1. Decision Making in Groups

2. People often questions the value of groups
• Why do people so frequently use groups to make
decisions?
• Are groups’ decisions superior to individual decisions?
• How do people, and groups, even make decisions: are
they rational or irrational?
• Should decisions be made carefully or intuitively?

3. The mob has
no judgment,
no discretion,
no direction,
no discrimination, no
consistency.
Cicero
Madness is the
exception in
individuals but the
rule in groups.
Nietzsche
When "a 100 clever
heads join a group,
one big nincompoop
is the result.”
Carl Jung
Decision Making in Groups

4. None of us alone is as smart as all of us
together (Myers, 2002)

5. Making Decisions in Groups: The Pluses and Minuses
Why Use Groups? Why Not Use Groups?
 sometimes the group doesn't
recognize the correct answer, even if
proposed
 groups oversample shared
information
 sometimes work done by just a few
(social loafing)
 discussion can be manipulated
 groups sometimes make riskier
decisions
 groups sometimes suffer from
groupthink
 more people = more information
 more people to do more work
 more people means people can do
what they are best at
 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

6. Decision Making
The mental processes (cognitive process)
resulting in the selection of a course of
action among several alternative
scenarios

7. Why was all party meeting called to
decide on Jan-Lokpal Bill?
Why do different organisations hold
meetings for their activities?
Why do people rely on groups for decision
making?

8. Case
• Examine the problem faced by Mr. Nataraj, Regional Manager
of Alpha Pvt. Ltd. Alpha makes and distributes products from
more than 10 international pharmaceutical and health care
companies. Mr. Nataraj is responsible for managing existing
clients and also to get new clients. He manages a number
of sales representatives. Important customers have
a dedicated sales representatives, while other sales
representatives try to get new clients.
One day an important customer (Good Health Hospital) called
Mr. Nataraj and complained that Mr. Bhavan (the sales
representative) was ineffective and insisted he be removed,
or else they would not give any business.

9. Mr. Nataraj's thoughts
• In an internal enquiry, Mr. Nataraj found that the real reason
was personal differences between Mr. Bhavan and the
hospital superintendent.
• The track record of Mr. Bhavan was good and he was liked
within the company. Dismissing him or even transferring him
to a new region will affect the morale of the work force.
• Good Health Hospital is a major customer and gives good
business. Loosing the hospital is not an option. Therefore the
demands of the hospital have to be met.

10. Some sample options:
1. Good Health Hospital is a major customer and cannot be displeased. I will remove
or transfer Mr. Bhavan.
2. Mr. Bhavan is a loyal and hard working. I need to keep people like him even if it
means loosing customers.
3. I will stop answering calls, act ignorant of the whole episode. 'Time will solve the
problem'.
4. I will try to get Mr. Bhavan and the Hospital Superintendent together for discussion
and try to compromise over the differences.
5. I will move Mr. Bhavan to a new and more important project - develop new
business in the newly formed sub-region. Good Health Hospital will have no
problem with the new sales representative.

11. Individual & Group Decision
Making
• People turn to groups because, in most cases,
groups are better at choosing, judging,
estimating, and problem solving than are
individuals.
• Investment groups outperform single
investors.
• Teams of physicians making a diagnosis are
more accurate than single physician.

12. Advantages of Group Decision making
• Collective memory
• More information
• More thorough discussion,
convergent/divergent thinking is possible
• Members are committed to the decision as
they have jointly produced it, implementation
is better

13. Disadvantages of Group Decision
making
• Groups do not perform well when tasks are very difficult,
complex, unfamiliar, or uninteresting to members.
• Group effectiveness also depends on whether task is
Intellective or Judgmental.
• Intellective task- yield soln.-Right or Wrong(e.g., Math
Problem)
• Judgmental task- no authoritatively correct answer-(e.g.,
Jury’s decision)

14. • Groups Succeed in case of intellective task
—maths, objective evaluation
• Not in case of judgmental task which
require evaluative judgments, subjective,
no correct or wrong answer

15. 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/Stages of Decision Making
- Orientation
- Discussion
- Decision
- Implementation

16. Defining the
Problem
Orientation Planning the
Functional Model of
Decision Making
Orientation
Discussion
Decision No Decision
Reached
Decision
Reached
Implementation
Process

17. Group Decision Making
1. Orientation
- Group’s desire to identify best solution
- Identifying resources needed to make decision
- Enumerate obstacles that must be overcome
- Specifying procedures for gathering information and
decision making
- Establishing ground rules for meetings
- Sets strategy & goals
- More time spent in this stage the greater the performance
- Tendency to skip this step

18. Discussion
Remembering
Information
Exchanging
Information
Processing
Information
2. Discussion
 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.
It is a shared reservoir of information held in the
memories of two or more members of a group.
 Cross-cueing – recall of memories improved
through group members’ statements
 Transactive Memory – information is distributed to
various members of the group

19. - Group members gather and process information needed to
make decision.
- This results in improved memory for information, increased
information exchange, and more thorough processing of
inf.

20. Weakness in group memory - importance of
keeping records (meeting minutes)
 Exchanging information: Acquiring & sharing data
 Processing information: Collective review of info.

