What is Decision Making?
Decision making is a regular part of the job of employees in different organizations all around the world. The decisions regarding the company's managerial, financial and working state impact how it will function and the state it is going to be. There are generally two broad categorizations in techniques for decision making- individual and group decision making. However, the decision-making process is so crucial for the existence and the future of a company that mostly it is not taken by any individual of the company. In an organization, decision making in groups is a far more common approach than decision making by an individual.
The organization must form a decision-making team and define the scope of power and authority that it holds. This allows the members to make better decisions for the company while getting supervised on important decisions. Policies made regarding such decision-making teams safeguard their positions. Also, in case of a failure, the burden of wrong decision does not lie with a single person and as the teams have been established under them, higher authorities also share the blame in the decision. Therefore the risk associated with such decisions is lower when compared to the other scenario.
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Advantages of Group Decision Making
The decision-making committee comprises people in different positions of power. Each of these members brings with them their ideas and opinions about the problem at hand. Therefore group decision-making allows the team to discuss the different viewpoints and objectively look at the options.
People from different parts of the organization are mixed in these groups while making the decision. Therefore it becomes easier to implement the decision throughout the organization. Each department manager knows exactly what has been decided in the meeting and how much of it they have to contribute. This crucial piece of information allows them to give clear instructions to their subordinates in the department.
A sense of unity prevails among the members when a decision is taken collectively. People take pride in it and often work hard to see that their decision leads to success for the company.
Disadvantages of Group Decision Making
In general, this method of decision-making requires more time than a single person making a decision. This is because here, every step needs to be consulted among the different members before proceeding.
The process of forming a committee and reaching a good decision can be drawn-out. Therefore, the opportunity to solve the problem or take a serious decision may be lost.
In the group, it is sometimes hard to reach a common decision for a problem. This may lead to indecisions and members may not be keen to share their ideas to avoid the blame in case of failures.
Decision making in groups can be done in several ways. Given below are a few of the group decision-making techniques widely used in the industry:
Brainstorming
The team is required to sit together for this technique to work. A person is assigned to write different ideas generated. This method aims to focus on the problem and think of the different ways it can be solved. Therefore here, the feasibility of the option is neglected in the initial stages of discussion. Creativity and innovation among the members are used to find new approaches to the problem.
The list containing all these gathered probable solutions is then circulated among the members. The committee improvises and improves on the different alternatives to ultimately come up with a solution.
The process is very effective for most of the group decision-making committees. The method is best suited for straightforward decisions. A complex problem is broken down into several different steps when dealt with a brainstorming approach.
Nominal Group Thinking
This approach is similar to brainstorming though the difference here is that it is better structured and has less open communication of ideas when discussing the problem. Every member of the team individually comes up with a solution to the problem at hand. The moderator then presents these potential solutions one by one to all the other members. Limiting the communications, this method tries to keep the ideas away from biases and public opinions when conceptualized.
When the options are presented in front of the team, a similar discussion to brainstorming takes place. Members here systematically weigh the risks and the benefits of the particular option and take the decision accordingly.
Even though it takes a bit longer and can get a little more cumbersome, group decision-making reduces the chances of error by an organization. It helps it achieve an overall successful operation.
FAQs on Group Decision-Making Process Explained
1. What is the group decision-making process in the context of business management?
Group decision-making is a participatory process where multiple individuals, acting as a collective, analyse problems, evaluate alternatives, and select a final course of action. Unlike individual decision-making, this approach leverages the combined knowledge, skills, and perspectives of a team to arrive at a more robust and well-accepted solution, which is crucial for organisational success.
2. What are the key steps involved in a typical group decision-making process?
A structured group decision-making process generally follows several logical steps to ensure a comprehensive and effective outcome. The most common steps include:
Identify the Decision: Clearly define the problem or the decision that needs to be made.
Gather Information: Collect all relevant data and facts to inform the group.
Brainstorm Potential Solutions: Generate a wide range of possible alternatives without initial judgement.
Evaluate Alternatives: Critically analyse the pros and cons of each potential solution against established criteria.
Select the Best Option: Choose the most suitable course of action through voting, consensus, or another agreed-upon method.
Implement the Solution: Put the chosen decision into action.
Monitor and Evaluate: Review the outcome of the decision to determine its effectiveness and make adjustments if necessary.
3. What are the main advantages and disadvantages of group decision-making?
Group decision-making offers significant benefits but also comes with potential drawbacks. The primary advantages include access to a greater pool of knowledge and diverse perspectives, which can lead to higher quality decisions. It also increases the acceptance and commitment to the final decision among team members. However, the main disadvantages are that it can be more time-consuming, be dominated by a few vocal members, and lead to a diffusion of responsibility where no single person feels accountable for the outcome.
4. How does 'Groupthink' negatively impact the group decision-making process?
'Groupthink' is a major pitfall in group decision-making. It is a psychological phenomenon where the desire for harmony and conformity within a group leads to an irrational or dysfunctional outcome. It negatively impacts the process by suppressing dissent and critical evaluation. Members avoid raising controversial issues or alternative solutions to maintain cohesiveness, which can cause the group to overlook potential risks and make poor, ill-considered decisions.
5. What are some common techniques used to improve group decision-making?
To structure discussions and mitigate issues like groupthink, organisations use several techniques. Key examples include:
Brainstorming: A technique to generate a large number of ideas quickly, where criticism is initially withheld to encourage creativity.
Nominal Group Technique (NGT): A more structured method where members first write down their ideas individually, then share them in a round-robin format before discussing and ranking them. This ensures even quiet members contribute.
Delphi Technique: A process where a group of experts anonymously provide feedback through multiple rounds of questionnaires, facilitated by a coordinator. This is useful when experts are geographically dispersed or when direct confrontation is undesirable.
6. Why is the size and composition of a group important for effective decision-making?
The size and composition of a group are critical factors for success. A group that is too large can lead to communication breakdowns and 'social loafing,' where some members contribute less. An ideal size is often considered to be five to seven members, which is large enough for diverse input but small enough for efficient discussion. An odd number is often preferred to prevent ties. Furthermore, a group's composition should be diverse in terms of skills, knowledge, and perspectives to enrich the discussion and prevent a narrow viewpoint.
7. Can you provide some real-world examples of group decision-making in a business?
Group decision-making is common in everyday business operations. For example:
A Board of Directors voting on a major capital investment or a potential merger.
A marketing team collaborating to decide on the branding and advertising strategy for a new product launch.
A product development team selecting which new features to prioritise for the next software update based on technical feasibility and customer feedback.
