CHAPTER 15 • DECISION MAKING AND ORGANIZATIONAL LEARNING
Group Decision Making
Frequently groups, rather than individuals, make decisions in organizations. These groups might
have a formal leader or functional manager who oversees the decision-making process. Selfmanaged work teams also need to make decisions, however. In this section, we consider some of
the potential advantages, disadvantages, and consequences of group decision making. (See
Advantages of Group Decision Making
There are several advantages of using groups to make decisions. These include the availability
and diversity of members’ skills and expertise; enhanced memory for facts; greater ability to
correct errors; and greater decision acceptance.
AVAILABILITY AND DIVERSITY OF MEMBERS’ SKILLS AND KNOWLEDGE When groups
make decisions, the skills and knowledge of each group member are pooled, and their joint
expertise can be focused on a specific opportunity or problem. For certain kinds of decisions, an
individual decision maker is very unlikely to have all the different capabilities needed to make a
good decision. For example, when General Electric (GE) needed to decide whether to invest $70
million to modernize GE’s washing machine-manufacturing facilities near Louisville, Kentucky,
or buy washing machines from another company and sell them under the GE brand name, a
cross-functional team composed of managers from its different departments was formed to gain
input about manufacturing costs, product development costs, and sales and issues. Union representatives were also involved because GE needed to know if union members would accept major
changes to their jobs that would be required to cut costs if the company decided to go forward
with the modernization program. After processing all this information, the group jointly agreed
on their final recommendation—to go ahead with the modernization program, and this proved to
be a wise decision.51 Whenever a decision requires the skills, knowledge, and expertise of different
functional experts (such as marketing, finance, engineering, production, and R&D), group decision making has clear advantages over individual decision making. And IT, such as ERP Systems,
today provide group members with a wealth of companywide information they can use to reach
the best decision possible.
To gain the information processing advantages of group decision, it is necessary that there is
diversity among group members (see Chapter 10). In addition to diversity in functional knowledge
and expertise, it is often desirable to have diversity in age, gender, race, and ethnic backgrounds.
Diversity gives a group the opportunity to consider different points of view. Traditionally, for
example, groups that designed new automobiles for major carmakers like GM and Ford were all
male. Now, to develop popular world cars, these companies realize it is vital to have women on the
team (women buy more cars than men today) and experts in sales and design from abroad who
know the tastes of customers in other countries. They bring new, different, important cultural
insights to the design process that result in a new car model that appeals to women and car buyers
in other countries.52 Gap, the well-known clothing company, is another company that is responsive
to the changing needs of its diverse customers, and it is careful to employ clothes designers and
salespeople who reflect the demographics of its customers. Gap forms teams of diverse employees
Group Decision Making
Disadvantages of Group
to make a
PART 2 • GROUP AND TEAM PROCESSES
to investigate customers’ changing needs to discover if it is meeting their needs, and if not, how its
clothing should be redesigned to do so.53
Although diverse work groups can improve decision making, they can give rise to a problem:
group members with different points of view because of their varied backgrounds sometimes
find it hard to get along with each other. Many organizations are trying to respond to this challenge through diversity training programs, which aim to help members of an organization understand each other so they can work together effectively and make good decisions.
ENHANCED MEMORY FOR FACTS When a decision requires the consideration of a substan-
tial amount of information, groups have an advantage over individuals because of their memory
for facts.54 Most people engaged in the process of making a decision have experienced the frustrating problem of forgetting an important piece of information. Because a group can rely on the
memory of each of its members, the problem of forgetfulness is minimized. Information that one
member of the group forgets is likely to be remembered by another. For example, by forming a
cross-functional team of diverse managers, GE helped ensure that important information was not
forgotten or overlooked when the decision about whether or not to embark on the modernization
program was being made.
