Robbins: Organizational Behavior

Chapter Five

PERCEPTION AND INDIVIDUAL DECISION MAKING
LEARNING OBJECTIVES After studying this chapter, students should be able to: 1. 2. 3. ". $. &. '. *. +. 1,. Explain how two people can see the same thing and interpret it differently List the three determinants of attribution escribe how shortcuts can assist in or distort our !udgment of others Explain how perception affects the decision ma#ing process %utline the six steps in the rational decision ma#ing model escribe the actions of the boundedly rational decision ma#er (dentify the conditions in which indi)iduals are most li#ely to use intuition in decision ma#ing escribe four styles of decision ma#ing efine heuristics, and explain how they bias decisions -ontrast the three ethical decision criteria

CHAPTER OVERVIEW Perception (ndi)iduals beha)e in a gi)en manner based not on the way their external en)ironment actually is but, rather, on what they see or belie)e it to be. An organi.ation may spend millions of dollars to create a pleasant wor# en)ironment for its employees. /owe)er, in spite of these expenditures, if an employee belie)es that his or her !ob is lousy, that employee will beha)e accordingly. (t is the employee0s perception of a situation that becomes the basis for his or her beha)ior. 1he employee who percei)es his2her super)isor as a hurdle reducer who helps him2her do a better !ob and the employee who sees the same super)isor as 3big brother, closely monitoring e)ery motion, to ensure that ( #eep wor#ing4 will differ in their beha)ioral responses to their super)isor. 1he difference has nothing to do with the reality of the super)isor0s actions5 the difference in employee beha)ior is due to different perceptions. 1he e)idence suggests that what indi)iduals percei)e from their wor# situation will influence their producti)ity more than will the situation itself. 6hether or not a !ob is actually interesting or challenging is irrele)ant. 6hether or not a manager successfully plans and organi.es the wor# of his or her employees and actually helps them to structure their wor# more efficiently and effecti)ely is far less important than how employees percei)e the manager0s efforts. 7imilarly, issues li#e fair pay for wor# performed, the )alidity of performance appraisals, and the ade8uacy of wor#ing conditions are not !udged by employees in a way that assures common perceptions, nor can we be assured that indi)iduals will interpret conditions about their !obs in a fa)orable light. 1herefore, to be able to influence producti)ity, it is necessary to assess how wor#ers percei)e their !obs. Absenteeism, turno)er, and !ob satisfaction are also reactions to the indi)idual0s perceptions. issatisfaction with wor#ing conditions or the belief that there is a lac# of promotion opportunities in the organi.ation are !udgments based on attempts to ma#e some meaning out of one0s !ob. 1he employee0s conclusion that a !ob is good or bad is an interpretation. 9anagers must spend time understanding how each indi)idual interprets reality and, where there is a significant difference between what is seen and what exists, try to eliminate the distortions. :ailure to deal with the differences when indi)iduals percei)e the !ob in negati)e terms will result in increased absenteeism and turno)er and lower !ob satisfaction. Indi id!"# Deci$ion M"%in& (ndi)iduals thin# and reason before they act. (t is because of this that an understanding of how people ma#e decisions can be helpful for explaining and predicting their beha)ior. ;nder some recent decision situations, people follow the rational decision<ma#ing model. =ut for most people, and most non<routine decisions, this is probably more the exception than the rule. :ew important decisions are simple or unambiguous enough for the rational model0s assumptions to apply, so we find indi)iduals loo#ing for solutions that satisfice rather than optimi.e, in!ecting biases and pre!udices into the decision process, and relying on intuition. 1

Robbins: Organizational Behavior

Chapter Five

>i)en the e)idence we ha)e described on how decisions are actually made in organi.ations, what can managers do to impro)e their decision<ma#ing? 6e offer fi)e suggestions. :irst, analy.e the situation. Ad!ust your decision ma#ing style to the national culture you are operating in and to the criteria your organi.ation e)aluates and rewards. :or instance, if you are in a country that does not )alue rationality, do not feel compelled to follow the rational decision ma#ing model or e)en to try to ma#e your decisions appear rational. 7imilarly, organi.ations differ in terms of the importance they place on ris#, the use of groups, and the li#e. Ad!ust your decision style to ensure it is compatible with the organi.ation0s culture. 7econd, be aware of biases. 6e all bring biases to the decisions we ma#e. (f you understand the biases influencing your !udgment, you can begin to change the way you ma#e decisions to reduce those biases. 1hird, combine rational analysis with intuition. 1hese are not conflicting approaches to decision ma#ing. =y using both, you can actually impro)e your decision<ma#ing effecti)eness. As you gain managerial experience, you should feel increasingly confident in imposing your intuiti)e processes on top of your rational analysis. :ourth, do not assume that your specific decision style is appropriate for e)ery !ob. @ust as organi.ations differ, so do !obs within organi.ations. And your effecti)eness as a decision ma#er will increase if you match your decision style to the re8uirements of the !ob. :or instance, if your decision<ma#ing style is directi)e, you will be more effecti)e wor#ing with people whose !obs re8uire 8uic# action. 1his style would match well with managing stoc#bro#ers. An analytic style, on the other hand, would wor# well managing accountants, mar#et researchers, or financial analysts. :inally, try to enhance your creati)ity. %)ertly loo# for no)el solutions to problems, attempt to see problems in new ways, and use analogies. Additionally, try to remo)e wor# and organi.ational barriers that might impede your creati)ity.

WEB E'ERCISES At the end of each chapter of this instructor0s manual, you will find suggested exercises and ideas for researching the 666 on %= topics. 1he exercises 3Exploring %= 1opics on the 6eb4 are set up so that you can simply photocopy the pages, distribute them to your class, and ma#e assignments accordingly. Aou may want to assign the exercises as an out<of<class acti)ity or as lab acti)ities with your class. 6ithin the lecture notes the graphic will note that there is a 666 acti)ity to support this material.

The chapter opens introducing Bob Lutz currently with General Motors !n the "#$%s he was president o& Chrysler when it was highly criticized as 'brain dead() 'technologically dated() and &or building cars that were 'uninspiring ) *uring a +oy ride in his Ford,-ade Cobra Roadster he had an idea( which lead to a decision that changed the public.s perception o& Chrysler &orever /se the new ten,cylinder engine in develop-ent &or a new *odge truc0 and put it into a sports car -odel 1e -et with critics &ro- within the co-pany( but he was unwavering in his resolve The result was the *odge 2iper Ma0ing decisions is an i-portant part o& everyday organizational li&e( and do not always care&ully &ollow a &or-ulated process as we see in this e3a-ple &ro- Mr Lutz

2

Robbins: Organizational Behavior CHAPTER OUTLINE 6hat (s Berception, and 6hy (s (t (mportant? De(inition: Berception is a process by which indi)iduals organi.e and interpret their sensory impressions in order to gi)e meaning to their en)ironment. 4otes:

Chapter Five

6hy is this important to the study of %=? • =ecause people0s beha)ior is based on their perception of what reality is, not on reality itself.

5

Factors !n&luencing 6erception

1. :actors that shape Cand can distort perceptionD: • • • Bercei)er 1arget 7ituation

2. 6hen an indi)idual loo#s at a target and attempts to interpret what he or she sees, that interpretation is hea)ily influenced by personal characteristics of the indi)idual percei)er. 3. 1he more rele)ant personal characteristics affecting perception of the percei)er are attitudes, moti)es, interests, past experiences, and expectations. ". -haracteristics of the target can also affect what is being percei)ed. 1his would include attracti)eness, gregariousness, and our tendency to group similar things together. :or example, members of a group with clearly distinguishable features or color are often percei)ed as ali#e in other, unrelated characteristics as well. $. 1he context in which we see ob!ects or e)ents also influences our attention. 1his could include time, heat, light, or other situational factors. Berson Berception: 9a#ing @udgments about %thers 5 5ttribution Theory 783hibit 9,:; 4otes:

1. %ur perceptions of people differ from our perceptions of inanimate ob!ects.

• • •

6e ma#e inferences about the actions of people that we do not ma#e about inanimate ob!ects. Eonli)ing ob!ects are sub!ect to the laws of nature. Beople ha)e beliefs, moti)es, or intentions.

2. %ur perception and !udgment of a person0s actions are influenced by these assumptions.

