals should behave in order to maximize some outcome

  • Model Assumptions

  • Problem clarity

  • Known options

  • Clear preferences

  • Constant preferences

  • No time or cost constraints

  • Maximum payoff

Steps in the rational decision making model
Steps in the Rational Decision-making Model

  • Define the problem.

  • Identify the decision criteria.

  • Allocate weights to the criteria.

  • Develop the alternatives.

  • Evaluate the alternatives.

  • Select the best alternative.

The three components of creativity
The Three Components of Creativity

  • Creativity

  • The ability to produce novel and useful ideas

  • Three-Component Model of Creativity

  • Proposition that individual creativity requires expertise, creative-thinking skills, and intrinsic task motivation

How are decisions actually made in organizations
How Are Decisions Actually Made in Organizations?

  • Bounded Rationality

  • Individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.

How are decisions actually made in organizations cont d
How Are Decisions Actually Made in Organizations? (cont’d)

How/Why problems are Identified

  • Visibility over importance of problem

    • Attention-catching, high profile problems

    • Desire to “solve problems”

  • Self-interest (if problem concerns decision maker)

    Alternative Development

  • Satisficing: seeking the first alternative that solves problem

  • Engaging in incremental rather than unique problem solving through successive limited comparison of alternatives to the current alternative in effect

3 common biases and errors
(3) Common Biases and Errors

Overconfidence Bias

  • Believing too much in our own ability to make good decisions

  • Anchoring Bias

    • Using early, first received information as the basis for making subsequent judgments

  • Confirmation Bias

    • Using only the facts that support our decision

  • Common biases and errors
    Common Biases and Errors

    Availability Bias

    • Using information that is most readily at hand

    • Recent

    • Vivid

      Representative Bias

    • “Mixing apples with oranges”

    • Assessing the likelihood of an occurrence by trying to match it with a preexisting category using only the facts that support our decision

      Winner’s Curse

    • Highest bidder pays too much

    • Likelihood of “winner’s curse” increases with the number of people in auction

    Common biases and errors1
    Common Biases and Errors

    Escalation of Commitment

    • In spite of new negative information, commitment actually increases

      Randomness Error

    • Creating meaning out of random events

      Hindsight Bias

    • Looking back, once the outcome has occurred, and believing that you accurately predicted the outcome of an event

    Organizational constraints on decision makers
    Organizational Constraints on Decision Makers

    Performance Evaluation

    • Evaluation criteria influence the choice of actions

      Reward Systems

    • Decision makers make action choices that are favored by the organization

      Formal Regulations

    • Organizational rules and policies limit the alternative choices of decision makers

      System-imposed Time Constraints

    • Organizations require decisions by specific deadlines

      Historical Precedents

    • Past decisions influence current decisions

    Cultural differences in decision making
    Cultural Differences in Decision Making

    • Problems selected

    • Time orientation

    • Importance of logic and rationality

    • Belief in the ability of people to solve problems

    • Preference for collective decision making

    4 ways to improve decision making
    (4) Ways to Improve Decision Making

    • Analyze the situation and adjust your decision making style to fit the situation.

    • Be aware of biases and try to limit their impact.

    • Combine rational analysis with intuition to increase decision-making effectiveness.

    • Don’t assume that your specific decision style is appropriate to every situation.

    • Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies.

    Organizational behavior 5

    Rational Decision-Making Model

    • Define the problem

    • Identify the decision criteria

    • Allocate weights to the criteria

    • Develop the alternatives

    • Evaluate the alternatives

    • Select the best alternative

    • Why this “rational” approach may not be feasible?

    • Decision-making short-cuts

    Organizational behavior 5

    Individual Different

    Decision making styles

    Overhead transparency

    Two dimensions:

    • Way of thinking

      • Rational----------Intuitive

    • Tolerance for ambiguity

      • High--------------Low

    Organizational behavior 5

    Decision Style Model

    • Directive: efficient, minimal information requirements, fewer decision point alternatives, logical, focus on short time perspective

    • Analytic: greater need for information, more alternatives considered, cautious approach, can adapt to the unexpected

    • Behavioral: strong concern for people and their development, receptive to suggestions from others, focus on the short term and make limited use of data, tries to avoid conflict, seeks acceptance

    • Conceptual: use data from multiple sources, more alternatives considered, long range focus, good at finding creative solutions

    • Dominant and back-up styles

    Organizational behavior 5


    • Time and resources

    • Government regulations

    • Reward systems

    • Pressure from supervisors and managers

    • Peer conformity pressures

    • Organizational culture

    Organizational behavior 5


    • Identify a recent decision that you made individually or with others (e.g. a group decision)

    • What factors influenced how the decision making process unfolded?

    • Any organizational constraints? Identify them.

    • Were there any ethical issues to be considered? Identify them.

    • Did the decision lead to a “positive” or “negative” outcome?

    Organizational behavior 5

    Thank You !

    Wuhan University of Technology