Chapter 5 - Perception, individual decision making & creativity

Performance evaluation

________ can be problematic because many shortcuts and subjectiveness is used.

Risk aversion

________: tendency to prefer a sure gain of a moderate amount over a riskier outcome might have a higher expected payoff.

Reward systems

________ influences decision makers by suggesting to them what choices are preferable in terms of personal payoff.

Hindsight bias

________: tendency to believe falsely, after an outcome of an event is actually known, that one would have accurately predicted the outcome.

Whistle blowers

________: individuals who report unethical practices by their employer to outsiders.

Justice criterion

________: impose and enforce rules fairly and impartially so that there is an equitable distribution of benefits and costs.

rationality

Bounded ________: process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.

Behavioral ethics

________: analyzing how people actually behave when confronted with ethical dilemmas.

Halo

________ effect: tendency to draw a general impression about an individual on the basis of a single characteristic.

Randomness

________ error: tendency of individuals to believe that they can predict the outcome of ________ events.

Self fulfilling

________ prophecy: situation in which a person inaccurately perceives a second person and the resulting expectations cause the second person to behave in ways consistent with the original perception.

Decisions

________: choices from among to or more alternatives.

relevant stakeholders

Creative outcomes (innovation): ideas or solutions judged to be novel and useful by ________.

Performance evaluation → managers

________ are strongly influenced in their decision making by the criteria on which they are evaluated.

Attribution theory

________: attempt to determine whether an individuals behavior is internally or externally caused.

Idea generation

________: process of creative behavior that involves developing possible solutions to a problem from relevant information and knowledge.

Information gathering

________: state when possible solutions to a problem incubate in individuals mind.

Perception

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

Selective perception

________: tendency to selectively interpret what one sees on the basis of one's interests, background, experience and attitudes.

current state of affairs

Problem: discrepancy between the ________ and some desired state.

individual differences

Influences on decision making: ________ and organizational constraints.

Fundamental attribution theory

________: tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgements about the behavior of others.

Cultural differences → cultural background

________ can definitely influence the way a decision is being made like in the selection of problems, depth of the analysis, etc.

Contrast effects

________: evaluation of a persons characteristics that is affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics.

Employment interview → perceptual judgements

________ are made that are often inaccurate.

Creativity

________: ability to produce novel and useful ideas.

Problem formulation

________: state of creative behavior which involved identifying problem or opportunity that requires a solution that is as yet unknown.

Availability bias

________: tendency for people to base their judgements on information that is readily available to them.

Intuitive decision making

________: unconscious process created out of distilled experience.

Overconfidence bias

________: overconfident about our abilities and the abilities of others, usually unaware of it.

Rights criterion

________: individuals to make decisions consistent with fundamental liberties and privileges, respecting and protecting basic rights of every individual.

Perception

Process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment

Attribution theory

Attempt to determine whether an individual’s behavior is internally or externally caused

Fundamental attribution theory

Tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgements about the behavior of others

Self-serving bias

Tendency for individuals to attribute their own success to internal factors and put the blame for failures on external factors

Selective perception

Tendency to selectively interpret what one sees on the basis of one's interests, background, experience and attitudes

Halo effect

Tendency to draw a general impression about an individual on the basis of a single characteristic

Contrast effects

Evaluation of a person’s characteristics that is affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics

Stereotyping

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

Self-fulfilling prophecy

Situation in which a person inaccurately perceives a second person and the resulting expectations cause the second person to behave in ways consistent with the original perception

Decisions

Choices from among to or more alternatives

Problem

Discrepancy between the current state of affairs and some desired state

Rational

Characterized by making consistent, value maximizing choices within specified constraints

Rational decision making model

Decision making model that describes how individuals should behave in order to maximize some outcome

Bounded rationality

Process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity

Intuitive decision making

Unconscious process created out of distilled experience

Overconfidence bias

Overconfident about our abilities and the abilities of others, usually unaware of it

Anchoring bias

Tendency to fixate on initial information, from which one then fails to adequately adjust for subsequent information

Confirmation bias

Tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgements

Availability bias

Tendency for people to base their judgements on information that is readily available to them

Escalation of commitment

Increased commitment to a previous decision in spite of negative information

Randomness error

Tendency of individuals to believe that they can predict the outcome of random events

Risk aversion

Tendency to prefer a sure gain of a moderate amount over a riskier outcome might have a higher expected payoff

Hindsight bias

Tendency to believe falsely, after an outcome of an event is actually known, that one would have accurately predicted the outcome

3 ethical decision criteria

Utilitarian criterion, rights criterion and justice criterion

Whistle-blowers

Individuals who report unethical practices by their employer to outsiders

Behavioral ethics

Analyzing how people actually behave when confronted with ethical dilemmas

Creativity

Ability to produce novel and useful ideas

Three-stage model of creativity

Proposition that involves three stages: causes (creative potential and creative environment), creative behavior and creative outcomes (innovation)

Problem formulation

State of creative behavior which involved identifying problem or opportunity that requires a solution that is as yet unknown

Information gathering

State when possible solutions to a problem incubate in individuals mind

Idea generation

Process of creative behavior that involves developing possible solutions to a problem from relevant information and knowledge

Idea evaluation

Process of creative behavior involving the evaluation of potential solutions to problems to identify the best one

Creative potential

Intelligence is related to creative behavior, expertise is the foundation of all creative work

Creative environment

Potential is not enough, you need to be in an environment where creative potential can be realized

Creative outcomes (innovation)

Ideas or solutions judged to be novel and useful by relevant stakeholders