CAPABILITY OF ERROR DETECTION No matter how experienced decision makers are, they
all make mistakes. Some errors occur in the information-gathering stage or in the evaluation of
alternatives. Other errors occur when the final decision is made. When a group makes a decision,
errors made by some group members can be detected and corrected by others.55 If, for example,
a manufacturing manager at GE overestimated the costs of retooling the new washing machine
facility, it is likely that other group members would detect the error in the decision-making
GREATER DECISION ACCEPTANCE For a decision to be implemented, it is necessary that the
members of an organization accept the decision. Suppose, for example, a grocery store manager
decides to extend the store’s operating hours from 18 to 24 hours a day by scheduling employees
to work for longer periods of time (and not hiring any new employees). The employees must
accept this decision for it to work. If none of the employees is willing to work the new 10 P.M. to
6 A.M. shift, the decision cannot be implemented.
The likelihood employees will accept a decision increases when they take part in the decision-making process. GE’s decision to invest $70 million to modernize its washing machinemanufacturing facilities, for example, depended on union leaders agreeing to major changes in
the employees’ jobs, such as cross-training, so they could perform different tasks as required.56
By involving the union in the decision-making process, GE helped ensure employees would
accept and support changes in work relationships.
Disadvantages of Group Decision Making
Group decision making has certain advantages over individual decision making (particularly
when the decisions are complex, require the gathering and processing of large amounts of information, and require the acceptance of other organizational members). But there are also disadvantages to group decision making. Two of them are time and the potential for groupthink.
TIME NEEDED TO MAKE A DECISION Have you been in the annoying situation of being
in a group that seemed to take forever to make a decision that you could have made yourself
right away? One of the disadvantages of group decision making is the amount of time it
consumes. Groups can seldom make decisions as quickly as individuals. Moreover, when
the amount of time a group takes to make a decision is multiplied by the number of people
in the group, the extent to which group decision making consumes valuable time and effort
Under certain conditions, individual decision making takes less time than group decision making and is likely to result in a decision that’s just as good. Organization’s should
use individual and not group decision making when (1) an individual has the capabilities
needed to make a good decision; (2) an individual is able to gather and accurately process
all the necessary information; and (3) the acceptance of the decision by the organization’s
other members is either not required or will likely happen, regardless of their involvement
in decision making.
Bruce Weaver\AP Wide World Photos
CHAPTER 15 • DECISION MAKING AND ORGANIZATIONAL LEARNING
THE POTENTIAL FOR GROUPTHINK Groupthink is a pattern
of faulty decision making that occurs in cohesive groups whose
members strive to reach a common agreement or understanding,
and to achieve this they do not accurately process important information relevant to the decision—and are even willing to gloss
over or suppress information that might lead them to disagree.57
Irving Janis coined the term groupthink in 1972 to describe a paradox that he observed in group decision making: Sometimes
groups of highly qualified and experienced individuals make very
poor decisions.58 The decisions made by President Lyndon B.
Johnson and his advisers between 1964 and 1967 to escalate the
war in Vietnam, the decision made by President Richard M. Nixon
and his advisers to cover up the Watergate break-in in 1972, the
decision made by NASA and Morton Thiokol in 1986 to launch
the Challenger space shuttle (which exploded after takeoff, killing
Groupthink often occurs in crisis situations when decision makers
all crew members)—all these decisions were influenced by grouplack accurate information about events and process information
think. After the fact, the decision makers involved in these and
according to the group’s preferred assumptions and values. Some
other fiascoes are often shocked that they and their colleagues
argue this occurred at NASA and resulted in the launch and
were involved in such poor decision making. Janis’s investigations
subsequent destruction of the Challenger space shuttle.
of groupthink primarily focused on government decisions, but the
potential for groupthink in business organizations is just as likely.
For example, the joint decision of Mattel’s managers (see the opening case for this chapter) not to
A pattern of faulty decision making
change Barbie or bring out new, contemporary lines of dolls to protect current Barbie sales can
that occurs in cohesive groups
also be seen as an example of this decision-making error.
whose members strive for agreeRecall from Chapter 11 that cohesive groups are very attractive to their members, and
ment at the expense of accurately
people value their group membership and strongly want to retain it. When groupthink occurs,
assessing information relevant to
members of a cohesive group are often willing to unanimously support a decision favored by the
group leader without carefully assessing its pros and cons. This unanimous support is often
based on members’ exaggerated beliefs about the group’s capabilities and moral standing. They
think the group is more powerful than it is and could never make a decision that might be
morally or ethically questioned. As a result, the group becomes closed-minded and fails to pay
attention to information that suggests that the decision might not be a good one. Moreover, when
members of the group do have doubts about the decision being made, they are likely to discount
those doubts and not mention them to other group members. As a result, the group as a whole
perceives that there is unanimous support for the decision and its members actively try to prevent negative information pertaining to the decision from being brought up for discussion.59
Exhibit 15.5 summarizes Janis’s basic model of the groupthink phenomenon. It is important to
note that although groupthink occurs only in cohesive groups, many cohesive groups never
succumb to this faulty mode of decision making.
