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

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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.

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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.

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whereas if other employees who too# the same route made it to wor# on time. < Consistency in a person0s actions. the person is seen as ha)ing been forced into the beha)ior by the situation. &. (f consensus is high. *. 4 . especially in countries with strong collecti)ist traditions. :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. it will probably be !udged as internal. they tended to accept responsibility for group failure. *istinctiveness refers to whether an indi)idual displays different beha)iors in different situations. 1his is called the 3self<ser)ing bias4 and suggests that feedbac# pro)ided to employees will be distorted by recipients.Robbins: Organizational Behavior 3. (f this action is not unusual. 1he Forean study suggests caution in ma#ing attribution theory predictions in non<6estern societies. 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. you would be expected to gi)e an external attribution to the employee0s tardiness. 6hat we want to #now is whether the obser)ed beha)ior is unusual. Externally caused beha)ior is seen as resulting from outside causes5 that is. 1hat determination depends largely on three factors: 4otes: Chapter Five • • • • • istincti)eness -onsensus -onsistency ". your conclusion as to causation would be internal. $. • • (f it is. oes the person respond the same way o)er time? 1he more consistent the beha)ior. the more the obser)er is inclined to attribute it to internal causes. we attempt to determine whether it was internally or externally caused. Consensus occurs if e)eryone who is faced with a similar situation responds in the same way. 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#. Attribution theory suggests that when we obser)e an indi)idual0s beha)ior. • +. -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. Attribution theory was de)eloped largely based on experiments with Americans and 6estern Europeans. contrary to the self<ser)ing bias. the obser)er is li#ely to gi)e the beha)ior an external attribution.

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

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

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

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

Robbins: Organizational Behavior Chapter Five 9 .

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

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

don0t expect peopleGespecially in Eorth America. 1he result is that the intuiti)e decision ma#er can decide rapidly with what appears to be )ery limited information. %nce you ha)e completed the exercise. 6hat is intuiti)e decision ma#ing? • • • (t is an unconscious process created out of distilled experience. and other cultures where rational analysis is the appro)ed way of ma#ing decisionsG to ac#nowledge they are using it. 2. refer students to the -A7E (E-( EE1: ?ohn 4eill at /nipart for another )iewpointGthis time from the -E% perspecti)e. (t operates in complement with rational analysis. • 1he expert0s experience allows him or her to recogni. when time is limited. Eight conditions when people are most li#ely to use intuiti)e decision ma#ing: a. (ntuiti)e decision<ma#ing has recently come out of the closet and into some respectability. b.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. 1he purpose of the exercise is to help students better understand how intuition and experience are lin#ed. g. f. 7ome belie)e it is a personality trait that a limited number of people are born with. 12 . 3. 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. d. Hational analysis is considered more socially desirable in these cultures. 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. 7ome consider it a form of extrasensory power or sixth sense. c. A suggestion for a class exercise follows the introduction of the material below.Robbins: Organizational Behavior B !ntuition 4otes: Chapter Five 1. and there is pressure to come up with the right decision • • • Although intuiti)e decision ma#ing has gained in respectability. A summary of the case and 8uestions can be found at the end of this chapter. Hesearch on chess playing pro)ides an excellent example of how intuition wor#s. >reat =ritain. with good arguments for each h. e.

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

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

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

e of any gi)en year0s budget is last year0s budget. 4otes: 1 Cultural *i&&erences 1.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. the importance placed on logic and rationality d. 1he rational model ma#es no ac#nowledgment of cultural differences. ecisions must be made 8uic#ly in order to stay ahead of the competition and #eep customers satisfied.ation itself constrains decision ma#ers.Robbins: Organizational Behavior G Organizational Constraints 4otes: Chapter Five 1. procedures. policies. differ in terms of time orientation. etc. their belief in the ability of people to sol)e problems. and preference for collecti)e decision ma#ing. Berformance e)aluation • 9anagers are strongly influenced in their decision ma#ing by the criteria by which they are e)aluated. selection of problems b.ed as points in a stream of decisions. 1his happens due to policies.ation0s reward system influences decision ma#ers by suggesting to them what choices are preferable in terms of personal payoff. regulations. the importance of rationality.ed regulations in order to standardi. for example.ations impose deadlines on decisions. 7ystem<imposed time constraints • • • %rgani.e the beha)ior of their members. 1he organi. 3. 2. whether organi. 1heir performance in decision ma#ing will reflect expectation. depth of analysis c. Heward systems • 1he organi. ecisions made in the past are ghosts which continually haunt current choices. Brogrammed routines • All but the smallest of organi. 6e need to recogni.ations create rules.e that the cultural bac#ground of the decision ma#er can ha)e significant influence on: a. organi. (t is common #nowledge that the largest determining factor of the si. &. time constraints. (ndi)idual decisions are more accurately characteri. • $. /istorical Brecedents • • ecisions ha)e a context. Almost all important decisions come with explicit deadlines. -ultures. 16 . ". =y programming decisions. and other formali.

