GROUP DECISION-MAKING

Individual& Group Decision-Making



Individual & Group Decision-Making

The Nature of Decision Making

A decision is a choice made from among available alternatives. Decision making is the process of identifying and choosing alternative courses of action. A decision-making style reflects the combination of how an individual perceives and responds to information. Decision-making styles may tend to have a value orientation, which reflects the extent to which a person focuses on either task or technical concerns versus people and social concerns when making decisions. Decision-making styles may also reflect a person's tolerance for ambiguity, the extent to which a person has a high or low need for structure or control in his or her life. When the dimensions of value orientation and tolerance for ambiguity are combined, they form four styles of decision making: directive, analytical, conceptual, and behavioral (Schaubroeck 2000, p. 565-573).

Two Kinds of Decision Making: Rational & Nonrational

Two models managers follow in making decisions are rational and non rational. In the rational model, there are four steps in making a decision: Stage 1 is identifying the problem or opportunity. A problem is a difficulty that inhibits the achievement of goals. An opportunity is a situation that presents possibilities for exceeding existing goals. This is a matter of diagnosis analyzing the underlying causes. Stage 2 is thinking up alternative solutions. Stage 3 is evaluating the alternatives and selecting a solution. Alternatives should be evaluated according to cost, quality, ethics, feasibility, and effectiveness. Stage 4 is implementing and evaluating the solution chosen.

The rational model of decision making assumes managers will make logical decisions that will be the optimum in furthering the organization's best interests. The rational model is prescriptive, describing how managers ought to make decisions. Nonrational models of decision making assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimum decisions. Three nonrational models are satisficing, incremental, and intuition. (1) Satisficing falls under the concept of bounded rationality—that is, that the ability of decision makers to be rational is limited by enormous constraints, such as time and money. These constraints force managers to make decisions according to the satisficing model—that is, managers seek alternatives until they find one that is satisfactory, not optimal. (2) In the incremental model, managers take small, short-term steps to alleviate a problem rather than steps that will accomplish a long-term solution. (3) Intuition is making choices without the use of conscious thought or logical inference. The sources of intuition are expertise and feelings (Salas 2008, p. 23).

Evidence-Based Decision Making & Analytics

Evidence-based management means translating principles based on best evidence into organizational practice. It is intended to bring rationality to the decision-making process. Scholars Jeffrey Pfeffer and Robert Sutton identify seven implementation principles to help companies that are committed to doing what it takes to profit from evidence-based management: (1) treat your organization as an unfinished prototype; (2) "no brag, just facts"; (3) see yourself and your organization as outsiders do; (4) have everyone, not just top executives, ...