3

the more the obser)er is inclined to attribute it to internal causes. (f consensus is high. 4 . (f this action is not unusual. -larification of the differences between internal and external causation: (nternally caused beha)iors are those that are belie)ed to be under the personal control of the indi)idual. whereas if other employees who too# the same route made it to wor# on time. • +. it will probably be !udged as internal. Consensus occurs if e)eryone who is faced with a similar situation responds in the same way. the obser)er is li#ely to gi)e the beha)ior an external attribution. oes the person respond the same way o)er time? 1he more consistent the beha)ior. your conclusion as to causation would be internal. &. you would be expected to gi)e an external attribution to the employee0s tardiness. contrary to the self<ser)ing bias. Externally caused beha)ior is seen as resulting from outside causes5 that is. 1his is called the 3self<ser)ing bias4 and suggests that feedbac# pro)ided to employees will be distorted by recipients. they tended to accept responsibility for group failure. 1hat determination depends largely on three factors: 4otes: Chapter Five • • • • • istincti)eness -onsensus -onsistency ". especially in countries with strong collecti)ist traditions.Robbins: Organizational Behavior 3. Attribution theory suggests that when we obser)e an indi)idual0s beha)ior. • • (f it is. < Consistency in a person0s actions. :undamental Attribution Error • 1here is substantial e)idence that we ha)e a tendency to underestimate the influence of external factors and o)erestimate the influence of internal or personal factors. the person is seen as ha)ing been forced into the beha)ior by the situation. 1he Forean study suggests caution in ma#ing attribution theory predictions in non<6estern societies. 1here is also a tendency for indi)iduals to attribute their own successes to internal factors such as ability or effort while putting the blame for failure on external factors such as luc#. 6hat we want to #now is whether the obser)ed beha)ior is unusual. *istinctiveness refers to whether an indi)idual displays different beha)iors in different situations. $. Are these errors or biases that distort attribution uni)ersal across different cultures? 6hile there is no definiti)e answer there is some preliminary e)idence that indicates cultural differences: • • • Forean managers found that. Attribution theory was de)eloped largely based on experiments with Americans and 6estern Europeans. we attempt to determine whether it was internally or externally caused. *.

An understanding of these shortcuts can be helpful toward recogni.ation and acti)ities of a steel company. 7electi)e Berception • • • Any characteristic that ma#es a person. led the researchers to conclude that the participants percei)ed aspects of a situation that were specifically related to the acti)ities and goals of the unit to which they were attached. 1he experiment showed that sub!ects were allowing a single trait to influence their o)erall impression of the person being !udged. A classic example: a. but not without the ris# of drawing an inaccurate picture.Robbins: Organizational Behavior B Fre=uently /sed >hortcuts in ?udging Others 4otes: Chapter Five 1. c. A group0s perception of organi. =ecause we see what we want to see. we can draw unwarranted conclusions from an ambiguous situation. and were as#ed to e)aluate the person to whom those traits applied. Hesearch suggests that it is li#ely to be most extreme when the traits to be percei)ed are ambiguous in beha)ioral terms. or e)ent stand out will increase the probability that it will be percei)ed.ing when they can result in significant distortions. (t is impossible for us to assimilate e)erything we seeGonly certain stimuli can be ta#en in. ob!ect. 7ub!ects were gi)en a list of traits such as intelligent. • 1he reality of the halo effect was confirmed in a classic study. 7tudents may gi)e prominence to a single trait such as enthusiasm and allow their entire e)aluation to be tainted by how they !udge the instructor on that one trait. determined. 3. b. 6e use a number of shortcuts when we !udge others. /alo Effect • 1he halo effect occurs when we draw a general impression on the basis of a single characteristic: a. practical. 1he results along with other results of the study. and when the percei)er is !udging traits with which he or she has had limited experience. 5 . d. b. when the traits ha)e moral o)ertones.ational acti)ities is selecti)ely altered to align with the )ested interests they represent. b. and warm. c. 2. s#illful. 1his phenomenon fre8uently occurs when students appraise their classroom instructor. earborn and 7imon performed a perceptual study in which 23 business executi)es read a comprehensi)e case describing the organi. industrious. 6hen the word 3warm4 was substituted with 3cold4 the sub!ects changed their e)aluation of the person. 7electi)ity wor#s as a shortcut in !udging other people by allowing us to 3speed<read4 others. a.

1his tendency to attribute one0s own characteristics to other peopleGwhich is called pro!ectionGcan distort perceptions made about others. Employment (nter)iew • • E)idence indicates that inter)iewers ma#e perceptual !udgments that are often inaccurate. =ecause inter)iews usually ha)e so little consistent structure and inter)iewers )ary in terms of what they are loo#ing for in a candidate. (n organi. whether or not they are accurate. !udgments of the same candidate can )ary widely. 7tereotyping • • • • In$tr!ctor Note) At this point in the lecture you may want to introduce the B%(E1G-%. %ur reaction to one person is influenced by other persons we ha)e recently encountered. they compromise their ability to respond to indi)idual differences. :rom a perceptual standpoint. 1hey tend to see people as more homogeneous than they really are. and e)en weight. $. (t ius a means of simplifying a complex world.ation is not without ad)antages. ethnicity. 7tudies indicate that most inter)iewers0 decisions change )ery little after the first four or fi)e minutes of the inter)iew. if people expect to see these stereotypes. and it permits us to maintain consistency. -ontrast Effects 4otes: Chapter Five • • 6e do not e)aluate a person in isolation.E1EH B%(E1: @hen 1iring 8-ployees 8-phasize the 6ositive found in the text and at the end of these chapter notes. 7tereotypingG!udging someone on the basis of our perception of the group to which he or she belongs >enerali. agreement among inter)iewers is often poor.ations. race. age. (n addition. of course. :or example. (nter)iewers generally draw early impressions that become )ery 8uic#ly entrenched. istortions in any gi)en candidate0s e)aluation can occur as a result of his or her place in the inter)iew schedule. is when we inaccurately stereotype. ifferent inter)iewers see different things in the same candidate and thus arri)e at different conclusions about the applicant. A suggestion for a class exercise follows. Bro!ection • • &. 1he problem. C >peci&ic 5pplications in Organizations 4otes: 1. we fre8uently hear comments that represent stereotypes based on gender. • • 6 . 6hen managers engage in pro!ection. ". that is what they will percei)e. an inter)iew situation in which one sees a pool of !ob applicants can distort perception.Robbins: Organizational Behavior B Fre=uently /sed >hortcuts in ?udging Others 7cont .

Berformance Expectations 4otes: Chapter Five • • E)idence demonstrates that people will attempt to )alidate their perceptions of reality. e)en when those perceptions are faulty. 2. A study was underta#en with 1. by definition. • 3. 7oldiers were randomly di)ided and identified as ha)ing high potential. ". • • • 7 .Robbins: Organizational Behavior C >peci&ic 5pplications in Organizations 7cont . and whether or not to comply with a re8uest made by the boss. (nstructors got better results from the high potential group because they expected it confirming the effect of a self< fulfilling prophecy.$ soldiers in the (sraeli efense :orces who were ta#ing a fifteen<wee# combat command course. how much effort to put forward once at wor#. many !obs are e)aluated in sub!ecti)e terms. 7ub!ecti)e measures are.es the fact that people0s expectations determine their beha)ior. !udgmental. and decide how pay raises are to be allocated. 1o the degree that managers use sub!ecti)e measures in appraising employees. Employee Effort • An indi)idual0s future in an organi. Berformance E)aluation • • • An employee0s performance appraisal is )ery much dependent on the perceptual process. A number of organi. 4otes: 1he Lin# between Berception and (ndi)idual ecision 9a#ing 1. or where to locate a new manufacturing plant. 9iddle< and lower<le)el managers determine production schedules.ation0s goals. 7elf<fulfilling prophecy or Bygmalion effect characteri. normal potential. how best to finance operations. • 1op managers determine their organi. (ndi)iduals in organi.ations in recent years ha)e been empowering their non<managerial employees with !ob<related decision<ma#ing authority that historically was reser)ed for managers. what products or ser)ices to offer. An assessment of an indi)idual0s effort is a sub!ecti)e !udgment susceptible to perceptual distortions and bias. select new employees. and potential not #nown.ations ma#e decisions5 they ma#e choices from among two or more alternati)es. Expectations become reality. Although the appraisal can be ob!ecti)e.ation is usually not dependent on performance alone. Eon<managerial employees also ma#e decisions including whether or not to come to wor# on any gi)en day. what the e)aluator percei)es to be good or bad employee characteristics or beha)iors will significantly influence the outcome of the appraisal.

ing choices within specified constraints. 9any poor decisions can be traced to the decision ma#er o)erloo#ing a problem or defining the wrong problem. • • -ritically analy. ecisions =e 9ade? 4otes: /ow 7hould 5 The Rational *ecision. >tep C: 1he final step is to compute the optimal decision: • E)aluating each alternati)e against the weighted criteria and selecting the alternati)e with the highest total score. 1he optimi. re8uiring consideration of alternati)e courses of action. >tep 9: Hating each alternati)e on each criterion. >tep A: 6eight the pre)iously identified criteria in order to gi)e them the correct priority in the decision. >tep B: >enerate possible alternati)es that could succeed in resol)ing the problem. and similar personal preferences. >tep ": efining the problem • • A problem is a discrepancy between an existing and a desired state of affairs.e and e)aluate each alternati)e 1he strengths and wea#nesses of each alternati)e become e)ident as they are compared with the criteria and weights established in the second and third steps. *.A 3. and the strengths and wea#nesses of each will need to be e)aluated. 1he Hational 9odelGsix steps listed in 83hibit 9. • 1he decision ma#er determines what is rele)ant in ma#ing the decision. 8 . )alues. >tep :: (dentify the decision criteria important to sol)ing the problem. • • • ata are typically recei)ed from multiple sources. 2. 1he awareness that a problem exists and that a decision needs to be made is a perceptual issue. /e or she ma#es consistent.ing decision ma#er is rational. 4otes: Chapter Five • • 1here is a discrepancy between some current state of affairs and some desired state. 3.Ma0ing 6rocess 1. • $. '. 6hich data are rele)ant to the decision and which are not? Alternati)es will be de)eloped.Robbins: Organizational Behavior 1he Lin# between Berception and (ndi)idual ecision 9a#ing 2. &. 1he perceptions of the decision ma#er will address these two issues. Any factors not identified in this step are considered irrele)ant to the decision ma#er. )alue< maximi. ecision<ma#ing occurs as a reaction to a problem. ". 1his brings in the decision ma#er0s interests. E)ery decision re8uires interpretation and e)aluation of information.

