Chapter 5

Question 1

What is perception?

Answer 1

A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment. This is important because behaviour is based on the perception of reality. Differs per culture

Question 2

Which factors is perception based on?

Answer 2

1. Perceiver: attitude, personality, motivation, expectations etc.
2. Object (target) being perceived: things that stand out in a group/against their background
3. Situation/context in which a perception is created: time, location, light, setting and other situational factors

Question 3

What is attribution theory?

Answer 3

This theory tries to explain how we judge people differently, based on the meaning we attribute to behaviours. We try to determine whether certain behaviours are caused by internal or external factors.

Question 4

What are internally caused behaviours?

Answer 4

This behaviour is caused by what we believe to be under the control of the individual

Question 5

What are externally caused behaviours?

Answer 5

This behaviour is caused by the situation we imagine forces an individual to do something.

Question 6

What does the decision between internally and externally caused behaviour?

Answer 6

1. Dinstinctiveness: whether an individual acts differently in different situations
2. Consensus: behaviour is widely shared
3. Consistency: does person respond the same way over ceratin period of time

Question 7

What is fundamental attribution error?

Answer 7

The tendency to underestimate external influences and overestimeate internal influences when judging others.

Question 8

What is a self-serving bias?

Answer 8

The tendency to attribute success to internal factors and failures to external factors. This is a consequence of fundamental attribution error

Question 9

what is selective perception?

Answer 9

The tendency to selectively interpret what one sees on the basis of one’s interests, background, experience and attitudes. This is because we can’t observe everything.

Question 10

What is the halo effect?

Answer 10

The tendency to draw a general impression about individuals based on a single characteristics.

Question 11

What are contrast effects?

Answer 11

This is the evaluation of characteristics affected by comparisons with other people who rank higher or lower on the same characteristics

Question 12

What is stereotyping?

Answer 12

Judging someone based on one’s perception of the group to which that person belongs/ They help us make decisions quickly.

Question 13

What are decisions?

Answer 13

Choices made from among two or more alternatives. These are largely influenced by perceptions/ This is becoming more important because individual decisions making within the organizations is increasing. Decisions are made as a reaction to problems.

Question 14

What is a problem?

Answer 14

This is the occurrence of discrepancies between how things are and how you want them to be.

Question 15

What is rational?

Answer 15

This is characterized by making consistent, value-maximizing choices within a specific constraints.

Question 16

What are the three types of decision making?

Answer 16

1. Rational decision-making
2. Bounded rationality
3. Intuitive decision-making

Question 17

What is the rational decision-making model?

Answer 17

This model describes how individuals should behave to maximize their desired outcome. Chooses option with highest utility. They rely on the assumption that decision-maker has perfect information scenario.

Question 18

What are the steps in the rational decision-making model?

Answer 18

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

Question 19

What is bounded rationality?

Answer 19

Process of decision-making by building simplified models to extract essential features of problems without capturing all their complexity. Most people look for satisfactory outcome.

Question 20

What is satisficing?

Answer 20

Choosing for a satisfactory, sufficient or reasonable alternative.

Question 21

What is intuitive decision-making?

Answer 21

Unconscious process created out of distilled experience. /can be useful but it can’t be the only proof. Intuitions should be tested with proper tests.

Question 22

What are common biases and errors in decision-making?

Answer 22

1. Overconfidence bias
2. Anchoring bias
3. Confirmation bias
4. Availability bias
5. Escalation of commitment
6. Randomness error
7. Risk aversion
8. Hindsight bias

Question 23

What is the overconfidence bias?

Answer 23

We think we know more than we do. Weakest are most likely to overestimate

Question 24

What is anchoring bias?

Answer 24

A tendency to fixate on initial information, from which one the fails to adjust for subsequent information

Question 25

What is confirmation bias?

Answer 25

A tendency to look for information that validates past choices and to ignore contradiction confirmation.

Question 26

What is the availability bias?

Answer 26

Tendency to base judgments on information that is available to those people. These judgments are also based on experience

Question 27

What is escalation of commitment?

Answer 27

Increased commitment to previous decisions despite negative information. Happens when individuals beleive they are responsible and there are sunk costs involved.

Question 28

What is randomness error?

Answer 28

Tendency to believe we can predict the outcome of random events. Decision making is impaired by believing imaginary patterns.

Question 29

What is risk aversion?

Answer 29

A tendency to prefer a sure gain of moderate outcome over a riskier outcome, even if this riskier outcome has a higher expected payoff

Question 30

What is a hindsight bias?

Answer 30

A tendency to falsely believe that we could have predicted the outcome of events after the outcome is actually known. This increases overconfidence.

Question 31

How can you avoid becoming a victim of these errors and biases?

Answer 31

1. Focus on goals 2. Look for information disconforming your beliefs 3. Don't create meaning our of random events 4. Increase your options

Question 32

Name four individual differences influencing decision-making

Answer 32

1. Personality: conscientiousness and self-esteem 2. Gender: women suffer more from Rumination 3. Mental ability: higher mental ability--> faster information processing 4. Cultural differences: time orientation, collectivism etc.

Question 33

What is rumination?

Answer 33

This is excessive reflecting on decisions and their outcome, also known as overthinking. More often occurs by women.

Question 34

What are organizational constraints influencing decision making?

Answer 34

1. How is performance evaluated? 2. How will choices pay off (reward system) 3. System-imposted time constraints like deadlines 4. Historical precedents: what has been done in the past

Question 35

What are the three ethical decision criteria?

Answer 35

1. Utilitarianism 2. Whistle-blowers 3. Justice

Question 36

What is utilitarianism?

Answer 36

Decisions are made to provide the best outcome for the biggest number of people. This is associated with goals like efficiency and maximal profits

Question 37

what are whistle-blowers?

Answer 37

These are people who report unethical practices of employers to outsiders. Ethical decision making requires considering the rights of whistle-blowers

Question 38

What is justice in decision making?

Answer 38

You have to impose and enforce rules fairly and impartially.

Question 39

What is the broken window theory?

Answer 39

This is the idea that bad urban environments facilitate criminal behaviour because they signal antisocial norms.

Question 40

How can behavioural ethics be improved?

Answer 40

1. Realizing that signals influence ethical behaviour 2. encouriging conversations about morals and ethics 3. Increase awareness of moral blind spots

Question 41

What is the three-stage model of creativity?

Answer 41

This is based on the idea that creativity requires three stages: 1. Causes (creative potential and environment) 2. Creative behaviour 3. Creative outcomes (innovation)

Question 42

Name the four steps in which creative behaviour occurs

Answer 42

1. Problem fourmulation: identify problems requiring solutions 2. Information gathering: possible solutions incubute in the mind 3. Idea generation: possible solutions are developed from relevant information 4. Idea evaluation: evaluate potential solutions and pick best one

Question 43

What are the causes of creative behaviour?

Answer 43

1. Creative potential: intelligence, openness to experience, experties, proactivity etc. 2. Creative environment: you should be motivated, incentivized, individualistc and good leadership

Question 44

What are creative outcomes?

Answer 44

Ideas/solutions found to be novel and useful.Creative ideas are only actualized due to a social process.