Chapter 10 Decision Making

DECISION MAKING - Individual
and Group Perspective
Dr.Kahsu Mebrahtu (Asst. Prof.)

Mekelle university
College of Business and Economics
• “When Albert Einstein was asked how he
would save the world in one hour, he
replied that the first 55 minutes should be
spent defining the problem and the last 5
minutes solving it.”
Mcshane and Von Glinow
What is Decision making ?
• It is a conscious process of making choices among one
or more alternatives with the intention of moving toward
some desired state of affairs .Eg. What product to sell
New technology development
• Decision occurs in response to problems or opportunities
• A problem is a deviation between the current and

desired situation
• An opportunity is a deviation between current
expectations and the recognition of a potentially better
situation that is neither planned or expected.
GENERAL MODEL OF DECISION
MAKING
1. Identify problem or opportunity
Two factors interfere in the process of identification :
a. perceptual biases:
 People define problem and opportunities based on
their perceptions, values and assumption
 Unfortunately , selective attention mechanisms cause
relevant information to be unconsciously screened out.
 Mental Models (theories in use)-this blind people to
consider new realities
b. Poor Diagnostic Skills

People quickly define problems based on stereotypes and other
unsubstantiated information . Hence they fail to see problems and
opportunities due to insufficient time and information .
 Due to complex situation
 Defining problems in terms of their solutions
Eg. “the problem is that we need more control over our
suppliers .”but the problem may be lack of timely delivery of the
product by suppliers
2. Choose the best decision style
. Programmed decision
. Non programmed decision
3. Develop alternative solutions
. Search for ready-made answers
. If not , design a custom –made solution or modify an existing one
Avoid groupthink by listing many solutions
4. Choose the best alternative solution
This requires: . Identifying all factors
. Assigning weights for the factors
. Rating all alternatives on the factors
5. Implement the selected alternative
This requires mobilizing sufficient resources
6. Evaluate Decision Outcomes

Evaluating whether the gap has narrowed between “what is
“ and “what ought to be”
Cont…
• The Final Decision

There are many ways that a group can make a final
decision include:
• Consensus: The group members all agree on the
final decision through discussion and debate.
• Compromise: Through discussion and
readjustment of the final plan, group members come
to agreement by giving up some of their demands.
• Majority Vote: The decision is based on the opinion
of the majority of its members.
• Decision by Leader: The group gives the final
decision to its leader.
• Arbitration: An external body or person makes a
decision for the group.
Problems in Team Decision making
1. Time Constraints
.“committees keep minutes and waste hours”
. Production blocking (due to procedural requirements )
1. Evaluation Apprehension
Individuals are reluctant to mention ideas that may seem silly or not
directly applicable because they believe that other team members are
silently evaluating them.
1. Conformity to peer Pressure
2. Group Think
3. Group Polarization (Shift)
The tendency of teams to make more extreme decisions
than individuals working alone (either more risky or more risk averse)
Team Structures for Creativity and Decision
Making
A. Constructive Controversy
 This occurs when team members debate their
different perceptions about an issue in away that
minimizes socio -emotional conflict
 It is constructive because the discussion focuses on
facts rather than people and avoids statements that
threaten the esteem and wellbeing of other team
members
 For this , some people should be devil’s advocates
–team members who challenge others to explain the
logic of their differences.
B. Brainstorming
• This can be : face to face and electronic (groupware )
Rules :
1. No criticism- no one should criticize any idea
2. Encourage freewheeling –wild and strange ideas are
welcomed for divergent thinking
3. Piggy back ideas –team members are encouraged to
combine and improve on the ideas already presented
4. Encourage many ideas
c. Delphi Technique
structured team decision making process of systematically
pooling the collective knowledge of experts on a particular
subject to make decisions, predict the future , or identify
opposing views.
D. Nominal Group Technique
structured team decision making process whereby members
independently write down ideas , describe and clarify them to the
group , and then independently rank or vote on them.
Individual activity Group Activity

Describe problem Members individually Members describe their
to team members Write down possible solutions to each other
solutions
Individual Activity
Members individually
rank order
Groupthink
• Groupthink is a concept that refers to faulty
decision-making in a group
• Groups experiencing groupthink do not

consider all alternatives and
• They desire unanimity at the expense of

quality decisions
Cont…
• Negative outcomes :
– Examining few alternatives
– Not being critical of each other's ideas
– Not examining early alternatives
– Not seeking expert opinion
– Being highly selective in gathering information
– Not having contingency plans
Symptoms of Groupthink
• Some symptoms of groupthink are:
• Having an illusion of invulnerability
• Rationalizing poor decisions
• Believing in the group's morality
• Sharing stereotypes which guide the
decision
• Exercising direct pressure on others
• Not expressing your true feelings
• Maintaining an illusion of unanimity
• Using mind guards to protect the group
from negative information
solutions
• Some solutions include:
– Using a policy-forming group which reports to the larger
group
– Having leaders remain impartial
– Using different policy groups for different tasks
– Dividing into groups and then discuss differences
– Discussing within sub-groups and then report back
– Using outside experts
– Using a Devil's advocate to question all the group's ideas
– Holding a "second-chance meeting" to offer one last
opportunity to choose another course of action
THANK YOU !!!

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DECISION MAKING - Individual

and Group Perspective

Dr.Kahsu Mebrahtu (Asst. Prof.)

• A problem is a deviation between the current and

b. Poor Diagnostic Skills

6. Evaluate Decision Outcomes

• The Final Decision

Individual activity Group Activity

• Groups experiencing groupthink do not

• They desire unanimity at the expense of

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