midterm -1 27 th june- class time
DESCRIPTION
Midterm -1 27 th June- Class Time. Covers Ch 1,2,3,4 20% MCQ 40% SQ 40% LQ. IOA- C2 Jun 25-27. Chapter 5. Muslims are terrorist! Hindus are transferring assets to India Aborigines make trouble ……. Perception and Individual Decision Making. - PowerPoint PPT PresentationTRANSCRIPT
Adeyl Khan, Faculty, BBA, NSU
Midterm -127th June- Class Time
Covers Ch 1,2,3,420% MCQ
40% SQ40% LQ
1
Adeyl Khan, Faculty, BBA, NSU
IOA- C2Jun 25-27
2
Adeyl Khan, Faculty, BBA, NSU
Chapter 5 Perception and
Individual Decision Making
Muslims are terrorist!Hindus are transferring assets to India
Aborigines make trouble……..
Adeyl Khan, Faculty, BBA, NSU
What Is Perception, and Why Is It Important?
People’s behavior is based on their perception of what reality is, not on (objective) reality itself.
Reality Behavior
A great org. to work for
Adeyl Khan, Faculty, BBA, NSU
Factors Influencing Perception
Shape
Distort
PersonalCharacteristi
cs
Relationship to
background-Grouping
Context
Adeyl Khan, Faculty, BBA, NSU
Person Perception: Making Judgments About Others
Judging: Why people act the
way they do? What is causing it?
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.
Adeyl Khan, Faculty, BBA, NSU
Attribution Theory
Individual’s behavior
Everyone’s behavior
Individual’s action
Adeyl Khan, Faculty, BBA, NSU
Errors and Biases in Attributions
Poor Sales Performance
Adeyl Khan, Faculty, BBA, NSU
Errors and Biases in Attributions …
Adeyl Khan, Faculty, BBA, NSU
Frequently Used Shortcuts in Judging Others
Boss reprimand certain people and not others
Comprehensive Case Study- Important
problems
Adeyl Khan, Faculty, BBA, NSU
Frequently Used Shortcuts in Judging OthersHalo Effect
Draw a general impression about others on the basis of a single attribute/characteristic intelligence, appearance an instructor, a student who comes in
late in the first class Contrast Effect
Contrast effects (can) distort perceptions
Do we evaluate a person in isolation? Or influenced by other persons we have recently encountered.
Interviewer sees a pool of job applicants.
HP CEO- Fiorina
• Articulate, decisive, charismatic … Vs. unproven, egotistical, inflexible
Children, Animal and
You
Adeyl Khan, Faculty, BBA, NSU
Frequently Used Shortcuts in Judging Others- StereotypingJudge someone on the basis of
our perception of the group to which he or she belongs Generalization has
advantages! Success in the past
Women Vs. Men Relocation, Childcare
Profiling- Arab descant! Balance
Adeyl Khan, Faculty, BBA, NSU
Shortcuts in Organizations Employment Interview (1/10th Second, 4/5 mins)
Perceptual biases affect the accuracy of interviewers’ judgments
Performance Expectations Behave according to Expectation (Students) Self-fulfilling prophecy (pygmalion effect): The lower or
higher performance of employees reflects preconceived leader expectations about employee capabilities.
Performance Evaluations (Promotion, Pay) Appraisals are subjective perceptions. (Vs. Objective)
Assessment is a subjective judgment subject to perceptual distortion and bias
Employee Effort
Errors•Selective•Halo•Contrast
Adeyl Khan, Faculty, BBA, NSU
The Link Between Perceptions and Individual Decision Making
Outcomes
Reaction
Is this a problem?What is acceptable ?
Empowerment make the issue
even more critical
Perceptions of the decision maker
Adeyl Khan, Faculty, BBA, NSU15
Adeyl Khan, Faculty, BBA, NSU
Rational Decision-Making ModelStep follows in a
logical/rational order based on thinking
through and weighing up the alternatives
Goal Maximize outcome
1. Problem clarity2. Known options3. Clear preferences4. Constant preferences5. No time or cost
constraints6. Maximum payoff
Assumptions
Steps
Adeyl Khan, Faculty, BBA, NSU
Steps in the Rational Decision-Making Model
1. Define the problem.2. Identify the decision criteria.3. Allocate weights to the criteria.4. Develop the alternatives.5. Evaluate the alternatives.6. Select the best alternative.
