FOUNDATION OF DECISION MAKING

FOUNDATION OF DECISION MAKING

1. GROUP DECISION MAKING

   • Many decisions in organizations, esp important decisions that have far-reaching effects on organizational activities and personnel - typically made in groups (committees, task forces, review panels, work teams)
     • ADVANTAGE
       • More complete information
       • Diversity of experiences & perspectives brought to the decision process
       • More alternatives generated due to greater quantity & diversity of information - esp when group members represent different specialties
       • Increased acceptance of solution by having people who will be affected by certain solution and who will help implement
       • Increased legitimacy bcs group decision-making process is consistent with democratic ideals & decisions made by groups may be perceived as more legitimate than those made by a single person (appear autocratic & arbitrary)

2. DISADVANTAGE

   • Time-consuming
   • Minority domination can unduly influence final decision bcs group members are never perfectly equal (differ in rank, experience, knowledge about the problem, influence on other members, verbal skills, assertiveness)
   • Ambiguous responsibility. Group members share responsibility but not for final outcome. Individual Decision (clear) Group decision (not)
   • Pressures to conform: Groupthink - conformity in which group members withhold deviant, minority or unpopular views in order to give appearance of agreement

3. GROUP THINKING

   • Undermining critical thinking in the group
   • Affecting a group’s ability to objectively appraise alternatives
   • Deterring individuals from critically appraising unusual, minority or unpopular views
   • HOW IT OCCUR??
     • Group members rationalize resistance to assumptions
     • Members directly pressure those who express doubts or question the majority ’s views & arguments
     • Members who have doubts or differing points of view avoid deviating from what appears to be group consensus
     • An illusion of unanimity prevails. Full agreement is assumed if no one speaks up
   • HOW IT CAN BE MINIMISED?
     • • Encourage cohesiveness • Foster open discussion • Have an impartial leader who seeks input from all members
   • Hinders decision making & can jeopardize the quality of the decision by

4. WHEN ARE GROUP MOST EFFECTIVE

   • Depends on criteria defining effectiveness - accuracy, speed, creativity & acceptance
   • Individuals are faster at decision making
   • Groups tend to be more accurate, make better decisions, more creative, more effective in terms of acceptance of the final solution
   • With few exceptions, group decision making consumes more work hours than individual decision making does

5. IMPROVING GROUP DECISION MAKING

   • Brainstorming - Idea generating process that encourages all alternatives while withholding any criticism of those alternatives. The group leader states the problem clearly and members “freewheel” as many alternatives as they can in a given time and all alternatives are recorded for later discussion
   • Nominal group technique helps groups arrive at a preferred solution.Restricts discussion during decision-making process: Group members gather but required to operate independently. They secretly list general problem areas or potential solutions to problems
   • Electronic meeting blends nominal group technique with computer technology. People sit around with a computer terminal. Issues are presented to the participants (anonymously type their responses onto their computer screens that are displayed on a projection screen)
     • Advantages - Anonymity, honesty, speed & cost effectiveness. Discussions don't digress & participants can “talk” at once without interrupting others

6. CONTEMPORARY ISSUE

   • National Culture – Influences way decisions made and degree of risk involved
     • Decision variables that reflect a country’s national cultural environment • The way decisions are made (group or team members, participatively or autocratically by individual manager) • The degree of risk a decision maker is willing to take
       • Managers who deal with employees from diverse cultures need to recognize common and accepted behavior when asking them to make decisions. Those who accommodate the diversity in decision-making philosophies and practices can reap the benefits of capturing the perspectives & strengths that diverse workforce offers
   • Creativity allows decision maker to appraise & understand problem more fully, “see” problems others can’t see & identify all viable alternatives
     • Individuals & organizations can stimulate employee creativity by adhering to creativity model (individual creativity requires expertise, creative-thinking skills & intrinsic task motivation
   • Design thinking approach begins with first step of identifying problems
     • Managers should look at problem identification collaboratively and integratively with goal of gaining deep understanding of the situation. Influence how managers identify & evaluate alternatives
       • Opening up perspective & gaining insights by using observation and inquiry skills & not relying on rational analysis
   • Collecting & analyzing big data for data’s sake is wasted effort. Goals needed collecting and using this type of information
     • Managers need to examine & evaluate how big data contribute to decision making before jumping in with both feet (Benefits of capturing perspectives & strengths that diverse workforce offers)