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

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

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

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

ational constraints: Berformance e)aluation • 9anagers are strongly influenced in their decision ma#ing by the criteria by which they are e)aluated. &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. • Almost all important decisions come with explicit deadlines. 21 . $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. 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. • ecisions made in the past are ghosts which continually haunt current choices.Robbins: Organizational Behavior $ Chapter Five *escribe organizational &actors that -ight constrain decision -a0ers An$/er I 1D 1he lac# of problem clarityG1he decision ma#er is assumed to ha)e complete information regarding the decision situation. 1he expert0s experience allows him or her to recogni. # @hat role does intuition play in e&&ective decision -a0ingF An$/er 0 (ntuiti)e decision ma#ing has recently come out of the closet and into some respectability. (t operates in complement with rational analysis. (ndi)idual decisions are more accurately characteri. 3D Eot being able to ma#e clear preferencesG-riteria and alternati)es can be ran#ed and weighted to reflect their importance.s wor0 environ-entF 83plain An$/er I 1his is an opinion 8uestion. 2D Eot #nowing all the optionsG(t is assumed the decision ma#er is aware of all the possible conse8uences of each alternati)e. 6e define intuiti)e decision ma#ing as an unconscious process created out of distilled experience.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. /istorical precedents • ecisions ha)e a context.ations impose deadlines on decisions. %ther organi. 7ystem<imposed time constraints • %rgani.e of any gi)en year0s budget is last year0s budget. 1he result is that the intuiti)e decision ma#er can decide rapidly with what appears to be )ery limited information. • (t is common #nowledge that the largest determining factor of the si. it parallels earlier 8uestions whether heredity or en)ironment shape personality. "D -onstant preferencesG6hen specific decision criteria are constant and the weights assigned to them are stable o)er time. Brogrammed routines • =y programming decisions. • ecisions must be made 8uic#ly in order to stay ahead of the competition and #eep customers satisfied.ed as points in a stream of decisions. (n many ways.ations are able to get indi)iduals to achie)e high le)els of performance without paying for the years of experience. • 9anagers bloc#ing negati)e information Heward systems • 1he organi. 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.ation0s reward system influences decision ma#ers by suggesting to them what choices are preferable in terms of personal payoff. organi.

