Decision-Making © 2010 Randall B. Dunham

Decision-Making Define decision-making Assess individual versus group decision- making Consider the group phenomenon, “Escalation of Commitment” Explore and learn to use a variety of decision-making tools Exercise: Brainstorming

Choice Making The narrow set of activities associated with choosing one option from among already identified alternatives

Decision Making The process of: specifying a problem or opportunity identifying alternatives & criteria evaluating alternatives against the criteria selecting from among the alternatives (choosing) Site 1 Pros/Cons Site 2 Pros/Cons

Problem Solving Begins where decision- making ends Implementation of decision Monitoring of impact Revision of actions Achievement of objectives

Choice-Making, Decision- Making, & Problem Solving With choice-making, who defines: –The problem/opportunity? –The alternatives? –The criteria? When would choice-making be appropriate? With decision-making, who defines: –The problem/opportunity? –The alternatives? –The criteria? When would decision-making be appropriate? Problem solving?

Mini-Case: Choice-Making, Decision-Making, & Problem Solving Description of Situation Description of those involved Selection of choice-making, decision- making, or problem solving Explanation and justification of selection

Decision Standards Optimize –Find the best possible decision Maximize –Find decision that meets maximum number of criteria Satisfice –Find the first satisfactory solution

The Risky Shift Groups make risky decisions because: Group discussion makes decision situation seem more familiar and safer Group assets make risks appear more manageable Reward systems encourage risk Diffusion of responsibility Risk persuaders Cultural values and desire for approval from others in the group

The Cautious Shift Groups make cautious decisions because: Group discussion makes decision risks more clear Reward systems discourage risk Personal acceptance of responsibility Cautious persuaders Cultural values and desire for approval from others in the group

Groupthink A group drive for consensus so strong that dissent is (intentionally and/or unintentionally) suppressed. Most common in delusion stage of team development.

Groupthink Symptoms Belief that the group is impervious to threats Illusion of morality False perceptions of unanimity Internal censoring of ideas Peer pressure to conform to norms Negative stereotyping of opponents Rationalization of actions Use of mindguards

Groupthink Process Errors Restricted search for information Restricted analysis of alternatives Expert opinions ignored Contingency plans not developed

Common Groupthink Consequences Inferior decisions Ineffective group performance Wasted expenditures of time, money, materials, and personnel Failure to take advantage of opportunities Potential catastrophic event

Groupthink Avoidance & Repair Organization Leader MemberProcess

Groupthink Avoidance & Repair Cont. Organizational remedies –Multiple groups examine same issue –Teach managers methods they can use to recognize and overcome symptoms Leader-oriented remedies –Encourage all members to evaluate ideas critically –Bring in outsiders to evaluate ideas critically –Pick a member to play devil’s advocate –Encourage focus on objective information

Groupthink Avoidance & Repair (cont.) Member-oriented remedies –Make no decisions until all ideas have been evaluated –Go outside the group for opinions and share them within group Process-oriented remedies –Use subgroups to develop alternatives and compare solutions –Compare to other organizations’ solutions –Prior to implementation, hold “second chance” meetings

Escalation of Commitment Adhering to an unsuccessful course of action with increasing commitment of resources

Escalation: A Personal Example

Factors that Drive Escalation Modeling Retrospective Rationality Norms for consistency Motivation to justify previous decisions Commitment to a Course of Action Perceived probability of future outcomes Perceived value of future outcomes Prospective Rationality

Other Escalation Considerations What about the following? Involvement in original decision Individual versus group decision Organizational culture National culture Other factors?

Mini-Case: Managing Escalation of Commitment Description of Situation Description of those involved Description of plan to manage escalation of commitment Explanation and justification of plan

Some Valuable Tools for Teams Nominal Group Technique Brainstorming Delphi Technique

Brainstorming Stimulates people to develop alternatives during the planning and decision-making process Main focus is on identifying alternatives

Brainstorming Ground Rules Do not evaluate or criticize the ideas of others Be free-wheeling in creating ideas Produce as many ideas as possible “Hitchhike” (take another person’s idea and expand on it)

Brainstorming Assets Reduces dependence on one authority figure Encourages the open sharing of ideas Stimulates participation among group members Provides individual safety in a competitive group Maximizes output for a short period of time Ensures a nonevaluative climate Tends to be enjoyable and stimulating

Brainstorming Liabilities Can create a feeling of lack of closure (only generates a list of unevaluated ideas, not a plan or a solution) May cause dissatisfaction among participants because it is so narrow Even in a relaxed atmosphere, presence of group members may inhibit creativity among some participants

Brainstorming Exercise: Description of Situation Identification of issue (e.g., opportunity or threat) Definition of the goal of the session Five minute brainstorming session Discussion of brainstorming technique

Nominal Group Technique (NGT) Generate a large number of creative potential solutions to a problem or opportunity, evaluate these solutions, and rank them from most to least promising

NGT Assets Cont Generates many high quality ideas Low quality ideas eliminated during vote Participation is balanced across members Influence of individuals is balanced Feelings of accomplishment and commitment to both the process and the ideas identified

NGT Assets (cont.) Conforming influence is minimized Produces more creative ideas than do traditional interacting groups Produces more ideas than do traditional interacting groups Participants are more satisfied than are participants of interacting groups Leads to greater confrontation of issues on a problem-solving (not personal) basis

NGT Liabilities Requires advance planning Takes a couple of hours to implement Only succeeds if all members abide by the rules High level of structure can reduce feelings of involvement and direct interaction

NGT: The 4-Step Process Generation of ideas in writing 2.Round-robin recording of ideas 3.Serial discussion of ideas 4.Ranking of ideas

Delphi Technique Similar to NGT but the Delphi Technique gathers and evaluates information from a group without physically assembling its members

Delphi: The 5-Step Process Develop the Delphi question and the first inquiry Collect first response Analyze first response, provide feedback, and develop second inquiry Collect second response Continue process until a clear resolution emerges

Decision-Making Knowledge - Choice-making, decision- making, & problem solving - Groupthink & escalation of commitment - Decision tools: brainstorming, Nominal Group Technique, & Delphi Technique Skills - Determine when to use choice-making, decision making, or problem-solving - Identify Groupthink symptoms & develop a plan for dealing with Groupthink - Identify the risk of dysfunctional escalation of commitment & develop a plan to avoid or reduce it - Conduct brainstorming, Nominal Group Technique, & Delphi Technique sessions

Decision-Making © 2010 Randall B. Dunham