DECISION MAKING

1. DECISION MAKING Chapter 10

2. Groups Decision Making None of us alone is as smart as all of us together (Myers, 2002) • more people = more information • more people to do more work • more people means people can do what they are best at

3. Groups Decision Making • groups can discuss, process information (check for errors, etc.) • groups have standards for deciding (e.g., majority rules) • people are more likely to follow through if part of a group that decided • is not caused by any one mechanism, but by several processes

4. Why make decisions in Groups? • The effectiveness of groups as decision makers • Examples: investment groups, advisory boards, planners • Individual vs. group decision making • Majorie E. Shaw’s (1932) study of groups vs. individuals • Individuals solved fewer problems than groups

5. Type of Decisions Group effectiveness also depends has a demonstrated correct solution • Intellective Tasks (right or wrong answer – e.g., math problems ) vs. Judgmental Tasks (no correct answer – jury’s verdict) • Group members are superior in intellective tasks than judgment tasks.

6. Anatomy of Group Decision Functional Theory of Group Decision Making - Skilled decision making groups are more likely use procedures that enhance the way they gather, analyze, and weight information Phases of Decision Making - Orientation - Discussion - Decision - Implementation

7. Orientation Orientation Defining the Problem Planning the Process Discussion Decision No Decision Reached Decision Reached Implementation Functional Model of Decision Making • Orientation • Development of shared mental model • Group defines the problem • Sets strategy & goals • More time spent in this stage the greater the performance

8. Remembering Information Discussion Exchanging Information Processing Information • Remembering Information – 30 % of all comments made by group members are expressions of opinions and analysis of issues • Collective Memory – a group’s combined memory • Cross-cueing – recall of memories improved through group members’ statements • Transactive Memory – information is distributed to various members of the group

9. Remembering Information Discussion Exchanging Information Processing Information Weakness in group memory - importance of keeping records (meeting minutes) • Exchanging information: Acquiring & sharing data • Processing information: Collective review of info.

10. Deciding • Social Decision Schemes – strategy used to select a single alternative from various alternatives proposed by the group • Delegation - an individual or subgroup within the group makes the decision for the group • Statistical Aggregation – group members’ individual decision are averaged

11. Deciding • Social Decision Schemes • Voting – publicly or secret ballot – 50% rule is used primarily, however, sometimes more substantial percentages are needed for a decision to become final • Consensus (discussion to unanimity) • Random Choice– final decision is left to chance

12. Implementation • Implementation • Evaluating the decision • Adhering to the decision: Coch and French’s (1948) clothing mill study • Participation is key in decision making – if limited, hostility, turnover, & satisfaction decreases

13. Post-Mortem Discussions • Bringing closure and learning lessons to bring to future decisions • Gather group together • Review decisions made and decision making process • Look for lessons learned • Record them

14. Individual vs. Group Decision Making • Vroom’s Normative Model of Decision Making: theory of decision making that predicts the effectiveness of decisional procedures across a number of group settings • Autocratic I & II – leader solves the problem on his/her own with information available at the time or obtains information from group members and then decides • Consultative I & II – leader either shares the problem with selected group members or the entire group

15. Individual vs. Group Decision Making • Vroom’s Normative Model of Decision Making: • Group – the leader discusses the problem with the members of the group. Together the leader and members devise options for a solution. • The leader acts as a chairperson of a committee & does not try to influence the group to adopt a certain a certain solution. • Procedure must fit the problem to be solved and the decision to be made

16. Group Discussion Pitfalls • Group discussion pitfalls • Information processing limitations: leveling, assimilation, sharpening • Poor communication skills • Decisional avoidance (procrastination, bolstering, avoiding responsibility, ignoring alternatives, satisficing)

17. Shared Information Bias • Is the tendency for groups to spend more time discussing information that all members know and less time examining information that only a few members now • Oversampling shared information leads to poorer decisions when a hidden profile would be revealed by considering the unshared information more closely. • Factors that increase (leadership style) and decrease (using a Group Decision Support System) the bias • Judgment errors and heuristic biases • Sins of omission and commission • Sins of imprecision: Heuristics

18. Cognitive Limitations • Judgment errors and heuristic biases – individual’s judgments are often distorted by cognitive and motivational biases • Individuals also overestimate their judgmental accuracy because they remember all of the times their decisions were confirmed • Sins of omission – overlook useful information • Sins of commission – information misused • Heuristics – mental rules of thumb • Sins of imprecision – oversimplify decision • Confirmation Bias – tendency to seek out information that confirms one’s inferences rather than disconfirms them

19. Group Polarization • Group Polarization – the tendency to respond in a more extreme way when making a choice as part of a group, as opposed to when responding individually • Social comparison theory • Persuasive-arguments theory • “Risk-supported wins” social decision scheme

20. Polarization and Risk • Group Polarization: A shift in the direction of greater extremity in individuals' responses

21. What is Groupthink? • Janis’s theory of groupthink – a distorted style of thinking that renders group members incapable of making rational decisions. • Members try very hard to agree with one another that they make mistakes that could easily be avoided • Example: Kennedy’s advisory group planning the Bay of Pigs “covert op” • The theory identifies symptoms, causes, and possible cures

22. Symptoms of Groupthink • Overestimation of the group (illusions of invulnerability, illusions of morality) • Close-mindedness (rationalizations, stereotypes about the outgroup) • Pressures toward uniformity (self-censorship, the illusion of unanimity, direct pressure on dissenters, self-appointed mindguards). • Pluralistic ignorance and the Abilene Paradox (Harvey, 1988) • Entrapment and sunk costs • Defective decision-making processes

23. Causes

24. Causes of Groupthink • Cohesiveness • Cordial relationships • Lack of conflict • Structural Faults • Insulation • Control of the leader • Provocative Situational Context • How members deal with stress • Exaggerate the positive and minimize the negative

25. Can Groupthink Be Prevented? • Limiting premature seeking of concurrence • Open style of leadership • Devil’s advocate, subgroup discussions • Correcting misperceptions and biases • Using effective decision-making techniques