Effect of a Person's Perceptions on Business Decision-Making

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1. What is perception?

Perception is the procedures by which we try and interpret information about the environment that surrounds us. The perceptual process has several characteristics that help us understand that it can have a profound negative effect on organizational behavior (especially the two last points):

- Feedback about others and ourselves
- Not always based on true picture of reality
- We behave as though our perceptions are real (2)

In fact, several attributes feed into our perceptions of others:

- Raw data - The information that we experience about other people (e.g., someone talks sharply to me)
- Mental process - which is unseen but affected by things (e.g., ?she doesn?t like me? schema was made based on personal feelings of inadequacies)

Our perception, sensing or interpretation of our experience (e.g. since she talked sharply to me, it is clear that she doesn't like me ? leads to involuntary reactions to the mental schema that has become a part of the perceptual process). Thus, we are reacting to perceptions that are not based on a true picture of reality.

2. How can a person's perception of others impact an organization's behavior?

As mentioned above, perceptions can impact organizational behavior because we act and treat others based our perceptions, which are not always based on true picture of reality. However, we still behave as though our perceptions are real. For example, you might perceive the team as talking negatively behind your back (which is not true), so you begin to act defensively whenever someone approaches you. This can have very serious implications. Mental and perceptual shortcuts often have a negative impact on organizational behavior, but mental and perceptual short-cuts can also save time. See further discussion in #4 below.

3. What are the positive and negative effects of using perceptive "shortcuts" when judging others?

It is argues that we take mental short cuts to economize our mental processes, such as through perceptual shortcuts:
- First Impression
- Self-fulfilling Prophecy
- Just Like Me
- Blaming the Victim
- Halo Effect
- Stereotypes (e.g., all men are power hungry)
- An exaggerated belief associated with a category (2)

Stereotypes are one form of perceptual bias or shortcut used in judging others.
- Fixed, rigid ideas
- Associated with a group or category of people
- Not supported by evidence
- Can be favorable or unfavorable
- Driven by motive (2)

Sources of Stereotypes
- Socialization process (e.g., taught that men are the main breadwinners; people with a disability should not work, etc.)
- Books
- Mass Media
- Education and public officials (2)

Strategies to Correct Inaccurate Perceptions
- Acceptance of differences in people
- Active listening
- Provide feedback
- Own your behaviors/feelings
- Use inclusionary language
- Avoid stereotypes (2)

Positive effects

a. Saves time and mental energy: People use perceptual shortcuts to simplify the amount of information they receive from the environment, including judging people?s motives. It can be positive when the information is accurate. For example, if your boss is known through experience to be reliable and consistent, you can rely on the perceptual shortcut ("she is reliable and consistent") without wasting time every morning to check to see if she made it to work on time. It helps stay focused on the task at hand, instead of wasting mental and physical energy on irrelevant information.

Negative effects

a. Lead to poor decision making and intragroup conflict
b. Organizational stresses and lack of overall productivity

Thus, when we perceive something to be true, we make assumptions (e.g., perceptual short-cuts) that affect our organizational behavior (see Exmaple 1 below).

4. How are decisions in real world organizations actually made?

Sometimes, business decisions are made following a step-by-step decision-making model, which helps to eliminate biases and perceptual short cuts, through looking in-depth at many alternatives and potential solutions to the problem. This is very important, but perceptual biases can also enter this type of decision-making process. It is important to have training to understand your own perceptual biases and the impacts they can have on your decisions and business decisions.
However, perceptual short cuts are still alive and thriving in the real world organizations.

Let's look at the following article that supports this idea:

EXAMPLE 1: Assumptions Can Be Major Barriers (excerpts)

Mental Baggage Inhibits Bold Solutions

There's an old saying: "To assume makes an "ass" out of "u" and "me"." In approaching problems, in business and other walks of life, ...