Issues Of Group Decision Making Commerce Essay

Decision making nowadays plays an important role in the organizations. Important decisions must be made by an organization during its life-cycle in order to survive and progress. Usually decision making is not an easy process for organization since it demands quantitative and qualitative skills by the decision makers: “Decision making is a dynamic process: a complex search for info, full of detours, enriched by feedback from casting about in all directions, gathering and discarding info, fuelled by fluctuating uncertainty, indistinct and conflict concepts”(Zeleny,1982,pg.86). Many researches have been taken to assess which method is most effective at doing accurate decisions: groups or individuals. Therefore the aim of the essay is to consider the process of decision making and to examine both ways of making decisions and give its opinion on which method to rely our decision making.

Models of decision making

“Decision making is not an event, it’s a process” (Garvin D. and Roberto M., 2001, p.2). So there are 3 models of decision making: a) the rational model, b) Simon’s normative model and c) the Garbage can model. The rational model involves a four step model used to make logical and optimum decisions: a) indentifying the problem, b) generating alternative models, c) selecting a solution (by evaluating alternatives in terms of feasibility, ethics and effectiveness) and d) implementing – evaluating the solution. With this model managers are objective and have all the required and desired information to make decisions (Kreitner and Kinicki, 2001). This rational model indicates the way that decision makers should approach a problem and solve it by making the correct decision, but actually this is not always the case. Decision makers actually find it difficult and challenging to make logical and optimum decisions, their decisions are affected by emotions.

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The other two irrational models indicate how managers actually do decisions. Simon’s normative model indicates the method that a decision maker actually uses in order to solve a problem. The main issue of this model is that decision making is characterized by (a) limited information processing due to bounded rationality and failure to evaluate possible alternatives, (b) the use of judgmental heuristics (both representative and availability)- rules of thumb that limit quality of decisions by reducing demands of input data when making a decision and (c) satisficing -decision makers find the most satisfactory decision, not the optimal due to constraints faced (Kreitner and Kinicki, 2001). The other model is the garbage can model that indicates that “organizational decisions are consequences of intersections of problems looking for solutions, solutions looking for problems, and opportunities for making decisions” (Huber, 1982, p. 4).

The dynamics of decision making

The decision making dynamics, which decision makers assess in order to improve their decision making effectiveness and evaluate alternative solutions to a problem, are: contingency considerations, decision making styles and problem of escalation of commitment.

Contingency considerations refer to the 3 different strategies that can be used when selecting a solution: a) aided-analytic in which a decision maker uses specific and sometimes scientific tools in order to reach a solution, b) unaided analytic in which a decision maker choose a solution based on information available and does not research for any new and c) non analytic in which decision makers use specific rules in order to reach a decision.

Choosing a strategy depends on two variables: a) the characteristics of the decision task and b) the characteristics of the decision maker. The characteristics of the decision task depend on the characteristics of problem that is handled such as unfamiliarity, ambiguity, complexity, instability and also the characteristics of the environment in which the decision will take place such as irreversibility, significance, and accountability and time-money constraints. Normally the harder and more challenging the constraints that a problem requires or the more unstable the environment, the more likely that an aided analytic will be used and so help the decision maker to reach quality decision to a problem. However it can be argued that time or costs available may prevent the decision maker from using aided-analytic whatever the nature of the problem or environment since the costs involved using aided approach may outweigh the benefits of the quality decision. Moreover, if time pressure exists then decision maker may use the other two types which may provide quicker solutions. In addition the characteristics of the decision maker have to be assessed. Less skilled or motivated decision makers may not be able to use aided analytic due to its scientific nature. Therefore all must be taken into consideration before deciding which approach to use.

