Perception and individual decision


The organization was Intel, the World’s largest computer chip maker .And the executive in question was its co-founder and CEO at the time .,Andrew Grove. A year earlier ,Intel had introduced the powerful Pentium chip. It had quickly become the brains in more than 4 million personal computers.

In Oct, 1994, a professor discovered a flaw in the Pentium chip. In division problems involving very large numbers, the solution was incorrect A trade publication a found the flaw four months earlier and had corrected it. A small but vocal group of customers and computer industry advocates was not happy with that response They wanted Intel to replace all the flawed chips. Grove attacked the issue as a big challenge and consider it as an engineering problem. They broke it down into smaller parts, analyzed it rationally , and came to a conclusion. Later, the company had decided it would refuse to guarantee replacement chips for all customers. It would replace faulty Pentium chips, but only if computer owners could demonstrate that they really needed an extra margin of accuracy The company argued that most users would encounter an inaccurate answer just once in 27,000 years. Grove considered the issue closed.

But consumers were angry because they didn’t wanted a flawed product Many people who bought computers with the Pentium chips wanted a replacement regardless of whether they did complex calculations. Grove wanted to analyze the problem. After meeting they decided to hold the ground They described the flaw as � minor�. Grove insisted that the odds were 9 billion to I against the Pentium chips causing a mathematical error.

In 1994, Intel announced that it would replace all flawed Pentium chips for free, no questions asked. The company spent $475 replacing those faulty chips. Grove describes his decision not to replace the flawed chips as �an enormous mistake�

Grove made a blunder because he responded like an engineer. He treated the flaw as a technical problem, not a consumer problem. From a technical standpoint ,logic and reason would argue that there was no need to replace all flawed chips since the flaw affected so few users What Grove failed to grasp was that who bought the flawed chip felt taken advantage of They had paid for a perfect chip and didn’t get one .Grove’s position came across as condescending and arrogant The engineering mentality that Grove had bought him technical problems Making decisions is a critical element of organizational life

What is perception, and why is it important?

Perception can be defined as a process by which individuals organize and interpret their sensory impression in order to give meaning to their environment .However, what one perceives can be substantially different from objective reality .It need not be, but there is often disagreement .For example, it’s possible that all employees in a firm mat view it as a great place to work—favorable working conditions ,interesting job assignments, good pay , an understanding and responsible management –but, as most of us know, it’s very unusual to find such agreement

Why is perception important in the study of OB?

Simply because people’s behavior is based on their perception of what reality is, not on reality itself. The World as it is perceived is the world that is behaviorally important.