INDIVIDUAL AND GROUP DECISION MAKING

PREPARED BY: CRESENCE SHINE S. TRAJAO

REFERENCE: MOSURA, CARMEL T. ET AL., HUMAN BEHAVIOR IN ORGANIZATIONS
CHAPTER 8 AND 10, PAGES 146-165 AND 186-202
  Describe and explain the Individual and
Group decision-making;
 Define and classify groups;
 Explain group interaction and what are
OBJECTIVES the group models;
 Describe external conditions imposed on
the group;
 Lastly, emphasize group task activities.
INDIVIDUAL DECISION MAKING
Most individual think of reason before they act. By understanding
how people act, you will know how people make decisions which can
be helpful for explaining and predicting the behavior.
 What can Managers do to improve their decision making?
1. Analyze the situation. Adjust your decision-making style to
the situation to the culture you’re operating and to the criteria
your organization evaluates and rewards.
2. Be aware of biases. We all bring biases to the decisions we
make. If you understand the biases influencing your judgments,
you can begin to change the way you make decisions to reduce
biases.
3. Combine rational analysis with intuition. By using both you
can actually improve your decision-making effectiveness. As you
gain managerial experience, you should feel increasingly confident
in imposing your intuitive processes on top on your rational
analysis. “Gut Feeling” when you think it is the right thing to do.
4. Don’t assume that your specific decision style is
appropriate for every job. Just as organizations differ, so too the
jobs within organizations. And your effectiveness as a decision maker
will increase if you match your decision style to the requirements of
the job.
5. Use creativity-stimulation techniques. You can improve your
overall decision making effectiveness by searching new and novel
solutions to the problem.
DETERMINING HOW TO MAKE DECISIONS AS A
LEADER
The true value develop by Tannebaum and Schimdt lies in its use in
making practical and desirable decisions.
1. Forces in the Managers-
 they should be aware of the forces within themselves that
influence their determination of hoe to make decisions as a
leader.
 Level of confidence in subordinates. The more confidence a
manager has in his or her subordinates, the more likely the
manager’s decision-making style will be democratic, or subordinate-
centered.
 Possess personal strengths. Managers must be able to recognize
their own leadership strength and capitalize on them.
 The Manager is tolerance for ambiguity. A manager who is
disturbed by this loss of certainty will find it extremely difficult to
be successful as a subordinate-centered leader.
2. Forces of Subordinates. To lead successfully, the manager needs
to keep in mind that subordinates are both somewhat different and
somewhat alike.
3. Forces in the situation.
 A type of organization in which the leader works.
 Effectiveness of a group.
 The problem to be solved.
TYPE OF DECISION MAKING
 Programmed Decisions. If particular situation
occurs often, a routine procedure usually can
worked out for solving it. Thus, decision are
programmed to the extent that problems are
repetitive and a definite procedure has been
developed for handling them.
 Non-programmed Decision. When they are
novel and unstructured. Not established
procedure exists for handling the problem, either
because it has not arisen in exactly the same
manner before or because it is complex or
extremely important. Such problems deserve
special treatment.
THE DECISION-MAKING PROCESS
A decision is a choice of one alternative from a set
of available alternatives. The decision-making process
comprises the decision maker take to arrive at this
choice.
1. Identify an existing problem
2. List of possible alternatives for solving the
problem
3. Select the most beneficial of these alternatives
4. Implement the selective alternative
5. Gather feedback to find out if the implemented
alternative is solving the identified problem.
IDENTIFYING PROBLEMS
1. Perceptual problems. Brainstorming includes a strict series of rules to
promote the generation of ideas while at the same time
2. Defining the problems in terms of solutions
removing members’ inhibitions that usually stymie face-
3. Identifying symptoms as problems. to-face groups.
EVALUATING ALTERNATIVES - group discussion to produce ideas or solve problems.
In every decision situation, the objective in
making a decision is to select the alternative
that will produce the most favorable outcomes
1. Exists when decision makers know exactly what the
and the least unfavorable.
results of an implemented alternative will be.
1. Certainty. 2. Exists when decision makers have absolutely no
2. Uncertainty idea what the results of an implemented alternative
will be.
3. Risk
3. Decision makers have only enough information
about the outcome of each alternative to estimate
how probable an outcome will be.
A group is defined as two or more individuals, interacting and
interdependent, who have come together to achieve a particular
objectives.
 Formal groups. Are those defined by the organization’s
structure, with designated work assignments and tasks.
 Informal groups. Are alliances that are not formally structured
or organizationally determined.
 Command groups. It is composed of the subordinates who
report directly to a certain manager.
 Task groups. Formed by the organization, they represent those
working together to complete a job or a task.
 Interest groups. Has one particular aim/interest.
 Friendship groups. Individual members have one or more
common characteristics.
 WHY DO PEOPLE JOIN GROUPS?
 Security. Can reduce insecurity of “Standing along”. Some
people become confident when they become part of a
group.
 Status. Inclusion in a group that is viewed as important by
others provides recognition and status for its members.
 Self-esteem. Can provide people with feelings of self-
worth.
 Affiliation. People enjoy the regular interaction that comes
with the group membership.
 Power. What cannot be achieved individually often possible
through group action.
 Goal achievement. There is a need to pool talents,
knowledge, or power in order to complete the job.
Goal achievement
1. Forming Stage. Is characterized by a great deal of
uncertainty about the group’s purpose, structure
and leadership.
2. Storming Stage. One intergroup conflict.
Members accept the existence of the group, but
individual members do not want to be dictated
upon by the group. Often, leader is selected.
3. Norming Stage. In which close relationships has
been develop and the group becomes stable and
solid.
4. Performing Stage. Group energy has moved from
getting to know and understand each other to
performing the task at hand.
5. Adjourning stage. The group is prepares for its
break up. High task performance is no longer the
group’s top priority. Instead, attention is directed
toward ending the activities.
THREE ETHICAL DECISION CRITERIA
1. Utilitarian. Decisions are made solely
on the basis of their outcomes or
consequences.
2. Focus on Rights. Calls individuals to
make decisions consistent with
fundamentals liberties and privileges as
basic rights on individuals, such as the
right to privacy, to free speech, and due
to process.
3. Focus on Justice. This requires
individuals to impose and enforce rules
fairly and impartially so there is an
equitable distribution of benefits and
costs.
 Probability theory  Participative Management
This is a decision-making tool used in risk entails much more than simply asking employees
situations. Probability refers to the likelihood that for their ideas and opinions. Expert classified this
an event or outcome will occur again. situation by defining participative management as a
process whereby employees play a direct role in
 Factors influencing Ethical Decision-
making Behavior 1. Setting goals
Assess a person’s capacity to judge what is 2. Making decisions
morally right.
3. Solving problems
 Organizational environment
4. Making changes in the organizations
refers to an employee’s perception of
organizational expectations.
 Locus of control
is a personality characteristic that taps the
extent to which people believe they are responsible
for the events in their lives.
MODELS OF DECISIONS MODELS

