1. Individual and Group Decision Making
Chapter 11
Individual and Group Decision Making
Models of Decision Making
Dynamics of Decision
Making
Group Decision Making

2. Models of Decision Making
11-2
Models of Decision Making
Rational Model logical four-step approach to decision making
Identifying the problem
Problem – deviation between current and desired situations
Opportunity – deviation between current expectations and recognition of potentially better situation
Generating alternative solutions
Selecting solution
Implementing and evaluating the solution
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3. Assumptions of Rational Decision Making
11-3
Figure 11-1
Assumptions of Rational Decision Making
Problem is clear and unambiguous
Single and well-defined goal can be identified
Alternatives (and consequences are all known)
Preferences and needs are clear, recognized, and unchanging
Time and resources are abundant and accessible
Decision will be implemented willingly and supported by all
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4. Simon’s Normative Model of Decision Making
11-4
Simon’s Normative Model of Decision Making
Based on premise that decision making is not rational
Decision makers are guided by bounded rationality
Bounded rationality constraints that restrict decision making
Decision making is characterized by
Limited information processing
Use of judgmental heuristic
Satisficing
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5. Judgmental Heuristics
11-5
Judgmental Heuristics
Judgmental Heuristics rules of thumb or shortcuts that people use to reduce information-processing demands
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6. Types of Judgmental Heuristics
11-6
Types of Judgmental Heuristics
Availability Heuristic a decision maker’s tendency to base decisions on information that is readily available in memory.
Representativeness Heuristic the tendency to assess the likelihood of an event occurring based on one’s impressions about similar occurrences.
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7. 11-7
Knowledge Management
Knowledge Management implementing systems and practices that increase the sharing of knowledge and information throughout the organization
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8. 11-8
Forms of Knowledge
Tacit information gained through experience that is difficult to express and formalize
Explicit Knowledge information that can be easily put into words and shared with others
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9. Decision Making Styles
11-9
Figure 11-2
Decision Making Styles
Analytical
Conceptual
High
Directive
Behavioral
Tolerance for Ambiguity
Low
Tasks and Technical Concerns
People and Social Concerns
Value Orientation
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10. Escalation of Commitment
11-10
Figure 11-3
Escalation of Commitment
Psychological and Social
Determinants
Organizational Determinants
Escalation of
commitment
Poor results or
outcomes
Project Characteristics
Contextual Determinants
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11. Advantages and Disadvantages of Group-Aided Decision Making
11-14
Table 11-2
Advantages and Disadvantages of Group-Aided Decision Making
Advantages
Greater pool of knowledge
Different perspectives
Greater comprehension
Increased acceptance
Training ground
Disadvantages
Social pressure
Domination by a vocal few
Goal displacement
“Groupthink”
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12. Research and group decisions
Groups are less efficient decisions makers
Groups are more confident in their decisions
Decision quality is negatively related to group size
Homogeneity brings less conflict
Heterogeneity brings less efficiency
Groups tend to polarize in decision making

13. Group Problem Solving Techniques
11-17
Group Problem Solving Techniques
Brainstorming process to generate a quantity of ideas
Nominal Group Technique process to generate ideas and evaluate solutions
Delphi Technique process to generate ideas from physically dispersed experts
Computer-Aided Decision Making
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14. Creativity Creativity process of developing something new or unique
11-19
Creativity
Creativity process of developing something new or unique
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