Psychology of Decision Making

Personality in Decision Making Definition of Personality Encompass the characteristic traits and patterns of adjustment of a person in his interrelationships with others and his environments. A holistic concept which is inclusive if those integrated qualities, impulses, habits, interests, ideals and other characteristics that compose the individual as he exist in society. The entire system if relatively permanent tendencies, both physical and mental, that are distinctive of a given individual, and determine his characteristic adjustments to his material and social surroundings. The pattern of organization of various responses made by individuals in the presence of general consistency to all the different kinds of behavior in which the unique or individual aspects of behavior. Viewed as representing the essence of a person what the person really is. It consists concretely of a set of scores or descriptive terms which are used to describe the individual being studied according to the variables or dimensions which occupy a central position within the particular theory utilized. Biological, Subconscious, and Hereditary Forces Sigmund Freud developed the concept of subconscious mind. Human beings are dominated by subconscious motives and emotions Early stages of childhood form the most important basis for adult personality People are governed by two basic drives: 1. Life instinct activities that are positive and constructive 2. Death or Hate instinct destructive Human personality is made up of the id (contains the basic drives for pleasure and aggression in their pure form), ego (the rational part of the mans psychic system, which tries to satisfy the desires of the id within the limits of the real world), and superego (the social and moral arbiter of the psychic system) that continually conflict with one another. Can be resolved by various adjustments in the conscious and subconscious. Common Traits and Unique Individuality Trait is a consistent pattern of action and reaction. It has four classifications: 1. Common traits aggressiveness 2. Unique traits prudishness 3. Surface traits tact 4. Depth traits intellectual capacity It permits the use of factor analysis for prediction that reduces countless of traits into a manageable number of basic and independent factors. Set back: It overlooks the cohesive substance that organizes and integrates these factors into a single human personality. Also, it holds the individual apart from the environment as a kind of composite of factor.

Holistic Approach to Personality It emphasizes the totality and interrelatedness of individual behavior. Individual operates in a phenomenal field the entire experience of the person (Carl Rogers) Human beings are motivated by a hierarchy of Needs (Maslow) Characteristics of self-actualized person: 1. Perceived reality accurately and accept it readily 2. Behave naturally and have a need for privacy 3. Show self-sufficiency as opposed to dependency 4. Appreciate and enjoy life and transcend the ordinary through peak experiences 5. Show brotherly love and social interest, including strong friends 6. Possess a democratic, egalitarian attitude 7. Be able to focus directly on problems 8. Express values and know the difference between right and wrong 9. Have a broad philosophical sense of humor 10.Be sensitive and creative, see things in new ways 11.Resist the pressure of society to conform 12.Be well integrated, total, and entire 13.Transcend differences, bring together opposites Empirical Perspective on Personality Highlights of different studies: Brim and associates, 1962 Decision making is influenced by the personal traits of the decision maker as well as by certain situational and interactional variables. Three sets of variables: 1. Personality abilities, beliefs, attittudes and motives 2. Situational external and observable situations in which individual find themselves 3. Interactional momentary state of the individual resulting from interaction of specific situation with characteristics individual personality Pollay Decision makers take longer to choose from four alternatives when two of the alternatives are easily rejected than when all four alternatives are equal. Chris Argyris Managers are reluctant to express their own feelings or recognize the feelings of others in the conduct of daily operations and it is a sign of immaturity to express sentiments openly during decision-making meetings. Wallach and Kogan Women are more conservative than men when unsure of their decisions and more extreme that men when very sure of their decisions. Taylor and Dunnette Personality attributes influenced styles and idiosyncrasies leading to a choice and are especially influential on behavior after the choice was made. Personality Affects on Decision Making Managers do not merely act out their private motives in organizational affairs, rather they transform childhood experiences, disappointments, and memories

into actions. Saunders and Staton Personality of managerial decision makers provides a general orientation toward goal attainment. Arroba Managers have tendencies to rely on feelings or wants in making quite important decisions. Taylor Older managers tend to take longer to reach decisions and are generally less confident of their choices Henderson and Nutt Cognitive makeup (decision style) of managerial decision makers influenced the selection among alternative courses of action Perception in Decision Making Definition of Perception Being sensitive to and interpreting stimuli or facts. It is a selective process. Perceptual Process 1. Selectivity separates certain pieces of information for further consideration 2. Closure - compiles information into a meaningful whole 3. Interpretation judging information collected Characteristics of the Perceiver and the Perceived Perceiver Influenced by unidentified responses to cues that are below the threshold of awareness When required to form difficult perceptual judgment, the perceiver may respond to irrelevant cues to arrive at a judgment In making abstract or intellectual judgment, the perceiver may influences by emotion Will weigh perceptual evidence coming from respected (or favored) sources more heavily that that coming from other sources May not identify all factors on which his or her judgement are based. Perceived The status of the person perceived influences judgment about his or her behavior High-status persons are judged as wanting to cooperate, whereas lowstatus persons are seen as having to cooperate The person of high status is better liked than the person of low status The perceived persons organizational role influences the judgment of the perceiver. Visibility of the traits being judged will influence the accuracy of the judgment. Influences that distorts the process of forming impression

 Stereotyping A simple picture in our head that which tells us all about people in the particular group on which we are focusing. Halo effect A process in which a general impression that is favorable or unfavorable is used to evaluate specific traits Projections Refers broadly to the tendency to attribute ones characteristics to other people. Perceptual Defense It occurs when the perceiver is confronted with a fact or event that disagrees with any of his stereotypes Chapter Summary: 1. Decision makers tendency to accept or avoid uncertainty depends upon his perception of the desirability of the outcome of a series of choices 2. Decision makers who cannot cope with uncertainty prefers a choice where the outcome is certain. 3. Decision maker who seeks uncertain situation will pursue decisions toward the current objective only until it becomes apparent that the certainty of success or failure is becoming too great. 4. Decision makers are unable to avoid inaccuracies in forming impressions of people, things and events. 5. The influence of decision makers preconscious and subconscious mind add to the psychological complex within which a choice is made.