I. HOW DO GROUPS MAKE DECISIONS?
A. Introduction
1. Many decisions in organizations, especially important decisions that have
far-reaching effects on organizational activities and personnel, are typically made in
groups.
2. In many cases, these groups represent people who will be most affected by the
decisions.
3. Managers spend a significant portion of their time in meetings.
B. What Are the Advantages and Disadvantages of Group Decision Making?
1. Individual and group decisions have their own set of strengths—neither is ideal for all
situations.
2. Advantages of group decision making:
a) Group decisions provide more complete information than do individual ones.
b) A group will bring a diversity of experiences and perspectives to the decision
process.
c) Groups also generate more alternatives.
1) Quantity and diversity of information are greatest when group members
represent different specialties.
d) Group decision making increases acceptance of a solution.
e) This process increases legitimacy.
3. Disadvantages of group decision making:
a) They are time-consuming.
b) There may also be a situation in which there is minority domination.
1) Members of a group are never perfectly equal.
2) A minority that dominates a group frequently has an undue influence on the
final decision.
c) There is ambiguous responsibility. In a group decision, the responsibility of any
single member is watered down.
d) Another problem focuses on the social pressures to conform in groups.
1) Irving Janis’ groupthink—a form of conformity in which group members
withhold deviant, minority, or unpopular views in order to give the appearance
of agreement.
2) Groupthink hinders decision making, possibly jeopardizing the quality of the
decision by:
(a) Undermining critical thinking in the group.
(b) Affecting a group’s ability to objectively appraise alternatives.
(c) Deterring individuals from critically appraising unusual, minority, or
unpopular views.
e) How does groupthink occur?
1) Group members rationalize any resistance to the assumptions they have made.
2) Members apply direct pressures on those who momentarily express doubts
about any of the group’s shared views or who question the arguments favored
by the majority.
3) Those members who have doubts or hold differing points of view seek to
avoid deviating from what appears to be group consensus.
4) There is an illusion of unanimity. Silence is assumed as being in full accord.
f) Groupthink can be minimized if:
1) The group is cohesive.
2) It fosters open discussion.
3) Is led by an impartial leader who seeks input from all members.
C. When Are Groups Most Effective?
1. Group decisions tend to be more accurate.
2. On the average, groups make better decisions than individuals—although groupthink
may occur.
3. If decision effectiveness is defined in terms of speed, individuals are superior.
4. If creativity is important, groups tend to be more effective than individuals.
5. If effectiveness means the degree of acceptance that the final solution achieves, then
groups are better.
6. The effectiveness is also influenced by the size of the group.
a) The larger the group, the greater the opportunity for heterogeneous representation.
b) A larger group requires more coordination and more time to allow for
contributions.
c) A minimum of five to a maximum of about fifteen is best.
d) Because five and seven are odd numbers, strict deadlocks are avoided.
7. Effectiveness should not be considered without also assessing efficiency.
a) Groups almost always are less efficient than the individual decision maker.
A Question of Ethics
There’s no doubt that American college sports is a big business, generating billions for colleges
and universities and for the NCAA (National Collegiate Athletic Association), the umbrella
organization that monitors, overseas, and supports these sports programs. The NCAA, which
brought in over a billion dollars in revenue last year, recently reached a $20 million settlement
with ex-football and basketball players who had sued about their likenesses being used in
videogames made by Electronic Arts. This was hailed as a landmark settlement because it’s the
first time the NCAA will pay college athletes for their playing a sport. This reflects an ongoing
issue: should college athletes be paid? Not surprisingly, there are pros and cons to this
decision. And not surprisingly, there are ethical issues associated with the decision.
Discuss This:
•Paying college athletes. Who are the stakeholders in this situation and what stake do
they have?
•How do ethical issues affect decision making and what ethical issues do you see in the
decision about whether to pay college athletes for their time and work?
D. How Can You Improve Group Decision Making?
1. Three ways of making group decision making more creative: brainstorming, the
nominal group technique, and electronic meetings.
2. What is brainstorming?
a) A relatively simple technique for overcoming pressures for conformity.
b) It utilizes an idea-generating process that specifically encourages any and all
alternatives.
1) A half-dozen to a dozen people sit around a table.
2) The leader states the problem clearly, ensuring understanding by all
participants.
3) Members then “free-wheel” as many alternatives as they can in a given time.
4) No criticism is allowed; all the alternatives are recorded.
(a) Brainstorming is merely a process for generating ideas.
3. How does the nominal group technique work?
a) The technique restricts discussion during the decision-making process.
b) Group members must be present, but they are required to operate independently.
c) They secretly write a list of general problem areas or potential solutions.
d) The chief advantage is that it permits a formal meeting but does not restrict
independent thinking.
4. How can electronic meetings enhance group decision making?
a) This approach—called the electronic meeting—blends the nominal group
technique with computer technology.
b) Once the technology for the meeting is in place, the concept is simple.
c) Numerous people sit around a horseshoe-shaped table that is empty except for a
series of computer terminals.
d) Issues are presented to participants, who type their responses onto their computer
screens.
e) Individual comments, as well as aggregate votes, are displayed on a projection
screen in the room.
f) The major advantages of electronic meetings are anonymity, honesty, and speed.
