9/26/2017

Group Decision Making

Group Versus the Individual

Herbert Simons Bounded Rationality Model

Class Activity: Desert Survival Exercise Team decision audit

Pre Read
Ch 6 pg 169-177 and Ch9
Eisenhardt, K.M, 1989, Making Fast Strategic Decisions
in High-Velocity Environments, Academy of
Management 32, 543-576

Group Versus Individual

Rational Decision Making
Define the problem
Identify decision criteria
Allocate weights to the criteria
Develop alternatives
Evaluate alternatives
Select the best alternative
Assumptions for Individual Decision Making Model
Individual has all information and can identify all
options and chooses with best utility

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Bounded Rationality Model

- Herbert Simon

Limited information processing ability to

assimilate all the information and optimize(?)
Complex problem reduced to simple (?)
Did you come to NMIMS by going all thru?
You probably had SATISFYICING solution
We allow cognitive biases to creep in

Decision making
Rational Model, Bounded rationality, Intuition

Common Biases & errors

Overconfidence bias
Anchoring bias
Confirmation bias
Availability bias
Escalation of commitment
randomness error
Risk aversion
Hindsight bias

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Influences of Decision Making

Individual differences
Personality
Gender
Mental ability
Cultural differences

Organizational constraints

Performance evaluation
Reward system
Formal regulation
System imposed time constraints
Historical precedent

Reducing biases and errors

Focus on goals

Look for information that disconfirms your belief

Do not try to create meaning out of random events

Increase your options

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Group Think
Group Polarization
Group Decision Making Techniques

Case:Group Process in the Challenger Launch

Decision A,B,C,D
Pre Read Chapter 9 Foundations of Group
Behaviour

Group Think

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Group Think Symptoms

1.Over-estimation of the group
Illusion of invulnerability
Belief in the inherent morality of the group
2.Closed - Mindedness
Collective Rationalization
Stereotyping of out groups
3.Pressure towards uniformity
Self-censorship
Illusion of unanimity
Direct pressure on dissenters
Self appointed Mind guards

How to Minimize Groupthink

Assign group members the role of critical evaluator

Bring in outsiders with differing opinions

Create subgroups and rotate membership among them

Assign several devils advocates

Provide clear rules to encourage disagreement and
constructive conflict

Encourage an open climate through nondirective
leadership

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Group Shift or Polarization

Group shift is special case of group think
Discussion leads members toward a more
extreme view. Group discussion tends to
exaggerate the initial position of the group
Group MOVE towards greater caution or more
risk depends on dominant pre-discussion norm
Why
Out group
Accountability
Comfortable with each other

Group Decision Making

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Group Decision Making Techniques

Brain Storming
Nominal Group Technique
Delphi
Devils Advocate

Improving Group Decision Making

Devils-Advocate Approach
The group appoints a person to prepare a
detailed counterargument that lists what is
wrong with the groups favored solution and
why the group should not adopt it.
The aim is to ensure
a full and objective
consideration of the
solution proposal.

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Improving Group Decision Making

(contd)
Brainstorming
A creativity-stimulating technique in which prior
judgments and criticisms are specifically forbidden from
being expressed and thus inhibiting the free flow of ideas,
which are encouraged.
Brainstorming rules:
Avoid criticizing others ideas until all suggestions are out on the
table.
Share even wild suggestions.
Offer many suggestions and comments as possible.
Build on others suggestions to create your own.

Improving Group Decision Making

(contd)
The Delphi Technique
A multistage group decision-making process aimed at
eliminating inhibitions or groupthink through obtaining the
written opinions of experts working independently.
Process steps
Identify the problem.
Solicit the experts individual opinions on the problem.
Analyze, distill, and then resubmit these opinions to other experts.
Continue this process for several more rounds until the experts
reach a consensus.

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Improving Group Decision Making

(contd)
The Nominal Group Technique
1. Each group member writes down his or her ideas for
solving the problem at hand.
2. Each member then presents his or her ideas orally, and the
person writes the ideas on a board for other participants
to see.
3. After all ideas are presented, the entire group discusses all
ideas simultaneously.
4. Group members individually and secretly vote on each
proposed solution.
5. The solution with the most individual votes wins.

Improving Group Decision Making

(contd)
The Stepladder Technique
1. Individuals A and B are given a problem to solve, and each
produces an independent solution.
2. A and B develop a joint decision, and meet with C, who has
analyzed the problem and arrived at a decision.
3. A, B, and C discuss the problem and arrive at a consensus
decision, and are joined by D, who has analyzed the
problem and arrived at a decision.
4. A, B, C, and D jointly develop a final group decision.

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Improving Group Decision Making

(contd)
How to Lead a Group Decision-Making
Discussion
1. See that all group members participate and contribute.
2. Distinguish between idea getting and idea evaluation.
3. Do not respond to each participant or dominate the
discussion.
4. Direct the groups effort toward overcoming surmountable
obstacles.
5. Dont sit down.

Pros and Cons of Group Decision

Making
Pros
More points of view
More ways to define the
problem
More possible
solutions/alternatives
More creative decisions
Stronger commitment to
decisions
Cons
More disagreement and less
problem solving
Desire for consensus
(groupthink)
Domination by a single
individual
Less of commitment to the
group decision

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