Introduction

As people interact with each other at work (or elsewhere) they begin to form impressions of each other and of the situations they are dealing with. This process of forming impressions is called perception. Perception is important because our decisions and subsequent behaviour are often based on the impressions we have formed of a person or a situation rather than what might be the ‘reality’. Indeed, we will see in this topic that we tend to make some predictable errors in our process of perception.

In some cases, our perception leads us to see a person or a situation as being problematic, and we then attempt to solve the problem. Problems can be solved in a number of different ways, and we must make a decision as to the best way to do so. In this topic we discuss some important concepts about how we perceive problems and how we make decisions about solving them.

Objectives

On completion of this topic, you should be able to:

• define perception and explain the factors that influence it
• explain attribution theory and list the three determinants of attribution
• distinguish between internal and external attributions
• discuss the interrelationship between perception and problem solving
• distinguish between the perceptual and diagnostic definitions of the word ‘problem’
• apply the rational model of decision making and contrast it with bounded rationality and intuition
• list and explain the common decision biases or errors
• prepare an action plan to deal with a problem.

Approximate study time required

Actively engaging with the lecture content	3 hrs
Topic readings	3 hrs
Undertake the prescribed learning activities	1 hrs
Self-directed topic review	1 hrs
Total	8 hrs

Perception

Perception is defined by Robbins et al. (2020, p. 134) as ”a process by which individuals organise and interpret their sensory impressions in order to give meaning to their environment”. The perception process is related to how we take in information through our five senses to make sense of our external world. Of course, it is physically impossible for us to process all the stimuli we experience and so it is necessary for a filtering process to occur. Exhibit 6.1 on page 135 shows us that three factors influence this filtering process: (1) characteristics of the the perceiver, (2) the situation and (3) the target.

Mental models are road maps we use to make sense of the world and maintain a level of control or stability and predictability in the face of so much stimuli. These mental models are our broad world views or ‘theories-in-use’ that guide our preferences and behaviours. These mental models help us make sense of the environments in which we inhabit but can also blind us to seeing the world in different ways. There are several theories which deal with this process. These include Attribution theory, stereotyping and self-fulfilling prophecy.

Attribution theory

While perception is described as a process in which people receive, organise and interpret information from their external environment, attribution can be seen as a subcategory of the general process of perception. This subcategory has to do with the perception we have about the reason or cause behind a person behaving in a particular way. While we can observe the actual behaviour of a person, we have no direct way of knowing the reason for their behaviour, since we cannot look inside another person’s head. At the same time, if we have no idea of the reason for someone’s behaviour, we would have difficulty in deciding how we should react to their behaviour. We tend, therefore, to make up an explanation or interpretation as to why someone is doing what they are doing. This explanation or interpretation is called ‘attribution’. Attribution theory attempts to explain how we go about deciding the cause of someone’s behaviour.

According to attribution theory, whenever we observe someone’s behaviour, we usually attempt to determine whether that behaviour was caused by a factor internal to that person, i.e. that person’s personality, or whether it was caused by some external factor influencing that person. For example, suppose that you are driving on the road, and the driver of the car behind you is tailgating you. Why is he doing that? We have no way of knowing for sure, but there are two likely possibilities. One is that he is an aggressive (if not rude) driver, who likes driving as fast as possible, even if it might mean endangering other drivers. The other possibility is that there is an emergency of some sort forcing him to drive faster than he would prefer.

If you interpret his behaviour as being caused by the first factor (his aggressive personality), you are said to use internal or dispositional attribution. If you interpret his behaviour as being based on the second factor (a specific emergency facing him in this particular situation), you are said to use an external or situational attribution. In the example of the tailgating driver, you have no other information to help you to decide which of the two types of attribution you should use, and your choice would depend mostly on your own personality background On the other hand, if the other person is someone you have known for a while, in various situations, your attribution will be influenced by three factors called distinctiveness, consensus and consistency. Now let’s focus on a particular aspect of attribution theory, known as the fundamental attribution error.

The fundamental attribution error

The important point is to notice that we all tend to make what psychologists call the fundamental attribution error (p. 136). This means that we tend to use the internal or dispositional attribution far more frequently than justified by data, and use the external or situational attribution far less frequently than justified by data. Psychologists have come to this conclusion based on a number of laboratory experiments in which subjects were given varying amounts of information about someone’s behaviour and were asked to make a judgment as to why the person was behaving that way.

