Topics: Decision making, Attribution theory, Perception Pages: 86 (20857 words) Published: February 19, 2013
After studying this chapter, you should be able to:


Define perception and explain the
factors that influence it.


Explain the link between
perception and decision making.



Explain attribution theory and list
the three determinants of



Contrast the three ethical decision


Identify the shortcuts individuals
use in making judgments about

Apply the rational model of
decision making and contrast it
with bounded rationality and

Explain how individual differences
and organizational constraints
affect decision making.


List and explain the common
decision biases or errors.


Define creativity and discuss the
three-component model of

ISBN 0-558-97987-4

Organizational Behavior, Fourteenth Edition, by Stephen P. Robbins and Timothy A. Judge. Published by Prentice Hall. Copyright © 2011 by Pearson Education, Inc.


and Individual
Decision Making
Indecision may or may not be my problem.
—Jimmy Buffett


ISBN 0-558-97987-4


hen you think about the roots of creativity
and innovation, you might imagine pure
inspiration, that singular Eureka! moment
that’s more artistic (right brain) than analytical (left
brain). In reality, though, the division between art and
analysis is mostly false, as Google’s process for making
creative and effective decisions illustrates.
Nicholas Fox, director of business product management, is a critical member of Google’s creative culture. However, like many at Google, he is an extraordinarily
analytical thinker.
A key part of Google’s profitability is advertising
revenues: it earns about $2 million in ad revenues per
hour. Google sells ads through a complex auction system. For every aspect of an ad’s placement and order, Fox runs an analysis to determine how each variable affects user behavior, advertisers, and Google’s revenue. Fox, a soft-spoken 30-year-old with a degree in economics and past experience at management consulting powerhouse McKinsey & Company, has been at Google

since 2003. He believes the secret to Google’s success—
it not only sells many more ads than its main rivals Yahoo
and Microsoft but it also earns 60 to 70 percent more ad
revenue on every search—rests on its ability to make intricate and fast adjustments, which in turn are based on the fact that Google “measures just about everything.”

Fox and Google don’t rest on their laurels, either. At
the height of the company’s growth in number of
users, Fox and others thought revenue-per-click was
too low. So Fox, along with chief economist Hal Varian
and principle engineer Diane Tang, devised complex
ad-pricing schemes whereby they charge advertisers
rates based on a “quality score”—an algorithm of the
ad’s ability to generate positive reactions among
Google’s users. Google will even advise advertisers
about how to increase their quality score (without, of
course, giving away the secrets of its algorithm).
Google’s culture is unique, but its successes suggest that if more organizations decided to blend creativity and analysis, they too would be more effective at innovation.
How has Google’s unusual approach to innovation
fared during the recession? CEO Eric Schmidt remarked,
“Innovation has nothing to do with downturns.”1
As the Google example shows, decision making
and creativity—the subjects of this chapter—are often
linked. Decision making is often intuitive, and creativity is often the product of analysis.We begin with a factor that feeds into both: perception. In the following Self-Assessment Library, consider

one perception, that of appropriate gender roles.

Organizational Behavior, Fourteenth Edition, by Stephen P. Robbins and Timothy A. Judge. Published by Prentice Hall. Copyright © 2011 by Pearson Education, Inc.

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