Four steps sequence. 1) Identifying Problem; 2)Generating

Rational
Model
alternative solutions; 3) Selecting solution; 4) Implementing and
evaluating the solution

Normative
Attempts to identify the process that managers actually use

Simon’s

Model
when making decisions.

can Model
Garbage
Decisions result from a complex interaction between
The

independent of events: problems, solutions, participants, and

choice of opportunities.
THE RATIONAL PROBLEM-SOLVING PROCESS

1 2 3 4
Identifying the
Problem Generating Selecting a Implementing and
Solutions Solutions evaluating a
Assumes that the recent
past is the best estimate solution
of the future.
THE GARBAGE CAN MODEL

1 2 3 4
Implementing and Summarizing the
Selecting solutions Evaluating Solutions Rational Model Stratregies in
Selecting solutions
GROUP TASK ACTIVITIES
All groups need members who are able and willing to
perform task activities.
1. Initiating
2. Seeking Information
3. Giving information
4. Clarifying
5. Summarizing
GROUP MAINTENANCE ACTIVITIES
are activities that support the emotional life of the group as an
on-going social system
1. Encouraging
2. Harmonizing
3. Compromising
4. Gatekeeping
5. Setting Standards
6. Following
DISRUPTIVE BEHAVIOR IN A GROUP

 Any behavior that harms the group process.

 This is the behaviors that harms the group process:
1. Being overly aggressive towards other members
2. Withdrawing and refusing to cooperate with others
3. Playing around when there is work to be done
4. Using the group as a forum foe self-confession
5. Talking too much about irrelevant matters
6. Trying to compete for attention and recognition
  Groupthink. Is the tendency of members in highly
GROUP COMMUNICATION NETWORK cohesive groups to lose their critical evaluation.
 Everyone in an interacting group works together Group decision effectiveness = individual
and close coordination is required to achieved a contribution + group processes gains – group
desired task performance. This interaction processes loses
patterns results in a good communication
structure known as decentralized
communication network.  The Management Information System. Is a
network established within an organization to provide
HOW GROUP MAKE DECISIONS managers with information that will assist them in
decision making.
 Edgar Schein, a noted scholar consultant, has worked
extensively with groups to analyze and improve their An MIS is a system designed to provide selected decision-
decision-making processes. oriented information needed by management to plan,
1. Decision by lack of response control, and evaluate the activities of the corporation. It is
2. Decision by authority rule designed within a framework that emphasizes profit
3. Decision by minority rule
planning, performance planning, and control at all levels. It
contemplates the ultimate integration of required business
4. Decision by consensus information subsystems, both financial and nonfinancial,
5. Decision by unanimity within the company.
DYNAMICS OF DECISION MAKING

Decisions making is a part of science and

part art. Accordingly, this section
examines two dynamics of decision
making- contingency considerations and
the problem of escalation of
commitment- that affect the “science”
component. An understanding of these
dynamics can help the managers make
better decisions.
THANK YOU