Decision making is an integrated sequence of activities that involves:
- Gathering, interpreting, and exchanging information
- Creating and identifying alternative courses of action
- Choosing among alternatives
- Implementing a choice and monitoring its consequences
Framing bias
People react to a particular choice in different ways depending on how it is presented
Ex. People tend to avoid risk when a positive frame is presented but seek risks when a negative frame is presented.
Decision making biases that plague individual decision making
- framing bias
- overconfidence bias
- confirmation bias
- decision fatigue bias
Overconfidence bias
Tendency for people to place unwarranted confidence in their judgements
Confirmation bias
Tendency for people to consider evidence that supports their position, hypothesis, or desires and disregard or discount evidence that refutes their beliefs
Group decision rules
Teams need a method by which to combine individuals decisions to yield a group decision
Overall objectives of group decision rules
- to find the alternative that the greatest number of team members prefer
- to find the alternative the fewest members object to
- select the choice that maximizes team welfare
Individual versus group decision making in demonstrable tasks
Groups perform better than independent individuals on a wide range of demonstrable tasks
Group performance increases over that of individuals as the demonstrability of the task increases
Individual version group decision making in demonstrate leadership tasks
- groups perform better than interdependent individuals on a wide range of demonstrable task
- group performance increase over that of individuals as the demonstrability of the task increases
- more likely to give into the overconfidence bias, regardless of their actual accuracy
- more likely to exacerbate some shortcoming displayed by individuals
Group to individual transfer
Phenomenon where individual group members become more accurate during group interaction
Group decision rules:
Overall objectives of these rules:
Teams need a method by which to combine individuals decisions to yield a group decision
- to find the alternative that the greatest number of team members prefer
- to find the alternative the fewest members object to
- select the choice that maximizes team welfare
Decision making pitfall 1
GROUPTHINK
Symptoms of groupthink
Occurs when team members place decision consensus above all other decision priorities
- overestimation of the group
- closed-mindedness
- pressures toward uniformity
Causes of Groupthink
- incomplete survey of alternatives and objectives
- failure to reexamine alternatives and examine preferred choices
- selection bias
- poor information search
- failure to create contingency plans
How to avoid groupthink
- monitor team size
- provide a face-saving mechanism for teams
- the risk technique
- invite different perspectives
- appoint a devil’s advocate
- structure discussion principles
- establish procedures for protecting alternative viewpoints
- identify a second solution
- beware of time pressure
Decision making pitfall 2
Escalation of commitment
Under some conditions, teams will persist with a losing course of action, even in the face of clear evidence to the contrary
Four key processes involved in the escalation of commitment cycle
Project, psychological, social, structural determinants
To avoid escalation of commitment…
- set limits
- avoid the bystander effect
- avoid tunnel vision
- recognize sunk costs
- avoid bad mood
- external review of decision
Decision making pitfall 3
Abilene Paradox
A form of pluralistic ignorance in which group members adopt a position because they feel other members desire it; team members don’t challenge one another because they want to avoid conflict or achieve consensus
Self-limiting behavior
Person’s reluctance to air or defend viewpoints
Can lead to problems like the Abilene Paradox
Causes of self-limiting behavior in teams
- presence of someone with expertise
- the presentation of a compelling argument
- lack of confidence in one’s ability to contribute
- group sees decision as meaningless
Strategies to avoid Abilene Paradox
- Confront the issue in a team setting
- Conduct a private vote
- Minimize status difference
- Utilize the scientific method
- take responsibility for failure
Decision making pitfall 4
Group Polarization
The tendency for group discussion to intensify group opinion, thus producing more extreme judgements that might be obtained by pooling individuals views separately
Psychological explanation for group polarization
- the need to be right
- the need to be liked
- conformity pressure
Decision making pitfall 5
Unethical decision making
Rational expectations model- people’s own motivations are to maximize ones own utility and self-interest
False consensus- tendency for people to believe their own views, when really they don’t
Vicarious licensing-people are more likely to express prejudiced and immoral attitudes when their group members past behavior has established non-prejudiced credentials
Desensitization