Here is an example of such an experiment. You are told that you are a supervisor and that Lee, one of your subordinates, has come to work late today. You are then asked to indicate what action you would take about this. In this situation, you are very likely to say that Lee should be given a stern warning, because he is probably a person who is habitually late. Only if the experimenter gives you some additional information to indicate that Lee does not usually come to work late, and that he has been having a health or family problem, are you likely to take a sympathetic attitude in your response to him.

As a real life example of this laboratory phenomenon, consider again the tailgating driver. Remember that you don’t really know anything about the driver behind you and why he is tailgating you. Are you more likely to get angry at the rudeness of the driver behind you, or are you more likely to think that perhaps he has some good reason for being in a hurry, and feel sympathy for him? If laboratory experiments which have supported the notion that most of us make the fundamental attribution error are any guide, you are more likely to attribute his behaviour to rudeness and get angry with him.

The difference between dispositional and situational attributions can be indicated by a metaphor. To use a dispositional or personality-based attribution is similar to thinking of a person’s personality as being frozen like an ice cube. Regardless of the container (that is, the situation) in which you put an ice cube, it maintains its shape. The situational attribution, on the other hand, is similar to thinking of a person’s personality as being like water. The water has no shape of its own. If you put it in a round cup, it takes the round shape. If you put it in a square vessel, it will appear to have a square shape. The fundamental attribution error finding says that we tend to think of people having rather stable personalities, like ice cubes, and don’t pay enough attention to the situation which is ‘shaping’ the person to behave in a particular way.

Note that the fundamental attribution error happens primarily when we are making judgments about other people’s behaviour, rather than our own. When it comes to our own behaviour, we tend to attribute its cause to the impact of specific situations. For example, if you are late for work, you will probably mention to your boss that there was an unusual traffic jam on the way today. Another interesting finding about looking at our own behaviour is that if we are successful, we are likely to take credit for the success, but if we are unsuccessful, we will tend to blame the circumstances. This is called the self-serving bias, as mentioned on page 137 in the text.

Problem solving

One of the key aspects of a manager’s job is to discover, define and solve problems. As indicated in Exhibit 6.3 on page 141, in a rational choice decision situation, a problem appears in a clearly defined form. However, not all problems are easy to identify nor is it always obvious whether a problem exists at all.

If we are to identify what the problem is in a given situation we first need to be clear about what we mean when we use the word ‘problem’. Now while we all use the word ‘problem’ several times in a typical day, it turns out that defining that word is not that easy. This is because we tend to use that word in different contexts to mean different things. It also seems to be the case that different people may view the problem in a given situation in different ways, and some people may not see a problem at all. As a text argues, ‘One person’s problem is another person’s satisfactory state of affairs’ (p. 140). This means that problems, like attributions for someone’s behaviour, may be matters of perception, and we may thus be liable to commit various perceptual errors when perceiving (and therefore solving) a problem.

In the very last section of your previous reading (from the textbook), you will have read that the authors define a problem as ‘a discrepancy between the current state and the desired state – the gap between “what is” and “what ought to be”’ (p. 140). Similarly, the authors implicitly define a problem when they say: ‘Decision making occurs as a reaction to a problem. There is a discrepancy between some current state of affairs and some desired state, requiring consideration of alternative courses of action’.

Could this mean, therefore, that a problem should not always be perceived as a negative; rather it may be perceived as an opportunity to change something which may well result in a better outcome?

Gause and Weinberg (1990, p. 15) define a problem in this way. Their definition is that a problem is ‘the difference between things as desired and things as perceived’. Gause and Weinberg (1990, p. 6) advise that we should ask, ‘Who has a problem?’. This definition of a problem could thus be called a ‘perceptual definition’ because it emphasises the perceptual aspect of a problem. It asks: what is the problem as it is perceived or experienced by some person?

Another definition of the word ‘problem’ comes from a management strategy text by Craven and Lamb (1989), where they describe how to identify a problem in a case. They write:

Identification of the main problem, opportunity, or issue in a case is crucial … A major pitfall in defining problems/decisions is confusing symptoms with problems … Such things as declining sales, low morale, high turnover, or increasing costs are symptoms that are often incorrectly identified as problems … Problems are causes, and symptoms are effects … The key question is WHY? … Keep asking the question WHY until you are satisfied that you have identified the problem (cause) and not just another symptom (effect).

