Chap 5: Perception and Individual Decision Making: Chapter Review

Chap 5: Perception and individual decision making
Chapter Review
Summary
Perception
Perception is a process by which individuals organize and interpret their sensory impressions in
order to give meaning to their environment.
Perceptions differ depending whether we think the behaviour is caused by the person or the
situation.
Attribution theory states that an internal or external attribution depends on distinctiveness (whether
an individual displays different behaviours in different situations), consensus (whether everyone
who is faced with a similar situation responds in the same way), and consistency (whether a person
responds the same way over time).
Fundamental attribution error occurs when we attribute poor performance to internal factors rather
than situational constraints. Similarly, self-serving bias is when individuals attribute successes to
internal factors, such as their intelligence or ingenuity, and failures to external factors like bad luck
or uncooperative co-workers.
Individuals often use shortcuts in decision making and these shortcuts can result in significant
distortions.
These shortcuts include selective perception, the halo effect, contrast effects, and stereotyping.
 Selective perception occurs when we only process information that is aligned with our attitudes,
interests, and backgrounds. In other words, we choose to see what we want to see.
 The halo effect occurs when a single characteristic, say attractiveness, forms the basis for a
general impression about someone. For example, if someone is attractive we may associate
he/she has an array of unassociated traits: sociability, intelligence, promotability.
 Contrast effects occur because we don’t evaluate a person in isolation; our reaction is influenced
by other persons we have recently encountered. For example if one has average skills and is
evaluated in a group which includes someone who is stellar, the average skill set may look poor
by comparison.
 Stereotyping is when we use decision making short-cuts to draw general determinations about
an individual or group.
There are many applications of perception theory in the organization, including employment

interviews and performance expectations.
 Perception is a major influence in the interview process and can severely impair the
effectiveness of decision making. Studies have shown that interviewers tend to make decisions
very early in the interview process and different interviewers often perceive candidates quite
differently.
 In evaluating the performance of employees, generalizations save time, but often prevent us
from accurately perceiving the individual. Perception also has a major impact on the
performance evaluation process.
Individual decision making
Individuals in organizations make decisions, making choices among two or more alternatives.

Understanding how managers make decisions can improve decision effectiveness.
The first step in making a decision is identification of the problem, a discrepancy between the
current and desired conditions.
Rational decision-making is a model derived from economics, in which individuals wish to make
decisions that maximize value. Steps in the rational decision making model include
1. identifying the problem;
2. identifying the decision criteria;
3. weighting the previously identified criteria;
4. generating possible alternatives;
5. rating each alternative on each criterion;
6. computing the optimal decisions. The rational decision-making model makes a number of
assumptions, including complete information, lack of bias, and maximum payoff.
While the model of rational decision-making describes how decisions should be made, bounded
rationality describes how decisions are made. When faced with a complex problem, most people
reduce the problem to a level at which is can be understood. Because we do not have all of the
available information we “satisfice”, or arrive at an outcome that it “good enough,” one that meets
an acceptable level of performance.
Intuitive decision-making is a process that occurs unconsciously. It is the accumulation of

distilled experience that manifests as a “gut feeling.” There is a growing recognition that intuitive
decision-making can be a legitimate alternative in certain circumstances.
Creativity, or the ability to produce novel and useful ideas, consists of expertise, creative-thinking
skills, and intrinsic task motivation. The potentiality for creativity is enhanced when individuals work
in environments that provide flow of ideas, fair and constructive judgment of ideas, rewards for
creative work, sufficient financial, material, and information resources, freedom, to decide what
work is to be done and how to do it, a supervisor who communicates effectively, shows confidence
in others, and supports the work group, and work group members who support and trust each
other.
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Pre Test
Take the pre test to check your knowledge of this chapter.
Multiple choice
This activity contains 9 questions.
1. _____ is the process by which individuals organize and interpret their sensory
impressions.
a. Perception
b. Intuition
c. Analysis
d. Self-serving bias
2. According to _____, when observing the behaviour of others, individuals attempt to

determine if the behaviour is internally or externally caused.
a. randomness error
b. utilitarianism
c. attribution theory
d. confirmation bias
3. If a person is seen as having been forced into a situation, the cause of his/her
behaviour is ____.
a. internal
b. independent
c. external
d. random
4. _____ refers to whether an individual displays different behaviours in different
situations.
a. Distinctiveness
b. Consistency
c. Consensus
d. None of the above
5. When we judge someone on the basis of our perception of the group to which he or
she belongs, we are using the decision making technique of _____.
a. projection
b. escalation of commitment
c. self-fulfilling prophecy
d. stereotyping
6. The decision maker's interests, values, and similar personal preferences are important
when engaging in the _____ step of the rational decision-making model.
a. defining the problem
b. analyzing the alternatives
c. weighing the evidence
d. identifying the decision criteria
7. The rational decision making process assumes _____.
a. the decision maker has complete information
b. the decision maker is able to identify all of the relevant options in an unbiased manner
c. the decision maker will choose the option with the highest utility
d. all of the above
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8. Through _____, decision makers construct simplified models that extract the essential
features from problems without capturing all of their complexity.
a. bounded rationality
b. intrinsic task motivation
c. creative thinking skills
d. expertise
9. _____ is a non-conscious process created from distilled experience.
a. Rational decision making
b. Information modeling
c. Satisficing
d. Intuitive decision making
Post Test
1. _____ behaviours are believed under the control of the person.

