1. PRESENTED BY : Mir Zeeshan Ali
PERCEPTION AND INDIVIDUAL
DECISION MAKING

2. Learning Objectives
1. Perception and the factors that influence it.
2. Attribution Theory
3. Making judgements about others
4. Link between Perception and Decision Making
5. Rational Model of Decision Making
6. Common Decision biases or errors
7. Individual differences and organizational constraints
affects decision making
8. Three Ethical decision criteria
9. Creativity
10. Global Implications
2

3. Perception
• Perception is the process of receiving information about
and making sense of the world around us. It involves
deciding which information to notice, how to categorize
this information and how to interpret it within the
framework of existing knowledge.
• A process by which individuals organize and interpret their
sensory impressions in order to give meaning to their
environment.
“WE DON’T SEE THINGS AS THEY ARE, WE SEE THINGS AS
WE ARE”

4. Factors That Influence Perception
Factors in the perceiver
• Attitudes
• Motives
• Interests
• Experience
• Expectations
Factors in the situation
• Time Perception
• Work Setting
• Social Setting
Factors in the Target
• Novelty
• Motion
• Sounds
• Size
• Background
• Proximity
• Similarity

9. Attribution Theory
Perceptions we have of people
Observing individual's behavior
Internal external
Distinctiveness Consensus
consistency

10. Attribution Theory
Determining
Factors

11. Determining
Factors
Internal
dispositional

12. Attribution Theory
Determining
Factors
External
situational

13. DISTORTIONS
Distortions In attributions
Fundamental attribution error Self serving bias
 Under estimating the influence of Indviduals and organisations tend to
External factors  Attributing success to ability/ effort,
 Over estimate the influence of  blame for failure on
Internal or personal factors bad luck/ unproductive coworkers

15. SHORTCUTS- JUDGEMENTS
• SELECTIVE PERCEPTION
• HALO EFFECT
• CONTRAST EFFECT
• STEREOTYPE

16. APPLICATION OF SHORTCUTS
• Employment interview
• Performance
Expectation
• Performance
Evaluation

17. LINK BETWEEN PERCEPTION &INDIVIDUAL
DECISION MAKING
• What is perception and its importance?
• Factors influencing perception.
• How decision should be made?
• How to improve quality of decision?

18. Decision-Making Organizations
• Rational Model: Characterized by making consistent, value-
maximizing choices within specified constraints.
• Six – Step Decision Process:
4. Define problem
5. Identify decision criteria
6. Allocate weights to the criteria
7. Develop alternatives
8. Evaluate alternatives
9. Select the best alternatives

19. Decision-Making Organizations
• Bounded Reality: A process of making
decision by constructing simplified models that
extracts the essential features from problems
without capturing all their complexity.
• Intuition: An unconscious process created out
of distilled experience.

20. “Good Enough” Lacks
versus Complete
Optimizing Information
Bounded
Rationality
Cannot Cannot
Assess All Weigh
Alternatives All Criteria

21. WHAT IS INTUITION?
Managers make Managers make Managers make
Decisions based decisions based decisions based
on experience
on ethical values on feelings and
or culture Experienced- emotions
based decisions
Affect-
Values or
initiated
ethics-based
decisions
decisions Intuition
Cognitive-
Subconscious
based
mental
decisions
processing
Managers make
Manager make
decisions based
decisions based
on
on skills,
subconscious
knowledge,
data
© 2003 Pearson Education Canada Inc. or training

22. Common Biases & Errors in decision making
Common biases and Errors in decision making :
2. Overconfidence bias
3. Anchoring bias
4. Confirmation bias
5. Availability bias
6. Escalation of commitment
7. Randomness Error
8. Winner’s Curse

23. Individual Differences in decision-making
• Personality:
 Conscientiousness may effect escalation of commitment
3. Achievement-strivers are likely to increase commitment
4. Dutiful people are less like to have this bias
• Gender:
8. Women analyze decisions more than men rumination
9. Women are twice as likely to develop depression
23

24. Organizational Constraints
 Performance Evaluation
 Managerial evaluation criteria influence actions
 Reward Systems
 Managers will make the decision with the greatest personal
payoff for them
 Formal Regulations
 limit the alternative choices of decision makers
 System-imposed Time Constraints
 Restrict ability to gather or evaluate information
 Historical Precedents
 Past decisions influence current decisions

25. Ethics in Decision Making
Ethics, also known as moral philosophy, is a branch
of philosophy that addresses questions about morality — that is,
concepts such as good and evil, right and
wrong, virtue and vice, justice and crime, etc.
Here are some criteria that can help ensure appropriate ethical
considerations are part of the decisions being made in the
organization .
• Compliance.
• Promote good and reduce harm.
• Responsibility.
• Respects and preserves rights.
• Promotes trust.
• Builds reputation

26. Three Ethical Decision Criteria
An individual can use three different criteria in making ethical choices
• Utilitarian criterion;
- Decisions are made solely on the basis of their outcomes or consequences.
- The goal is to provide the greatest god for the greatest number.
- It promotes efficiency and productivity, but it can result in ignoring the rights of some
individuals, particularly those with minority representation.
• Focus on Rights
- To make decisions consistent with fundamental liberties and privileges as set forth in
documents such as Constitution of India.
- It means respecting and protecting the basic rights of individuals.
- It creates an overly legalistic work environment that hinders productivity and efficiency.
• Focus on Justice
- This requires individuals to impose and enforce rules fairly and impartially so that there is an
equitable distribution of benefits and costs.
- It justifies paying people the same wage for a given job, regardless of performance
differences and using seniority as the primary determination in making layoff decisions.
- It encourages a sense of entitlement that reduces risk taking, innovation and productivity.

27. CREATIVITY
• The ability to produce novel & useful ideas i.e different from
what’s been done before but that are appropriate to the problem
or oppurtunity presented.
• Why is creativity important to decision making ?
• Three component model of creativity
Expertise
Creative thinking skill
Intrinsic task motivation

28. GLOBAL IMPLICATIONS
• Attributions
• Decisions Making
• Ethics

29. THANK YOU