The way that Craven and Lamb define the word ‘problem’ is thus quite different from the way that Robbins et al. (2020) and Gause and Weinberg (1990) define the word. To Craven and Lamb a problem as it is perceived by someone is not the ‘real’ problem; it is only a symptom. The ‘real’ problem from this point of view is the underlying diagnosis or cause which is giving rise to the symptom. In contrast to the ‘perceptual’ definition of the problem, the Craven and Lamb definition may be called the ‘diagnostic’ definition.

The difference between the two definitions of what a problem is can be illustrated with an example. When you go to a doctor and she asks you, ‘What’s the problem?’, you might answer, ‘I have a fever’. This is an example of the perceptual definition of the word ‘problem’. You desire your temperature to be 37 degrees (normal), while your perceived current temperature is 40 degrees, and this difference of three degrees between the desired and current temperatures is the problem as you perceive it.

The doctor is not, however, satisfied with this definition of the ‘problem’. To her, the fever is only a symptom. She is interested in discovering the cause of the fever: for example, is it due to a virus or bacteria and if so which one? It is only by diagnosing the cause of the fever that she can decide on the action to be taken. Her view of the problem is thus similar to that proposed by Craven and Lamb, that is a diagnostic one.

The purpose of our looking at various definitions of the word ‘problem’ is not to quibble about the words used by various authors, or to determine which is the ‘right’ definition but to become aware of the two rather opposite ways in which the word ‘problem’ is used. Perhaps the more useful purpose is to become aware of these two rather opposite ways in which we use the word ‘problem’ and then see which way you are using the word in a given situation.

The manager who defines the problem from a perceptual view will have a different understanding of the situation, and will take a different action to solve it, compared with the manager who defines the problem from a diagnostic view.

Dealing with a problem from the perceptual perspective

The perceptual view of a problem acknowledges that the problem experienced by one person may not be a problem to another person. Also, it does not go into diagnosing the cause of the problem, but simply identifies what is desired and what is perceived as the current situation. Given this identification, and assuming that you are the person experiencing a certain problem, the perceptual perspective suggests that you ask yourself the following questions:

1. Am I the only one perceiving a problem in this situation, or do the other person(s) involved in this situation also perceive a problem (and if so, do they perceive it the same way as I do)?
2. Since I am likely to perceive a problem when there is a gap between my desired state, and the actual state, what is the actual state as I perceive it, and what is the evidence I have to indicate that my perception of the actual state is accurate?
3. Similarly, what is my desired state (or objective) in this situation, and why?

The perceptual view of the problem thus encourages a manager to develop better self-understanding by asking questions like: What are my real motives, and do they make sense? Do I really know whether my perception is accurate? etc.

The perceptual perspective on problems can lead us to ask certain useful questions, and to see how the answers to these questions may give us new insights into the problem. For example, we might see that the problem is of our own making. Or we might see that the action we are contemplating taking is unwise and will cause further problems rather than solve the currently perceived problem. In medicine, there is a phenomenon called iatrogenic diseases, which means diseases which are caused by the medical treatment. The best remedy for these diseases is to leave the medication alone. Similarly, some managerial problems are actually caused by the previous attempts to solve them and are best left alone.

Dealing with a problem from the diagnostic perspective

Of course, it may well be that after the questions mentioned above have been asked and answered, you are still convinced that there really is a problem and it needs to be solved. Here is where the diagnostic perspective comes in. This perspective asks you to think of the causes which have led to the discrepancy between the current and desired state of affairs. Only by identifying these causes can you hope to make decisions which might result in reducing or eliminating the discrepancy. Craven and Lamb help to illustrate this process where the surface problem (the symptom) is that sales are declining. Sales may be declining because morale is low and turnover is high. These effects may be caused by an inadequate compensation plan which is seen to be the fundamental cause behind the sales decline; then the manager will try to improve the compensation plan. The search for causes is thus important, and the diagnostic perspective suggests that until we have understood the causes of certain symptoms, we have not really identified the real problem.

Thus, if we come to the conclusion that there really is a problem with respect to a colleague’s behaviour, then we need to think about the reasons underlying it.

Having understood the reasons, and thus the ‘real’ problem, we may then be able to take some action to bring about a change in that behaviour. Not all problems are of one’s own making. An effective manager will need to take strong action from time to time to overcome resistance and to bring about results.