21. Decision
3. Decision: Social decision schemes- Group method
of combining individual members’ inputs in a
single group decision.
- Delegation-an individual or subgroup within the group
makes the decision for the group
 Authority Scheme – Leader/individual speaks
 Oligarchy- coalition speaks
– Statistical aggregation- group members’ individual
decision are averaged
– Voting- publicly or secret ballot – 50% rule is used
primarily, however, sometimes more substantial
percentages are needed for a decision to become final
– Plurality Decision – Majority Wins
– Consensus (discussion to unanimity)
– Random choice – final decision is left to chance- coin
flipping

22. 4. Implementation
– Evaluating the decision
 Adhering to the
decision: Coch and
French (1948) )
clothing mill study
 Participation is key in
decision making – if
limited,
 hostility,
 turnover, &
 satisfaction
decreases
Decision
Reached
Implementation
Evaluating
the Decision
Adhering to
the Decision

23. Vroom’s normative model of decision
making
– Types of procedures: Autocratic, consultative, group
– Procedure must fit the problem to be solved and the
decision to be made

24. 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

25. Normative Decision Model
Vroom and Yetton Model
• Decision Procedures
– AI – Leader makes decision without any additional
information
– AII – Leader seeks information and makes decision
alone
– CI – Leader shares problem with others
individually and makes decision alone
– CII – Leader shares problem with others
collectively and makes decision alone
– GII – Group discusses problem collectively and the
group makes the decision

26. 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
solution.
 Procedure must fit the problem to be solved and the
decision to be made

27. Problem faced at the time of
Decision Making
• Communication
• Avoiding responsibility,
• Egocentric behaviour,
• Attitudes & emotions,
• Nonparticipation
• Interruptions
• Negative leader behaviour

28. Group Discussion Pitfall
 Information processing limitations:
- leveling ( simplify & shorten),
- Sharpening (embellish distinction made by the speaker),
- Assimilation ( Interpret messages),
 Poor communication skills

29. Decisional avoidance Tactics-
• procrastination,
• bolstering ,
• denying responsibility,
• ignoring alternatives/sidetracking,
• satisficing (members accept low risk & easy way out
• muddling through ( consider narrow range policy),
• trivializing the issue ( avoids dealing with large
issues)

30. What Problems Undermine the Effectiveness of
Decision-Making Groups?
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 information9 general
tendencies)
 Sins of commission – information misused
 Sins of imprecision /Heuristics – oversimplify decision,
mental rules of thumb
 Confirmation Bias – tendency to seek out information that
confirms one’s inferences rather than disconfirms them

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

32. Groupthink
• Janis’s theory
of groupthink
– Example:
Kennedy’s
advisory group
planning the
Bay of Pigs
“covert op”

33. Groupthink
• Janis’s theory
of groupthink
– Example:
Kennedy’s
advisory group
planning the
Bay of Pigs
“covert op”

34. Groupthink
– The theory identifies symptoms, causes,
and possible cures
Symptoms
Concurrence
Seeking
Defective
Decision
Making
Strategies
Fiasc
o
Causes
Cohesion,
etc

35. Symptoms
– 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

36. Causes

37. 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

38. How 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

39. Bay of Pigs
• In October 1962, USSR was installing weapons of mass destruction
on the island of Cuba. JFK and his team negotiated for 13 days with
Russians to dismantle base. They could succeed in making Russians
shift the base.
• Same group had an year ago made one of the greatest blunders of
all time. JFK and his advisors guided by CIA developed a plan to
invade Cuba with the hope of overthrowing the country’s govt. A
squad of well trained troops will capture a strip of land and later
encourage civilian revolt in Havana.
• The entire attacking force was killed or captured within days and
the US govt had to send food and supplies to ransom them back.
• “worst fiascoes ever perpetrated by a responsible govt.” JFK- “How
could I have been so stupid?”

40. Risky-Shift Phenomenon
• Groups’ decisions are more extreme than
individuals’ decisions
• Groups seem to make riskier decisions than
individuals— “invade cuba” or “use diplomatic
means to influence Cuba”

41. Group Think (Irving Janis)
• Phenomenon in which the norm for consensus overrides
the realistic appraisal of alternative courses of action, a
distorted style of thinking that renders group members
incapable of making a rational decision
• Symptoms of group think
– Overestimation of the group: unwarranted optimism
– Close mindedness: not open to new ideas, shut to other
alternatives and rationalize their initial decision, sent 1400 to
fight 200,000 and expected an easy success
– Pressures toward uniformity: interpersonal pressures make
agreeing easy and disagreeing very difficult; Self-censorship-many
had doubts about the success of plan

42. Techniques of decision making
• Brainstorming- any and all alternatives, free-wheeling of ideas, no
criticism, all ideas are recorded for future analysis
• Nominal group technique- ideas are presented by each member and
all are recorded, discussion and evaluation, all members rank the
ideas and the idea with the highest aggregate rank is selected
• Delphi technique- When gp members cannot meet, questionnaires
are distributed to a panel responsible for making decision, inviting
responses. A summary is sent to the panel with a follow-up
questionnaire, process is repeated till consensus is reached
• Computer assisted decision making- software compiles the
responses and disseminates the information to all members