Perception attribution and individual decision making

1. Perception attribution and individual decision making Interactive lecture III Jolanta Babiak Winter semester 2018/2019

2. Perception

3. Why is perception important to OB? Peoples’ behavior is based on their perception of what reality is, not on reality itself

4. Factors that influence perception

5. Person Perception Making judgments about others

6. Attribution theory

7. Attribution theory

8. Differences between internal vs external causation Internally caused behavior Externally caused behavior What the situation forced the individual to do Employee is late for work: must have run into tied up traffic due to some accident on the way Colleague is gaining weight: could have some health issues, maybe thyroid Manager is in tensed mood: he must have been under fire during yesterday’s board meeting Under the control of the individual • Employee is late for work: he was partying and then overslept • Colleague is gaining weight: he is socializing a lot and overeating • Manager is in tensed mood: he wants to evoke fear in us purposefully

9. Three determining factors: (1) Distinctiveness

10. Three determining factors: (2) Consensus

11. Three determining factors: (3) Consistency

12. Most important finding: fundamental attribution error While making judgments about the behavior of other people • We tend to overestimate the effects of internal factors; e.g. sales dropped recently - my sales agents are just lazy • We tend to underestimate the effects of the external factors; sales dropped recently – it cannot be the innovative product introduced by the competitor

13. Most important finding: fundamental attribution error While making judgments about our own behavior • We tend to attribute our own success to internal factors; e.g. ability, effort • We tend to blame failure on the external factors; e.g. bad luck, poor performance of others

14. Fundamental attribution error: cultural differences • non-Western managers are less likely to use self-serving bias: tend to assume responsibility for failure • Asian cultures: group-based attributions – more likely to blame institutions or whole organizations • Western cultures – individuals should get blame or praise

15. Shortcuts in judging others: selective perception

16. Shortcuts in judging others: halo effect We draw a general impression about an individual on the basis of a single characteristic; here: appearance

17. Shortcuts in judging others: contrast effect Our reaction is influenced by other persons we have recently encountered; attention: job interviews

18. Shortcuts in judging others: stereotyping • Less difficult to deal with unmanageable number of stimuli if we use heuristics • Problem occurs when we generalize inaccurately or too much • We usually stereotype based on: • Gender • Age • Race • Religion • Ethnicity • Weight Stereotypes operate emotionally and often below the level of conscious awareness

19. Specific applications of shortcuts in Organizations • Employment interview • We form impressions of others within tenth of a second: first glance • Good applicant: absence of negative characteristics • Performance expectations • Self-fulfilling prophecy: one’s behavior is determined by others’ expectations • Expectations become reality • Performance evaluations • Depend on the perceptual process: subjective • Some are luckily evaluated objectively: sales people

20. How isperceptionlinked to decisionmakingprocess • Every individual makes decisions • Managers make many! decisions every single day • Top managers: determine organization’s goals, what products to offer, how best to finance operations, where to locate new manufacturing plant • Middle managers: set production schedules, select new employees, how to allocate pay raises • Lower-level managers: how to resolve a conflict between two new employees, when to seek advice from upper management, how best to explain coworkers scope, money and time constraints for the new project • Non managerial employees make decisions about their effort , engagement and compliance with boss’s request

21. Decision making – important part of organizational behavior • Nonmanagerial staff gets empowered with decision making authority (historically reserved for managers) • They way individuals make decisions is based on their thinking style and problem solving style • Quality of choices in decision making is influenced by perception processes • Decision making occurs as a reaction to a problem

22. To make or not to make a decision – perceptual process • Decisions require interpretation and evaluation of information • Decisions require to screen, process and choose relevant data • Decisions require development of alternatives and evaluation of their strengths and weaknesses • Perceptual distortions can bias analysis and conclusions

23. 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

24. Role of intuition in decision making • Intuitive decision making – unconscious process created from experience • Occurs outside conscious thought • Relies on holistic associations • It is fast and affectively charged • Least rational way of decision making, but not necessarily wrong • It is highly complex and developed form of reasoning that is based on years of experience and learning • Intuition can improve overall decision making process

25. Common biases and errors in decision making process (1) overconfidence • Can produce catastrophic results • Being 100 percent sure of an outcome equals to ca. 70% accuracy • Studies show thatindividualsoverestimatetheirintellectual and interpersonalabilities • the moreentrepreneursareoptimisticabouttheirnew venture the less successfulitbecomes • newinvestorsoverestimatetheirskills and the quality of informationtheyhave

26. Common biases and errors in decision making process (2) anchoring bias • Fixation on initial information • Failure to adjust to subsequent information • Reason: our mind emphasizes first information it receives • Anchors are widely used by persuasion masters: marketing specialists, politicians, managers, legal workers, realtors • During negotiations anchoring takes place as well

27. Common biases and errors in decision making process (3) confirmation • We gather information selectively not objectively • Confirmation bias is a case of selective perception: we seek information that is in line with what we already know, or with our preconceived views e.g. our past choices; we rather omit information which is incongruent with it • We select information that support our views and we give it too much attention in comparison to contradictory views • When we strongly believe in our opinion we are mostly prone to confirmation bias

28. Common biases and errors in decision making process (4) availability • Example: overstating the risk of flying and understating the risk of driving • Availability bias is tendency to base judgements on information readily available • The availability bias can explain errors managers make when performing performance reviews: more weight is given to recent employee behavior

29. Bibliography • Gerrig, R. J., Zimbardo, P. G. (2010). Psychology and life. New Jersey: Person education, Inc. • Robbins, S. P., Judge, T. A. (2013). Organizational behavior. New Jersey: Person education, Inc. • Whetten, D. A., Cameron K. S. (2011). Developing Management Skills. New Jersey: Person education, Inc