Robbins: Organizational Behavior Chapter Five 9 .

Ma0ing 6rocess 7cont . Dnown options. the ability to use analogies. as well as the talent to see the familiar in a different light. (t is assumed the decision ma#er is aware of all the possible conse8uences of each alternati)e. 3. Beople differ in their inherent creati)ity. 1hese are ideas that are different from what has been done before. creati)e<thin#ing s#ills. satisfying. Ma3i-u. or personally challenging. exciting.Robbins: Organizational Behavior 5 The Rational *ecision. proficiencies. 4o ti-e or cost constraints 1he rational decision ma#er can obtain full information about criteria and alternati)es because it is assumed that there are no time or cost constraints. 1his turns creati)ity potential into actual creati)e ideas. Constant pre&erences 7pecific decision criteria are constant and the weights assigned to them are stable o)er time.B . • 83pertise is the foundation for all creati)e wor#. Assumptions of the 9odel 4otes: Chapter Five • • • • • • 6roble. • • 10 . -reati)e Botential • • 9ost people ha)e creati)e potential. • • A study of lifetime creati)ity of "&1 men and women found that fewer than one percent were exceptionally creati)e. and about sixty percent were somewhat creati)e. 1his model proposes that indi)idual creati)ity essentially re8uires expertise.payo&& 1he rational decision ma#er will choose the alternati)e that yields the highest percei)ed )alue. in)ol)ing. 1his encompasses personality characteristics associated with creati)ity. and intrinsic tas# moti)ation. 1. !ntrinsic tas0 -otivation 1he desire to wor# on something because it0s interesting. 1en percent were highly creati)e. +.clarity 1he decision ma#er is assumed to ha)e complete information regarding the decision situation. 2. #nowledge. 1he potential for creati)ity is enhanced when indi)iduals ha)e abilities. B !-proving Creativity in *ecision Ma0ing De(inition) -reati)ity is the ability to produce no)el and useful ideas. Creative thin0ing s0ills. Beople ha)e to get out of the psychological ruts most of us get into and learn how to thin# about a problem in di)ergent ways. (t determines the extent to which indi)iduals fully engage their expertise and creati)e s#ills. but that are also appropriate to the problem or opportunity presented. 7>ee 83hibit 9. and similar expertise in their field of endea)or. Clear pre&erences -riteria and alternati)es can be ran#ed and weighted to reflect their importance. 1hree<component model of creati)ity.

Alternati)es that depart the least from the status 8uo are the most li#ely to be selected.Robbins: Organizational Behavior /ow Are ecisions Actually 9ade in %rgani. the decision ma#er will begin re)iewing it. 6hen faced with a complex problem. 3. most people respond by reducing the problem to a le)el at which it can be readily understood. • 1his is because the limited information<processing capability of human beings ma#es it impossible to assimilate and understand all the information necessary to optimi. (ndi)iduals operate within the confines of bounded rationality. Are decision ma#ers in organi. • 2. -hoices tend to be confined to the neighborhood of the problem symptom and to the neighborhood of the current alternati)e. and when the cost of searching out and e)aluating alternati)es is low. b. • 11 .ations rational? 4otes: Chapter Five • 6hen decision ma#ers are faced with a simple problem ha)ing few alternati)e courses of action. %nce this limited set of alternati)es is identified. the search for criteria and alternati)es begins. • • • 1he order in which alternati)es are considered is critical in determining which alternati)e is selected. • • ecision ma#ers generally ma#e limited use of their creati)ity. and they will represent familiar criteria and pre)iously tried<and<true solutions. Beople satis&iceGthey see# solutions that are satisfactory and sufficient. 1he first alternati)e that meets the 3good enough4 criterion ends the search. 5 Bounded Rationality 1. a.e. 1he decision ma#er will begin with alternati)es that differ only in a relati)ely small degree from the choice currently in effect. 2.ations? 1. Assuming that a problem has more than one potential solution. the rational model is fairly accurate. /ow does bounded rationality wor#? • • %nce a problem is identified. which are easy to find. tend to be highly )isible. the satisficing choice will be the first acceptable one the decision ma#er encounters. 1hey construct simplified models that extract the essential features. 9ost decisions in the real world do not follow the rational model. 1he decision ma#er will identify a limited list made up of the more conspicuous choices.

6hat is intuiti)e decision ma#ing? • • • (t is an unconscious process created out of distilled experience. (t operates in complement with rational analysis. with good arguments for each h. when a high le)el of uncertainty exists when there is little precedent to draw on when )ariables are less scientifically predictable when 3facts4 are limited when facts do not clearly point the way to go when analytical data are of little use when there are se)eral plausible alternati)e solutions to choose from. 3. and other cultures where rational analysis is the appro)ed way of ma#ing decisionsG to ac#nowledge they are using it. 12 . A summary of the case and 8uestions can be found at the end of this chapter. refer students to the -A7E (E-( EE1: ?ohn 4eill at /nipart for another )iewpointGthis time from the -E% perspecti)e. (ntuiti)e decision<ma#ing has recently come out of the closet and into some respectability. g. when time is limited. Hational analysis is considered more socially desirable in these cultures. d. A suggestion for a class exercise follows the introduction of the material below. don0t expect peopleGespecially in Eorth America. 1he purpose of the exercise is to help students better understand how intuition and experience are lin#ed.e the pattern in a situation and draw upon pre)iously learned information associated with that pattern to 8uic#ly arri)e at a decision choice. >reat =ritain. b. 2. c. In$tr!ctor Note) At this point in the lecture you may want to introduce the %= (E 1/E EE67: Fire&ighters /se !ntuition to Ma0e the Right Choices box found in the text. f. and there is pressure to come up with the right decision • • • Although intuiti)e decision ma#ing has gained in respectability. Eight conditions when people are most li#ely to use intuiti)e decision ma#ing: a. Hesearch on chess playing pro)ides an excellent example of how intuition wor#s.Robbins: Organizational Behavior B !ntuition 4otes: Chapter Five 1. 7ome belie)e it is a personality trait that a limited number of people are born with. %nce you ha)e completed the exercise. e. • 1he expert0s experience allows him or her to recogni. 1he result is that the intuiti)e decision ma#er can decide rapidly with what appears to be )ery limited information. 7ome consider it a form of extrasensory power or sixth sense.

/ot fires are loud. =reen. /ad the men stayed in the house. 1he decision ma#er0s self interest also plays a part. %hio. . 2+. but the fire roared bac# and continued to burn. fire commander and his crew encountered a fire at the bac# of a house.!denti&ication 4otes: 1.e fires according to how they should react to them.Robbins: Organizational Behavior Chapter Five OB IN THE NEWS I Fire&ighters /se !ntuition to Ma0e the Right Choices o fire commanders use the rational model to ma#e life<and<death decisions? Eo. >ource: =ased on =. 1he commander was intuiti)ely sensing that the floor was muffling the roar of the flames that were raging below.ation. @ust as the crew reached the street. 6hat is intuition? 6as the commander using intuition or utili. selecting a roommate. remember we are concerned with decision ma#ing in organi. the rising heat made the room extremely hotGtoo hot for such a seemingly small fire.I3. 1he commander led his hose team into the building. self<interest tends to win out. As the firefighters retreated and regrouped. 1hey loo# for cues or patterns in situations that direct them to ta#e one action o)er another. 1hey rely on their intuition.D 6hat resources do you thin# you used when ma#ing that decision? 3.. 9uch of the fire was burning underneath the li)ing<room floor.ation and one that is important to the decision ma#er. 1he men doused the fire again.. o you use a decision ma#ing process when ma#ing a 3big4 decision in your life? C:or example. Experienced people whose !obs re8uire 8uic# decisionsGfirefighters. 13 • .. or both? 2. Also. intensi)e<care nurses.D 6hy or why not? /a)e you made a decision recently that you could ha)e done better had you used a formal decision ma#ing process? C 6roble. 1he following illustrates how that recognition process wor#s. 6hen faced with selecting a problem important to the decision ma#er or important to the organi. Broblems that are )isible tend to ha)e a higher probability of being selected than ones that are important. etc. they blasted water onto the smo#e and flames that appeared to be consuming the #itchen. the commander was gripped by an uneasy feeling. 1he formal rules of decision<ma#ing are almost incidental. 7tanding in the li)ing room. pp. /a)e there been times when you needed to ma#e a decision 8uic#ly? 6as it intuition. they would ha)e plunged into a bla.ations. 7econd. Another clue that this was not !ust a small #itchen fire was that the sounds it emitted were strangely 8uiet.. and the flames briefly subsided. (f a decision ma#er faces a conflict between selecting a problem that is important to the organi.ltimately. intuition is all about perception. self interest tends to win out. etc. 6hy? • • Jisible problems are more li#ely to catch a decision ma#er0s attention. Jeteran firefighters ha)e accumulated a storehouse of experiences and they subconsciously categori. 7eptember 2. and intuition begins with recognition. 6hy did the commander gi)e the order to lea)e? =ecause the fire0s beha)ior did not match his expectations. 76A1 team membersGsee a different world than no)ices in those same !obs do.. /e ordered e)eryone to lea)e. when buying a car.ing his experience and training. or something else? C:or example. a)oiding hitting another car. during a sports match. a reaction. 36hat0s Aour (ntuition?4 Fast Co-pany.ing basement. built on years of experience. but then they flared up again with an e)en greater intensity. and what they see tells them what they should do. the li)ing<room floor ca)ed in. A -le)eland. C#"$$ E*erci$e) -onduct as a K L A for the entire class: 1. so it was unaffected by the firefighters0 attac#. !et<fighter pilots.

