Perception and Individual Decision Making

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CHAPTER 5 – PERCEPTION AND INDIVIDUAL DECISION MAKING LEARNING OBJECTIVES After studying this chapter, students should be able to: 1. Explain how two people can see the same thing and interpret it differently 2. List the three determinants of attribution 3. Describe how shortcuts can assist in or distort our judgment of others 4. Explain how perception affects the decision-making process 5. Outline the six steps in the rational decision-making model 6. Describe the actions of the boundedly rational decision maker 7. Identify the conditions in which individuals are most likely to use intuition in decision making 8. Describe four styles of decision making 9. Define heuristics, and explain how they bias decisions 10. Contrast the three ethical decision criteria TEXT OUTLINE I. Introduction A. The Intel Decision Blunder 1. Fall of 1994 2. The executive co-founder and CEO at the time, Andrew Grove 3. The powerful Pentium chip had become the brains in more than 4 million personal computers. 4. In late October 1994, a professor in Virginia discovered a flaw in the Pentium chip. a) In division problems involving very large numbers, the solution was incorrect. b) Intel admitted that it had found the flaw four months earlier and had corrected it. 5. A small but vocal group of customers and computer industry advocates were not happy. a) They wanted Intel to replace all the flawed chips. b) Grove and his executive team approached the issue as an engineering problem. c) They would replace faulty Pentium chips, but only if computer owners could demonstrate that they really needed an extra margin of accuracy. d) Grove considered the issue closed. 6. Consumers were angry. 7. Under pressure, Grove again met with his senior executive group to analyze the problem, and

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