A decision making style indicates the relationship of how an individual identifies and responds to information and depends on two dimensions: a) value orientation which indicates the value that decision makers place on decisions, whether social – people or task -technical concern and b) tolerance for ambiguity which indicates whether the decision maker need control or structure in his/her life (Kreitner and Kinicki, 2001). These relationships -combinations of the two dimensions give rise to four (4) styles of decision making: a) directive, b) analytical, c) conceptual and d) behavioral. Decision makers that have directive style tend to be efficient, practical, and autocratic with task -technical concern and low tolerance for ambiguity. Those that have analytical style are careful, need a lot of time to reach a decision by overanalyzing it and therefore they have high tolerance for ambiguity and are task-technical oriented. Decision makers with conceptual style takes more risks, are creative, idealistic and able to find many alternative to solutions and so are social-people concern and have high tolerance for ambiguity. Finally, decision makers with behavioral style are sociable people who can build up relationships and cooperate with other people. Therefore are social-people concerns and have low tolerance for ambiguity. It is possible to suggest that based on researches made, decision makers may have more than one decision making style and this may depend on the country situated, the job level and job. For example decision makers in China tend to have directive style while decision makers in USA have both analytical and conceptual style (davison, 2007???). Knowledge of the different styles of decision making is important since it helps you realize your abilities for improvement, influence others and be aware of how other decision makers do decisions (Kreitner and Kinicki, 2001).

The final issue of decision making dynamics is the one of the escalation of commitment which can be found in both individual and group decision making. It is more than a psychological issue since decision makers keeps favor decisions or plans despite that are proved to be not so successful or even a failure. An example is the American strategy and decisions in Vietnam where they continue to support their initial decision even though it was proving to be the wrong one (teger, 1979). This may occur due to ego defense and individual motivations and the fear of failure which drive decision makers to continue supporting their decisions despite any negative indications (Kreitner and Kinicki, 2001). Also may occur due to the sunk costs trap which makes managers think that costs already paid for a decision are too large to just abandon it (Hammond, Keeney and Raifa, 1998). This can lead to poor decision making. Many steps can be done towards reducing it: a) ”inducing decision maker to examine decisions in a more independent manner” (Bazerman, Giuliano and Appelman, 1984, P.151), b) generate feedbacks and evaluations of the effectiveness of the decision, c) set benchmarking in order for comparisons between decision to be evaluated frequently and easily, even though it can be argued that setting benchmarking is a difficult and not accurate task and d) if a group makes the decision, then its members not to be too “ego-involved” which may affect the group negatively. However no to be so isolated since it can be suggested that this may make them feel unimportant and not care a lot about the decision which will adverse affect the group’s effectiveness.

Assess group decision making effectiveness

Groups traditionally were formed in order to make important decisions. According to Tuckman model, 5 stages where involved: forming, storming, norming, performing and adjourning. According to many authors (Maier 1967), the main advantages of group decision making are: 1) groups can possess greater knowledge than individuals. However it can be argued that nowadays sharing and learning is encouraged inside organizations increasing explicit (easily written down, easily shared) and tacit (gained from experience ,hard to share) knowledge among employee and so able them to make better decision whether as a group or individual 2) groups are able to generate and evaluate more alternative and innovative solutions to a problem, 3) individuals in a group feel more confident, satisfied and supportive about a decision as members of a group and so able to accept it rather being isolated, 4) group decision making process tend to act as political and communication function, 5) group provide training grounds for less experienced individuals members (Kreitner and Kinicki, 2001). In addition groups guarantee a larger percentage of correct solutions than individuals (Shaw M, 1932), even though it can be argued that a fully skilled and educated with all available knowledge individual can make correct decisions more frequently. This is argument is stated by a group member in an article (Wetlaufer, 2001, P.25): “brilliant ideas come from brilliant individuals, who then inspired others in organization to implement them”. Furthermore, group decision making can work on complex task and implement complex decisions (lecture notes). Moreover groups are better at solving problems than individuals since they may share the same conceptual system which assist them at choosing the best solution [Laughlin (1980, 1999), kerr n and tindale r, 2004]

However a lot of reviewers suggest that problems associated with group decision making have to be taken in mind and reconsider this view. A big liability against group decision making is that is slower than individual decision making which can be a big disadvantage when time pressure exist. However this can be argued to be not totally correct, since many research studies has shown that actually groups are not slower. A study (Morgan and Blinder, 2005) in the field of monetary policy committee (MPC) shows clearly that groups are not slower than individuals at making decisions. Moreover, group decision making is criticized to involve compromise which affect negatively the quality of the decision. But it can be argued that the advantages as discussed previously show that groups provide more optimal decisions. This view is supported by the study of MPC that groups actually do better decisions by individuals without demanding more information (Morgan and Blinder, 2005). In addition, minority domination may occur in group decision making where one member may affect the other’s opinion and dominate the group, mainly due to psychological fusion – “failure of one person to separate himself from the words /actions of another” (Wetlaufer, 2001, P.34). Furthermore, being reliant on group decision making may prevent manager’s ability to respond instantly and determinedly if is needed (Maier, 1967). Also satisficing as discussed previously is a drawback as well as goal displacement which occurs when primary goal is subsumed to a secondary goal (Kreitner and Kinicki, 2001).