Each creates biases in !udgment. 3. many more people suffer from fear of flying than fear of dri)ing in a car. • In$tr!ctor Note) At this point in the lecture you may want to introduce the 1EA9 EMEH-(7E: Biases in *ecision Ma0ing box found in the text and at the end of these chapter notes. Escalation of commitment • • Escalation of commitment is an increased commitment to a pre)ious decision in spite of negati)e information. -onsistency is a characteristic often associated with effecti)e leaders.4 E)ents that e)o#e emotions.Robbins: Organizational Behavior * 5lternative *evelop-ent 4otes: Chapter Five 1. (n order to a)oid information o)erload. A)ailability heuristic • • 1he availability heuristic is 3the tendency for people to base their !udgments on information that is readily a)ailable to them. E)idence indicates that decision<ma#ing is incremental rather than comprehensi)e. Hepresentati)e heuristic • 1o assess the li#elihood of an occurrence by trying to match it with a preexisting category. decision ma#ers rely on heuristics or !udgmental shortcuts in decision ma#ing. (t has been well documented that indi)iduals escalate commitment to a failing course of action when they )iew themsel)es as responsible for the failure. Efforts tend to be confined to the neighborhood of the current alternati)e. 1he picture that emerges is one of a decision ma#er who ta#es small steps toward his or her ob!ecti)e. 1he purpose of the exercise is to help students better understand what their own decision ma#ing biases might be. An organi. managers fre8uently predict the performance of a new product by relating it to a pre)ious product0s success. 8 Ma0ing Choices 1. 7ince decision ma#ers see# a satisficing solution. ". 2. ecision ma#ers ma#e successi)e limited comparisons.ations: a. 14 . Another bias is the tendency to escalate commitment to a failing course of action. • • 1here are two common categories of heuristicsGa)ailability and representati)eness. (mplications for the organi. :ore example. 9anagers might be reluctant to change a failed course of action to appear consistent. there is a minimal use of creati)ity in the search for alternati)es. b. 2. that are particularly )i)id. or that ha)e occurred more recently tend to be more a)ailable in our memory.ation can suffer large losses when a manager continues to in)est in a failed plan !ust to pro)e his or her original decision was correct.

1hese two dimensions. ecisions are made with minimal information and with few alternati)es assessed. 1heir focus is long range. 9a#e decisions fast and focus on the short<run. :ocusing on decision styles can be useful for helping you to understand how two e8ually intelligent people. 1hey percei)e things as a whole. Hesearch on decision styles has identified four different indi)idual approaches to ma#ing decisions. =eha)ioral a. d. • • • • 7ome people are logical and rational.Ma0ing >tyles 4otes: Chapter Five 1. 1he other dimension is a person0s tolerance for ambiguity 7ome people ha)e a high need to minimi. diagrammed.es decision ma#ers who wor# well with others b. 1ries to a)oid conflict and see#s acceptance • • • $. 1hey process information serially. • irecti)e: a. Analytic a. can differ in the ways they approach decisions and the final choices they ma#e. =est characteri. • • =usiness students. Efficient and logical c. and they are )ery good at finding creati)e solutions to problems.9 . %thers are able to process many thoughts at the same time. 3. 2. (t is best to thin# in terms of a manager0s dominant style and his or her bac#up styles. esire for more information and consideration of more alternati)es c. with access to the same information.e ambiguity. Low tolerance for ambiguity and see# rationality b. lower<le)el managers. >reater tolerance for ambiguity b. 7ome people are intuiti)e and creati)e. and top executi)es tend to score highest in the analytic style. 1end to be )ery broad in their outloo# and consider many alternati)es b. 7>ee 83hibit 9. 9ost managers ha)e characteristics that fall into more than one. ". 1he first is their way of thin#ing. 15 . -haracteri. form four styles of decision ma#ing. relying hea)ily on meetings for communicating c. Beople differ along two dimensions.Robbins: Organizational Behavior F !ndividual *i&&erences: *ecision.ed as careful decision ma#ers with the ability to adapt to or cope with new situations -onceptual a. -oncerned with the achie)ement of peers and subordinates and are recepti)e to suggestions from others.

whether organi. their belief in the ability of people to sol)e problems.e that the cultural bac#ground of the decision ma#er can ha)e significant influence on: a. Heward systems • 1he organi. 6e need to recogni. and preference for collecti)e decision ma#ing. • $. 3. ". and other formali. regulations. 4otes: 1 Cultural *i&&erences 1. 1heir performance in decision ma#ing will reflect expectation. Almost all important decisions come with explicit deadlines.ations create rules. procedures. 1he organi.ed regulations in order to standardi. 1his happens due to policies. etc. selection of problems b.ed as points in a stream of decisions. &.ation itself constrains decision ma#ers. (t is common #nowledge that the largest determining factor of the si. differ in terms of time orientation. ecisions made in the past are ghosts which continually haunt current choices. /istorical Brecedents • • ecisions ha)e a context. the importance placed on logic and rationality d. 2. depth of analysis c.e of any gi)en year0s budget is last year0s budget.Robbins: Organizational Behavior G Organizational Constraints 4otes: Chapter Five 1. 1he rational model ma#es no ac#nowledgment of cultural differences. the importance of rationality.ations impose deadlines on decisions. =y programming decisions. time constraints. (ndi)idual decisions are more accurately characteri. Berformance e)aluation • 9anagers are strongly influenced in their decision ma#ing by the criteria by which they are e)aluated. organi. 7ystem<imposed time constraints • • • %rgani. Brogrammed routines • All but the smallest of organi. -ultures.e the beha)ior of their members. ecisions must be made 8uic#ly in order to stay ahead of the competition and #eep customers satisfied.ations are able to get indi)iduals to achie)e high le)els of performance without paying for the years of experience.ational decisions should be made autocratically by an indi)idual manager or collecti)ely in groups 2. 16 .ation0s reward system influences decision ma#ers by suggesting to them what choices are preferable in terms of personal payoff. for example. policies.

ation. 3.Robbins: Organizational Behavior Chapter Five 4otes: • • 7ome cultures emphasi.tilitarianism a. ecision 9a#ing? 6hat about Ethics in Ethical considerations should be an important criterion in organi.e sol)ing problems. • An emphasis on rights means respecting and protecting the basic rights of indi)iduals. :ocus on rightsGcalls on indi)iduals to ma#e decisions consistent with fundamental liberties and pri)ileges as set forth in documents such as the =ill of Hights. (t can encourage a sense of entitlement that reduces ris# ta#ing.tilitarian criterionGdecisions are made solely on the basis of their outcomes or conse8uences. 1his )iew tends to dominate business decision ma#ing. and producti)ity. 17 . Ad)antages and liabilities of these three criteria: • . :ocus on !usticeGre8uires indi)iduals to impose and enforce rules fairly and impartially. 1here is an e8uitable distribution of benefits and costs. 1he goal of utilitarianism is to pro)ide the greatest good for the greatest number. inno)ation. (t can result in ignoring the rights of some indi)iduals. Brotects indi)iduals from in!ury and is consistent with freedom and pri)acy b. 9any critics of business decision ma#ers argue that this perspecti)e needs to change. such as the right to pri)acy.ational decision ma#ing. while others focus on accepting situations as they are. . ecision ma#ing by @apanese managers is much more group<oriented than in the . to free speech. 5 Three 8thical *ecision Criteria 2. Hights a. Bromotes efficiency and producti)ity b. (ncreased concern in society about indi)idual rights and social !ustice suggests the need for managers to de)elop ethical standards based solely on non< utilitarian criteria. 3. and to due process. @ustice a. ecision ma#ers tend to feel safe and comfortable when they use utilitarianism. particularly those with minority representation in the organi. ". c. Brotects the interests of the underrepresented and less powerful b.nited 7tates. • • $. (t can create an o)erly legalistic wor# en)ironment that hinders producti)ity and efficiency.

