1. Perception and Decision-Making

2. The Issues
Perceptual Process and phenomena
Choice making, decision making, &
problem solving
Optimizing, maximizing, & satisficing
Decision models
Individual v. group decisions
Decision-Making Phenomena
Decision-making tools

3. PERCEPTION
Process through which a person senses,
selects, organizes, and interprets stimuli
Sensation
Selection
Organization
Interpretation

4. Person Perception:
Making Judgments About Others
Attribution theory
When individuals observe
behavior, they attempt to
determine whether it is
internally or externally
caused
Distinctiveness: shows different behaviors in different situations.
Distinctiveness: shows different behaviors in different situations.
Consensus: response is the same as others to same situation.
Consensus: response is the same as others to same situation.
Consistency: responds in the same way over time.
Consistency: responds in the same way over time.

5. Attribution Process

6. COMMON PERCEPTUAL
PHENOMENA
Fundamental attribution errors
Self serving bias
Selective perception
Halo effect
Contrast effect
Stereotypes

7. Errors and Biases in Attributions
Fundamental attribution error
The tendency to underestimate
the influence of external
factors and overestimate the
influence of internal factors
when making judgments about
the behavior of others.
Self-serving bias
The tendency for individuals to
attribute their own success to
internal factors while putting
blame for failures on external
factors.

8. Frequently Used Shortcuts in
Judging Others
Selective perception
People selectively interpret
what they see on the basis of
their interests, background,
experience, and attitudes.
Stereotyping
Judging someone on the
basis of one’s perception
of the group to which
that person belongs.

9. Frequently Used Shortcuts in
Judging Others
Contrast effect
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.
Halo effect
Drawing a general
impression about an
individual on the basis of
a single characteristic.

10. Choice Making
The narrow set of
activities associated
with choosing one
option from among
already identified
alternatives

11. Decision Making
The process of
specifying a problem or
opportunity, identifying
alternatives & criteria,
evaluating alternatives,
and selecting from
among the alternatives
Site 1
Pros/Cons
Site 2
Pros/Cons

12. Problem Solving
Includes decision-making process
Implementation of decision
Monitoring of impact
Revising action
Achieving objectives

13. Decision Making, Choice
Making, and Problem Solving
Decision Making
Choice Making
Step 1
Recognizing
the need
for a
decision
Step 2
Generating
alternative
solutions
Step 3
Evaluating
the
alternatives
Problem Solving
Step 4
Choosing an
alternative
Step 5
Implementing
the chosen
alternative
Step 6
Monitoring
and maintaining the
solution

14. Decision Standards
Optimize
Find the best possible decision
Maximize
Find decision that meets maximum
number of criteria
Satisfice
Find the first satisfactory solution

15. Decision Models
The rational/economic person
Person is rational and deals with objective facts
Person is economically motivated
Decisions are driven by objective rationality and a search
for the best possible alternative (optimizing)
The administrative person (Herbert Simon)
Person is limited by restricted cognitive capacity
Person is aware of only certain alternatives
Person considers only certain criteria
Decisions are driven by desire to identify and select the
first acceptable alternative (satisficing)

16. Groups vs. Individuals?
Advantages
Greater knowledge and facts
Broader perspectives on issues
More alternatives considered
Greater satisfaction with and support of decisions
Better problem comprehension
Disadvantages
Less speed
Compromise may damage decision quality
Premature decisions
Negative social pressure
Individual domination
Interference of personal goals

17. Decision-Making Phenomena
Group shift (risky, cautious)
Groupthink
Escalation of commitment

18. Group Shift
The risky shift
Group discussion makes decision
situation more familiar
Diffusion of responsibility
Risk persuaders
Cultural values and desire for approval
from others in the group
The cautious shift
Far less common than risky shift
Group discussion makes decision risks
more clear
Personal acceptance of responsibility
Cautious persuaders
Cultural values and desire for approval
from others in the group

19. Groupthink
A group drive for
consensus so strong that
dissent is (intentionally
and unintentionally)
suppressed

20. Escalation of Commitment
Adhering to an
unsuccessful
course of action
with increasing
commitment of
resources

21. Factors That Drive Escalation
Motivation to
justify previous
decisions
Norms for
consistency
Perceived
probability of
future outcomes
Perceived value
of future
outcomes
Retrospective
Rationality
Modeling
Commitment
to a Course of
Action
Prospective
Rationality
Based on Staw, B.M. (1981). The escalation of commitment to a course of
action. Academy of Management Review, 6 (4), p. 582.

22. Other Escalation
Considerations
What about the following?
Involvement in original decision
Individual vs. group decision
Organization culture differences
Recommendation for managers?

23. Some Valuable Tools
Brainstorming
Nominal Group
Technique
Delphi Technique

24. Brainstorming
Stimulate people to
develop alternatives
during the planning
and decision-making
process. Focus on
identifying
alternatives.

25. Nominal Group Technique (NGT)
Generate a large number of
creative potential solutions to a
problem or opportunity,
evaluate these solutions, and
rank them from most to least
promising
4-stops
Generation of ideas in
writing
Round-robin recording of
ideas
Serial discussion of ideas
Ranking of ideas
1.
2.
3.
4.
5.
6.

26. Delphi Technique
Gathers and evaluates
information from a group without
physically assembling its
members
Steps
Develop the Delphi question and the first inquiry
Collect first response
Analyze first response, provide feedback, and develop
second inquiry
Collect second response
Continue process until a clear solution emerges

27. The Issues
Perceptual Process and phenomena
Choice making, decision making, &
problem solving
Optimizing, maximizing, & satisficing
Decision models
Individual v. group decisions
Decision-Making Phenomena
Decision-making tools