Chapter

11 Individual and Group Decision

Making

Individual and Group Decision

Making Models of Decision MakingModels of Decision Making Dynamics of Decision Dynamics of Decision

MakingMaking Group Decision MakingGroup Decision Making

Models of Decision Making

Rational ModelRational Model logical four-step approach to decision making

Identifying the problem Problem – deviation

between current and desired situations

Opportunity – deviation between current expectations and recognition of potentially better situation

Generating alternative solutions

Selecting solution Implementing and

evaluating the solution

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Assumptions of Rational Decision Making

Problem is clear and unambiguous

Single and well-defined goal can be identified

Alternatives (and consequences are all known)

Preferences and needs are clear, recognized, and

unchanging

Time and resources are abundant and accessible

Decision will be implemented willingly and supported by all

11-3Figure 11-1

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Simon’s Normative Model of Decision Making

Based on premise that decision making is not rational

Decision makers are guided by bounded rationality Bounded rationality constraints that

restrict decision making Decision making is characterized by

Limited information processing Use of judgmental heuristic Satisficing

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Judgmental Heuristics

Judgmental Heuristics rules of thumb or shortcuts that people use to reduce information-processing demands

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Types of Judgmental Heuristics

Availability Heuristic a decision maker’s tendency to base decisions on information that is readily available in memory.

Representativeness Heuristic the tendency to assess the likelihood of an event occurring based on one’s impressions about similar occurrences.

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Knowledge Management

Knowledge Management implementing systems and practices that increase the sharing of knowledge and information throughout the organization

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Forms of Knowledge

Tacit information gained through experience that is difficult to express and formalize

Explicit Knowledge information that can be easily put into words and shared with others

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Decision Making Styles

Analytical Conceptual

Directive Behavioral

Tasks and TechnicalConcerns

People and SocialConcerns

Value Orientation

Low

High

Tole

ran

ce f

or

Am

big

uit

y

11-9Figure 11-2

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Escalation of Commitment

Psychological and Social Determinants

Organizational Determinants

Project Characteristics

Contextual Determinants

Escalationof

commitment

Poor resultsor

outcomes

11-10Figure 11-3

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Advantages and Disadvantages of Group-Aided Decision Making

AdvantagesAdvantages Greater pool of knowledge Different perspectives Greater comprehension Increased acceptance Training ground

DisadvantagesDisadvantages Social pressure Domination by a vocal few Goal displacement “Groupthink”

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Research and group decisions

Groups are less efficient decisions makers Groups are more confident in their decisions Decision quality is negatively related to group size Homogeneity brings less conflict Heterogeneity brings less efficiency Groups tend to polarize in decision making

Group Problem Solving Techniques

Brainstorming Brainstorming process to generate a quantity of ideas

Nominal Group Nominal Group Technique Technique process to generate ideas and evaluate solutions

Delphi TechniqueDelphi Technique process to generate ideas from physically dispersed experts

Computer-Aided Computer-Aided Decision MakingDecision Making

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Creativity

Creativity process of developing something new or unique

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