Group decision
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Transcript of Group decision
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Decision Making
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DEFINITION
Decision making is defined as selection of a course of action from among alternatives.
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The Link Between Perceptions and Individual Decision Making
Perceptions of the
decision maker
Perceptions of the
decision maker
Outcomes
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CHIEF CHARACTERISTIC OF DECISION MAKING
It implies choosing from among two or more alternative courses of action.
It is a continuous process. It involves all the organizational
activities. It is an intellectual process, involving
both reason and instinct. It aims at finding a solution for a given
problem.
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Assumptions of the Rational Decision-Making Model
1. Problem clarity
2. Known options
3. Clear preferences
4. Constant preferences
5. No time or cost constraints
6. Maximum payoff
1. Problem clarity
2. Known options
3. Clear preferences
4. Constant preferences
5. No time or cost constraints
6. Maximum payoff
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How Are Decision Actually Made In An Organization
1.Specific Objective
2.Problem Identification
Problem identification involves-
a. Diagnosis
b. Analysis
3. Search for Alternatives
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4. Evaluation of Alternatives5. Choice of Alternative a. Experiences b. Experimentation c. Research and Analysis6. Action 7. Results The results must correspond with
objectives.
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How Are Decisions Actually Made in Organizations
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Making Choices
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Making Choices
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MINTZBERG’S PHASES OF DECISION MAKING
Decision making is a dynamic process
Phase-1
IDENTIFICATION
•Recognition
•Diagnosis
Phase-2
DEVELOPMENT
•Search
•Design
Phase-3
SELECTION
•Judgement
•Analysis
•Bargaining
Authorization
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MODELS OF BEHAVIOURAL DECISION MAKING
Social Model
Economic Rationality
Simon’s Bounded Rationality Model
Judgmental Heuristics and Biases Model
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ECONOMIC RATIONALITY MODEL
1. Decision maker perfectly and completely rational
Assumptions• Decision will be completely rational in means
-ends sense• Complete and Consistent system of
preferences allows a choice among alternatives
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ECONOMIC RATIONALITY MODEL
• Complete awareness of all possible alternatives
• No limits to complexity of computations to determine best alternatives
• Probability calculations neither frightening nor mysterious
2. Decision maker always strives to maximize outcomes
3. Decisions directed to the point of maximum profit where Marginal Cost = Marginal Returns
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SIMON’S BOUNDED RATIONALITY MODEL
• Objectives are dynamic• Information deficiencies• Time and Cost constraints• Not possible to Quantify Alternatives• Environmental Forces can’t be ignored
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JUDGMENTAL HEURISTICS AND BIASES MODEL
1. Identifies Specific Systematic Biases that influence judgment
2. Judgmental Heuristics help by :-¨ Past experiences help to evaluate present¨ Substitute Rules of Thumb for complex
information collection and evaluation.¨ Save Mental activity and cognitive processing
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3. Three Biases : The Availability Heuristic
¨ Tendency to assess probability by how readily they can remember
¨ Event that evokes emotions easily remembered and vice versa
The Representative Heuristic¨ Likelihood of an event occurring depending upon similarity
of occurrence of stereotypes The Anchoring and Adjustment Heuristic
¨ Judgement biased by an initial value or anchor (May be Historical precedent)
JUDGMENTAL HEURISTICS AND BIASES MODEL (Continued…)
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THE SOCIAL MODEL1. Sigmund Freud : Behavior guided by
unconscious desires2. Social pressures and influences produce
irrational conformists.3. Straw and Ross : Phenomenon of
Escalation of Commitment¨ Psychological Determinants¨ Social Forces¨ Organizational Determinants
4. Human Complexity plays an important part in Management Decision Making
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Common Errors in DM Indecisiveness Postponing the decision until the last
moment Failure to isolate the root cause of the
problem Failure to assess the reliability of
informational sources The method for analyzing the info. May
not be sound one.
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POSITIVE ASPECTS OF DECISION MAKING
Pooling of knowledge and information. Satisfaction and Commitment. Personnel development More risk taking
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NEGATIVE ASPECTS OF DECISION MAKING
Time consuming and costly Individual domination Problem of responsibility Group thinking
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Organizational Constraints on Decision Makers
Performance Evaluation Evaluation criteria influence the choice of actions.
Reward Systems Decision makers make action choices that are
favored by the organization. Formal Regulations
Organizational rules and policies limit the alternative choices of decision makers.
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Organizational Constraints on Decision Makers
System-imposed Time Constraints Organizations require decisions by specific
deadlines. Historical Precedents
Past decisions influence current decisions.
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Group Decision Making
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Three Assumptions – Gary John
Why groups can make higher quality decisions than individuals --
Groups are more vigilant than individuals.
Can generate more ideas and develop more alternatives solutions.
Can evaluate ideas better.
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Other Advantages
People with more specializations and competencies.
Implementation of decision more effectively.
Increases the commitment of people.
Biases are eliminated. More democratic in nature.
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Disadvantages of Group DM Time consuming Social pressures on group members. Pass the buck. Groupthink No clear responsibility/accountability Self-censorship Some times decisions get influenced by
members of strong personality.
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Techniques of Group DM (Improving DM)
Brainstorming Delphi Technique Nominal Technique. Fish bowling Didactic Interaction