Decision making by individual and group

“Two Heads are better than one“

"Too many cooks spoil the broth”

"You can't accomplish anything in a meeting. Everyone has his or her own agenda. The more

people, the more impossible it becomes."

(in organizations)

Louzel M. LinejanMPA IIXavier Univ – Ateneo de Cagayan

“Should the leader make the decision?”

“Should the leader delegate the decision to some other members of

the group?”“Should the group make the

decision through some form of majority vote?”

“Should all decisions involving the group be made by consensus?”

Decision-making is one of the central activities of management and is a huge part of any process of implementation

Good decision making is an essential skill to become an effective leaders and for a

successful career

the quality (correctness) of decision, for those decision may represent a false consensus

the required level of commitment to the decision by group members

the time available to make the decisions

TYPES OF DECISION MAKING

Programmed & non-programmed decisions

One way of distinguishing among decisions is in terms of whether they are fairly routine and well-structured, or novel and poorly structured.

PROGRAMMED DECISIONS Well-structured decisions, can be understood, measured and are actually programmed

NON-PROGRAMMED DECISIONSPoorly structured decisions, unique, non-

routine and more ambiguous and frequently more difficult to make since it involves major planning issues

TYPES OF DECISION MAKING

Individual & group decisions

Research revealed that GROUP DECISION MAKING will outperform individuals working in isolation

Groups' solutions to problems are typically of higher quality than the average of the individuals' solutions.

However, best solitary worker may often outperform the group who has diverse personalities that can not arrive with a consensus.

“What and How to decide?”Advantages of group decisions:combine individual strengths of the group members

broader perspective owing to differences of perception between individual in the group.

enhanced collective understanding of the course of action to be taken after the decision is taken

gains greater group commitment since everyone has his/her share in the decision making

imbibes a strong sense of team spirit among group members and helps the group to think together in terms of success as well as failure.

“What and How to decide?”Disadvantages of group decisions:

more time-consuming and more costly

people whose opinions are not considered tend to be left out from the decision making process and hence the team spirit ceases to grow.

Groupthink

responsibility and accountability are not equally shared

highly cohesive groups sometimes encourage a restricted view of alternatives

may give rise to hostility and conflict

tends to be influenced by the relative status of group members

Factors Affecting Decision MakingPerceptual and judgemental factors

1. Limited Information Processing Capability- We thought we have all the information we need, but we

merely have all the information we are willing and able to handle for the moment.

2. Perceptual filters and biases-We frequently rely on ineffective decision-making heuristics (rule of

thumb)3. Changing Perceptions

- Our filters and perceptions change, via learning, experience, attitude change and belief change

4. Inaccurate Perceptions- Perceptions are subject to factors of attention, stress and

many perceptual phenomena

Factors Affecting Decision Making

Perceptual and judgemental factors

5. First Perceptions- Research shows that they are frequently not accurate, and

frequently long lasting6. Stereotyping and categorization

- Our filters and perceptions change, via learning, experience, attitude change and belief change

7. Halo Effect- Tendency to over-generalise from one or two points of

information8. Contrast Effects

- Contrast or differences between pieces of information9. Attribution

- people tend to contribute causes to actions and events

Techniques for better decision-making

1. NOMINAL GROUP THINK

The NGT is designed to help all team members participate and express opinions while still building team consensus

The nominal group technique is a structured decision making process in which group members are required to compose a comprehensive list of their ideas or proposed alternatives in writing

NGT is designed to help with group decision making by ensuring that all members participate fully.


1. NOMINAL GROUP THINK

NGT follows these steps:

7-10 individuals are brought together to participate in a structured exercise that includes the following steps:

Team members are presented with a problem, challenge or issue

Individual team members silently and independently write down their ideas about how to tackle the problem.

Each team member (one at a time, in round-robin fashion) presents an idea to the group.

Individuals silently and independently vote on each idea.

Techniques for better decision-making2. DELPHI TECHNIQUE

Another technique which capitalises group's resources, while avoiding several possible disadvantages of relying on group decision-making processes

This approach, called the Delphi Technique, is similar to NGT in several respects, but also differs significantly in that the decision-makers never actually meet.

Its greatest advantage is that it avoids many of the biases and obstacles associated with interacting groups (that is, groups where the members meet face-to-face)

Techniques for better decision-making2. DELPHI TECHNIQUE

DELPHI follows these steps:

Select a group of individuals who possess expertise in a given problem area

Survey the experts for their opinions via a mailed questionnaire. Analyse and distil the experts' responses. Mail the summarised results of the survey to the experts and request that they respond once again to

a questionnaire.If one expert's opinion sharply differs from the rest, he or she may be asked to provide a rationale. process is repeated several times, the experts usually achieve a consensus

3. STEPLADDER TECHNIQUE

A problem-solving structure recently proposed as a solution to the problem of unequal participation in groups

The technique is intended to improve group decision-making by structuring the entry of group members into a core group.

encourages all members to contribute on an individual level before being influenced by anyone else

This results in a wider variety of ideas, it prevents people from "hiding" within the group, and it helps people avoid being "stepped on" or overpowered by stronger, louder group members.