To continue with, other important issues affecting groups making decision effectiveness are: groupthink, group polarization, social loafing, uniformity pressures and conflicts.

Groupthink is a “group’s unwillingness to realistically view alternatives” (Corbett and Robert, 2009, p.128) and so force group members to conform to group decision. This is lead to supporting a not functional decision and the evaluation of decisions inside the group is low. Groupthink increases with cohesiveness which in turn is increased if collaborative working exists in a group, members share the same characteristics or co-operation is highly encouraged, even though cohesiveness is not always the main reason for groupthink. Symptoms of groupthink which affect negatively group decision making as listed in a study (Robotham D, 2008) are: a) invulnerability, when members feel sure that their decision are correct and no alternatives are considered ignoring any negative signals from outside, b) stereotypes meaning that group reject any views or opinions from outsiders, c) pressure on group member who may disagree with group decision to conform with group and stop questioning, d) self-censorship which force members to decide themselves not to disagree or oppose group’s decision, e) unanimity which makes the members to have the illusion that all members agree and so not encouraged to oppose group decision. All this affect negatively the decision making by : a) generating fewer alternatives, b) No reexamination of preferred alternatives,c) No reexamination of rejected alternatives,d) Rejection of expert opinions,d) Selective bias of new information, e) No contingency plans(Corbett and Robert, 2009, p.128). A famous example is the Bay of Pigs invasion decision which was affected by groupthink (Garvin D. and Roberto M., 2001).

On the other hand, it can be argued that groupthink can be overcome and not affect negatively decision making if all members are encouraged to state their own opinions and criticize any decisions, to add to the group constructive criticism from outside qualified people or divide group into sub groups to reach suggestions to a problem and then all sub groups meet together to evaluate suggestions (Robotham D, 2008). Moreover, introducing accountability in groups can decrease overestimation of the group, conformity pressures, disregarding relevant information and can encourage members to say their opinion (Kroon, Kreveld and Rabbie, 1992). It must mentioned that Individual accountability within a group should be prefer to collective accountability since the latter can lead to diffusion of responsibility(Kroon, Kreveld and Rabbie, 1992). In addition, groups usually chose the solution supported by the majority of the group regardless if groupthink exists or not (Whyte, 1989). Overall, by overcoming groupthink, group decision making becomes more attractive than individual one for the organization to rely on.

Group polarization occurs when group members take more risk at making decisions as a group rather than they would have taken as individuals. Therefore group decision making is chosen over individual decision making if problem involves risky characteristics. However there is some evidence that a group may force individual member to more moderate decisions (Kocher M and Sutter M, 2005- Moscovici, 1985) rather than riskier.

Social loafing occurs when as group size increases, individuals members of a group decrease their effort because they consider their partners to loaf, their contribution is not appreciated and the task is not motivating (Kreitner and Kinicki, 2001). Social loafing may encourage organization to move towards individual decision making. However it can be argued that social loafing can be prevented in groups by rewarding individuals for their performance and support to group decision, sufficient time allowed to each member to review the problem and develop its opinion and then express it during group discussion (Rogelberg, Barnes-Farrell and Lowe, 1992).

Uniformity pressure may occur in groups when a member may influence other to conform or make the other to feel uncomfortable to express their opinion and so conform to group decision. This also may occur due to normative social influence and informational influence. Normative influence creates conformity through the desire to conform to others expectations while informational influence is when one member relies on other member to obtain information about reality (Whyte, 1989). These influence lead also to group polarization as it was discussed previously.

Also, conflicts may arise between groups due to members’ different personal goals or perception about a problem called intra-group. Conflicts can be damaging to group decision making. Also interpersonal conflict exists which can affect individual decision making However it is possible to suggest that conflict is desirable since allows members to counter any opinions, allow more alternatives to be developed and so diminish groupthink symptoms. So an optimal level of conflict may be aimed in order to help group reach an optimal decision.

All these issues affect negatively the group decision making effectiveness. If tackle effectively, group decision making can be more effective than individual decision making.

