Decision Making

Question 1

Decision making 1

Answer 1

The decision making process (Wedley and Field, 1984)

1. It is widely assumed that people make rational, reasonable and logical decisions.
   > This assumption rests on a further assumption - that people making decisions have access to complete and accurate information and that they can process this without bias.
2. Wedley and Field describe the pre-planning stage of the decision making process and the decisions that are taken before beginning to solve a problem.
   > These include deciding which type of leadership to use, whether to involve others, how to gather information, what people to contact and how to generate alternatives.
   > These are not the end decisions but are important ‘pre-decisions’ that need to be considered.
3. Wedley and Field suggest that once the decision making process has been started, it is difficult to stop and this may lead to poor decisions being taken.
   > They propose that for greater flexibility, managers should be encouraged to pre-plan the decision making process.
4. 8 stages of rational problem solving decision making.
   A. Identify the problem or opportunity
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   B. Formulate your objective(s)
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   C. Familiarise yourself with the problem
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   D. Generate alternative solutions
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   E. Evaluate the alternatives
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   F. Choose the best alternatives
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   G. Implement the alternative
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   H. Follow up with evaluation of the results
5. They identify a set of problem-solving stages that is widely considered to be logical and rational.
   > However, it is unlikely that every decision making situation will fit this model. There may be time pressures, there may be information missing and so on.
6. A decision support system (DSS) is a computer-based system that supports decision making activities.

Question 2

Decision making 2

Answer 2

Groupthink (Janis, 1971)

1. A psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision making outcome.
   > This is because the group creates a situation in which a decision happens which individuals within the group would not have made.
   > Famous example: Bay of Pigs
2. Janis identified 8 different ‘symptoms’ that indicate groupthink.
   A. Illusions of invulnerability
   > Members of the group believe that they can do no wrong and can never be in any sort of trouble.
   > This can lead to overly optimistic thinking about likely outcomes and encourages risky decision making.
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   B. Unquestioned beliefs
   > A lack of questioning, particularly from a legal or moral standpoint, can prevent group members from considering all the possible consequences of their decisions.
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   C. Rationalising
   > Group members ignore warning signs and assume that everything will be alright.
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   D. Stereotyping
   > Group decision making can involve stereotypical views of those who raise issues or point out problems.
   > This can mean that they are ignored or labelled as members of an ‘out-group’.
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   E. Self-censorship
   > In a group situation, we are less likely to listen to our own doubts or misgivings as it appears to us that no-one else has any doubts or misgivings.
   > This is a little like the ‘pluralistic ignorance’ seen in bystanders to an accident when they assume that, since no-one else is responding, that there is no real emergency.
   > In this way, everyone is convinced that there is nothing to worry about.
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   F. Mind guards
   > Janis described these as ‘self-appointed censors to hide problematic information from the group.’
   > We don’t want the rest of the group to see that we are worried and so we hide this.
   > Unfortunately, if everyone is feeling the same way and hiding their feelings, this can lead to some very risky decisions.
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   G. Illusions of unanimity
   > Groups behaving in the ways that we have just considered will produce the illusion of ‘unanimity’ or agreement.
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   H. Direct pressure to conform
   > Groups can place dissenters ir those who question under a great deal of pressure, in some cases making them appear as though they are being disloyal or traitorous by asking questions.
3. This means that groupthink can lead to extremely poor decision making.
4. Benefit of groupthink:
   > When working with a large number of people, it often allows the group to make decisions, complete tasks, and finish projects quickly and efficiently.
5. Groupthink is caused by a number of factors:
   > Occurs more in situations where group members are very similar to one another and is more likely to take place if there is an extremely charismatic leader.
   > High levels of stress or situations that are morally challenging also seem to increase the chances of groupthink occurring.
6. Strategies to reduce the risk of groupthink:
   > Leaders need to give group members the opportunity to express their own ideas or argue against ideas that have already been proposed.
   > Breaking up members into smaller independent teams.
   > Leader should avoid stating their views too forcefully, especially at the start of the discussion, to ensure that people are able to develop their own views first.
   > If someone is instructed to take the role of ‘devil’s advocate’, that is to deliberately present the opposing view regardless of their own personal viewpoints, this can reduce the likelihood of groupthink occurring and encourage the group members to take a critical perspective.

Question 3

Decision making 3

Answer 3

Cognitive limitations and errors (Forsyth, 2006)

1. Individuals in a group decision making setting are often functioning under substantial cognitive demands.
   > As a result, cognitive and motivational biases can often affect group decision-making adversely.
2. Forsyth suggests that there are three categories of potential biases that may affect group decision making.
   A. Sins of commission
   > Misuse of information in the decision making process.
   > May involve the use of information in the decision making process that has already been shown to be inaccurate (belief perseverance).
   > Alternatively, it may be shown by group members remaining committed to a plan because some investment of time or money has already been made even though this plan may now be obviously flawed.
   > If a group chooses to use information despite having been told to ignore it then they are guilty of extra-evidentiary bias and, falsely overestimating the importance of past knowledge or experience is termed hindsight bias.
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   B. Sins of omission
   > Overlooking key information.
   > Include base rate bias which would be overlooking very basic relevant information.
   > The fundamental attribution error is made when members of a group make decisions based on inaccurate appraisals of an individual’s behaviour.
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   C. SIns of imprecision
   > Relying too heavily on heuristics that over-simplify complex decisions.
   > Heuristics include the availability heuristic (over-reliance on the information that is most easily and readily available), conjunctive bias (failing to consider relationships between events), representativeness heuristic (where group members rely too heavily on decision making factors that may appear meaningful but are, in fact, misleading).

Question 4

Evaluation

Answer 4

1. Application to everyday life
   > Understanding the process of decision making is clearly very useful and will have obvious applications to any organisation.
   > Wedley and Field not only explain the process of decision making but identify several strategies to ensure that poor decisions are avoided.
   » These include the use of pre-planning as well as the use of computer-based decision support systems.
   > Janis’s exploration of groupthink is also useful and can be applied in organisations to ensure that the negative outcomes of groupthink are avoided.
   » It is important to remember that groupthink can sometimes be extremely useful, allowing for big decisions to be taken quickly and easily, but that there are also pitfalls.
   » The strategies outlined above should be common practice in any organisation where decision making occurs regularly.
   > Forsyth examines cognitive limitations and errors in even more detail and knowledge of these biases would be valuable information within an organisation that makes decisions frequently.
   » Acknowledging and recognising the possibility of these errors will allow an organisation to take steps to reduce them.