Social Psychology in Organizations
College 6 Decision making, conflict, and communication
Perception, Decision-Making, and Problem-Solving
Perception
Perception: a leader must understand that each person’s perception is their
reality, and this is how they will interpret the leader’s actions and everything else that
happens at the workplace. Perceptions can change; you can feel your salary is nice
but when you compare it to others, your perception can change.
Perceptual errors
- Primacy effect
o Belief perseverance, once a person has formed an initial impression,
they maintain it even when presented with concrete evidence that it is
false (e.g., first impressions).
- Recency effect
o Aside from remembering the first experience, we also remember to
most recently presented items or experiences (e.g., end of application
interview).
- Availability bias
o When a person’s judgements are based on what most readily comes
into a person’s mind
- Contrast effects
o Comparisons based on what has happened just before we decide or
judgements (e.g., interviewing job applicants and not so good
applicants in the first half but an average applicant in the second you
are willing to rate them higher)
- Halo error (Horns error)
o Occurs when the rater’s overall positive impression strongly influences
ratings of specific attributes (e.g., performance appraisals).
Sul-fulfilling prophecies during the application process
Social/interpersonal compatibility > rewarding to deal with >
Abilities, expertise, know-how > able to do the job > Employability
Ambition, work ethic, drive > willing to work hard >
Individual Decision making
PPT
Constraints on individual decision making, three situational factors may hinder
decision making
- Lack of information
- Unclear of conflicting goals
- The uncertainty of outcomes
, The Rational decision-making model
Problem or opportunity identification > information search and analysis > generate
alternatives > evaluate alternatives > make decision > develop action plans.
Bounded rationality
- Decision makers have limits on ability to assimilate large amounts of
information
o Results from:
Organizational factors
Individual limits on the ability to process information
Perceptions
PPT
Prospect theory
Focuses on risk perceptions
- People are risk-averse about gains
- People are risk-seeking about losses
Losses weigh more heavily in decision making than equivalent gains (PPT)
- Leaders must pay attention to how decision are framed when they are
presented
- Framing in terms of gains or losses
Decision traps
Highsight bias (I-knew-it-all-along effect)
PPT
Overconfidence bias (“hubris”)
- Inflated confidence in how accurate a person’s knowledge or estimates are
- Leaders with more power tend to have more overconfidence bias
Escalation of commitment
- Individuals continue a failing course of action after receiving feedback that
shows it isn’t working
- Sunk costs fallacy: continued commitment because a person has already
invested in a course of action and does not recognize what they invested
initially is sunk (gone).
Creative problem solving
Creativity: The tendency to generate or recognize ideas, alternatives, or
possibilities that may be useful in solving problems, communicating with others, and
entertaining ourselves and others
College 6 Decision making, conflict, and communication
Perception, Decision-Making, and Problem-Solving
Perception
Perception: a leader must understand that each person’s perception is their
reality, and this is how they will interpret the leader’s actions and everything else that
happens at the workplace. Perceptions can change; you can feel your salary is nice
but when you compare it to others, your perception can change.
Perceptual errors
- Primacy effect
o Belief perseverance, once a person has formed an initial impression,
they maintain it even when presented with concrete evidence that it is
false (e.g., first impressions).
- Recency effect
o Aside from remembering the first experience, we also remember to
most recently presented items or experiences (e.g., end of application
interview).
- Availability bias
o When a person’s judgements are based on what most readily comes
into a person’s mind
- Contrast effects
o Comparisons based on what has happened just before we decide or
judgements (e.g., interviewing job applicants and not so good
applicants in the first half but an average applicant in the second you
are willing to rate them higher)
- Halo error (Horns error)
o Occurs when the rater’s overall positive impression strongly influences
ratings of specific attributes (e.g., performance appraisals).
Sul-fulfilling prophecies during the application process
Social/interpersonal compatibility > rewarding to deal with >
Abilities, expertise, know-how > able to do the job > Employability
Ambition, work ethic, drive > willing to work hard >
Individual Decision making
PPT
Constraints on individual decision making, three situational factors may hinder
decision making
- Lack of information
- Unclear of conflicting goals
- The uncertainty of outcomes
, The Rational decision-making model
Problem or opportunity identification > information search and analysis > generate
alternatives > evaluate alternatives > make decision > develop action plans.
Bounded rationality
- Decision makers have limits on ability to assimilate large amounts of
information
o Results from:
Organizational factors
Individual limits on the ability to process information
Perceptions
PPT
Prospect theory
Focuses on risk perceptions
- People are risk-averse about gains
- People are risk-seeking about losses
Losses weigh more heavily in decision making than equivalent gains (PPT)
- Leaders must pay attention to how decision are framed when they are
presented
- Framing in terms of gains or losses
Decision traps
Highsight bias (I-knew-it-all-along effect)
PPT
Overconfidence bias (“hubris”)
- Inflated confidence in how accurate a person’s knowledge or estimates are
- Leaders with more power tend to have more overconfidence bias
Escalation of commitment
- Individuals continue a failing course of action after receiving feedback that
shows it isn’t working
- Sunk costs fallacy: continued commitment because a person has already
invested in a course of action and does not recognize what they invested
initially is sunk (gone).
Creative problem solving
Creativity: The tendency to generate or recognize ideas, alternatives, or
possibilities that may be useful in solving problems, communicating with others, and
entertaining ourselves and others
