Organizational Behaviour

Chapter 11 Group Decision Making - Pg 400 - 409

Decision makers:

• Tend to be overconfident about the decisions that they make
• Tend to seek out information that confirms their own problem definitions and solutions (Confirmation bias)
• Tend to remember and incorporate vivid, recent events into their decisions
• Fail to incorporate known existing data about the likelihood of events into their decisions
• Ignore sample sizes when evaluating samples of information
• Overestimate the odds of complex chains of events occurring
• Do not adjust estimates enough from some initial estimate that serves as an anchor as they acquire more information (Anchoring effect)
• Have difficulty ignoring sunk costs when making subsequent decisions
• Overestimate their ability to have predicted events after-the-fact, take responsibility for successful decision outcomes, and deny responsibility for unsuccessful outcomes (Hindsight)

Advantages of Group Decision Making

1. Decision Quality

Groups or teams can make higher-quality decisions than individual → This argument is based on three assumptions and these characteristics suggest that groups should make higher-quality decisions than individuals can:

• Groups are more vigilant than individuals are - more people are scanning the environment (At problem identification and information search stages, vigilance is especially advantageous)
• Groups can generate more ideas than individuals can (When it comes to developing alternative solutions, more people should have more ideas)
• Groups can evaluate ideas better than individuals can (When it comes to evaluating solutions and choosing the best one, groups have the advantage of checks and balances)

     2. Decision Acceptance and Commitment

Linking back to chapter 9 on participative leadership, groups are often used to make decisions on the premise that a decision made in this way will be more acceptable to those involved → Several assumptions underlying this premise:

• People wish to be involved in decisions that will affect them
• People will better understand a decision in which they participated
• People will be more committed to a decision in which they invested personal time and energy

In summary, if decision makers truly understand the decision and feel committed to it, they should be willing to follow through and see that it is carried out

    3. Diffusion of Responsibility

A less admirable reason to employ groups is to allow for diffusion of responsibility across the members in case the decision turns out poorly → Each member of the group will share part of the burden of the negative consequences, and no one person will be singled out for punishment

However, this often cause individual group members to exhibit biased hindsight (E.g. I knew all along that the bid was too high to be accepted, but they made me go along with them)