Group decision

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A PPT on Group Decission.

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Group decision

  1. 1. Decision Making
  2. 2. DEFINITION Decision making is defined as selection of a course of action from among alternatives.
  3. 3. The Link Between Perceptions and Individual Decision Making Perceptions of the decision maker Perceptions of the decision maker Outcomes
  4. 4. CHIEF CHARACTERISTIC OF DECISION MAKING  It implies choosing from among two or more alternative courses of action.  It is a continuous process.  It involves all the organizational activities.  It is an intellectual process, involving both reason and instinct.  It aims at finding a solution for a given problem.
  5. 5. Assumptions of the Rational Decision-Making Model 1. Problem clarity 2. Known options 3. Clear preferences 4. Constant preferences 5. No time or cost constraints 6. Maximum payoff 1. Problem clarity 2. Known options 3. Clear preferences 4. Constant preferences 5. No time or cost constraints 6. Maximum payoff
  6. 6. How Are Decision Actually Made In An Organization 1.Specific Objective 2.Problem Identification Problem identification involves- a. Diagnosis b. Analysis 3. Search for Alternatives
  7. 7. 4. Evaluation of Alternatives 5. Choice of Alternative a. Experiences b. Experimentation c. Research and Analysis 6. Action 7. Results The results must correspond with objectives.
  8. 8. How Are Decisions Actually Made in Organizations
  9. 9. Making Choices
  10. 10. Making Choices
  11. 11. MINTZBERG’S PHASES OF DECISION MAKING  Decision making is a dynamic process Phase-1 IDENTIFICATION •Recognition •Diagnosis Phase-2 DEVELOPMENT •Search •Design Phase-3 SELECTION •Judgement •Analysis •Bargaining Authorization
  12. 12. MODELS OF BEHAVIOURAL DECISION MAKING Social Model Economic Rationality Simon’s Bounded Rationality Model Judgmental Heuristics and Biases Model
  13. 13. ECONOMIC RATIONALITY MODEL 1. Decision maker perfectly and completely rational Assumptions • Decision will be completely rational in means -ends sense • Complete and Consistent system of preferences allows a choice among alternatives
  14. 14. ECONOMIC RATIONALITY MODEL • Complete awareness of all possible alternatives • No limits to complexity of computations to determine best alternatives • Probability calculations neither frightening nor mysterious 2. Decision maker always strives to maximize outcomes 3. Decisions directed to the point of maximum
  15. 15. SIMON’S BOUNDED RATIONALITY MODEL • Objectives are dynamic • Information deficiencies • Time and Cost constraints • Not possible to Quantify Alternatives • Environmental Forces can’t be ignored
  16. 16. JUDGMENTAL HEURISTICS AND BIASES MODEL 1. Identifies Specific Systematic Biases that influence judgment 2. Judgmental Heuristics help by :- ¨ Past experiences help to evaluate present ¨ Substitute Rules of Thumb for complex information collection and evaluation. ¨ Save Mental activity and cognitive processing
  17. 17. 3. Three Biases :  The Availability Heuristic ¨ Tendency to assess probability by how readily they can remember ¨ Event that evokes emotions easily remembered and vice versa  The Representative Heuristic ¨ Likelihood of an event occurring depending upon similarity of occurrence of stereotypes  The Anchoring and Adjustment Heuristic ¨ Judgement biased by an initial value or anchor (May be Historical precedent) JUDGMENTAL HEURISTICS AND BIASES MODEL (Continued…)
  18. 18. THE SOCIAL MODEL 1. Sigmund Freud : Behavior guided by unconscious desires 2. Social pressures and influences produce irrational conformists. 3. Straw and Ross : Phenomenon of Escalation of Commitment ¨ Psychological Determinants ¨ Social Forces ¨ Organizational Determinants 4. Human Complexity plays an important part in Management Decision Making
  19. 19. Common Errors in DM  Indecisiveness  Postponing the decision until the last moment  Failure to isolate the root cause of the problem  Failure to assess the reliability of informational sources  The method for analyzing the info. May not be sound one.
  20. 20. POSITIVE ASPECTS OF DECISION MAKING  Pooling of knowledge and information.  Satisfaction and Commitment.  Personnel development  More risk taking
  21. 21. NEGATIVE ASPECTS OF DECISION MAKING  Time consuming and costly  Individual domination  Problem of responsibility  Group thinking
  22. 22. Organizational Constraints on Decision Makers  Performance Evaluation  Evaluation criteria influence the choice of actions.  Reward Systems  Decision makers make action choices that are favored by the organization.  Formal Regulations  Organizational rules and policies limit the alternative choices of decision makers.
  23. 23. Organizational Constraints on Decision Makers  System-imposed Time Constraints  Organizations require decisions by specific deadlines.  Historical Precedents  Past decisions influence current decisions.
  24. 24. Group Decision Making
  25. 25. Three Assumptions – Gary John Why groups can make higher quality decisions than individuals --  Groups are more vigilant than individuals.  Can generate more ideas and develop more alternatives solutions.  Can evaluate ideas better.
  26. 26. Other Advantages  People with more specializations and competencies.  Implementation of decision more effectively.  Increases the commitment of people.  Biases are eliminated.  More democratic in nature.
  27. 27. Disadvantages of Group DM  Time consuming  Social pressures on group members.  Pass the buck.  Groupthink  No clear responsibility/accountability  Self-censorship  Some times decisions get influenced by members of strong personality.
  28. 28. Techniques of Group DM (Improving DM)  Brainstorming  Delphi Technique  Nominal Technique.  Fish bowling  Didactic Interaction

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