decision making by individual and group
TRANSCRIPT
“Two Heads are better than one“
"Too many cooks spoil the broth”
"You can't accomplish anything in a meeting. Everyone has his or her own agenda. The more
people, the more impossible it becomes."
(in organizations)
Louzel M. LinejanMPA IIXavier Univ – Ateneo de Cagayan
“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?”
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
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
TYPES OF DECISION MAKING
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 DECISIONSPoorly structured decisions, unique, non-
routine and more ambiguous and frequently more difficult to make since it involves major planning issues
TYPES OF DECISION MAKING
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.
“What and How to decide?”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.
“What and How to decide?”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
Factors Affecting Decision MakingPerceptual and judgemental factors
1. 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 change
4. Inaccurate Perceptions- Perceptions are subject to factors of attention, stress and
many perceptual phenomena
Factors Affecting Decision Making
Perceptual and judgemental factors
5. 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 change
7. 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
Techniques for better decision-making
1. NOMINAL GROUP THINK
The NGT is designed to help all team members participate and express opinions while still building team consensus
The 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 writing
NGT is designed to help with group decision making by ensuring that all members participate fully.
Techniques for better decision-making
1. NOMINAL GROUP THINK
NGT follows these steps:
7-10 individuals are brought together to participate in a structured 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.
Techniques for better decision-making2. DELPHI TECHNIQUE
Another technique which capitalises group's resources, while avoiding several possible disadvantages of relying on group decision-making processes
This 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)
Techniques for better decision-making2. DELPHI TECHNIQUE
DELPHI 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 expert's opinion sharply differs from the rest, he or she may be asked to provide a rationale. process is repeated several times, the experts usually achieve a consensus
3. STEPLADDER TECHNIQUE
A problem-solving structure recently proposed as a solution to the problem of unequal participation in groups
The technique is intended to improve group decision-making by structuring the entry of group members into a core group.
encourages all members to contribute on an individual level before being influenced by anyone else
This results in a wider variety of ideas, it prevents people from "hiding" within the group, and it helps people avoid being "stepped on" or overpowered by stronger, louder group members.
Techniques for better decision-making
3. STEPLADDER TECHNIQUE
Step 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 done
Step 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.
Techniques for better decision-making
3. STEPLADDER TECHNIQUE
Step 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.
Techniques for better decision-making
Techniques for better decision-making4. 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.
Techniques for better decision-making4. 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)
Techniques for better decision-making4. PARETO ANALYSIS
How to Use the Tool:
5. write out a list of the changes you would make
2. 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.
Techniques for better decision-making5. 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 important problem to solve, or select the solution that will give you the greatest advantage. Paired Comparison Analysis helps you to set priorities where there are conflicting demands on your resources.
Techniques for better decision-making5. PAIRED COMPARISON ANALYSIS
Overseas Market
(A)
HomeMarket
(B)
CustomerService
(C)
Quality(D)
Overseas Market(A)
--------------- A,2 C,1 A,1
Home Market(B)
---------------
--------------- C,1 B,1
Customer Service(C)
---------------
--------------- --------------- C,2
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!
Techniques for better decision-making6. 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. It's particularly powerful where you have a number of good alternatives to choose from, and many different factors to take into account.
Techniques for better decision-making6. GRID ANALYSIS
Factors:Cos
tBoar
dStorag
eComfor
tFun Look Total
Weights:
Sports Car 1 0 0 1 3 3
SUV/4x4 0 3 2 2 1 1
Family Car 2 2 1 3 0 0
Station Wagon
2 3 3 3 0 1Factors: Cost
Board
Storage
ComfortFun Look Total
Weights: 4 5 1 2 3 4
Sports 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
Techniques for better decision-making7. 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
More going on (+5) Have to sell house (-6)Easier to find new job?
(+1)
Easier to see friends (+5) More pollution (-3) Meet more people? (+2)
Easier to get places (+3) Less space (-3)More difficult to get own
work done? (-4)
No countryside (-2)
More difficult to get to
work? (-4)
+13 -18 -1
Techniques for better decision-making8. SIX THINKING HATS
- Looking at a Decision from All Points of View
"Six Thinking Hats" is a powerful technique that helps you look at important decisions from a number of different perspectives. It helps you make better decisions by pushing you to move outside your habitual ways of thinking. As such, it helps you understand the full complexity of a decision, and spot issues and opportunities which you might otherwise not notice.
Many successful people think from a very rational, positive viewpoint, and this is part of the reason that they are successful
Techniques for better decision-making8. SIX THINKING HATS
How 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.
1. Nominal Group Think2. Delphi Technique3. Stepladder Technique4. Pareto Analysis5. Paired Comparison Analysis6. Grid Analysis7. Plus, Minus, Interesting8. Six Thinking Hats
Decision-Making MethodsMETHOD 1 – DECISION MADE BY AUTHORITY (without group decision)
STRENGTHS WEAKNESSES
Takes minimal time to make decision
No group Interaction
Familiarity - commonly used in organizations
Team may not understand the decision 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
Process: The designated leader makes all decisions without consulting group members
METHOD 2 – DECISION BY EXPERT
STRENGTHS WEAKNESSES Useful when one person on the team has the overwhelming expertise
Unclear how to determine who the expert is (team members may have 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.
Process: Select the expert from group, let the expert consider the issues, and let the expert make decision
Decision-Making Methods
METHOD 3 – DECISION BY AVERAGING INDIVIDUAL’S OPINION
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.
Process: 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 team together to talk
Unresolved conflict may exist or escalate
Urgent decisions can be made May damage future team effectiveness
Decision-Making Methods
METHOD 4 – DECISION MADE BY AUTHORITY AFTER GROUP DISCUSSION
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.
Process: 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 accuracy of the decision
Team may compete for the leader’s attention
Commitment to decision may not be strong
Still may not have commitment from the team to the decision
Decision-Making Methods
METHOD 5 – DECISION BY MINORITY
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.
Process: 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 committees
Can be railroading
Method can be used by temporary committees
May not have full team commitment to decision
Useful for large number of decisions and limited time
May create an air of competition among team members
Some team perspective and discussion
Still may not have commitment fromteam to decision
Decision-Making Methods
METHOD 6 – DECISION BY MAJORITY VOTE
Appropriate times for Method 6: Time constraints require decision; group consensus supporting voting
process; team commitment required to implement decision is moderately high.
Process: 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 to make decision by consensus
Taken for granted as the natural, or only, way for teams to make a decision
Useful when the complete team- member commitment is unnecessary for implementing a decision
Team is viewed as the “winners and the losers”; reduces the quality of decision
Minority opinion not discussed and may not be valued
May have unresolved and unaddressed conflict
Full group interaction is not obtained
Decision-Making Methods
Decision-Making MethodsMETHOD 7 – DECISION BY CONSENSUS
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.
Process: 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 decision making
Takes more time than methods 1–6
All team members express their thoughts and feelings
Takes psychological energy and high degree of team-member skill (can be negative if individual team members not committed to the process)
Team members “feel understood”
Active listening used
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
Thank you for listening