Step 1: Before getting together as a group, present the task or problem to all members. Give everyone sufficient time to think about what needs to be done

Step 2: Form a core group of two members. Have them discuss the problem.

Step 3: Add a third group member to the core group. The third member presents ideas to the first two members BEFORE hearing the ideas that have already been discussed.



Step 4: Repeat the same process by adding a fourth member, and so on, to the group. Allow time for discussion after each additional member has presented his or her ideas.

Step 5: Reach a final decision only after all members have been brought in and presented their ideas.


Techniques for better decision-making4. PARETO ANALYSIS - Choosing the Most Important

Changes to Make

Pareto principle – the idea that by doing 20% of work you can generate 80% of the advantage of doing the entire job

Pareto analysis is a formal technique for finding the changes that will give the biggest benefits. It is useful where many possible courses of action are competing for your attention.

Techniques for better decision-making4. PARETO ANALYSIS - Choosing the Most Important

Changes to Make

80/20 Rule means that in anything a few (20 percent) are vital and many(80 percent) are trivial.

The value of the Pareto Principle is it reminds to focus on the 20 percent that matters. (Of the things you do during your day, only 20 percent really matter. Those 20 percent produce 80 percent of your results)

Techniques for better decision-making4. PARETO ANALYSIS

How to Use the Tool:

5. write out a list of the changes you would make

2. score the items or groups. The scoring method you use depends on the sort of problem you are trying to solve.

3. The first change to tackle is the one that has the highest score. This one will give you the biggest benefit if you solve it.

Techniques for better decision-making5. PAIRED COMPARISON ANALYSIS

- Working Out the Relative Importance of Different Options

- PCA helps you to work out the importance of a number of options relative to each other. It is particularly useful where you do not have objective data to base this on.

PCA makes it easy to choose the most important problem to solve, or select the solution that will give you the greatest advantage. Paired Comparison Analysis helps you to set priorities where there are conflicting demands on your resources.

Techniques for better decision-making5. PAIRED COMPARISON ANALYSIS

Overseas Market

(A)

HomeMarket

(B)

CustomerService

(C)

Quality(D)

Overseas Market(A)

--------------- A,2 C,1 A,1

Home Market(B)

---------------

--------------- C,1 B,1

Customer Service(C)

---------------

--------------- --------------- C,2

Quality(D)

-------------- --------------- --------------

---------------

-

Steps to use the technique:List the options you will compare. Assign a letter to each

option.Mark the options as row and column headings on the

worksheet.Note that the cells on the table where you will be comparing

an option with itself have been blocked out - there will never be a difference in these cells!

Techniques for better decision-making6. GRID ANALYSIS

Making a decision by weighing up different factors

Paired Comparison Analysis helps you to work out the importance of a number of options relative to each other. It is particularly useful where you do not have objective data to base this on.

A useful technique to use for making a decision. It's particularly powerful where you have a number of good alternatives to choose from, and many different factors to take into account.

Techniques for better decision-making6. GRID ANALYSIS

Factors:Cos

tBoar

dStorag

eComfor

tFun Look Total

Weights:

Sports Car 1 0 0 1 3 3

SUV/4x4 0 3 2 2 1 1

Family Car 2 2 1 3 0 0

Station Wagon

2 3 3 3 0 1Factors: Cost

Board

Storage

ComfortFun Look Total

Weights: 4 5 1 2 3 4

Sports Car 4 0 0 2 9 12 27SUV/4x4 0 15 2 4 3 4 28Family Car 8 10 1 6 0 0 25Station Wagon

8 15 3 6 0 4 36

Techniques for better decision-making7. PLUS, MINUS, INTERESTING!

- Weighing the Pros and Cons of a Decision

PMI is an important Decision Making tool which focuses on selecting a course of action from a range of options.

Plus Minus Interesting

More going on (+5) Have to sell house (-6)Easier to find new job?

(+1)

Easier to see friends (+5) More pollution (-3) Meet more people? (+2)

Easier to get places (+3) Less space (-3)More difficult to get own

work done? (-4)

No countryside (-2)

More difficult to get to

work? (-4)

+13 -18 -1

Techniques for better decision-making8. SIX THINKING HATS

- Looking at a Decision from All Points of View

"Six Thinking Hats" is a powerful technique that helps you look at important decisions from a number of different perspectives. It helps you make better decisions by pushing you to move outside your habitual ways of thinking. As such, it helps you understand the full complexity of a decision, and spot issues and opportunities which you might otherwise not notice.

Many successful people think from a very rational, positive viewpoint, and this is part of the reason that they are successful

Techniques for better decision-making8. SIX THINKING HATS

How to Use the Tool:

White Hat: focus on the data available.

