2012 Women Leaders Conference

1. A Race to the Finish:
Decision Making in Groups and Teams
Elaine M. Wong
Department of Communication
UW-Milwaukee

2. Overview
• Decision making (DM) models
• DM in teams: Carter racing exercise
• Debrief and discuss problems team DM
© Elaine Wong, UW-Milwaukee

3. Rational Decision Making Models
Select the Define
best alternative the problem
Evaluate Identify the
the alternatives decision criteria
Develop the Allocate weights
alternatives to the criteria
© Elaine Wong, UW-Milwaukee

4. What kinds of assumptions do rational
theorists make?
• People are “rational”
• Use information optimally
• Driven by outcomes, consumption
• Framing does not matter
• People know their preferences, preferences do
not change
• Probabilities can be calculated
© Elaine Wong, UW-Milwaukee

5. Factors affecting decisions in organizations
Organizational Level
•System complexity
•Time pressure
•Politics
Uncertainty
Decision
Individual Level
•Decision making Group Level
styles •Group effectiveness
•Cognitive limitations •Group composition
•Past experience •Group processes
© Elaine Wong, UW-Milwaukee

6. March & Simon’s Administrative Model
• Based on observations that people
– have limited skills
– are subject to cognitive biases
– rarely have accurate and complete information
– in short, assumes bounded rationality
• Satisficing decisions
– Select an acceptable solution
© Elaine Wong, UW-Milwaukee

7. Carter Racing
• Your dilemma: Should Carter Racing take
part in the Pocono race?
– Read case
– Write down individual decision to race or not
(provide justification- 5 min.)
– Get into groups and reach a group decision to
race or not (provide justification- 20-25 min.)
© Elaine Wong, UW-Milwaukee

8. Carter Racing: push and pull factors
Pros Cons
-prize money from race -if race and fail:
-lose tire sponsorship
-gain a new sponsor
-need to replace $20K
(Goodstone tires) engine
-have the money to put out -lose oil contract
another car to their racing -wasted entry fees
team -if withdraw without racing
-lose $7,500 of entry fee
-lose potential sponsorship
with Goodstone and need to
return money
-end season with $ 50K
deficit
© Elaine Wong, UW-Milwaukee

9. Relationship between temperature and
gasket failures
3.5
3
2.5
Head Gasket Failures
2
1.5
1
0.5
0
50 55 60 65 70 75 80
Am bient Air Tem perature (in degrees)
© Elaine Wong, UW-Milwaukee

10. Ambient temperature for races without
blown gaskets
3.5
3
2.5
Number of Races
2
1.5
1
0.5
0
50 55 60 65 70 75 80 85
Am bient Air Tem perature (in degrees)

11. Races with and without gasket failures
3.5
3
Number of incidents
2.5
2
1.5
1
0.5
0
50 55 60 65 70 75 80 85 90 95 100
Am bient air tem perature (in degrees)
gasket failures no gasket failures

12. Why your decision matters…
© Elaine Wong, UW-Milwaukee

13. Cognitive biases in DM groups
• Confirmation bias
– Tendency to search for information that
substantiates currently-held beliefs/goals.
• Availability bias
– Overestimating the frequency of vivid, extreme
or recent events and causes
• Representative bias
– Failure to take into account base rates and
overestimating the likelihood of rare events
© Elaine Wong, UW-Milwaukee

14. More cognitive biases!
• Anchoring and adjustment
– Inappropriate decisions when initial amounts are
too high or low
• Groupshift
– Tendency to exaggerate one’s initial position
• Groupthink
– When a group’s norm for consensus overrides the
realistic appraisal of alternatives
© Elaine Wong, UW-Milwaukee

15. Social problems in DM groups
• Production blocking
– Having to wait your turn to voice your ideas
• Evaluation apprehension
– Worried about how others will evaluate your ideas
• Free riding/social loafing
– The larger the group, the less individual effort
exerted.
• Conflict
– Task: regarding how to approach the task
– Emotional: typically based on value differences
© Elaine Wong, UW-Milwaukee

16. Improving group DM
• Generate more alternatives
– Brainstorming
• 1) Don't allow criticism;
• 2) Encourage wild ideas;
• 3) Go for quantity;
• 4) Combine and/or improve
on others' ideas.
– Nominal group technique
• Go it alone first!
© Elaine Wong, UW-Milwaukee

17. More on improving group DM
• Generate task conflict
– Minority dissent
• Alternative perspective to majority views enhances
divergent thinking at the subconscious level.
– Devil’s advocate
• Force the group to consider alternative solutions.
© Elaine Wong, UW-Milwaukee