To continue with, to increase effectiveness of group decision making several variables must be taken into account (Aamodt, 1990): a) group cohesiveness: the more cohesive the group, the more effective a group. However as discussed previously too much cohesiveness may have adverse effects on group performance. If group performance is poor and low cohesiveness exists, then performance may not be so poor, b) Group homogeneity: whether group members may share same characteristics or not. A balance must be achieved since homogeneity makes it easier for group members to co-operate but limits innovation and creativity, c) stability of membership is important since increases trust among group, increases cohesiveness and therefore group performance, d) outside pressure may force groups towards a specific decisions. However it can be suggested that outside pressure may have adverse effects and cause members to do exactly the opposite than the outside indicates, e) group size affects cohesiveness. A small group increases trust and bonds between members, increasing group performance. However it can be said that group size effects may depend on the type of task that has to be handled. Moreover, it can be argued that a bigger group size may lead to higher transaction costs which may outweigh the benefits (Kocher and Sutter, 2005). Usually a 5-9 member group is the desired. f) if group status is increased, then members feel important and more confident at making decisions, g) group roles should be given according to each individual ‘s characteristics and skills and be clearly set out. This will avoid any role conflict, ambiguity and overload which harm group effectiveness and h) group composition and structure should be appropriated set. A diverse composition helps in complex problems. Also women in groups reach consensus decision easier than men.

Moreover, group problem solving techniques exist to overcome problems associated with group decision making: brainstorming, Delphi technique and nominal group technique. In general members of a group must be able to listen to all members, argue all opinions, avoid “horse trade”, voting or majority rule may be avoided since may cause “fights” among the group.

Brainstorming is the process of generating multiple and alternative solutions, evaluating them and increase creativity of a group by writing down as many ideas as possible, everybody should say its idea, avoid criticizing any opinions before members expressing them finish their thinking (Kreitner and Kinicki, 2001). It can be argued that brainstorming effectiveness may be limited due to “an unwillingness to contribute idea due to evaluation apprehension” (kerr n and tindale r, 2004, p. 627) and therefore this unwillingness should be avoided also.

The nominal group technique generates and evaluated ideas. It improves group decision making by a) separating brainstorming from evaluation, b) encourages all group members to express their view equally and c) using scientific techniques in order to reach consensus (Kreitner and Kinicki, 2001). It is fast, generate unique ideas and greater decision making satisfaction (van den ven, 1974 ?)

The third way is using the Delphi technique which involves gathering all group members’ opinions via the internet or questionnaires without any personal contact and evaluating them in order to reach a decision. It is effective, no pressure to conform exists however it can be criticized as time consuming.

Choosing between individual and group

Group decision making seem to be the most appropriate decision making style in organizations. However which is more appropriate depend on several preferences as discussed in several studies (Aamodt, 1990):

Depend on type of task/outcome desired

If quality is important, then a group may be chosen it can influence, encourage, and support its member. Also provide larger pool of knowledge.

If tasks involve creating ideas, individuals create better ideas on their own and then meet as group. However it may be argued that “the whole is equal to the sum of its parts” and so an effective group can also generate creative ideas comparable to individuals.

If task involve taking chances/risky, then group should be used because of group polarization as discussed previously.

Time pressure – limits. If time is not available then group decision making may be avoided since it can be time consuming. However many researches show that groups can come to decisions quicker.

If climate is competitive then individual should be used while if it is supportive a group decision making should be used ( lecture notes).

If able to spot an individual who possess all the appropriate skills and may not be able to perform in a group, then individual decision making should be use. If individuals do not differ a lot, then a group of them can improve the quality of decision made.

Actually as discussed in the beginning of the essay, group and individual decision making share the same procedure of reaching a decision, however their outcomes may differ. According to researches taken, some points that assist the evaluation of group and individual decision making in order to choose the appropriate one has as follow:

Group can set up objectives more effectively than individuals, since they possess greater knowledge database. But it can be argued that if one individual possess most of the knowledge database, then he can himself set the objectives and actually set them out more accurate without any conflicts.

Individual can be more effective at spotting out alternatives and solutions than a group as a whole (Stees, 1981 -Harrison, 1975??). But still then may group together to evaluate these and so generate better decisions.

Group evaluation of alternatives is better to individuals one since group has a wider range of viewpoints (Stees, 1981 -Harrison, 1975??).