transfer to (ndia. he or she is more li#ely to be influenced by strong cultures. business tra)el to Las Jegas. a written code of ethics. and the perspecti)es and decision process they underwent. 1he team should now come to a decision as how they would resol)e the CnewD situation. =ecause ethical people essentially a)oid unethical practices. management. unpaid o)ertime. Brior to class prepare 3 x $ index cards with )arious 3e)ents. managers should be encouraged to screen !ob candidates Cthrough testing and bac#ground in)estigationsD to determine their ethical standards. Eo one will #now if ( #eep it.ations or situations in which there are strong pressures to conform. but when an indi)idual0s ethical and moral de)elopment are not of the highest le)el.ed by pro)iding indi)iduals with a supporti)e wor# climate.ation increases the li#elihood that employees will act ethically. 1he purpose of the exercise is to help students better understand what their reactions might be when faced with )arious ethical decisions. /a)e the student teams switch cards with another team.t *o /nethical Things) 1his statement is mostly true. co<wor#ers. Beople with high ethical standards are less li#ely to engage in unethical practices. M+TH OR SCIENCE.4 which might lead to an emotional response or the possibility of ma#ing an decision Chopefully in an ethical mannerND.4 %r. 1his would include clear !ob descriptions. A suggested class exercise follows within the boxed text. and customers. I 38thical 6eople *on. you may want to introduce the 9A1/ %H 7-(EE-E: '8thical 6eople *on. %r.ational norms. 18 . 3hey they fired meGthey don0t remember (0)e got their laptop<<(0m #eeping itN 3 3. etc. lunch with )endor. 1he essential issue that this statement addresses is whether ethical beha)ior is more a function of the indi)idual or the situational context. ( 8uitN. positi)e management role models. double insurance refund. o different perspecti)es create a different outcome for the decision? 6ho carries the most weight when the final decision is made? C(s it self<ser)ing or for the greater good?D ". 2. =y see#ing out people with integrity and strong ethical principles. the e)aluating and rewarding of means as well as ends. 1he e)idence indicates that people with high ethical principles will follow them in spite of what others do or the dictates of organi. :or example the cards should ha)e the statements li#e: Aou are firedN.Robbins: Organizational Behavior Chapter Five In$tr!ctor Note) At this point in the lecture you may want to introduce the E1/(-AL (LE99A EMEH-(7E: Five 8thical *ecisions: @hat @ould Eou *oF found in the text and at the end of these chapter notes. As a class. As# them to loo# at it from se)eral different perspecti)es: the employee. A suggestion for a class exercise follows the introduction of the material. the organi. 1his is true e)en when those cultures encourage 8uestionable practices. %f course. e)en in organi. :or example: 3( recei)ed a refund from the health insurer for twice the amount ( was expecting. and a culture that encourages indi)iduals to openly challenge 8uestionable practices. C#"$$ e*erci$e) 1.t *o /nethical Things) box found in the text Cand belowD. =rea# students into teams and as# them write a short scenario around the e)ent listed. discuss what they learned when faced with these situations. unethical practices can be further minimi.

Be aware o& biases: .ation e)aluates and rewards. 6hat can managers do to impro)e their decision ma#ing? 1. as do !obs. 19 .nderstanding how they influence !udgment can help to reduce their impact.. 1here are no global ethical standards.Robbins: Organizational Behavior B 8thics and 4ational Culture 4otes: Chapter Five 1. the criteria the organi. 4otes: • • C !ndividual *ecision Ma0ing rather than optimi. Realize that no speci&ic decision style is appropriate &or every +ob: %rgani. company operating in -hina caught an employee stealing. -ontrasts between Asia and the 6est illustrate: • =ribery is commonplace in countries such as -hina. 2. only to learn later that the employee had been summarily executed. 9ost people do not follow the rational decision<ma#ing modelGbut satisfice 2. Co-bine rational analysis with intuition: .7. turned him o)er to the local authorities. 6hile ethical standards may seem ambiguous in the 6est.sing both can impro)e decision ma#ing effecti)eness. =e aware of these fi)e strategies: • • • • 5nalyze the situation: Ad!ust to national culture. 7hould a 6estern business professional pay a bribe to secure business if it is an accepted part of that country0s culture? A manager of a large .e. :ew issues are blac#<and<white there5 most are gray. 7he fired him.ations differ. criteria defining right and wrong are actually much clearer in the 6est than in Asia. 9atching decision style to the situation is the most effecti)e strategy.

Berformance e)aluationGAn employee0s performance appraisal is )ery much dependent on the perceptual process. but the drawbac#s may out weigh such ad)antages. 1his is the fundamental attribution error.OR REVIEW " Chapter Five *e&ine perception An$/er I Berception is a process by which indi)iduals organi. @hat is the rational decision. • >enerate possible alternati)es that could succeed in resol)ing the problem. and consistency. such as ability or effort. An assessment of an indi)idual0s effort is a sub!ecti)e !udgment susceptible to perceptual distortions and bias. 1here is also a tendency for indi)iduals to attribute their own successes to internal factors. • (dentify the decision criteria important to sol)ing the problem. %ne of the problems of stereotypes is that they are widespread.ation is usually not dependent on performance alone.e and interpret their sensory impressions in order to gi)e meaning to their en)ironment. e)en when those perceptions are faulty. while putting the blame for failure on external factors such as luc#. 1his is the self< ser)ing bias and suggests that feedbac# pro)ided to employees will be distorted by recipients. 7electi)ity wor#s as a shortcut in !udging other people by allowing us to 3speed<read4 others.our perceptions o& the actions o& othersF An$/er I %ne of the more interesting findings from attribution theory is that there are errors or biases that distort attributions. • -ritically analy. ob!ect. @hat is attribution theoryF @hat are its i-plications &or e3plaining organizational behaviorF An$/er I Attribution theory suggests that when we obser)e an indi)idual0s beha)ior.-a0ing -odelF /nder what conditions is it applicableF An$/er I 1he optimi. (t is a means of simplifying a complex world. or e)ent stand out will increase the probability that it will be percei)ed. =ecause we see what we want to see. • efine the problem. • 6eight the pre)iously identified criteria in order to gi)e them the correct priority in the decision. • -ompute the optimal decision.ing choices within specified constraints. we can draw unwarranted conclusions from an ambiguous situation. :rom a perceptual standpoint. consensus. 1here is substantial e)idence that we ha)e a tendency to underestimate the influence of external factors and o)erestimate the influence of internal or personal factors. 20 : A B 9 C < . whether they are accurate or not.Robbins: Organizational Behavior -UESTIONS . we attempt to determine whether it was internally or externally caused. 1he Hational 9odelGsix steps listed in Exhibit $<". Berformance expectationsGE)idence demonstrates that people will attempt to )alidate their perceptions of reality. of course. Employment inter)iewGE)idence indicates that inter)iewers ma#e perceptual !udgments that are often inaccurate. that is what they will percei)e. 1he problem. and it permits us to maintain consistency. @hat is stereotypingF Give an e3a-ple o& how stereotyping can create perceptual distortion An$/er I 7tereotypingG!udging someone on the basis of our perception of the group to which he or she belongs. 1hat determination depends largely on three factors: distincti)eness. 6hat one percei)es can be substantially different from ob!ecti)e reality. 1ow does selectivity a&&ect perceptionF Give an e3a-ple o& how selectivity can create perceptual distortion An$/er 0 7electi)e perceptionGAny characteristic that ma#es a person. /e2she ma#es consistent. Employee effortGAn indi)idual0s future in an organi. 1ow are our perceptions o& our own actions di&&erent &ro. • E)aluate each alternati)e against the weighted criteria. but not without the ris# of drawing an inaccurate picture.e and e)aluate each alternati)e.ing decision ma#er is rational. not on reality itself.ation is not without ad)antages. Berception is important in the study of %= because people0s beha)ior is based on their perception of what reality is. =ecause inter)iews usually ha)e so little consistent structure and inter)iewers )ary in terms of what they are loo#ing for in a candidate. )alue<maximi. (t is impossible for us to assimilate e)erything we seeGonly certain stimuli can be ta#en in. >enerali. Give so-e positive results o& using shortcuts when +udging others An$/er I 1hey sa)e us time and they help us process o)erloads of information effecti)ely. is when we inaccurately stereotype. !udgments of the same candidate can )ary widely. if people expect to see these stereotypes. and select the alternati)e with the highest total score.