Choosing between the perspectives of a problem

The perceptual perspective encourages you to see the problem as a gap or discrepancy between what you believe to be the current state of affairs and your desired state of affairs. Before trying to ‘solve’ a problem, this perspective encourages you to take a close look at the problem (i.e. the discrepancy) to see if it really exists. If you investigate the ‘current state of affairs’ and discover that it is not really what you believed it to be, the problem might dissolve itself, and thus need not be solved by you. If you investigate your desired state of affairs, and discover that what you are after is something of a fool’s gold, again the ‘problem’ may dissolve itself.

Taking a close look at a perceived problem requires self-awareness and self-examination, and this can only come about by developing the habit of asking questions of the sort mentioned above. This may seem to be a time-consuming process, but may turn out to be a very efficient process. An ounce of prevention is said to be worth a pound of cure. In the same way, making sure that a problem really exists may be much more efficient than attempting to solve self-imagined or self-created problems.

The diagnostic perspective generally leads one towards taking an action in the external world. The solution from the perceptual perspective on the other hand consists of better self-understanding and changing your attitude toward the problem. The perceptual perspective should perhaps be considered first in case the solution really does lie in better self-understanding. If better self-understanding will dissolve the problem, it is a solution to be preferred, because once you take an action in the external world, it obviously affects other people, and creates the possibility that they will resist or react in some other undesirable and unpredictable way. If this happens the problem may get worse rather than better.

If a problem really does exist, then the external perspective becomes not only useful but essential because it requires the determination of what are the causes and what are the symptoms. In some situations, taking the diagnostic view is relatively safe. For example, if a doctor tries to determine the cause of your fever in order to treat it, you will not normally object to her doing so. Similarly, if a person with a business problem comes to you as a consultant and asks for your diagnosis in order to solve his problem, he would not object to your attempt at finding the cause of the problem.

The tricky situation is when you are convinced that another person’s behaviour is the cause of a problem you experience, and attempt to influence that person’s behaviour in some way. Here, the other person is not experiencing a problem, and has not sought your help. This is the kind of situation which managers are often faced with. Handling such a situation requires considerable skills of communication and persuasion, as we will note later in the unit. If you do not possess these skills, the use of the diagnostic perspective can cause no end of (unnecessary) troubles when it tempts you as the ‘expert’ manager to want to solve someone else’s problem ‘for their own good’, even when they have not asked for your intervention.

The distinction between the perceptual and diagnostic perspectives is particularly useful when dealing with situations in which one person is trying to influence the behaviour of another person. In some subjects like marketing or strategic management this distinction may be less useful. If sales or profits have been falling in a company, for example, it may be appropriate to skip the perceptual perspective, to jump immediately to the why question as suggested by Craven and Lamb, and to consider what actions need to be taken to solve the problem.

Decision making

Having identified a problem, the next step is to decide whether you should focus your energy on solving it. Whether you do so depends on whether you see the problem as being solvable, and worth solving by you (as against by somebody else). The following reading discusses several methods of evaluating and choosing alternatives.

There are two other key points which should be considered when examining decision making in organisations:

1. The manager does not normally act alone, but rather as a member of a team. Further, each organisation has certain norms and traditions. The manager’s decision is often influenced (if not dictated) by views of the team and the organisation’s norms and traditions (Pfeffer 1977). A manager does not have the power of a dictator in most modern companies, and needs to operate and make decisions within the constraints imposed by the expectations and preferences of others.
2. The decision process in many organisations is not necessarily a well-structured or analytical process aimed at bringing about optimal decisions. Decisions often ‘happen’, rather than being ‘made’, and are greatly affected by random and accidental events.

Preparing an action plan

In the previous discussion of decision making, we have assumed that a person has a series of alternatives available from which he or she is to choose one alternative. In real life cases, however, you are likely to make a series of decisions which taken together will form an action plan. The action plan is likely to have some flexibility built into it, so that the action you choose at a certain point will depend in part on what has happened at a previous point.

An analogy for such an action plan is a chess game. A good chess player is likely to have looked several moves ahead in thinking about his or her general approach to a given game with a given opponent. But the actual sequence of moves will depend on what the opponent does from move to move. Similarly, a general will have a certain kind of campaign in mind, but the particular actions taken will depend on the moves made by the enemy from time to time. Good managers, too, are likely to have given some thought to a general action plan in a similar way.