Red Hat: look at the decision using intuition, gut reaction, and emotion

Black Hat: look at things pessimistically, cautiously and defensively.

Yellow Hat: think positively (optimistic viewpoint)

Green Hat: develop creative solutions to a problem.

Blue Hat: process control.

1. Nominal Group Think2. Delphi Technique3. Stepladder Technique4. Pareto Analysis5. Paired Comparison Analysis6. Grid Analysis7. Plus, Minus, Interesting8. Six Thinking Hats

Decision-Making MethodsMETHOD 1 – DECISION MADE BY AUTHORITY (without group decision)

STRENGTHS WEAKNESSES

Takes minimal time to make decision

No group Interaction

Familiarity - commonly used in organizations

Team may not understand the decision or be unable to implement it

High on assertiveness scale Low on cooperation scale

Appropriate times for Method 1: Simple, routine, administrative decisions; little time available

to make decision; team commitment required to implement the decision is low

Process: The designated leader makes all decisions without consulting group members

METHOD 2 – DECISION BY EXPERT

STRENGTHS WEAKNESSES Useful when one person on the team has the overwhelming expertise

Unclear how to determine who the expert is (team members may have different opinions)

No group interaction

May become popularity issue or power issueAppropriate times for Method 2:

Result is highly dependent on specific expertise, clear choice for expert, team commitment required to implement decision is low.

Process: Select the expert from group, let the expert consider the issues, and let the expert make decision

Decision-Making Methods

METHOD 3 – DECISION BY AVERAGING INDIVIDUAL’S OPINION

Appropriate times for Method 3: Time available for decision is limited; team participation is

required, but lengthy interaction is undesirable; team commitment required to implement the decision is low.

Process: Separately ask each team member his/her opinion and average the results.

STRENGTHS WEAKNESSES Extreme opinions cancelled out No group interaction, members are

not truly involved in the decision

Error typically cancelled out Opinions of least and most knowledgeable members may cancel

Group members consulted Commitment to decision may not be strong

Useful when it is difficult to get the team together to talk

Unresolved conflict may exist or escalate

Urgent decisions can be made May damage future team effectiveness


METHOD 4 – DECISION MADE BY AUTHORITY AFTER GROUP DISCUSSION

Appropriate times for Method 4: Available time allows team interaction but not agreement; clear

consensus on authority; team commitment required to implement decision is

moderately low.

Process: The team creates ideas and has discussions, but the designated leader makes the final decision. The designated leader calls a meeting, presents the issue, listens to discussion from the team, and announces her/his decision.

STRENGTHS WEAKNESSES Team used more than methods 1–3 Team is not part of decision

Listening to the team increases the accuracy of the decision

Team may compete for the leader’s attention

Commitment to decision may not be strong

Still may not have commitment from the team to the decision


METHOD 5 – DECISION BY MINORITY

Appropriate times for Method 5: Limited time prevents convening entire team; clear choice of

minority group; team commitment required to implement the decision is moderately

low.

Process: A minority of the team, two or more members who constitute less than 50% of the team, make the team’s decision

STRENGTHS WEAKNESSES Method often used by executive committees

Can be railroading

Method can be used by temporary committees

May not have full team commitment to decision

Useful for large number of decisions and limited time

May create an air of competition among team members

Some team perspective and discussion

Still may not have commitment fromteam to decision


METHOD 6 – DECISION BY MAJORITY VOTE

Appropriate times for Method 6: Time constraints require decision; group consensus supporting voting

process; team commitment required to implement decision is moderately high.

Process: This is the most commonly used method in the United States (not synonymous with best method). Discuss the decision until 51% or more of the team members make the decision.

STRENGTHS WEAKNESSES Useful when there is insufficient time to make decision by consensus

Taken for granted as the natural, or only, way for teams to make a decision

Useful when the complete team- member commitment is unnecessary for implementing a decision

Team is viewed as the “winners and the losers”; reduces the quality of decision

Minority opinion not discussed and may not be valued

May have unresolved and unaddressed conflict

Full group interaction is not obtained


Decision-Making MethodsMETHOD 7 – DECISION BY CONSENSUS

Appropriate times for Method 7: Time available allows a consensus to be reached; the team is sufficiently skilled to

reach a consensus; the team commitment required to implement the decision is high.

Process: Collective decision arrived at through an effective and fair communication process (all team members spoke and listened, and all were valued).

STRENGTHS WEAKNESSES Most effective method of team decision making

Takes more time than methods 1–6

All team members express their thoughts and feelings

Takes psychological energy and high degree of team-member skill (can be negative if individual team members not committed to the process)

Team members “feel understood”

Active listening used

1. Decision made by Authority2. Decision by Expert3. Decision by Averaging

Individual’s Opinion4. Decision made by authority after

group discussion5. Decision by Minority6. Decision by Majority vote7. Decision by Consensus

Thank you for listening

Education

Decision making by individual and group