Robbins: Organizational Behavior $ Chapter Five *escribe organizational &actors that -ight constrain decision -a0ers An$/er I 1D 1he lac# of problem clarityG1he decision ma#er is assumed to ha)e complete information regarding the decision situation. 1he result is that the intuiti)e decision ma#er can decide rapidly with what appears to be )ery limited information.ations are able to get indi)iduals to achie)e high le)els of performance without paying for the years of experience. it parallels earlier 8uestions whether heredity or en)ironment shape personality. %ther organi. organi. • ecisions must be made 8uic#ly in order to stay ahead of the competition and #eep customers satisfied. Brogrammed routines • =y programming decisions. 3D Eot being able to ma#e clear preferencesG-riteria and alternati)es can be ran#ed and weighted to reflect their importance.e the pattern in a situation and draw upon pre)iously learned information associated with that pattern to 8uic#ly arri)e at a decision choice. (ndi)idual decisions are more accurately characteri. 1he expert0s experience allows him or her to recogni. $D (f there are important time or cost constraintsG1he rational decision ma#er can obtain full information about criteria and alternati)es because it is assumed that there are no time or cost constraints. 21 . with good arguments for each • 6hen time is limited and there is pressure to come up with the right decision "% 5re unethical decisions -ore a &unction o& the individual decision -a0er or the decision -a0er. # @hat role does intuition play in e&&ective decision -a0ingF An$/er 0 (ntuiti)e decision ma#ing has recently come out of the closet and into some respectability.ed as points in a stream of decisions. 7ystem<imposed time constraints • %rgani. • Almost all important decisions come with explicit deadlines.ations impose deadlines on decisions. &D 6hen there is no maximum payoff alternati)eG1he rational decision ma#er will choose the alternati)e that yields the highest percei)ed )alue.s wor0 environ-entF 83plain An$/er I 1his is an opinion 8uestion. /istorical precedents • ecisions ha)e a context.ation0s reward system influences decision ma#ers by suggesting to them what choices are preferable in terms of personal payoff. 6e define intuiti)e decision ma#ing as an unconscious process created out of distilled experience. 2D Eot #nowing all the optionsG(t is assumed the decision ma#er is aware of all the possible conse8uences of each alternati)e. (t operates in complement with rational analysis. "D -onstant preferencesG6hen specific decision criteria are constant and the weights assigned to them are stable o)er time. Eight conditions when people are most li#ely to use intuiti)e decision ma#ing: • 6hen a high le)el of uncertainty exists • 6hen there is little precedent to draw on • 6hen )ariables are less scientifically predictable • 6hen 3facts4 are limited • 6hen facts do not clearly point the way to go • 6hen analytical data are of little use • 6hen there are se)eral plausible alternati)e solutions to choose from. • (t is common #nowledge that the largest determining factor of the si.ational constraints: Berformance e)aluation • 9anagers are strongly influenced in their decision ma#ing by the criteria by which they are e)aluated. • ecisions made in the past are ghosts which continually haunt current choices. (n many ways.e of any gi)en year0s budget is last year0s budget. • 9anagers bloc#ing negati)e information Heward systems • 1he organi.

: A 'For the -ost part( individual decision -a0ing in organizations is an irrational process ) *o you agree or disagreeF *iscuss An$/er I 7tudents may argue either side. 1he rational modelGsix steps listed in Exhibit $<". that interpretation is hea)ily influenced by personal characteristics of the indi)idual percei)er. it will probably be !udged as internal. /e or she ma#es consistent. • (f this action is not unusual. ecision ma#ers generally ma#e limited use of their creati)ity. -onsistency in a person0s actions. your conclusion as to causation would be internal. • efine the problemG9any poor decisions can be traced to the decision ma#er o)erloo#ing a problem or defining the wrong problem.nsatisfied needs or moti)es stimulate indi)iduals and may exert a strong influence on their perceptions. and consistency. • 6hat we want to #now is whether the obser)ed beha)ior is unusual. so do one0s past experiences.ing decision ma#er is rational. )alue<maximi. whereas if other employees who too# the same route made it to wor# on time. 6hen decision ma#ers are faced with a simple problem ha)ing few alternati)e courses of action. the obser)er is li#ely to gi)e the beha)ior an external attribution.e the pattern in a situation and draw upon pre)iously learned information associated with that pattern to 8uic#ly arri)e at a decision choice. Exhibit $<3 summari. (f e)eryone who is faced with a similar situation responds in the same way. we attempt to determine whether it was internally or externally caused. • (f it is. . B 22 .ing choices within specified constraints. the rational model is fairly accurate. 5n e-ployee does an unsatis&actory +ob on an assigned pro+ect 83plain the attribution process that this person. istincti)eness refers to whether an indi)idual displays different beha)iors in different situations. As interests narrow one0s focus. but they need to understand bounded rationality and the role of intuition in decision<ma#ing. the person is seen as ha)ing been forced into the beha)ior by the situation. 1he result is that the intuiti)e decision ma#er can decide rapidly with what appears to be )ery limited information. expectations can distort your perceptions in that you will see what you expect to see. we can say the beha)ior shows consensus. 1hat determination depends largely on three factors: distincti)eness. • (f consensus is high.es the #ey elements in attribution theory. -hoices tend to be confined to the neighborhood of the problem symptom and to the neighborhood of the current alternati)e. :irst. 1he capacity of the human mind for formulating and sol)ing complex problems is far too small to meet the re8uirements for full rationality. step rational -odel An$/er I 1he optimi.s -anager will use to &or. the more the obser)er is inclined to attribute it to internal causes. moti)es. 6hen faced with a complex problem. (ntuiti)e decision ma#ing as an unconscious process created out of distilled experienceGit operates in complement with rational analysis. past experiences. and expectations. consensus. Aou percei)e those things to which you can relate. clarification of the differences between internal and external causation • (nternally caused beha)iors are those that are belie)ed to be under the personal control of the indi)idual • Externally caused beha)ior is seen as resulting from outside causes5 that is. @hat &actors do you thin0 di&&erentiate good decision -a0ers &ro. and when the cost of searching out and e)aluating alternati)es is low.poor onesF Relate your answer to the si3. you would be expected to gi)e an external attribution to the employee0s tardiness. :inally. 1he expert0s experience allows him or her to recogni.Robbins: Organizational Behavior -UESTIONS . interests. oes the person respond the same way o)er time? • 1he more consistent the beha)ior. written wor0 and class co--entsF An$/er I 6hen an indi)idual loo#s at a target and attempts to interpret what he or she sees. 1he more rele)ant personal characteristics affecting perception are attitudes.s +ob per&or-ance An$/er I Attribution theory suggests that when we obser)e an indi)idual0s beha)ior. most people respond by reducing the problem to a le)el at which it can be readily understoodGbounded rationality.+udg-ents about this e-ployee.OR CRITICAL THINKING " Chapter Five 1ow -ight the di&&erences in e3periences o& students and instructors a&&ect their perceptions o& students.

6hen the information an applicant recei)es is excessi)ely inflated. mismatched applicants who will probably become dissatisfied with the !ob and soon 8uit are less li#ely to select themsel)es out of the search process.ations and the !obs they see# to fill. As a result. 1hird. 1hrough the foreseeable future. • -ritically analy. perform basic mathematical calculations. it is the !ob applicant0s responsibility to follow the dictum caveat e-ptorGlet the buyer beware. to get people to !oin their organi. maintenance mechanic. POINT1COUNTERPOINT 0 @hen 1iring 8-ployees( 8-phasize the 6ositive POINT /iring new employees re8uires managers to become salespeople.e the positi)e with !ob candidates is that this is what the competition is doing. 1hey ha)e to emphasi. 6hile there is a real ris# of setting unrealistic expectations about the organi.e the positi)e. -orporate layoffs ha)e recei)ed a lot of attention in recent years. COUNTERPOINT Hegardless of labor<mar#et conditions. 9 1ave you ever increased your co--it-ent to a &ailed course o& actionF !& so( analyze the &ollow.ations. 1his means presenting the !ob and the organi. during the selection process. they are forced to put a positi)e 3spin4 on their descriptions of their organi. 1hese unrealistic expectations often lead to premature resignations. openly pro)ides the negati)e aspects of a !ob along with the positi)eGris#s losing many of the most desirable candidates.ation when they come face<to<face with the negati)es in the !ob.ation in the most fa)orable light possible.ation. )alues.Robbins: Organizational Behavior Chapter Five • (dentify the decision criteria important to sol)ing the problem. and ha)e the proper wor# habits to effecti)ely perform these !obs is not so easy. (n this competiti)e en)ironment.ation and about the specific !ob. e)en if it means failing to mention the negati)e aspects in the !ob.up decision to increase your co--it-ent( and e3plain why you behaved as you did An$/er 0 Escalation of commitment is an increased commitment to a pre)ious decision in spite of negati)e information. en)ironmental engineer. 6hy should managers emphasi. but finding indi)iduals who can read. minimum<wage !obs. there is a dwindling supply of 8ualified applicants for many !ob )acancies5 and second. in 23 .ation and about the specific !ob he or she hopes to be offered. nurse. new hires are prone to become disillusioned and less committed to the organi. physical therapist. applicants should be gi)en a realistic !ob pre)iewGpro)ided both unfa)orable and fa)orable informationGbefore an offer is made. Any factors not identified in this step are considered irrele)ant to the decision ma#er. the absence of negati)e information builds unrealistic expectations. that is a ris# managers ha)e to ta#e.e the positi)e when discussing a !ob with a prospecti)e candidate? 1hey ha)e no choice. managers who treat the recruiting and hiring of candidates as if the applicants must be sold on the !ob and exposed to only positi)e aspects set themsel)es up to ha)e a wor#force that is dissatisfied and prone to high turno)er. write.e and e)aluate each alternati)e. :irst. Employees who feel they were tric#ed or misled during the hiring process are unli#ely to be satisfied wor#ers. a set of expectations about the organi. any employer who presents !obs realistically to applicantsGthat is. :irst. • -ompute the optimal decision. • >enerate possible alternati)es that could succeed in resol)ing the problem. 1his brings in the decision ma#er0s interests. accountant. so managers need to sell !obs to the limited pool of applicants. and similar personal preferences. managers will find it increasingly difficult to get 8ualified people who can fill !obs such as legal secretary. a number of things happen that ha)e potentially negati)e effects on the organi. 1o increase !ob satisfaction among employees and reduce turno)er. :or example. computer<repair specialist. • 6eight the pre)iously identified criteria in order to gi)e them the correct priority in the decision. %ther employers also face a limited applicant pool. 7econd. Another reason management is forced to emphasi. software programmer. (t has been well<documented that indi)iduals escalate commitment to a failing course of action when they )iew themsel)es as responsible for the failure. As in dealing with any salesperson. 9anagers will also find it harder to get 8ualified people to fill entry<le)el. social wor#er. and telecommunications specialist. 1here may be no shortage of physical bodies. this approach is necessary to meet the competition. 6hat has often been o)erloo#ed in this process is the growing shortage of 8ualified applicants for literally millions of !obs. 1here is a growing gap between the s#ills wor#ers ha)e and the s#ills employers re8uire. 7tudents0 analysis will )ary with their experience. E)ery applicant ac8uires.

