Lecture 6: Perception and Individual Decision Making

Question 1

Perception

Answer 1

A process by which individuals organise and interpret their sensory impressions in order to give meaning to their environment

Question 2

Attribution Theory and its 3 factors

Answer 2

When individuals observe behaviour, they attempt to determine whether it is internally or externally caused.

1. Distinctiveness: Does the person show different behaviours across different situations?
2. Consensus: Is the person’s response the same as others in the same situtation?
3. Consistency: Does the person respond in the same wat over time?

Question 3

Fundamental attribution error

Answer 3

The tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgements about the behaviour of others

Question 4

Self-serving bias

Answer 4

The tendency for individuals attribute their own successes to internal factors while putting the blame for failures on external factors

Question 5

Selective perception

Answer 5

People selectively interpret what they see on the basis of their interests, background, experience and attitudes

Question 6

Halo effect

Answer 6

Drawing a general impression about an individual on the basis of a single characteristic

Question 7

Contrast effects

Answer 7

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

Question 8

What are specific applications in organisations?

Answer 8

• Employment interviews
• Performance expectations
• Performance evaluations

Question 9

Rational decision-making

Answer 9

Describes how individuals should behave in order to maximise some outcome

Question 10

What are the steps of rational decision making?

Answer 10

1. Define the problem
2. Identify the decision criteria
3. Allocate weights to the criteria
4. Develop the alt
5. Evaluate the alt
6. Select the best alt

Question 11

Bounded rationality

Answer 11

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

Question 12

Common biases and errors

Answer 12

1. Overconfidence bias
   - Believing too much in our own ability to make good decisions
2. Anchoring bias
   - Using early, first received info as the basis for making subsequent judgements
3. Confirmation bias
   - Using only the facts that support our decision
4. Hindsight bias
   - Looking back, once the outcome has occurred, and believing that you accurately predicted the outcome of an event
5. Availability bias
   - Using info that is most readily at hand
6. Escalation of commitment
   - In spite of new negative info, commitment actually increases
7. Randomness error
   - Creating meaning out of random events

Question 13

What are the organisational constraints on decision makers?

Answer 13

• Performance evaluations
• Reward systems
• Formal Regulations
• System- imposed time constraints
• Historical precedents

Question 14

Three-component model of creativity

Answer 14

Proposition that individual creativity requires expertise, creative-thinking skills and intrinsic task motivation.