INDIVIDUAL VERSUS GROUP DECISION MAKING

In recent times most of the decisions in any large organisation are usually taken by a group of people (e.g., Board of Directors, Committees, Task-force, etc.) rather than by a single individual manager, however, brilliant, bright or powerful the manager may be.

Advantages and Disadvantages of group decision making

Advantages:

1. Groups can accumulate more knowledge and facts.
2. Groups have a broader perspective and consider more alternative solutions.
3. Individuals who participate in decisions are more satisfied with the decision and are more likely to support it.
4. Group decision processes serve an important communication function as well as a useful political function

Disadvantages

1. Groups often work more slowly than individuals.
2. Group decision involves considerable compromise which may lead to less than
3. optimal decisions.
4. Groups are often dominated by one individual or a small clique, thereby negating many of the virtues of group procedures.
5. Over-reliance on group decision making can inhibit management's ability to act quickly and decisively when necessary.

The impact of the groups in decision making process has been summarised by Harrison (1975) in the following way:

In establishing objectives, groups are typically superior to individuals in that they possess greater cumulative knowledge to bring to bear on problems.

In identifying alternatives, individual efforts are important to ensure that different and perhaps unique solutions are identified from various functional areas that later can be considered by the group.

In evaluating alternatives, group judgement is often superior to individual

judgement because it brings into play a wider range of viewpoints.

In choosing an alternative, involving group members often leads to greater
acceptance of the final outcome.

In implementing the choice, individual responsibility is generally superior to group responsibility, Regardless of whether decisions are made individually or collectively, individuals perform better in carrying out the decision than groups do.

Vroom and Yetton (1973) found evidence in support of the following propositions:

Managers tend to be more participative when:

1. The quality of the decision is important.
2. When subordinate acceptance of the decision is critical for its effective implementation.
3. When they trust their subordinates to focus on organisational rather than personal goals and when conflict among subordinates is minimal

Managers tend to be less participative when:

1. They have all the necessary information to make a high quality decision.
2. The immediate problem is well structured or where there is a common solution that has been applied in similar situations in the past.
3. Time is limited and immediate action is required.

Two phenomena observed in group decision making situations.

A. Risky Shift Phenomenon: Groups make riskier decisions than individuals do. Below are four possible reasons.

1. Risk takers are persuasive in getting more cautious companions to shift their position
2. As members of a group familiarise themselves with the issues and arguments they seem to feel more confident about taking
3. The responsibility for decision making can be diffused across members of the group.
4. There is the suggestion that in our culture people do not like to appear cautious in a public context.

B. Group think

It is mode of thinking in a group in which the seeking of concurrence among members becomes so dominant that it over-rides any realistic appraisal of alternative course of action

Group think can have following "negative" effects

1. Groups often limit their search for possible solutions to problems to one or two alternatives and avoid a comprehensive analysis of all possible alternatives.

2. Groups often fail to re-examine their chosen course of action after new information or events suggest a change in course.

3. Group members spend very little time considering whether there are any non-obvious advantages to alternative courses of action compared to the chosen course of action.

4. Groups often make little or no attempt to seek out the advice of experts either inside or outside their own organisation.

5. Members show positive interest in facts that support their preferred decision alternative and either ignore or show negative interest in facts that fail to support it.

6. Groups often ignore any consideration of possible roadblocks to their chosen decision and, as a result, fail to develop contingency plans for potential setbacks.

Reference & Source: Indira Gandhi National Open University :: School of Management studies :: Study Material for Management Functions and Behaviour