Optimize
Adeyl Khan, Faculty, BBA, NSU18
Source: http://en.wikipedia.org/wiki/Rational_planning_model
Adeyl Khan, Faculty, BBA, NSU
How Are Decisions Actually Made in Organizations
Adeyl Khan, Faculty, BBA, NSU
How Are Decisions Actually Made in Organizations … Identify problems
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.
Pitfalls
Adeyl Khan, Faculty, BBA, NSU
Common Biases and ErrorsOverconfidence 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.
Adeyl Khan, Faculty, BBA, NSU
Common Biases and ErrorsAvailability 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.
Adeyl Khan, Faculty, BBA, NSU
Common Biases and Errors
Adeyl Khan, Faculty, BBA, NSU
Common Biases and ErrorsRandomness Error
Creating meaning out of random eventsHindsight Bias
Looking back, once the outcome has occurred, and believing that you accurately predicted the outcome of an event 9/11 Prediction
Adeyl Khan, Faculty, BBA, NSU25
Adeyl Khan, Faculty, BBA, NSU
Intuition
Intuitive Decision Making
• An unconscious process created out of distilled experience.
Conditions Favoring Intuitive Decision Making
• A high level of uncertainty exists• There is little precedent to draw on• Variables are less scientifically predictable• “Facts” are limited• Facts don’t clearly point the way• Analytical data are of little use• Several plausible alternative solutions exist• Time is limited and pressing for the right decision
Adeyl Khan, Faculty, BBA, NSU
Making Choices …Individual DifferencesPersonality
Escalation of commitment Facets of Conscientiousness
Achievement Striving Forestall failure
Dutifulness Best for the organization
Self serving bias High self esteem
Errors•Bounded Rationality•Common Biases & Errors•Intuition
Gender Rumination Analyzing decision Over-thinking Age
Adeyl Khan, Faculty, BBA, NSU
Organizational Constraints Managers’ Decisions
Performance Evaluation (Evaluation criteria) Division manager Vs. Negative information
Reward Systems Risk aversion at GM (Low profile
managers)Formal Regulations
Rules and policies limit the alternative- Franchise
System-imposed Time Constraints Deadlines- New product development
Historical Precedents Past decisions influence current decisions-
Budget
Decision makers make action choices that are favored by the organization
Adeyl Khan, Faculty, BBA, NSU
Ethics in Decision MakingUtilitarianism- Outcomes and
consequences Seeking the greatest good for the greatest
number Maximizing profit- firing decision
(Questionable!)Rights
Respecting and protecting basic rights of individuals
Protecting Whistle blowersJustice
Imposing/enforcing rules fairly and impartially.
Equitable distribution of benefits and cost
Adeyl Khan, Faculty, BBA, NSU
Ways to Improve Decision Making
Analyze situation and adjust decisionBe aware of biases- limit their impact.Rational analysis with intuition –effectiveEnhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies
Novel and Useful Idea
Reducing Bias
and Errors
Adeyl Khan, Faculty, BBA, NSU
Reducing Bias and Errors
Focus on goals. Clear goals
Decision making easier Eliminate options inconsistent w/interests
Look for information that disconfirms beliefs Considering ways we could be wrong
we’re smarter than we actually areDon’t try create meaning off randomness/coincidenceIncrease your options.
Number and diversity
Be Creative
Adeyl Khan, Faculty, BBA, NSU
The Three Components of Creativity
Adeyl Khan, Faculty, BBA, NSU
Chapter Check-Up: PerceptionIt’s your little sister’s senior school party,
and she notices that everyone is wearing the same dress she has on! Which perceptual shortcut may be occurring?
Escalation of commitment
Representative bias
Availability Bias
Hindsight Bias
Availability Bias
Adeyl Khan, Faculty, BBA, NSU
Chapter Check-Up: Perception If all of these perceptual shortcuts happen
unconsciously, how can we keep the stereotypes we have from interfering with the way we work in group projects? Identify two specific things you could do to
help prevent stereotypes from inhibiting effective group relationships.
Diversity Training
Adeyl Khan, Faculty, BBA, NSU35
Decision Making … ExampleRashid has just discovered he is double
registered for two classes at the same time and must make a decision about which one to take this semester. He considers the professor teaching this semester the time of the class, and the classes his friends are taking. when you can take each class again costs and benefits for taking each this
semester versus later next year. He then makes his decision. You just
engaged in _____________________ ?
Adeyl Khan, Faculty, BBA, NSU
IOA- C5July 4-5
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