What is Organizational Behavior - Assignment Example

Type Here Topic: Organizational Behavior Answer no Elaine could you the attribution theory to explain why Marc erredin the project. Marc has done very well in the last few projects of the same type and from this information it could be concluded that Marc is normally a very cautious workers. His performance has also been very good and that is why he’s elevated to the top position of the finance department. Now, if we analyze the situation from the lens of attribution theory, we can conclude that Marc has not erred due to the internal attribution i-e he did not perform badly because he lacked capabilities or because he wasn’t the right person for the job. Instead, he erred due to the external attribution or outside factors such as, luck, poor team given to him or any other factor that might have influenced this project other than Marc’s expertise or aptitude for the project. Looking at Marc’s consistency and his past records, Elaine should infer that the project failed due to external attribution and not due to any internal attribution. There would be some errors that would be involved in the decision making process that takes into account the attribution forces. Elaine might overestimate or give more importance to the internal causes if in her opinion Marc hasn’t given his 100% for the project. In this case she would ignore other factors such as proper team was not given to him or any other factors such as bad working environment of the firm that might have contribute to the failure of the project. Similarly, another very natural reaction for her would be to say that Marc was solely responsible for the error and would taker herself out of the blame, whereas if the project would have been successful, she might have credited the entire organization not just Marc for the success. These are some of the attribution errors that Elaine would have to be wary of. Answer no: 2 The three perception errors that we can use are: 1) Halo Effect: It is when we look at good qualities (or bad) of a person in one category, we tend to apply it to all the people in that category. For example, If a supervisor has seen or encountered a employee who is lazy and abhors work, he may think that all employees are lazy and hate work. This would lead to a judgment error and could lead to other organizational problems. 2) Recency effect: This occur because managers and people tend to remember the latest things more than the past performances or record. For example, if an employee is always on time and get late for work one day. Then the managers will think that he always comes late and may scold him for that. 3) Contrast Effects: It occurs when we try to arrive at a decision by contrasting two things on the basis of their qualities (The may include the employees and mangers as well). For example, the CEO may contrast the managers of two departments on the basis of their performance and decide which one is better. However, this could lead to perception error because one manager might be better than other but low on profitability because he may be operating a branch in the area, where market share is low, demand for the product is low or it may be because he may be working with a team which is not as efficient as the other manager’s team. Answer no: 3 The three decision making errors could include: Biases: That is making a decision on the basis of your likeliness rather than the profitability or performances of the operations. A business manager might invest in a certain country, not because it is profitable but because he may have emotion attachment to the place like his birth-place. This would lead to a decision making error as it would not be good for business. The other error could be intuitions. This is when managers take certain decision, just because they want to take without assessing the pros and cons of this decision. For example, A CEO might think that certain product might not be successful and he stops its development. This may not lead to a good decision because no market research has been done to assess the success of that product and it has been withdrawn just on the intuition of the CEO. Another decision making error could be organization constraints. Although, a manager might want to expand the firm, he may find capital constraints and this would hinder the progress of expansion. This is a decision-making error because the firm is not been able to expand because of the constraint of a certain resource. Answer No: 4 The economic global down-turn which hit the world in the last quarter of 2007 was probably the most severe crisis that the economists witnessed since last decade. This crisis continued till 2008, matured and gnawed the world economy. Many arguments were given about how this financial crunch started. Many people argued that it was started by the booming oil prices, whereas other people stated that this crisis is a result of poor economic policies of IMF and World Bank which overheated the global economy and resulted in the financial crunch. Whatever the reason of this crisis, one can almost be sure that this crisis has affected subprime mortgages, declining house prices and caused investor bankruptcy. It was result of huge bubble that was created when Fed brings interest rates down to 1% in the wake of September 11 terrorists attack, This created huge credit crunch as investors thought this interest rate was too low and took their money out of the bank. This left the banks with less money to pay back to their account holders as most of the money was invested. As a result, Banks had to borrow from other expensive sources at high rates on interest. Behavioral economics would have predicted the result of lowering down these interest rates and would have stopped the Federal Reserve from taking this measure. Fed would have used other policies likes Fiscal policies rather than playing with the interest rates. This reduction in interest rate moved the people to invest in other investments such as collateral debts. The demand for these types of debts increased and as a result banks decided to invest more in mortgages. When they could not find new borrowers they gave facilities like no documents required loans. This resulted in investments getting more risky and some of these people could not pay their mortgages interest on time. This resulted in less money coming into the economy and disappearing in the bubble of credit. Behavioral Economics would counter the problem by not lowering the interest rates in the first phase, so that people would have earned sound profit on their investments in the Treasury bill. It would have also combated the problem by forecasting the effects of sub-prime mortgages and would have easily solved the problem. (Jarvis 2009) Reference List Jonathan Jarvis. Economic Crisis Visualized. 2009 January http://vimeo.com/3261363 Read More