A PPT on Group Decission.

1. Decision Making

2. DEFINITION
Decision making is defined as selection
of a course of action from among
alternatives.

3. The Link Between Perceptions
and Individual Decision Making
Perceptions
of the
decision
maker
Perceptions
of the
decision
maker
Outcomes

4. 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.

5. 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

6. 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

7. 4. Evaluation of Alternatives
5. Choice of Alternative
a. Experiences
b. Experimentation
c. Research and Analysis
6. Action
7. Results
The results must correspond with
objectives.

8. How Are Decisions Actually
Made in Organizations

9. Making Choices

10. Making Choices

11. 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

12. MODELS OF
BEHAVIOURAL
DECISION MAKING
Social
Model
Economic
Rationality
Simon’s Bounded
Rationality Model
Judgmental Heuristics
and Biases Model

13. 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

14. 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

15. 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

16. 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

17. 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…)

18. THE SOCIAL MODEL
1. Sigmund Freud : Behavior guided by
unconscious desires
2. 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

19. 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.

20. POSITIVE ASPECTS OF DECISION
MAKING
 Pooling of knowledge and information.
 Satisfaction and Commitment.
 Personnel development
 More risk taking

21. NEGATIVE ASPECTS OF DECISION
MAKING
 Time consuming and costly
 Individual domination
 Problem of responsibility
 Group thinking

22. 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.

23. Organizational Constraints on Decision
Makers
 System-imposed Time Constraints
 Organizations require decisions by specific
deadlines.
 Historical Precedents
 Past decisions influence current decisions.

24. Group Decision Making

25. 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.

26. 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.

27. 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.

28. Techniques of Group DM
(Improving DM)
 Brainstorming
 Delphi Technique
 Nominal Technique.
 Fish bowling
 Didactic Interaction