or that erratic fluctuations in wor#loads create considerable stress on employees during rush periods. 24 .Robbins: Organizational Behavior Chapter Five addition to positi)e comments. the candidate might be told that there are limited opportunities to tal# with co< wor#ers during wor# hours.

Bresenting only the positi)e aspects of a !ob to a recruit may initially entice him or her to !oin the organi. ecember 1++*. 2.. /and out your H@B5 ha)e students compare it with theirs. 9ost students would offer 3-hinese studies. • 9a#e copies to hand out in class. pp. )ol.R. List on the board what students thin# a professor does. 3Hesearch on Employee Hecruitment: 7o 9any 7tudies. 1he result is fewer unexpected resignations by new employees. /ershey :oods. (ngram 9icro. 1. but this represents a)ailable heuristic because of the emphasis in the media on car accidents. or ?D do you thin# the higher group0s sales exceeded the lower group? An$/er 0 $. 2&. 6hich group of fi)e organi.ation.nited 7tates< based firms according to sales )olume for 1++*.. but it may be a marriage that both parties will 8uic#ly regret. 7tudents often choose this group because of the a)ailable heuristicGthe companies are better #nown. as# students how they 3#now4 these things. =reaugh and 9. • %ne cautionG o not put anything down you are not willing to ha)e the ean or a parent read. 6hat was the student0s undergraduate ma!or: -hinese studies or psychology? An$/er I (llustrates representati)e heuristic. '. Bhillips. >roup A had combined sales of Q22.. =rainstorm with the students about a realistic !ob pre)iew for being a college professor teaching business.ine to be among the $. 2. • Aou may ha)e to encourage participation5 students may feel somewhat intimidated describing your !ob to you.4 ?ournal o& Manage-ent. sit down and write out a realistic !ob pre)iew for your position. >ource: (nformation in this argument comes from @. >oodrich. =efore handing our your H@B. &'3I+. 7how it to colleagues for their input and to help tone it down or up Odepending P. 3. ".nited 1echnologies. 3Effects of Healistic @ob Bre)iews on 9ultiple %rgani.R.nited 7tates each year? An$/er 0 7tomach cancer. etc. C1hey can be found in the text. 3.ational %utcomes: A 9eta<Analysis. TEAM E'ERCISE 0 Biases in *ecision Ma0ing 7tep 1. no. HR C#"$$ E*erci$e) 1.:.1 billion. Hemember that retaining 8ualified people is as critical as hiring them in the first place.5 and @.D 1. how he2she uses his2her time.4 5cade-y o& Manage-ent ?ournal. 7o 9any Hemaining Kuestions. 1he following ten corporations were ran#ed by Fortune maga. • >roup A: =.:1. with combined sales of Q12'.Robbins: Organizational Behavior Chapter Five Hesearch indicates that applicants who ha)e been gi)en a realistic !ob pre)iew hold lower and more realistic expectations about the !ob they will be doing and are better prepared for coping with the !ob and its frustrating elements.R. >roup = has $ times the sales but is less well #nown and is comprised of industrial firms. 6hich of the following causes more deaths in the .7M a..4 o)erloo#ing that psychology ma!ors outnumber -hinese studies ma!ors $. =efore doing this exercise. 9aytag.. $. 1he best student in my introductory 9=A class this past semester writes poetry and is rather shy and small in stature. 7tar#e. . &. $. 9attel. 9. 3. .ations listed CA or =D had the larger total sales )olume? An$/er 0 >roup = had the larger total. first<hand experience. Enron.. obser)ation. largest .& billion. /a)e students answer each of the following problems on their own.R. pp. "1$I1'. Kua#er %ats • >roup =: -onagra. 25 . /ow are they the same or different? 6hy are they different? 6hat are the implications? 2. A. etc. 1wice as many as from motor )ehicle accidents. As# students if any ha)e first<hand #nowledge of one of these professions. =y what percentage C1.

. 2. b.erman. 7tep 3: Aour instructor will gi)e you the correct answers to each problem..P Eighty<se)en percent chose 3b4G'$ percent chance. 1his exemplifies our tendency to be ris#<a)erse concerning gains and positi)ely framed 8uestions.. O1hese problems are based on examples pro)ided in 9. $. 6hich would you choose? An$/er I O1he percentage of responses come from the author0s experience. A sure gain of Q2".. Explain why you chose the answers that you did. Te"c2in& note$ 1. An *. Chapter Five 7tep 2: =rea# into groups of three<to<fi)e. b. (n all li#elihood. Answer found in instructions abo)e.. Answer found in instructions abo)e.P (n a test.. Answer found in instructions abo)e. 6hich would you choose? a. &. 7ixteen percent chose 3a4Ga 2$ percent chance.R chance of losing nothing. =a. 6hich would you choose? An$/er 0 O1he percentage of responses come from the author0s experience. *" percent of students chose 3b4Ga sure gain. percent loss is much greater.P 1his is the same 8uestion as number fi)e. &. A sure loss of Q'$.. and a 2$R chance of losing nothing. and 13 percent chose 3a4Ga sure loss. and a '$R chance of winning nothing. CEew Aor#: 6iley. 3.. but the amounts will probably shift students to choosing 3a4Gthe sure loss because 3b4Gthe *. 6hich would you choose? a. 1++"D. and a 2. 6hich would you choose? a.R chance of losing Q"..Robbins: Organizational Behavior ".. (n all li#elihood./. b.P 26 . 1his demonstrates our tendency to be ris#<see#ing concerning losses and negati)ely framed 8uestions. if they calculate the percentages. Eow discuss the accuracy of your decisions. ?udg-ent in Managerial *ecision Ma0ing( 3rd ed. 1he percentages aren0t important but the general pattern in your class is. (n all li#elihood. A '$R chance of losing Q1. ". A 2$R chance of winning Q1. and how you might impro)e your decision ma#ing to ma#e it more accurate.. 1he percentages are not important but the general pattern in your class is. the biases e)ident in the decisions you reached. your class will parallel the author0s experience. your class will parallel the author0s experience.. A sure loss of Q3. your class will parallel the author0s experience. -ompare your answers. $. 1he percentages aren0t important but the general pattern in your class is. 6hich would you choose? An$/er 0 O1he percentage of responses come from the author0s experience.