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

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

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

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

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

. $. Another executi)e. you tend to eat at fast<food places and rarely spend in excess of Q1$ a day. do not show shoc# at the lac# of ethicality of the students..nipart 6hile most part suppliers for the .4 !ndustry @ee0( 9arch 1$. Aou #now the representati)e0s employer wouldn0t appro)e of such a 3payoff.nipart di)ision of =ritish Leyland C=LD. a day. one company is doing !ust fineG.. 6hat would you do? An$/er 0 7ee S1 abo)e.ation0s way of doing business. fre8uently has the smell of alcohol on his breath. • -hoiceG6hat alternati)es do they ha)e? /ow much ris# do they face in doing the ethical thing? 2. O7e)eral of these scenarios are based on . policies and procedures contribute to the ethical conflict. 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. Aou do not need receipts for these expensesG the company will ta#e your word..nipart.e the 8uestion based on the following criteria. regardless of what their actual expenses are. Hesearch shows.nited Fingdom0s automobile industry struggle. 6hat would you do? An$/er I 7tudents0 responses will )ary significantly. Aou ha)e disco)ered that one of your closest friends at wor# has stolen a large sum of money from the company. who is part of a small planning team in which you are a member. not to exceed Q&. /ow much would you re8uest for your meal reimbursements? An$/er 0 7ee S1 abo)e.. a day. ". 7econd. • (mpact on peopleG6ho are the #ey sta#eholders? 6hat is the potential for harm to them? • %rgani. pp.3 billion<euro company has done well largely because of the decisions made by its -E%. 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. 1he point of these 8uestions is to help the students de)elop their ethical framewor#s. 27 . 6hen tra)eling. @ohn Eeill. @ohn Eeill was made managing director of the .. 1$I2.e such expenditure. (n 1+'".ational systemsG(n what way does the organi. /e immediately began to ruffle feathers of conser)ati)e =L executi)es by de)eloping inno)ati)e mar#eting campaigns and focusing company attention on the parts business Cin contrast to its cars and truc#sD. /ow would you respond to each of the following situations? 1. for some reason.H. Aou ha)e noticed that his wor# has not been up to standard lately and is hurting your team0s performance.Robbins: Organizational Behavior ETHICAL DILEMMA EXERCISE – Five 8thical *ecisions: @hat @ould Eou *oF Chapter Five Assume you are a middle manager in a company with about a thousand employees. 9ost of your colleagues put in reimbursement re8uests in the range of Q"$ to Q$.P CASE INCIDENT 0 @ohn Eeill at . 1his executi)e happens to be the son<in<law of the company0s owner and is held in )ery high regard by the owner. 1his 2. business students ha)e far lower ethicality than practicing managers. suggest the students analy. at the youthful age of 2+. 6ould you do it? An$/er 0 7ee S1 abo)e. Altany. 3. 1++3. 31orn between /alo and /orns. Aou ha)e the opportunity to steal Q1. 1wo suggestions for discussing these 8uestions: :irst. from your company with absolute certainty that you would not be detected or caught. 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.4 but you ha)e the discretion to authori.

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

while the rest of the company Cwhich later became part of the Ho)er >roupD labored along..4 Eeill recalls.nipart0s fortunes tied singularly to Ho)er. 1his ac8uisition ma#es .Robbins: Organizational Behavior Chapter Five /is 3parts first4 pitch did not go down well with his bosses. 1oday. (t is now down to 3 percent.nipart0s logistic business by paying 2+2 million euros for auto parts distributor Bartco. espite Eeill0s success since the buy<out. Luc# may )ery well ha)e been a part of the outcome. (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.nipart from =L. *o you thin0 ?ohn 4eill would have been e=ually success&ul i&( bac0 in "#$<( he had been -ade head o& BLF 83plain Kuite possibly.nipart saw itself as a )iable business apart from =L. one of . and has created an (nternet trading platform.able consumer brand in the .nipart became independent. (ntensi)e downward pricing pressure on suppliers is li#ely to eat away at . -!e$tion$ " '?ohn 4eill is not s-artG he is +ust luc0y ) *o you agree or disagreeF 83plain 7tudents0 answers will )ary. Eeill has expanded . sales to Ho)er represented +.nipart0s most profitable current businesses is running @aguar0s entire parts operation on a fee basis. a logistics business. 29 .$ million euro management buyout of . not necessarily the organi. /is willingness to ta#e a ris# and follow his 3hunch4 paid off for the organi.s decisionsF *iscuss (t appears so since the scenario does not discuss any other decision process that he may ha)e gone through. howe)er. (n fact. /e negotiated a *+.nipart independent from =L. losing mar#et share e)ery year. (nstead. pp.nipart0s profits. 1ypically manager0s will focus their decisions based on what will bring the most benefits to him or her. Almost from the beginning. %ctober 2.nited Fingdom. Contrast the -a+or strategic decisions at /nipart and British Leyland .nipart the biggest automoti)e parts distributor in the . (n response. Eo longer are .. 7ibillin. it appears Eeill0s intuition also may ha)e played a part. 7ince he ignored the critics and mo)ed ahead anywayGit could ha)e 8uite possibly been intuition. '&I'*. (n 1+*'.. percent of its business.nipart0s direction and as a result missed an opportunity. Hubython and A. auto industry suffers from massi)e o)ercapacity. . . /e was the head of the parts operation and which was where his performance was being e)aluated.ation as a whole. /e then immediately began ta#ing actions that would allow . 3because today0s mar#et share was smaller than yesterday0s. he may ha)e had a different focus which could ha)e benefited =L more substantially.nipart0s fortunes to one manufacture could put you at ris#.nipart has become a highly recogni.F. espite his youth. Eeill is also di)ersifying beyond . especially on the e<commerce front.ation.nipart faces tough times ahead. who saw it as an attac# on the )iability of =L itself. he did !ust that.4 1hat 3something4 was to mo)e away from pro)iding original parts for Ho)er.nited Fingdom.nipart to stand on its own two feet. 31he Heality 9an. 1he . (t was not enthusiastic about . (t has also di)ersified into a range of other businesses..nipart0s automoti)e parts roots. but it was too late for =L0s top management to do much about it. Eeill had created a )iable business. when . 36e #new the future would be worse. *id intuition play a role in 4eill. /ad he been charged with the entire =L operation. /is ideas were not initially met with enthusiasm. . (n 1+*'.nipart would commit to creating a strong consumer brand built around replacement parts. =L continued to follow its plan despite shrin#ing mar#et share. 7o the parts business would go down unless we did something dramatically different. Eeill en)isioned ma#ing . he had expertise in auto manufacturing business and #new that tying all the . Broducing and selling automoti)e parts is still the company0s main acti)ity but it also runs a successful warehouse. : A B >ource: =ased on 1.4 8uroBusiness.