1) Participants can anonymously type any message they want, and it will flash on
the screen for all to see at the push of a board key.
2) It is fast—chitchat is eliminated, discussions do not digress, and many
participants can “talk” at once without interrupting the others.
5. Experts claim that electronic meetings are significantly faster and much cheaper than
traditional face-to-face meetings.
a) Nestle example.
6. Drawbacks
a) Those who can type quickly can outshine those who may be verbally eloquent but
are lousy typists.
b) Those with the best ideas don’t get credit for them.
c) The process lacks the informational richness of face-to-face oral communication.
7. The future of group decision making is very likely to include extensive usage of
electronic meetings.
8. A variation of the electronic meeting is the video conference.
a) By linking together media from different locations, people can have face-to-face
meetings even when they are thousands of miles apart.
b) This has enhanced feedback among the members, saved countless hours of
business travel, and ultimately saved companies hundreds of thousands of dollars.
II. WHAT CONTEMPORARY DECISION-MAKING ISSUES DO MANAGERS FACE?
A. How does national culture affect manager’s decision making?
1. Research shows that, to some extent, decision-making practices differ by country.
2. Two decision variables:
a) The way decisions are made: who makes the decision?
b) The degree of risk a decision maker is willing to take.
3. India – power distance and uncertainty avoidance are high.
a) Only very senior-level managers make decisions, and they are likely to make safe
ones.
4. Sweden – power distance and uncertainty avoidance are low.
a) Swedish senior managers tend not to be afraid to make risky decisions and also
push decisions down in the ranks.
5. Egypt, where time pressures are low, managers make decisions at a slower and more
deliberate pace than managers in the United States.
6. Italy, history and traditions are valued, managers tend to rely on tried and proven
alternatives.
7. Decision making in Japan is much more group oriented than in the United States.
a) The Japanese value conformity and cooperation.
b) Japanese CEOs collect a large amount of information, to build consensus, called
ringisei.
c) Managerial decisions take a long-term perspective.
8. In France, autocratic decision making is widely practiced, and managers avoid risks.
9. Managerial styles in Germany reflect the German culture’s concern for structure and
order, extensive rules and regulations, and managers accept that decisions must go
through channels.
10. Managers who deal with employees from diverse cultures need to recognize what
common and accepted behavior is regarding decision making.
11. Managers who accommodate the diversity in decision making philosophies and
practices can expect a high payoff if they capture the perspectives and strengths that a
diverse workforce offers.
B. Why Are Creativity and Design Thinking Important in Decision Making?
1. Creativity allows the decision maker to appraise and understand the problem more
fully, including “seeing” problems others can’t see.
2. Creativity’s most obvious value is in helping the decision maker identify novel and
useful ideas.
3. Most people have creative potential.
a) They have to get out of the psychological rut.
b) They have to learn how to think about a problem in divergent ways.
4. People differ in their inherent creativity.
a) Exceptional creativity is scarce.
b) A study of lifetime creativity of 461 men and women.
1) Less than 1 percent was exceptionally creative.
2) 10 percent were highly creative.
3) About 60 percent were somewhat creative.
5. Three-component model of creativity – individual creativity requires (1) expertise, (2)
creative-thinking skills, and (3) intrinsic task motivation.
a) Expertise is the foundation of all creative work. The potential for creativity is
enhanced when individuals have abilities, knowledge, proficiencies, and similar
expertise in their fields of endeavor.
b) Creative-thinking skills encompass personality characteristics associated with
creativity, the ability to use analogies, as well as the talent to see the familiar in a
different light.
1) Individual traits associated with the development of creative ideas include
intelligence, independence, self-confidence, risk-taking, an internal locus of
control, tolerance for ambiguity, and perseverance in the face of frustration.
c) Intrinsic task motivation is the desire to work on something because it’s
interesting, involving, exciting, satisfying, or personally challenging.
1) Determines the extent to which individuals fully engage their expertise and
creative skills.
2) Creative people often love their work, to the point of seeming obsessed.
6. Five organizational factors can impede creativity.
a) Expected evaluation—focusing on how your work is going to be evaluated.
b) Surveillance—being watched while you’re working.
c) External motivators—emphasizing external, tangible rewards.
d) Competition—facing win-lose situations with your peers.
e) Constrained choices—being given limits on how you can do your work.
7. Design thinking is approaching management problems as designers approach design
solutions.
a) Many managers do not deal specifically with product or process design decisions
but they still make decisions about work issues and design thinking can help them
make better decisions.
b) Design thinking says that managers should look at problem identification
collaboratively and integrated with the goal of gaining a deep understanding of
the situation.
c) Design thinking means opening up your perspective and gaining. Insights by
using observation and inquiry skills, and not relying simply on rational analysis.
8. What does big data have to do with decision making?
a) Big data is using math modeling, predictive algorithms, and artificial intelligence
software to measure and monitor people and machines like never before. But
managers need to really examine and evaluate how big data might contribute to
their decision making before jumping in with both feet.