Factors Influencing Perception

Commonly used decision-making models are the shared decision-making model, the bounded decision-making model, and the intuitive decision-making model. 

Commonly used decision-making models are the shared decision-making model, the bounded decision-making model, and the intuitive decision-making model.

Rational decision-making

Develop Alternatives 

Weigh the Decision Criteria 

Intuitive decision-making is the process of forming a decision or judgment based on information gained from previous experiences or learnings. 

Recognition Primed Decision

The bounded rational decision-making technique helps in generating a satisfactory and sufficient solution by eliminating complex elements.

Rational decision-making

Intuitive decision-making

Bounded rational decision-making 

True

Intuitive decision-making

Perception refers to the way you interpret information and make sense of the world around you, affecting your behaviour, decision-making, and interaction with others.

The main factors are characteristics of the perceiver, characteristics of the perceived, and characteristics of the situation.

An individual's personality traits, beliefs, past experiences and expectations can shape their perception. For instance, a risk-taker may see a challenging task as an opportunity.

The way an employee perceives tasks or recognises certain situations can significantly influence their job performance, commitment, and satisfaction.

The external factors include: The Target (object or event under observation), The Context (the situation where the perception process happens), and The Perceiver's Experience (past experiences that could shape perception).

The Halo effect is a cognitive bias where an observer's overall perception is influenced by a single positive or negative trait.

Perceptual constancies refer to perceiving objects as stable in shape, size, and colour, despite sensory changes. Perceptual biases are errors in judgement based on an individual's expectations and attitudes.

Understanding and mitigating perceptual biases can help create a more harmonious and productive business environment, influencing team building, leadership, decision making, and conflict resolution.

'Perception influences' are the impacts of various factors on the way a person views, understands, or interprets a situation, event, or object in a business context.

How a manager or employee perceives a situation impacts decision-making. Different perceptions can cause misunderstandings leading to conflicts. Perception affects the effectiveness of communication, with misinterpretations disrupting communication flow. Biases rooted in perceptions can compromise objectivity in performance assessments.

A candidate's perception of a company affects their decision to join. This perception is influenced by factors like company rating or CSR activities. In marketing, customer perception, influenced by packaging and advertisement, affects their buying decisions.

Unilever identified that the perception of their brand Dove was stale among younger consumers. After conducting an in-depth analysis, they launched the "Real Beauty" campaign to challenge societal beauty stereotypes, which significantly altered the brand's perception and boosted sales.

Perception is the lens through which decision-makers view, decode, and react to information before they make any decision. It involves an individual’s process of absorbing and understanding information, and the interpretation and judgement of that information, which influences the decision-making process.

What decision-makers perceive influences their choices. Perception can be influenced by personal biases, selective perception or information overload. Each of these can affect judgement, influencing the meaning they attach to different decisions.

There are several types of perception that influence decision-making, including biased perception (influenced by personal experiences or beliefs), selective perception (only seeing what we want or expect), and information overload (too much information leading to distorted perceptions).

Perception plays a significant role in decision-making by affecting how we filter and interpret information. It is shaped by various factors like past experiences, personal beliefs, values, and expectations, which can steer the decision-making process towards the lens of the perceiver.

The CEO and CTO deciding whether to upgrade to new technology is an example. The CEO, concerned with cost-efficiency, may view it as an unnecessary expense. On the other hand, the technologically future-focused CTO may see it as an opportunity to streamline operations and stay competitive.

Sensory Perception and Cognitive Perception. Sensory Perception is about receiving data through our senses and translating it into signals for the brain. Cognitive Perception involves interpreting and making sense of the received information.

In professional settings, perception influences management decisions, market analysis, and customer interactions. It may cultivate creative thinking and diversified approaches, but can also lead to biases. Personal decision-making is often driven by perception formed by individual experiences, knowledge, needs, and personal traits.

The table shows that perception navigates corporate decisions based on collective perception. Its impact can be seen in business outcomes, brand positioning, and stakeholder relationships. The consequences could result in profit or loss, growth or stagnation, team-building or disputes.

Perception in decision-making is a double-edged sword. It enriches decision-making with empathy, experience and creativity, especially where quantitative data is scant. However, unchecked, it can lead to biases and become a liability.

The basic sensory mechanisms that influence perception in decision making are the five primary sensory systems - visual, auditory, olfactory, gustatory, and tactile – as they convert sensory stimuli from our environment into neural signals interpreted by our brain.

Cognitive factors like attention, memory, thought, and language significantly shape perception. The emotional state at the time of decision making can also colour the perception of the situation positively or negatively.

Individual attributes like personality traits, educational background, and cultural influences can change perceptual machinery. Aging can also affect sensory impressions of the world and thus impact perception in decision making.

Cognitive Reframing is a technique which involves changing the cognitive frame or standpoint from which a situation is perceived. It enables one to shift perspective and perceive things from different angles thereby reducing perception bias.

The key steps include recognising the existence of perceptual biases, identifying the specific biases, understanding their impact, implementing strategies to combat them, seeking feedback from others, reflecting and learning from past decisions, and doing periodic audits of the decision-making process.

The use of data and analytics in decision-making helps to reduce the reliance on subjective perception. It provides objective insights and helps to counterbalance perceptual biases in decision making.

Decision making biases refer to systematic errors that occur when people process and interpret information around them, leading to distorted understanding, illogical interpretation, and irrational behaviour. They often arise from heuristics or cognitive limitations such as lack of information, time, or cognitive resources.

Some examples of decision making biases include confirmation bias, anchoring bias, hindsight bias, and availability heuristic.

Cognitive biases are systematic errors in thinking that affect decisions and judgments. They can lead to inaccurate perception, illogical interpretation, or broadly viewed irrational behaviour. Some common examples are overconfidence bias, framing bias, and bandwagon effect. These biases can impact business decisions significantly.

Confirmation bias is the tendency to favour information that confirms existing beliefs or hypotheses. To manage it, you can seek disconfirming evidence, get a second opinion or question your assumptions.

Framing bias happens when decisions are made based on how information is presented rather than on facts alone. To mitigate it, take a step back to look at the situation objectively, consider the opposite, and consult others for a broader perspective.

Status quo bias is a cognitive bias that prefers the current state of affairs. Any change is perceived as a loss. To counteract this, highlight the costs of not changing, bring in fresh perspectives, and challenge the status quo.

Biases like anchoring bias and availability bias can lead to sticking to outdated plans, relying too much on past performance, focusing disproportionately on recent trends, and leading to short-sighted strategic planning.

Corporate culture, the shared values, behaviours, and norms within a company, can inadvertently reinforce biases. For example, a culture that values consensus might increase conformity bias, while a culture encouraging competition may lead to overconfidence bias.