com. /uitt on this topic at http:22chiron.html .com www. 1a#e one techni8ue and apply it to a 8uestion or decision you are in the process of ma#ing. 2. stereotyping and culture.mapnp. Learn more about Attribution 1heory at http:22cognet. %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. there are accurate attributions and errors in attributions that we ma#e e)eryday.pdf to ma#e a comparison of why employees and students say they sometimes beha)e in unethical ways.>. Also loo# at the roles and responsibilities of managing ethics in the wor#place. 7. 6hat role does our personality ha)e in our ability to problem sol)e and ma#e decisions.7 Army0s surgeon general http:22www. 6.google. 6rite about this also.. 7ome commonly used search engines are: www. 6rite a two page paper on the topic of your choice. 30 .com www. decision ma#ing and culture.shrm.12*.excite.email.icce2.htmS7napshot and http:22www. >o to a paper written by 6. ethics and culture.cocd.o.)aldosta.htm . Are college students different than employees when it comes to ethics? >o to www.com www. 1he -enter for the e)elopment of -reati)e 1hin#ing has a short test. 6rite a paragraph or two on what you belie)e are the similarities in reasons are between these two groups.loo#smart. Are you creati)e? 1a#e a creati)ity test to see how you compare to others.edu29(1E-72Entry2morris .htm . 5. =ring both paragraphs to class for discussion. Head more about ethics in the wor#place. 4.*2Au1. Earlier we learned about personality indicators.com www.2.lycos. -hoose three or four techni8ues and write a short !ournal entry or paragraph comparing them.hooah"health. 3. :or example.hotbot.org2cd2pdf2p. A comprehensi)e guide to many topics confronting managers can be found at http:22www.be2eng2index.goto. >o to http:22www. /ow can you impro)e your creati)ity? 1here are many strategies and most of the funN >o to: http:22members. =e sure to address how culture relates to the topic you chose.edu2whuitt2files2prbsmbti.com 1.htm .org2press2releases2+*. -onduct a web search on one of the topics from this chapter combined with the word culture.org2library2ethics2ethxgde.Robbins: Organizational Behavior Chapter Five Exploring OB Topics on the World Wide Web 7earch Engines are our na)igational tool to explore the 666. =ring your short story to class so that we can share them with the class. 6rite a paragraph or two about what you learned from this page.1.au2Tca)eman2-reati)e21echni8ues2 and read how to impro)e your creati)ity. :or a 3spirited4 o)er)iew of decision ma#ing and intuition go to the following web site sponsored by the . (n particular loo# at the pages on the myths and benefits of managing ethics in the wor#place.com2spirit2decisions.com www. *. oes this information explain how we as humans can explain anything? %b)iously. 6rite three ma!or ideas you learned from reading this page and bring them to class for further discussion.mit.

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