A group leader can take the following steps specifically designed to prevent the occurrence
of groupthink; these steps also contribute to good decision making in groups in general:60
Someone who argues against a
cause or position in order to
determine its validity.
The group leader encourages all group members to be critical of proposed alternatives, to
raise any doubts they may have, and to accept criticism of their own ideas. It is especially important for a group leader to subject his or her own viewpoint to criticism by
other group members.
The group leader refrains from expressing his or her own opinion and views until the group
has had a chance to consider all alternatives. A leader’s opinion given too early is likely to stifle the generation of alternatives and productive debate.
The group leader encourages group members to gather information pertaining to a decision
from people outside the group and to seek outsiders’ perspectives on the group’s ideas.
Whenever a group meets, the group leader assigns one or two members to play the role of
devil’s advocate—that is, to criticize, raise objections, and identify potential problems
with any decisions the group reaches. The devil’s advocate should raise these problems
even if he or she does not believe the points are valid.
If an important decision is being made and time allows, after a group has made a decision,
the group leader holds a second meeting. During the second meeting, members can raise
any doubts or misgivings they might have about the course of action the group has chosen.
PART 2 • GROUP AND TEAM PROCESSES
Source: From Irvin L. Janis,
Groupthink Psychological Studies of
Policy Decisions and Fiascoes, 2nd ed.
Copyright © 1982 Wadsworth, a part
of Cengage Learning, Inc. Reproduced
Symptoms of groupthink
1. Illusion of invulnerability
Group members are very optimistic and
take excessive risks.
2. Belief in inherent morality of the group
Group members fail to consider the
ethical consequences of decisions.
3. Collective rationalizations
Group members ignore information
that suggests they might need to
rethink the wisdom of the decision.
4. Stereotypes of other groups
Other groups with opposing
views are viewed as being incompetent.
Group members fail to mention
any doubts they have to the group.
6. Illusions of unanimity
Group members mistakenly believe
they are all in total agreement.
7. Direct pressure on dissenters
Members who disagree with the
group’s decision are urged to
change their views.
8. Emergence of self-appointed
Some group members try to shield the
group from any information that
suggests that they need to reconsider
the wisdom of the decision.
Defective decision-making process
Other Consequences of Group Decision Making
Three other consequences of group decision making are not easily classified as advantages or
disadvantages: diffusion of responsibility, group polarization, and the potential for conflict.
DIFFUSION OF RESPONSIBILITY Group decisions are characterized by a diffusion of respon-
sibility61—that is, the group as a whole rather than any one individual is accountable for the
decision. If the decision was a good one, the group gets the credit; if the decision was a poor one,
a single individual is not blamed.
Sometimes, when important decisions are made that entail considerable uncertainty, it can
be very stressful for one individual to assume sole responsibility for the decision. Moreover, under
these conditions, some people are inclined to make a decision they know will not come back to
haunt them rather than the decision they think is best for the organization. When this is the case,
diffusion of responsibility can be an advantage of group decision making.
Diffusion of responsibility can also be a disadvantage if group members do not take the time
and effort needed to make a good decision because they are not held individually accountable.
This consequence is related to the concept of social loafing (see Chapter 11), the tendency for
individuals to exert less effort when they work in a group.
GROUP POLARIZATION Another consequence of group decision making is that groups tend to
make more extreme decisions than do individuals. This tendency is called group polarization.62
By extreme decisions, we mean making more risky or conservative decisions rather than taking a
middle-of-the-road approach. At one extreme, for example, the group might decide to commit a
vast amount of resources to develop a new product that may or may not be successful. At the
other extreme, it might decide not to introduce any new products because of the cost and uncertainty involved.
Why are decisions made by groups more extreme than decisions made by individuals? The
diffusion of responsibility is one reason.63 But there are at least two more explanations for group
polarization. First, knowing that other group members have the same views or support the same
decision can cause group members to become more confident of their positions.64 Group members
who initially supported committing a moderate amount of resources to the development of a new
product may become more confident in the product’s potential success after learning that other
members of the group also feel good about the product. As a result of this increased confidence,
the group makes the more extreme decision to commit a large amount of resources. Second, as a
group discusses alternatives, members of the group often come up with persuasive arguments to
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