How should one go about preparing an action plan? Here are some suggestions which might be useful to you. They are adapted from a list prepared by Professor Kent Young of Saint Francis Xavier University in Canada. Although they are phrased in terms of analysing a case, and will be useful for that purpose, they are just as applicable when deciding on an action plan in your day to day work. While it would be useful to look through all the steps which follow, keep in mind when writing up a case analysis that some of these suggestions may be less important than the others depending on the case you are analysing.

1. Identify the problem and person

A case usually requires not only identification of the problem, but also of a person who is experiencing the problem. Take the role of this person, then consider why this person perceives the problem the way he or she does.

2. Short- and long-term objectives

Given the information in the case, and using some judicious assumptions as required, distinguish between the short- and long-term objectives you (playing the role of the person you have identified above) would want to accomplish.

3. Identify constraints and opportunities

In attempting to solve the problem, some situational constraints will make it difficult for you to take certain actions, while other actions will be possible due to your role and power in the organisation. Identify actions which you can and cannot take due to the constraints you face. Particularly important is to identify the limitations imposed by role expectations and your credibility and power (or lack of power) with key others.

4. Take responsibility

Recognise that you are personally responsible for achieving the objectives, but that you may wish to involve your superiors (or others) for help where necessary and possible. Identify whose advice or help you might seek and what you would do to secure their help. (What is their motivation for helping you?)

5. Effective action

Aim for an action which is ‘effective’ both from the organisation’s and your own point of view. It should accomplish a useful task for the organisation and increase your credibility with important others in the organisation. Avoid actions which are either careerist (saving your own skin as the first priority) or ‘kamikaze’ (taking an action even if you anticipate being destroyed in the process).

6. Small steps

To the extent possible, identify a series of small, careful steps which you could take consistent with the limited information available. The purpose of so doing is to verify your tentative hypotheses about what is going on in the case and what to do about it before taking big or precipitous actions. Be wary of ‘escalating commitment’.

7. Assume positive intentions

In the absence of case data that support a contrary interpretation, assume that the other key players in the case have positive (rather than malevolent) intentions. Remember that how you perceive their intentions can create a self-fulfilling prophecy, either for better or worse. Use a situational attribution rather than a dispositional attribution when you are working from incomplete information.

8. Empower others

Where possible, aim your actions towards working with (empowering) others, rather than using power over others. Keep in mind, however, that ‘power over’ others is a necessary approach when key others are not willing to cooperate.

9. Describe actions specifically

When describing what actions you will take, be as specific as possible. For example, if you need to gain the cooperation or compliance of key others to achieve your objectives, indicate what you would do to gain it. If your action involves saying something to another person (as frequently it will) write down a script or dialogue as to what you will say. It is easy to say that “I will be diplomatic (or persuasive, or straightforward, etc.) in my conversation”, but not so easy to find the right words to express your diplomacy, or persuasiveness, or straightforwardness. Try doing a role play or a rehearsal with a trusted friend before meeting with people who are actually involved in your problem situation.

Evaluating decision outcomes

Of course it goes without saying that decisions and the outcomes of those decisions should be evaluated. However, as the text highlights, decision makers aren’t completely honest with themselves when evaluating the effectiveness of their decisions, a phenomenon referred to as ‘post-decisional justification’.

Summary

Problem solving is a major aspect of a manager’s job, and it will involve making decisions among various possible actions to be taken to solve the problem. A key to solving a problem well is to understand it well before acting on it. A problem can be defined from the perceptual point of view or the diagnostic point of view. Both of these points of view have their uses, although they lead to different kinds of actions to solve the problem.

The perceptual definition of a problem requires the identification of a person who is facing a problem and wants to solve it. This is important because a situation which appears to be problematic to one person might appear to another person to be quite satisfactory. Having identified the person who sees something as being a problem, the perceptual perspective asks: What does this person want and why, and what is this person’s source of information which leads her/him to believe that a problem exists? By a careful consideration of these questions, a person will be able to distinguish between problems which really exist as against problems which are partly created by a poor understanding of the situation. To the extent that problems are partly self-created, no action is necessary to solve them other than achieving better self-understanding and understanding of the situation.

Evaluating a decision is a crucial part of the process, one which many managers do not like to do as this may reveal the true effectiveness of their choice. One way to avoid this dilemma is to include several levels of employees, those who are likely to be involved in achieving the outcome of the decision. By drawing on their ‘expertise’ this can encourage creativity and increase job enrichment, motivation and satisfaction.