Managerial Decision Making in Groups - Essay Example

Decision Making in Groups Decision Making in Groups Individuals, groups or teams need to make decisions every now and then. Sometimes these decisions are as easy as choosing a meal on the menu or a Movie to watch. These decisions have little or no impact on our life. However, there are decisions that bear greater consequences and therefore we may be more hesitant to decide, feeling frightened that if deciding incorrectly we may be less fulfilled or unhappy. Examples of these decisions may include choosing a financial management database for your company or even choosing the right product in an ever-competitive market. Managers in todays business environment are faced with numerous often-unplanned events that require decision-making. In the past it was more common for a manager to decide the course of action individually or within formal groups. Important decisions in the business circle are now deemed too risky or important to be made entirely by one person. A manager must seek the right advice from several different sources. Decisions made by group when dealing with problems and issues take place everyday in the life of an organization. Today it is often common for many managers to seek involvement from lower level employees in the decision making process whenever it can be done. However it is not always possible just to ask a colleague what they should do. Most decisions will require a process of a greater degree of subordinate participation; these decisions can be made through a variety of different ways such as committees, task groups, departmental participation and so forth. It is said that making decisions in a group allows for every angle to be looked at and every possible idea to be created with every decision from a group offering the best solution this method of decision-making. This paper hopes to discuss advantages of group decision-making using several theories and some real life case studies. We will see how participation in decision-making affects companies decisions; we will look at several helpful models i.e. vroom-jago model and all referencing it to real life situations and quotes from famous persons in the field (Schwenk, 1990, p.161–176) Circumstances of Group Decision Managers as part of their job are faced with many decisions in which they have to undertake, it is up to the managers themselves to decide in what kind of way they want to make the decision and solve the problem. However groups can offer an essential feature in decision making for an organisation. As Coghlan points out: Membership of teams and groups shape perception and participation in organisational change. Groups and teams play a key role in the process of planned organisational change. The change process typically involves teams in the organisational hierarchy responding to the change agenda and adapting to it in terms of its tasks and processes. Coghlan statement clearly leads us to believe that groups are critical in making important direction changing decisions for the company. Evidence supports this statement and we will look at this a little later as we discuss the advantage. First we will look at how managers come about making the decision to use group participation. A manager may decide to use group decisions in several circumstances and the contingency model by Vroom and Yetton as well as the Vroom and Jago decision model can prove useful in helping management decide when to encourage group participation. In he contingency model by Vroom and Yetton there are five key management styles as described by Vroom that a manager can undertake to make decisions. (Schwenk, 1990, p.161–176) We can see from this that the amount of participation that a manager involves in a decision varies greatly. It would not be logical for managers to always involve group decision-making on smaller problems such as whether to refund a customer (if it was something worth 10) this would be a waste of time and resources for the company and could easy be dealt with on the stop with a programmed decision by the staff. Group decisions as described by Coghlan can be very useful for important or company changing problems or opportunities. It would not be wise to let one person decide whether to invest 4 billions pounds to merge with another company. This is a case when it would be wise for the company to go for the style as vroom described as decision style GII i.e. where you share a problem with your subordinates as a group and implement any solution that has the entire support of the group. (Schittekatte, 1996, p.537–556) The Vroom and Jago decision model goes onto produce a decision tree for choosing an appropriate decision-making method. This decision tree allows the manger to move along the branches by answering the questions at each point. This leads to one of the five decision making styles as described in the Vroom Yetton model. However it has to be said that this model as well as models in general are neither right nor wrong they must be seen as guidelines or as a reference. However the Vroom-Yetton, Jago model must be seen as a useful tool in the aid of decision-making although it is not perfect. Advantages of Decision Making in Groups In todays empowered work places managers involve all workers in decision making as a rule rather than choice. However companies must understand that participative decision-making does has its disadvantages as well as it obvious advantages. It is seen that in business two heads are better than one. This can be true in some circumstances as it offers an advantage in terms of offering a boarder perspective to establish the problem and sort out its causes and effects. It also enables the company to have more ability and facts at its disposal therefore allowing for greater scope to sort out any potentially tricky problem. (Schittekatte, 1996, p.537–556) Group discussion leads to the evaluation and correction of possible decisions, plus group discussion also helps to back up and support a decision that an individual may not wish to take on his or her own due to the risk involved. And finally group discussion allows for more satisfaction from the workers, as they feel involved with the project and decision that their work place is taking. Group decisions however can tend to be time consuming, everyone must be consulted on the problem and then they must all find the time to jointly diagnose the problem and decide a solution. (Lyles and Thomas, 1988, p. 131-145) Groups may also have the problem of not using the best solution for the problem, although the group discussion allows for more ideas some members may not agree on the best solution and therefore a comprise solution will have to be used to gain group wide acceptance. A boarder instant of this would be the risky shift phenomenon, this suggests that instead of groups taking fewer risks and making safer decisions the reverse is often the case. There is a tendency for groups to make more risky