a. External
b. Internal
c. Consensual
d. Causal
2. If an individual responds the same way when faced with a similar situation he/she is
exhibiting ____.
a. distinctiveness
b. consistency
c. consensus
d. commitment
3. _____ is the tendency to underestimate the influence of external factors and
overestimate the influence of internal factors when making judgments about the
behaviour of others.
a. Fundamental attribution error
b. Self-serving bias
c. Absenteeism
d. Turnover
4. _____ occurs when an individual attributes their success to internal factors and failure
to external factors
a. Fundamental attribution error
b. Self-serving bias
c. Absenteeism
d. Turnover
5. _____ allows for "speed reading" others.
a. Escalation to commitment
b. Stereotyping
c. Selective perception
d. Contrast effects
6. Numerous research studies have shown that good-looking people are more likely to
get hired, even when less qualified than other applicants. This is an example of ____.
a. stereotyping
b. moral overtones
c. selective perception
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d. the halo effect
7. Jane is concerned about her chances of getting selected for a new job after hearing
that her interview follows that of a highly qualified candidate. This is an example of
_____.
a. halo effects
b. projection
c. stereotyping
d. contrast effects
8. When we judge someone on the basis of group membership, we are using the short-
cut process known as _____.
a. projection
b. stereotyping
c. escalation to commitment
d. intuition
9. A _____ is a situation in which one person inaccurately perceives a second person and
the resulting expectations cause the second person to behave in ways consistent with
the original perception.
a. self-fulfilling prophecy
b. halo error
c. bounded decision
d. perception event
10. A(n) _____ is a choice from among two or more alternatives.
a. option
b. decision
c. problem
d. evaluation
11. What is the first step in the rational decision making process?
a. Identify the decision criteria
b. Develop the alternatives
c. Define the problem
d. Select the best alternative
12. What is the last step in the rational decision making process?
a. Identify the decision criteria
b. Develop the alternatives
c. Define the problem
d. Select the best alternative
13. _____ extracts the essential features from problems without capturing all their
complexity.
a. Escalation to commitment
b. Intuition
c. Analysis
d. Bounded rationality
14. _____ is decision-making out of distilled experience.
a. Analysis
b. Hindsight bias
c. Intuition
d. None of the above
15. Which of the following professions is considered intuitive?
a. Accountants
b. Engineers
c. Computer programmers
d. Chess masters
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16. People with _____ appear to be especially susceptible to the self-serving bias.
a. high self-esteem
b. low conscientiousness
c. high conscientiousness
d. low self-esteem
17. Individuals from _____ are more likely to accept situations as they are rather than
trying to change them.
a. Germany
b. Japan
c. Indonesia
d. the United States
18. _____ is the ability to produce novel and useful ideas.
a. Generation
b. Optimization
c. Creativity
d. Obviation
True or False
1. The reality of a situation is what is behaviourally important.

o True
o False
2. Expectations can distort your perceptions in that you will see what you expect to see.
o True
o False
3. If you expect to see that older workers can't learn a new job skill, you will probably perceive
that, whether it is accurate or not.
o True
o False
4. The rational decision-making model assumes rationality and that the alternative that yields the
lowest perceived value will be chosen.
o True
o False
5. Interviewers can make perceptual judgments that are often inaccurate during an employment
interview.
o True
o False
6. The bounded rationality model assumes that the decision maker will simplify the problem.
o True
o False
7. Intuitive decision making is a conscious process created out of experience.
o True
o False
8. Rationality in decision-making is highly valued across cultures.
o True
o False

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Chap 5: Perception and individual decision making

There are many applications of perception theory in the organization, including employment

Individuals in organizations make decisions, making choices among two or more alternatives.

1. identifying the problem;

2. identifying the decision criteria;

3. weighting the previously identified criteria;

4. generating possible alternatives;

5. rating each alternative on each criterion;

Intuitive decision-making is a process that occurs unconsciously. It is the accumulation of

Take the pre test to check your knowledge of this chapter.

2. According to _____, when observing the behaviour of others, individuals attempt to

1. _____ behaviours are believed under the control of the person.

This activity contains 8 questions.

1. The reality of a situation is what is behaviourally important.

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