MAN5245 OB Chapter 6

The process by which individuals organize and interpret sensory impressions to give meaning to their environment

Perception

perceiver, target, and situation/context

The three factors that influence perception

Attitudes, motives, interests, experience, and expectations

Characteristics of the perceiver that influence perception

Attitudes, motives, interests, experience, and expectations

Characteristics of the target that influence perception

Time, work setting, and social setting

Characteristics of the situation/context that influence perception

An attempt to explain how we judge people differently depending on the meaning we attribute to their behavior, including whether we believe behavior is internally or externally caused

Attribution theory

Attributing behavior to something believed to be under the individual's personal control

Internal attribution

Attributing behavior to the situation or circumstances outside the individual's control

External attribution

Distinctiveness, consensus, and consistency

The three dimensions that determine whether we make an internal or external attribution

Whether the individual behaves differently in different situations

Distinctiveness in attribution theory

How does distinctiveness influence attribution?

High distinctiveness → external attribution; low distinctiveness → internal attribution

Whether other people behave similarly in the same situation

Consensus in attribution theory

How does consensus influence attribution?

High consensus → external attribution; low consensus → internal attribution

Whether the person behaves the same way over time

Consistency in attribution theory

How does consistency influence attribution?

High consistency → internal attribution; low consistency → external attribution

The tendency to underestimate external factors and overestimate internal factors when judging other people’s behavior

Fundamental attribution error

The tendency to attribute our own successes to internal factors and our failures to external factors

Self-serving bias

What is the key difference between the fundamental attribution error and self-serving bias?

Fundamental attribution error = explaining other people’s behavior too internally; self-serving bias = explaining our own successes internally and failures externally

The tendency to interpret what we see based on our interests, background, experience, and attitudes

Selective perception

Drawing a positive overall impression of someone based on a single characteristic

Halo effect

Drawnig a negative overall impression of someone based on a single characteristic

Horns effect

Evaluating someone’s characteristics based partly on comparisons with other people recently encountered

Contrast effect

Judging people based on beliefs about the group they belong to; it reduces cognitive effort but can lead to premature judgments, miscommunication, and conflict

Stereotyping

A choice made from among two o rmore alternatives

Decision

A discrepancy between the current state and a desired state

Problem

Rational decision making, bounded rationality, and intuition

Three decision-making processes

Making consistent, value-maximizing choices within specified constraints

Rational decision making

A Model describing how individuals should behave to maximize an outcome

Rational decision making model

1. Define the problem

2. Identify decision criteria

3. Allocate weights to the criteria

4. Develop alternatives

5. Evaluate alternatives

6. Select the best alternative

Six steps of the rational decision making model

The decision maker has complete information, can identify all relevant options without bias, and chooses the option with the highest utility

Assumptions the rational decision making model makes

A simplified decision-making process in which we focus on the essential features of a problem without capturing all of it’s complexity

Bounded rationality

To choose a solution that is good enough or sufficient rather than optimal

Satisficing

An Unconscious process created from distilled experience

Intuitive decision making

It occurs outside conscious thought, is fast, relies on holistic associations and experience, and is emotionally charged

Major characteristics of intuitive decision making

The tendency to be overconfident about our own abilities or the abilities of others

Overconfidence bias

The tendency to fixate on initial information and fail to adequately adjust for later information

Anchoring bias

The tendency to seek and accept information that supports our existing beliefs or choices and discount contradictory information

Confirmation bias

The tendency to base judgments on information that is readily available in memory, especially recent or emotionally vivid information

Availability bias

Increasing or maintaining commitment to a previous decision despite negative information showing it may be wrong

Escalation of commitment

What is another name for escalation of commitment?

The sunk cost effect

The tendency to believe we can predict or control the outcomes of random events

Randomness error

The tendency to prefer a sure, moderate gain over a riskier outcome, even when the risky option may have a higher expected payoff; When facing potential losses, people tend to become more risk-seeking

Risk aversion

How does framing affect risk aversion?

People tend to be more risk-averse when choices are framed as gains and more risk-seeking when choices are framed as losses

The tendency to believe, after learning an outcome, that we would have accurately predicted it beforehand

Hindsight bias

The tendency to judge the quality of a decision based on how desirable or believable its outcome was, rather than on the quality of the decision-making process

Outcome bias

What is the difference between hindsight bias and outcome bias?

Hindsight bias = “I knew that would happen”; Outcome bias = “It turned out well, so it must have been a good decision”

How do rational decision making, bounded rationality, and intuition relate to decision quality and speed?

Generally, rational decision making emphasizes higher decision quality but takes more time; bounded rationality seeks a reasonably good decision more quickly; intuition is fastest but relies most heavily on judgment rather than analysis

Limited knowledge, limited cognitive capacity, and time limites

Factors that create bounded rationality

Why can over-reliance on intuition be risky?

The more we rely entirely on our own mental processing, the more vulnerable we become to systematic decision-making biases and mental shortcuts

Are decision-making biases always harmful?

No. Mental shortcuts are not always problematic, but they can create systematic errors; understanding them can help reduce their negative effects

Attention → Organization → Interpretation → Judgment

four stages in the perception/judgment process

A coworker arrives late, and you assume they are lazy without considering traffic or an emergency. What bias is this?

Fundamental attribution error

How is the fundamental attribution error different from self-serving bias?

Fundamental attribution error = explaining other people’s behavior too internally; self-serving bias = explaining our own successes internally and our own failures externally

The tendency for initial information or first impressions to disproportionately influence later judgments of a person

first impression error

Applicant appearance, nonverbal cues, negative information, primacy effects, similarity effects, and poor recall

Factors that can bias interviewer perceptions