decisions than an individual may take. Another point is that people inclined to make risks are more influential within the group than say the more conservative members, therefore good ideas could be lost. (Hekkinghausen and Myers, 1998, p. 232) Groupthink is another issue that must be considered within a group. Group think tells us that pressures on individual members to conform and reach consensus mean that minority or unpopular ideas maybe suppressed. Members who oppose the group are stereotyped as being weak, stupid, and argumentative. As People may not wish to question any ideas of the group, bad ideas may filter through. (Larson, Foster and Keys, 1994, p. 446–461) One other big issue to group think as see we see in the example of Napster is that it can lead to a inherent morality of the group which in turn can lead to members to be convinced of the logical correctness of what it is doing and to ignore ethical or moral consequences of decisions. The final problem is people do not feel the same sense of responsibility for group decisions or their outcomes. A decision which is everyones is the responsibility of no one. Management have realized that encouraging employee participation in solving problems can be extremely advantageous toward the company. Frontline workers are constantly in touch with the needs, wants and concerns of the company’s customers; it allows them fuller insight into how to possibly solve problems that concern the companys consumer base. There are many different ways in which can pursue employee participation. The most common and well-known participation tool would be brainstorming. (Larson, Foster and Keys, 1994, p. 446–461) Brainstorming is a decision-making technique in which group member’s present spontaneous ideas and suggestions for solving the problem concerned. It allows any ideas regardless of how impractical they may seem. This in turn hopefully promotes freer and more creative thinking. Brain storming works on involving everyone, and encouraging communication, listening, and information sharing in the hope that it maximises ideas/possible solutions to problems and also minimises the risk of overlooking any points of the problem under question. (Rothwell, 2004, p. 11) Decision- making is serious to organizational performance and middle to any thoughtful of organizations. The decisions made by an organization to decide (or validate) actions taken, and reveal how organizations think. Decision- making for Business gathers crucial contributions to our knowledge of Decision- making and assembles them to form a coherent and sustained analysis of the key factors that can influence the process. (Salaman, 2002, p. 11-28) An advancement of the brainstorming technique is the Delphi technique this is based on anonymous inputs from individual members of the group and then management assess the responses until a consensus is reached. This can be time consuming but overcomes the limitations of brainstorming and the systems of group think. Now Lets take for example many common marketing departments; it is now commonplace for them to have basketball hoops, televisions, computers games, and other stimuli within the room. Management hope this will promote a relaxed environment within the group in the hope that it will allow for more creative thinking and brainstorming within the marketing group. Other techniques used for group decision making include signing a devils advocate. The devils advocate challenges the assumptions and assertions made by the group to prevent any premature consensus. This it hopes forces the team who created the idea to solve the problem to examine and explain any risks that maybe associated with it. (Kelly and Karau, 1999, p. 1342–1354) Another similar approach would be multiple advocacies. Multiple advocacies, involves several advocates and allows for the presentation of several different points of view on the idea in question. It allows minority and unpopular opinions; decisions are therefore based on solid augment and the understanding of the entire pros and cons. Conclusion As we can see there are circumstances where group decisions are more necessary than others and it is up to the managers to decide which situations would be best to involve group decision. Although the decision of when to involve group decisions is entirely up to the manager there are models available such as vroom to help give guidance should they need it. This means if there is a problem things can be solved more quickly, and solutions are generally of a better quality. For example if there was an architecture firm, and they needed some ideas to make a bridge, then if there was just one architect on the project he might use a suspension bridge, but if there was a group then others would have suggested an arch bridge, which would have been more appropriate for the situation. (Hastie and Kameda, 2005, p.494–508) As there is a group discussion going on, then everyone will be interacting with one another, so people will get to know each other better. This brings the people in the group closer together and the group will begin to become a team, as they are all working together. If the decisions were made by votes in a box, then there wouldnt be as much interaction between the members, and wouldnt promote teamwork or spirit. Group participation offers a variety of different advantages for solving problems and tasks. It allows for the group as a whole to participate toward solving the task and allows for more creative thinking than would be given by an individual. Groups cover all angles of a problem and enable any ideas to be looked at in detail before being implemented. References Graeme Salaman (2002), Decision Making for Business, published by SAGE ISBN: 0-7619-7411-3. Lyles, M. A., & Thomas, H., (1988). Strategic problem formulation: Biases and assumptions embedded in alternative decision-making models. Journal of Management Studies, 25(2), 131-145. Hekkinghausen, M.A. and J. Myers. (1998). “Empowered employees: A new team concept”. Industrial Management, Sep/Oct 1998, 40, 5 Rothwell, J.D. (2004). In the Company of Others. McGraw-HillWeiss, W. (2002). “Building and Managing Teams”. Super Vision, Nov 2002, 63:11 Hastie, R., & Kameda, T. (2005). The robust beauty of majority rules in group decisions. Psychological Review, 112, 494–508. Kelly, J. R., & Karau, S. J. (1999). Group decision making: The effects of initial preferences and time pressure. Personality and Social Psychology Bulletin, 25, 1342–1354. Larson, J. R., Foster-Fishman, P. G., & Keys, C. B. (1994). Discussion of shared and unshared information in decision-making groups. Journal of Personality and Social Psychology, 67, 446–461. Schittekatte, M. (1996). Facilitating information exchange in small decision-making groups. European Journal of Social Psychology, 26, 537–556. Schwenk, C. (1990). Effects of devils advocacy and dialectical inquiry on decision making: A meta-analysis. 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