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

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

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

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

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

Robbins: Organizational Behavior Chapter Five 9 .

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

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

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

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

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

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

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

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

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

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

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

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

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

minimum<wage !obs. :or example. 9 1ave you ever increased your co--it-ent to a &ailed course o& actionF !& so( analyze the &ollow. during the selection process. COUNTERPOINT Hegardless of labor<mar#et conditions.e and e)aluate each alternati)e.ation and about the specific !ob. • -ompute the optimal decision. accountant. -orporate layoffs ha)e recei)ed a lot of attention in recent years. • >enerate possible alternati)es that could succeed in resol)ing the problem. they are forced to put a positi)e 3spin4 on their descriptions of their organi. 7tudents0 analysis will )ary with their experience.e the positi)e with !ob candidates is that this is what the competition is doing. 7econd. physical therapist. :irst. E)ery applicant ac8uires. the absence of negati)e information builds unrealistic expectations. there is a dwindling supply of 8ualified applicants for many !ob )acancies5 and second. e)en if it means failing to mention the negati)e aspects in the !ob.ations. in 23 . 1hese unrealistic expectations often lead to premature resignations. (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. managers will find it increasingly difficult to get 8ualified people who can fill !obs such as legal secretary. Another reason management is forced to emphasi. any employer who presents !obs realistically to applicantsGthat is. 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. a number of things happen that ha)e potentially negati)e effects on the organi. 1hey ha)e to emphasi. 1his brings in the decision ma#er0s interests. it is the !ob applicant0s responsibility to follow the dictum caveat e-ptorGlet the buyer beware. nurse. so managers need to sell !obs to the limited pool of applicants. maintenance mechanic.ation. software programmer. 6hile there is a real ris# of setting unrealistic expectations about the organi. Employees who feel they were tric#ed or misled during the hiring process are unli#ely to be satisfied wor#ers. perform basic mathematical calculations.ations and the !obs they see# to fill.ation in the most fa)orable light possible. to get people to !oin their organi. write.ation when they come face<to<face with the negati)es 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. and telecommunications specialist. a set of expectations about the organi. 6hy should managers emphasi. 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.e the positi)e. this approach is necessary to meet the competition. • -ritically analy. POINT1COUNTERPOINT 0 @hen 1iring 8-ployees( 8-phasize the 6ositive POINT /iring new employees re8uires managers to become salespeople. new hires are prone to become disillusioned and less committed to the organi. 9anagers will also find it harder to get 8ualified people to fill entry<le)el. social wor#er. 1hird. 6hat has often been o)erloo#ed in this process is the growing shortage of 8ualified applicants for literally millions of !obs. As a result. :irst.e the positi)e when discussing a !ob with a prospecti)e candidate? 1hey ha)e no choice. As in dealing with any salesperson.Robbins: Organizational Behavior Chapter Five • (dentify the decision criteria important to sol)ing the problem. (n this competiti)e en)ironment. 1here is a growing gap between the s#ills wor#ers ha)e and the s#ills employers re8uire. but finding indi)iduals who can read. 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. 1his means presenting the !ob and the organi. • 6eight the pre)iously identified criteria in order to gi)e them the correct priority in the decision. 1here may be no shortage of physical bodies. computer<repair specialist. that is a ris# managers ha)e to ta#e. 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. %ther employers also face a limited applicant pool. en)ironmental engineer.ation and about the specific !ob he or she hopes to be offered. 1hrough the foreseeable future. and similar personal preferences. 1o increase !ob satisfaction among employees and reduce turno)er. )alues. 6hen the information an applicant recei)es is excessi)ely inflated.

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.Robbins: Organizational Behavior Chapter Five addition to positi)e comments. 24 .

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

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

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

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

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

6rite a paragraph or two on what you belie)e are the similarities in reasons are between these two groups. -onduct a web search on one of the topics from this chapter combined with the word culture.mapnp. >o to a paper written by 6. 7. =ring both paragraphs to class for discussion. 30 .com www.goto. (n particular loo# at the pages on the myths and benefits of managing ethics in the wor#place. Head more about ethics in the wor#place.org2library2ethics2ethxgde.hooah"health.>. Are college students different than employees when it comes to ethics? >o to www.12*. :or a 3spirited4 o)er)iew of decision ma#ing and intuition go to the following web site sponsored by the .au2Tca)eman2-reati)e21echni8ues2 and read how to impro)e your creati)ity.email. 7ome commonly used search engines are: www. there are accurate attributions and errors in attributions that we ma#e e)eryday.org2cd2pdf2p.mit.edu29(1E-72Entry2morris . -hoose three or four techni8ues and write a short !ournal entry or paragraph comparing them. Earlier we learned about personality indicators.edu2whuitt2files2prbsmbti.lycos. oes this information explain how we as humans can explain anything? %b)iously.be2eng2index.cocd. 6rite three ma!or ideas you learned from reading this page and bring them to class for further discussion.htm .)aldosta.org2press2releases2+*. 2. 6.o. 6rite about this also.com www. 3. Also loo# at the roles and responsibilities of managing ethics in the wor#place. 6rite a paragraph or two about what you learned from this page.icce2.com2spirit2decisions.loo#smart. 1a#e one techni8ue and apply it to a 8uestion or decision you are in the process of ma#ing. ethics and culture. 6rite a two page paper on the topic of your choice.com. /ow can you impro)e your creati)ity? 1here are many strategies and most of the funN >o to: http:22members. A comprehensi)e guide to many topics confronting managers can be found at http:22www. Learn more about Attribution 1heory at http:22cognet. 5. 4.google. %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.7 Army0s surgeon general http:22www.hotbot. :or example. =ring your short story to class so that we can share them with the class.*2Au1.1.htm . >o to http:22www.shrm.htmS7napshot and http:22www. 6hat role does our personality ha)e in our ability to problem sol)e and ma#e decisions. 1he -enter for the e)elopment of -reati)e 1hin#ing has a short test.com www. stereotyping and culture.com www.Robbins: Organizational Behavior Chapter Five Exploring OB Topics on the World Wide Web 7earch Engines are our na)igational tool to explore the 666.com 1.2.htm . /uitt on this topic at http:22chiron.. Are you creati)e? 1a#e a creati)ity test to see how you compare to others. =e sure to address how culture relates to the topic you chose.com www.excite.pdf to ma#e a comparison of why employees and students say they sometimes beha)e in unethical ways. decision ma#ing and culture.html . *.

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