4/8/23, 7:22 AM Group Vs.
Individual Decision Making for a Business
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Group Vs. Individual Decision Making for a Business
Small Business | Business Planning & Strategy | Making Business Decisions
By Leon Teeboom Updated October 26, 2018
At first glance, individual decision-making in organizational behavior is just as simple as the phrase implies. When
consdidering individual versus group decision-making, a group decision is one made by several people, while an
individual decision is made by one person. But, as is often the case in business, the issue is far from that simple.
Discussing the situations under which group decision-making is better than individual decision-making is one of the
most complex issues in business – because the real question is: Which is better?
As Nibedita Mukherjee, et al., note in their article, "Comparing Groups Versus Individuals in Decision Making: A
Systematic Review Protocol," complex psychological factors play into the decision-making process. Mukherjee and her
colleagues reviewed more than a thousand group decision-making articles from scholarly journals and found plenty of
disadvantages of consensus decision-making, but also some advantages. In some cases, individual decision-making
proved more fruitful and productive; in other cases, group decision-making proved the wiser choice. However, group
decision-making has come into favor more over the past few decades.
As Mukherjee, et al., explain in their 2016 article:
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4/8/23, 7:22 AM Group Vs. Individual Decision Making for a Business
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"In the past two decades there has been a pronounced shift towards using groups instead of individuals for
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decision-making (e.g., in key financial institutions such as the Bank of England). Recently, it has also been
suggested that groups should be preferred over individual experts for providing science advice to governments."
To truly understand the differences between group and individual decision-making – and to get a sense of which might
be better under specific circumstances – delve into what constitutes individual versus group decision-making, decision-
making in general in an organization and the different types of decision-making.
What Is Individual Decision-Making?
Individual decision-making does not involve a group or even more than one person. Individual decision-making is quick
and generally cost-effective, because it does not require gathering others and scheduling a meeting or multiple meetings
or sending a single email. Individuals have a tendency to think and question before performing, which is fruitful in
analysis and forecasting of an individual’s behavior, says Prachi Juneja writing on Management Study Guide.
In his article, "Individual Decision-Making – Pros and Cons," Juneja says that individual decision-making has certain
pros:
An individual generally makes prompt decisions, while a group is dominated by various people, making decision-
making very time consuming. Moreover, assembling group members consumes lots of time.
Individuals do not escape responsibilities. They are accountable for their acts and performance. In a group, it is not
easy to hold any one person accountable for a wrong decision.
Individual decision-making saves time, money and energy as individuals usually make prompt and logical decisions,
says Juneja, while group decision-making involves lot of time, money and energy.
But Juneja takes the time to discuss the situations under which group decision-making is better than individual decision-
making. In other words, there are also cons to individual decision-making. These include:
A group has the potential to collect more complete information, compared to an individual, while making decisions.
An individual uses his own intuition and views. A group has many members, so its many views and many approaches
result in better decision-making.
A group discovers the hidden talent and core competency of employees of an organization.
An individual will not take into consideration every member's interest, while a group will take into account interest of all
members of an organization.
What Is Decision-Making in an Organization?
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In a related article, called "Decision Making in an Organizational Context," also published on the Management Study
Guide website, Juneja says there are some important considerations when discussing group or individual decision-
making in organizational behavior:
“
"In an organizational context, it is worthwhile to note that decision-making needs the right kind of information, the
”
complete information and the ability to synthesize and make sense of the information."
Aaron De Smet, a senior partner with McKinsey & Company, a management consulting firm, and Leigh Weiss, a senior
expert with McKinsey, say there are three dimensions to decision-making in an organization. De Smet and Weiss say the
types of decisions are:
Big-bet decisions, or those you can't easily reverse, such as acquisition of another firm. This might be an individual
decision, such as by the CEO, or a small-group decision made by a select group of top management.
Cross-organizational or cross-functional decisions "where many different parts of the organization are involved and
there are lots of little decisions that accumulate to a larger decision," De Smet says. These, then, can be a series of
individual and group decisions.
Delegated decisions, or those that can be delegated to somebody who has enough knowledge to make a good
decision. This is a classic example of an individual decision. Determine who has the knowledge to make the decision,
and assign the decision to be made. That person researches the issues and makes an individual decision, then
announces it to the group or company.
Ad hoc decisions, which are infrequent and reasonably small and contained, where you don’t try to figure it out or map
it out ahead of time, De Smet says, adding: "You just say, well there’s a bunch of stuff that might bubble up, and we’ll
deal with it as it comes up. We’ll cross that bridge when we come to it." This is a clear example of a group decision,
though it may be made in a somewhat chaotic fashion.
As Juneja noted, all these types of decision-making depend on the level of knowledge involved in the decision to be
made and the speed at which the decision needs to be made.
What Are the Seven Types of Decision-Making?
Martin Zwilling, in an article on [Link], titled, "There are 7 Types of Decision Making. Which One is Best for You?"
explains the various kinds of decision-making in the context of individual versus group decision-making. Zwilling,
founder and CEO of a company called Startup Professionals, defines the different types of decision-making:
Decide and announce: The decision needs to be made quickly, and time is of the essence. It would almost certainly be a
decision made by a single individual.
Decide, and then communicate to others: Make the decision, and then explain to the team, the company and customers
the reasons for that decision and the positive benefits being accrued. In this scenario, an individual makes the decision
but then explains it to the group to seek confirmation.
Present the decision and invite comments: Presenting the decision along with the background, and inviting team
members to ask questions and discuss the rationale, is another way to go. This, again, is likely an individual decision.
But the person making the decision seeks comments and input from a group that may or may not alter the decision.
Suggest a decision and invite discussion: An individual draws up a decision, perhaps in a case that involves complex
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logistics or numbers, but then invites discussion that may allow the group to alter the decision.
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Present the situation for input and a joint decision: An even more trusting process is to present the options to the team.
Given a menu of options, and the group as a whole makes the decision.
Explain the situation and ask the team to decide: Delegate responsibility for the decision to the team, perhaps with
stated limits. In this case, the team might be given a menu of options and then make a decision as a group.
Ask the team to define the problem and make the decision: With this approach, group members identify and analyze the
situation, develop resolution options and then decide on a preferred course of action. In other words, this would be a
group decision from the get-go.
In sum, then, to discuss the situations under which group decision-making is better than individual decision-making
requires you to determine the speed at which the decision must be made. If time is of the essence, it often necessitates
an individual decision. As noted, there are disadvantages to consensus decision-making in cases like these. But where
an issue requires more input and consensus, a group decision may be the best way to go.
REFERENCES WRITER BIO
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