. Aou ha)e disco)ered that one of your closest friends at wor# has stolen a large sum of money from the company. who is part of a small planning team in which you are a member. $.ational systemsG(n what way does the organi.nipart 6hile most part suppliers for the .e such expenditure.. suggest the students analy. Aou #now the representati)e0s employer wouldn0t appro)e of such a 3payoff.ation0s way of doing business. you tend to eat at fast<food places and rarely spend in excess of Q1$ a day. 1$I2.e the 8uestion based on the following criteria. Aou are negotiating a contract with a potentially )ery large customer whose representati)e has hinted that you could almost certainly be assured of getting his business if you ga)e him and his wife an all<expense<paid cruise to the -aribbean.nipart di)ision of =ritish Leyland C=LD. 27 . Aou ha)e noticed that his wor# has not been up to standard lately and is hurting your team0s performance. regardless of what their actual expenses are. 1he point of these 8uestions is to help the students de)elop their ethical framewor#s. pp.H. fre8uently has the smell of alcohol on his breath.4 but you ha)e the discretion to authori. O7e)eral of these scenarios are based on . from your company with absolute certainty that you would not be detected or caught. at the youthful age of 2+. 1his 2. 6hat would you do? An$/er I 7tudents0 responses will )ary significantly. one company is doing !ust fineG. for some reason. • (mpact on peopleG6ho are the #ey sta#eholders? 6hat is the potential for harm to them? • %rgani. 6ould you: o nothing? >o directly to an executi)e to report the incident before tal#ing about it with the offender? -onfront the indi)idual before ta#ing action? 9a#e contact with the indi)idual with the goal of persuading that person to return the money? An$/er 0 7ee S1 abo)e. @ohn Eeill. business students ha)e far lower ethicality than practicing managers. Aou ha)e the opportunity to steal Q1.nited Fingdom0s automobile industry struggle. 3. 6hat would you do? An$/er 0 7ee S1 abo)e.4 !ndustry @ee0( 9arch 1$. not to exceed Q&. 1++3. (n 1+'".. /e immediately began to ruffle feathers of conser)ati)e =L executi)es by de)eloping inno)ati)e mar#eting campaigns and focusing company attention on the parts business Cin contrast to its cars and truc#sD. ". a day..3 billion<euro company has done well largely because of the decisions made by its -E%.nipart. Another executi)e. 9ost of your colleagues put in reimbursement re8uests in the range of Q"$ to Q$. /ow much would you re8uest for your meal reimbursements? An$/er 0 7ee S1 abo)e. Aou do not need receipts for these expensesG the company will ta#e your word. /ow would you respond to each of the following situations? 1. do not show shoc# at the lac# of ethicality of the students. Hesearch shows. 31orn between /alo and /orns. 6hen tra)eling. a day. Aour company policy on reimbursement for meals while tra)eling on company business is that you will be repaid for your out<of<poc#et costs. • -hoiceG6hat alternati)es do they ha)e? /ow much ris# do they face in doing the ethical thing? 2. 1wo suggestions for discussing these 8uestions: :irst. @ohn Eeill was made managing director of the . 6ould you do it? An$/er 0 7ee S1 abo)e. Altany..Robbins: Organizational Behavior ETHICAL DILEMMA EXERCISE – Five 8thical *ecisions: @hat @ould Eou *oF Chapter Five Assume you are a middle manager in a company with about a thousand employees. 1his executi)e happens to be the son<in<law of the company0s owner and is held in )ery high regard by the owner. 7econd..P CASE INCIDENT 0 @ohn Eeill at . policies and procedures contribute to the ethical conflict.

28 . and began promoting the di)ision0s parts on tele)ision. altered the pac#aging.Robbins: Organizational Behavior Chapter Five /e increased the di)ision0s mar#eting budget six<fold. created a retail shop program.

36e #new the future would be worse. percent of its business.. not necessarily the organi. *o you thin0 ?ohn 4eill would have been e=ually success&ul i&( bac0 in "#$<( he had been -ade head o& BLF 83plain Kuite possibly. (t was not enthusiastic about . he had expertise in auto manufacturing business and #new that tying all the . while the rest of the company Cwhich later became part of the Ho)er >roupD labored along. 1he . Eeill en)isioned ma#ing . 7ibillin. 7ince he ignored the critics and mo)ed ahead anywayGit could ha)e 8uite possibly been intuition. auto industry suffers from massi)e o)ercapacity. /e negotiated a *+. Contrast the -a+or strategic decisions at /nipart and British Leyland . .nipart0s profits.F.nipart has become a highly recogni. espite his youth. (t has also di)ersified into a range of other businesses.nipart independent from =L. Almost from the beginning.ation.able consumer brand in the . who saw it as an attac# on the )iability of =L itself. (n response. %ctober 2. especially on the e<commerce front. and has created an (nternet trading platform.nited Fingdom.4 1hat 3something4 was to mo)e away from pro)iding original parts for Ho)er. =L continued to follow its plan despite shrin#ing mar#et share. /e then immediately began ta#ing actions that would allow . Eeill has expanded . /ad he been charged with the entire =L operation.nipart0s fortunes tied singularly to Ho)er.nipart would commit to creating a strong consumer brand built around replacement parts. a logistics business. .4 Eeill recalls.nipart became independent. Eeill is also di)ersifying beyond . /e was the head of the parts operation and which was where his performance was being e)aluated. *id intuition play a role in 4eill. he did !ust that. -!e$tion$ " '?ohn 4eill is not s-artG he is +ust luc0y ) *o you agree or disagreeF 83plain 7tudents0 answers will )ary. (ntensi)e downward pricing pressure on suppliers is li#ely to eat away at . . 29 .$ million euro management buyout of . 1ypically manager0s will focus their decisions based on what will bring the most benefits to him or her.. (t focused its mar#eting and sales on parts and became strong enough to split from =L and begin offering its ser)ices to other =ritish auto manufactures.nipart0s logistic business by paying 2+2 million euros for auto parts distributor Bartco..nipart from =L. sales to Ho)er represented +. espite Eeill0s success since the buy<out. it appears Eeill0s intuition also may ha)e played a part.Robbins: Organizational Behavior Chapter Five /is 3parts first4 pitch did not go down well with his bosses.s decisionsF *iscuss (t appears so since the scenario does not discuss any other decision process that he may ha)e gone through. 1his ac8uisition ma#es . Hubython and A. but it was too late for =L0s top management to do much about it. Luc# may )ery well ha)e been a part of the outcome.nipart to stand on its own two feet. one of . howe)er.nipart0s automoti)e parts roots. Broducing and selling automoti)e parts is still the company0s main acti)ity but it also runs a successful warehouse.4 8uroBusiness. 7o the parts business would go down unless we did something dramatically different. (t is now down to 3 percent.. (nstead. 1oday. when .nipart saw itself as a )iable business apart from =L.ation as a whole. (n 1+*'. '&I'*. Eo longer are .nipart0s most profitable current businesses is running @aguar0s entire parts operation on a fee basis. pp.nipart0s fortunes to one manufacture could put you at ris#.nipart the biggest automoti)e parts distributor in the .nipart faces tough times ahead. (n fact.nited Fingdom. Eeill had created a )iable business.nipart0s direction and as a result missed an opportunity. : A B >ource: =ased on 1. /is willingness to ta#e a ris# and follow his 3hunch4 paid off for the organi. /is ideas were not initially met with enthusiasm. losing mar#et share e)ery year. 31he Heality 9an. he may ha)e had a different focus which could ha)e benefited =L more substantially. 3because today0s mar#et share was smaller than yesterday0s. (n 1+*'.

htm . stereotyping and culture.com 1.org2cd2pdf2p.. >o to a paper written by 6. 5. 6rite a paragraph or two about what you learned from this page. ethics and culture.html .mit. 30 . 6rite a paragraph or two on what you belie)e are the similarities in reasons are between these two groups. 1a#e one techni8ue and apply it to a 8uestion or decision you are in the process of ma#ing. 6.o.org2library2ethics2ethxgde. 6rite a two page paper on the topic of your choice.mapnp. 7ome commonly used search engines are: www.icce2.com www.pdf to ma#e a comparison of why employees and students say they sometimes beha)e in unethical ways. :or example. there are accurate attributions and errors in attributions that we ma#e e)eryday.loo#smart. Are you creati)e? 1a#e a creati)ity test to see how you compare to others. 1he -enter for the e)elopment of -reati)e 1hin#ing has a short test. 6rite about this also. =e sure to address how culture relates to the topic you chose.goto.excite.com2spirit2decisions. >o to http:22www.Robbins: Organizational Behavior Chapter Five Exploring OB Topics on the World Wide Web 7earch Engines are our na)igational tool to explore the 666. /uitt on this topic at http:22chiron. Also loo# at the roles and responsibilities of managing ethics in the wor#place.com www.com www. -onduct a web search on one of the topics from this chapter combined with the word culture. =ring both paragraphs to class for discussion.2.12*.7 Army0s surgeon general http:22www. /ow can you impro)e your creati)ity? 1here are many strategies and most of the funN >o to: http:22members.)aldosta. %nce you ha)e read the paper write a one page reaction paper on what you learned and how you thin# your personality influences the way you ma#e decisions.google. 6rite three ma!or ideas you learned from reading this page and bring them to class for further discussion.com www. 4.htm .*2Au1.edu2whuitt2files2prbsmbti. 7.>. 2.lycos. -hoose three or four techni8ues and write a short !ournal entry or paragraph comparing them.hooah"health.shrm.com.org2press2releases2+*.edu29(1E-72Entry2morris . *. 3.be2eng2index. Are college students different than employees when it comes to ethics? >o to www. Earlier we learned about personality indicators.com www. decision ma#ing and culture. oes this information explain how we as humans can explain anything? %b)iously. :or a 3spirited4 o)er)iew of decision ma#ing and intuition go to the following web site sponsored by the .hotbot. A comprehensi)e guide to many topics confronting managers can be found at http:22www. Learn more about Attribution 1heory at http:22cognet.email. (n particular loo# at the pages on the myths and benefits of managing ethics in the wor#place.1. 6hat role does our personality ha)e in our ability to problem sol)e and ma#e decisions.au2Tca)eman2-reati)e21echni8ues2 and read how to impro)e your creati)ity.cocd.htmS7napshot and http:22www. Head more about ethics in the wor#place. =ring your short story to class so that we can share them with the class.htm .