In a broad sense, perception can be defined as the way of seeing and understanding reality. Individuals tend to differ in their interpretations of things, people, and events, which demonstrates that perception is a highly individual feature. People’s view of the world can be affected by such factors as personal preferences, knowledge, expectations, prior experience, or mood. Additionally, physical and social environments, as well as the perceived object itself, are all likely to impact one’s way of thinking. This essay will discuss the role of perception in decision-making and explore individual and organizational characteristics that shape the process of choosing between various alternatives.
Perception and decision-making are closely connected. When choosing one option over the other, people typically consider all the available information, weigh the costs and benefits of each decision, and pick the best course of action. For instance, Shepherd, Williams, and Patzelt (2015) note that entrepreneurial choices are commonly affected by perceptions of environment, opportunities, risk, and urgency. Entrepreneurs also differ in their self-perceptions (e.g., perceived identity or ability levels), which might or might not encourage them to establish a new business. Moreover, evaluations of the environment and one’s abilities can change with time, influencing further decisions on whether to abandon a venture or continue with it. Thus, perceptions often act as the antecedent of the decision-making process.
Individual differences play an important role in how people make their decisions. According to Jackson, Kleitman, Stankov, and Howie (2017), cognitive abilities, monitoring output, and control thresholds all contribute to the decision-making behavior. While cognitive abilities determine the decision accuracy, monitoring output affects confidence in one’s choices and consequent decisiveness. At the same time, control thresholds, which depend on both individual differences and external conditions, help to weigh potential gains against potential losses and decide whether to carry out the chosen course of action. Taken together, the three factors can be used to predict such qualities of the decision-making process as competence, optimality, recklessness, and hesitancy.
The decisions people make at work also depend on the organizational context. Corporate culture often requires individuals to act in a certain way, which imposes constraints on the decision-making process and can lead to poor choices. For example, Ceschi, Costantini, Phillips, and Sartori (2017) report that within organizational settings, decisions appear to be guided by the logic of appropriateness, which favors the options that correspond to the established norms. The use of such a heuristic in the decision-making context causes individuals to forgo logical comparison of alternatives and depart from rational decision strategies. Furthermore, people tend to give preference to old and tested approaches instead of looking for new solutions and settling on satisfactory results without seeking the options with higher expected value. Therefore, the decisions made in the work environment are rarely aligned with individuals’ choices between similar alternatives in other domains.
Perceptions of one’s environment, as well as self-evaluations, constitute an important prerequisite of any decision-making process. Several personal characteristics, such as cognitive styles and mental control, influence the way individuals make their choices and result in either risky or well-considered decisions. In addition, people rarely engage in decision-making in an isolated context, which means that their surroundings have an impact on the way they consider and choose between the alternatives. Organizational culture can lead individuals to make suboptimal decisions that correspond to certain norms and expectations prevalent at work.
Ceschi, A., Costantini, A., Phillips, S. D., & Sartori, R. (2017). The career decision-making competence: A new construct for the career realm. European Journal of Training and Development, 41(1), 8-27.
Jackson, S. A., Kleitman, S., Stankov, L., & Howie, P. (2017). Individual differences in decision-making depend on cognitive abilities, monitoring and control. Journal of Behavioral Decision Making, 30(2), 209-223.
Shepherd, D. A., Williams, T. A., & Patzelt, H. (2015). Thinking about entrepreneurial decision making: Review and research agenda. Journal of Management, 41(1), 11-46.