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Decision making by individual and group


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Decision making by individual and group

  1. 1. “Two Heads are better than one“ "Too many cooks spoil the broth” "You cant accomplish anything in a meeting.Everyone has his or her own agenda. The more people, the more impossible it becomes."
  2. 2. (in organizations)Louzel M. LinejanMPA IIXavier Univ – Ateneo de Cagayan
  3. 3. “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?”
  4. 4. 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
  5. 5.  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
  6. 6. 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 DECISIONS Poorly structured decisions, unique, non- routine and more ambiguous and frequently more difficult to make since it involves major planning issues
  7. 7. 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.
  8. 8. 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.
  9. 9. 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
  10. 10. Perceptual and judgemental factors1. 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 change4. Inaccurate Perceptions - Perceptions are subject to factors of attention, stress and many perceptual phenomena
  11. 11. Perceptual and judgemental factors5. 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 change7. 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
  12. 12. 1. NOMINAL GROUP THINKThe NGT is designed to help all team members participate and express opinions while still building team consensusThe 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 writingNGT is designed to help with group decision making by ensuring that all members participate fully.
  13. 13. 1. NOMINAL GROUP THINKNGT follows these steps: 7-10 individuals are brought together to participate in astructured 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.
  14. 14. 2. DELPHI TECHNIQUEAnother technique which capitalises groups resources, while avoiding several possible disadvantages of relying on group decision-making processesThis 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)
  15. 15. 2. DELPHI TECHNIQUEDELPHI 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 experts opinion sharply differs from the rest, he orshe may be asked to provide a rationale. process is repeated several times, the experts usually achieve a consensus
  16. 16. 3. STEPLADDER TECHNIQUE A problem-solving structure recently proposed as a solution tothe problem of unequal participation in groups The technique is intended to improve group decision-makingby structuring the entry of group members into a core group. encourages all members to contribute on an individual levelbefore being influenced by anyone else This results in a wider variety of ideas, it prevents peoplefrom "hiding" within the group, and it helps people avoid being"stepped on" or overpowered by stronger, louder groupmembers.
  17. 17. 3. STEPLADDER TECHNIQUEStep 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 doneStep 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.
  18. 18. 3. STEPLADDER TECHNIQUEStep 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.
  19. 19. 4. 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.
  20. 20. 4. 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)
  21. 21. 4. PARETO ANALYSISHow to Use the Tool:1. write out a list of the changes you would make2. 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.
  22. 22. 5. 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 importantproblem to solve, or select the solution that will give you thegreatest advantage. Paired Comparison Analysis helps you toset priorities where there are conflicting demands on yourresources.
  23. 23. 5. PAIRED COMPARISON ANALYSIS Overseas Home Customer Quality Market (A) Market (B) Service (C) (D) Overseas Market --------------- A,2 C,1 A,1 (A) Home Market --------------- --------------- C,1 B,1 (B) Customer Service --------------- --------------- --------------- C,2 (C) 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!
  24. 24. 6. 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. Its particularly powerful where you have a number of good alternatives to choose from, and many different factors to take into account.
  25. 25. 6. GRID ANALYSISFactors: Cost Board Storage Comfort Fun Look TotalWeights:Sports Car 1 0 0 1 3 3SUV/4x4 0 3 2 2 1 1Family Car 2 2 1 3 0 0Station Wagon 2 3 3 3 0 1Factors: Cost Board Storage Comfort Fun Look TotalWeights: 4 5 1 2 3 4Sports 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
  26. 26. 7. 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 Easier to find new job? More going on (+5) Have to sell house (-6) (+1) Easier to see friends (+5) More pollution (-3) Meet more people? (+2) More difficult to get own Easier to get places (+3) Less space (-3) work done? (-4) No countryside (-2) More difficult to get to work? (-4) +13 -18 -1
  27. 27. 8. SIX THINKING HATS - Looking at a Decision from All Points of View "Six Thinking Hats" is a powerful technique that helps youlook at important decisions from a number of different perspectives. Ithelps you make better decisions by pushing you to move outside yourhabitual ways of thinking. As such, it helps you understand the fullcomplexity of a decision, and spot issues and opportunities which youmight otherwise not notice. Many successful people think from a very rational, positiveviewpoint, and this is part of the reason that they are successful
  28. 28. 8. SIX THINKING HATSHow 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.
  29. 29. 1. Nominal Group Think2. Delphi Technique3. Stepladder Technique4. Pareto Analysis5. Paired Comparison Analysis6. Grid Analysis7. Plus, Minus, Interesting8. Six Thinking Hats
  30. 30. METHOD 1 – DECISION MADE BY AUTHORITY (without group decision)Process: The designated leader makes all decisions without consulting group members STRENGTHS WEAKNESSES Takes minimal time to make  No group Interaction decision Familiarity - commonly used in  Team may not understand the decision organizations 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
  31. 31. METHOD 2 – DECISION BY EXPERTProcess: Select the expert from group, let the expert consider the issues, and let the expert make decision STRENGTHS WEAKNESSES Useful when one person on the  Unclear how to determine who the team has the overwhelming expert is (team members may have expertise 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.
  32. 32. METHOD 3 – DECISION BY AVERAGING INDIVIDUAL’S OPINIONProcess: 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  Unresolved conflict may exist or team together to talk escalate Urgent decisions can be made  May damage future team effectiveness 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.
  33. 33. METHOD 4 – DECISION MADE BY AUTHORITY AFTER GROUP DISCUSSIONProcess: 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  Team may compete for the leader’s accuracy of the decision attention  Commitment to decision may not be strong  Still may not have commitment from the team to the decision 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.
  34. 34. METHOD 5 – DECISION BY MINORITYProcess: 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  Can be railroading committees Method can be used by temporary  May not have full team commitment to committees decision Useful for large number of  May create an air of competition decisions and limited time among team members Some team perspective and  Still may not have commitment discussion fromteam to decision 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.
  35. 35. METHOD 6 – DECISION BY MAJORITY VOTEProcess: 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  Taken for granted as the natural, or to make decision by consensus only, way for teams to make a decision Useful when the complete team-  Team is viewed as the “winners and the member commitment is unnecessary losers”; reduces the quality of decision for implementing a decision  Minority opinion not discussed and may not be valued  May have unresolved and unaddressed conflict  Full group interaction is not obtained Appropriate times for Method 6: Time constraints require decision; group consensus supporting voting process; team commitment required to implement decision is moderately high.
  36. 36. METHOD 7 – DECISION BY CONSENSUSProcess: 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  Takes more time than methods 1–6 decision making All team members express their  Takes psychological energy and high thoughts and feelings degree of team-member skill (can be negative if individual team members not committed to the process) Team members “feel understood” Active listening used 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.
  37. 37. 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