Group members often lead to greater acceptance of the final outcome (Riggio, 1999?) than from individual. But this may not be considered to positive, if acceptance has been reached due to social pressure to conform.

Individual responsibility is generally superior to group responsibility in implementing choice, since they perform better in carrying out the decisions that group do (Stees, 1981 -Harrison, 1975??). However it can be suggested that a group consisting of responsible and dedicated individuals may implement better than a single individual. Also as Riggio (1999) suggests group members are more committed to action than individual and so may implement better.

Groups are more confident about their decisions than individuals however as discussed previously too much confidence can lead to groupthink (G Hill, 1982??)

“Groups are less rational decision makers than individuals” (Kocher M and Sutter M, 2005, p.202) even though there is a belief that is the opposite. However if individuals selected in a group are not so irrational, then group may prove to be as rational as single individuals at decision making.

According to discontinuity effect, groups are more aggressive – competitive than individuals. This may be advantageous or disadvantageous depending on the situation. However at the same time individuals facing important challenges may respond in relax mood and fail to reach an optimal decision or even respond in panic mood and not be able clearly to take a decision.

Decisions made by the group are not given up easily once chosen (Tuler, 1988). However if decision is false or poor then this may turn to be disadvantage of group decision making.

According to social impact theory, members of group behave differently than in isolation since in a group members try to act in line with the social norm (ambrus , gainer and pathak, 2009). Another theory that must be considered is the persuasive argument one which suggests that the more persuasive members of a group lead the decision towards their own opinion (ambrus , gainer and pathak, 2009).

Groups are more elegant at responding to past evidence and therefore superior in processing feedback (Kocher M and Sutter M, 2005).

According to studies, groups look more in the future and plan about it than individuals (gillet, 2005). However discontinuity effect, as discussed previously, can hammer this forwardlookingness of groups (gillet, 2005).

When choosing group decision making, may take care of the leader of the group. Group decision making is effective when the leader possess the skills to stimulate the group, act as devil’s advocacy to evaluate all opinions and support group to reach a consensus, logical and optimum decision. If the leader possess false or poor knowledge and influence the group towards a poor decision or when he pressure a group to conform to his opinion, then group decision making will fail and an individual decision making should be preferred. Moreover usually power and politics descriptions (Pettigrew,1973 -Pfeffer,1902) suggest that individuals in organizations who posses great power are those that finally influence the decisions (Krabuanrat and Phelps,1998), so inevitably decisions in group may influence by a powerful individual regardless its skills and knowledge level.

Group should be rewarded as a group for a successful decision not individually. This will motivated the group towards a more cooperative process of reaching decisions (lecture notes). In general organizational characteristics like culture, available resources, and structure are important for a group to perform well and be preferred than individual decision making (Kreitner and Kinicki, 2001).

Conclusion

After the discussion above, it can be suggested that despite the problems associated with group decision making, still it is the most effective way to reach correct decisions in terms of quality and commitment. This is because problems associated with group decision making can be overcome as discussed previously and so the benefits outweigh the drawbacks and make groups the most appropriate decision making style. Therefore, the essay’s opinion favors the use of groups and especially the small group process where “clear responsibilities can be assigned and multiple alternatives can be examined” (Davenport, 2009, p.5); Groups with members who cooperate and communicate well, trust each other, share opinions and ideas and reach consensus decisions .it can be also suggested that People in organization prefer to make decisions as a group rather than individually (Sutter m, Kocher m and strauβ s, 2005). However it must be bear in mind that many researches conclude by stating that it cannot be concluded a 100% that group decision making is better than individual one. The situation and each individual must be examined. Moreover nowadays technology has improved dramatically as well as scientific algorithms have been generated which assist individuals to make better decisions. Also electronic groups and computerized brainstorming have been developed while at some instances computer themselves make the decisions especially in hazard environments. Learning is also important nowadays since it makes decision making adaptive to rapid changing environment (Krabuanrat and Phelps, 1998). Organizations themselves must focus on 3 ”C’s” for effective decision making: conflict, consideration, closure (Garvin and Roberto, 2001). Still decision making is a crucial component of organizational management since “bad decisions can damage a business and a career” (Hammond, Keeney and Raifa, 1998, p.2), for example Times Warner buying AOL prove a bad decision that harm the organization (Davenport, 2009). Therefore more researches are coming up in the future.