Decision Making in Teams

Decision Making in Teams
- We begin this presentation by discussing how a variety of well-documented decision-making biases affect individual decision making and how these biases are making something bad better or making some things bad even worse in group environments.
- Many times we focus on group think. This is the tendency to conform to the consensus viewpoint in group decision making and then discuss escalation of commitment, the Abilene paradox, group polarization, and unethical decision making.

Individual Decision-Making Biases
On page 6 your workbooks, you will see a schematic diagram in the decision making process.
- Orientation
- Planning
- Decision Making
- Implementation
- Evaluation

Bias Continued
- Framing Bias – reveals inconsistency and a preference reversal
- Overconfidence Bias – placing unwarranted confidence in our judgement.
- Conformation Bias – considering evidence which supports their theory’s and disregards theory’s which are equally valid.
- Fatigue – decisions produce fatigue.

Individual Versus Group Decision Making in Demonstrable Tasks
Demonstrable Task – a task which has an obvious, correct answer.
- Groups perform better than individuals on demonstrable problems
  - Letter to numbers problems
  - Estimation problems
  - World knowledge problems
- Group to individual transfer
  - Group members become more accurate during the group interaction
  - However, groups are much more confident than are individuals

…Tasks cont.
Group Decision Rules – given the pervasiveness of group decision making, teams and groups need a method by which to combine all individuals’ decisions to gain a common decision.
- The most common decision rule: majority rules.
  - Issues with this rule regarding attainment of consensus are:
    - Major rule ignores members’ strength of preference for alternatives
    - May encourage the formation of coalitions, or subgroups within the team
- Although time-consuming, unanimous decision making encourages team members to consider alternatives which produce a greater accuracy.

DECISION MAKING PIT FALLS GROUP THINK:
Symptoms of groupthink cannot be easily assessed by outside observers.
- Group-think
  - The psychological phenomenon wherein a desire for conformity within a group results in them making an irrational decision; by actively suppressing dissenting viewpoints in the interest of minimizing conflict, group members reach a consensus without critically evaluating alternative

Unaniminity Creates Group-Think
Three key symptoms of group-think take root and blossom in groups that succumb to pressures of reaching unanimity:
- Overestimation of the group:
  - Members of the group regard themselves as invulnerable and, at the same time, morally correct. This can lead decision makers to believe they are exempt from standards. The causes of group-think may stem from group pressures to conform or a sincere desire to incorporate and reflect the views of all team members. Such pressure may also come from management if the directive is to reach a decision that all can agree to.
- Closed-mindedness:
  - Members of the group engage in collective rationalization, often accompanied by stereotyping out-group members.
- Pressures toward uniformity:
  - There is a strong intolerance in a group-think situation for diversity of opinion. Dissenters are subject to enormous social pressure. This often leads group members to suppress their reservations.

Learning from History
Consider two decisions made by the same U.S. presidential cabinet—the Kennedy administration. The Kennedy cabinet was responsible for the Bay of Pigs operation in 1961 and the Cuban Missile Crisis in 1962. The Bay of Pigs was a military operation concocted by the United States in an attempt to overthrow Fidel Castro, the leader of Cuba. The Bay of Pigs is often seen as one of the worst foreign policy mistakes in U.S. history. The operation was regarded as a disaster of epic proportions, resulting in the loss of lives and the disruption of foreign policy. It is also puzzling because the invasion, in retrospect, seemed to have been poorly planned and poorly implemented, yet it was led by people whose individual talents seemed to make them eminently qualified to carry out an operation of that sort.

Group-Think VS. Vigilant Decision Making
Some sharp differences distinguish group-think from vigilant decision making.
1. factors that may lead to group-think;
2. factors that may promote sound decision making;
3. factors that do not seem to induce group-think.
When groups are overly concerned with their political image, they may not make sound decisions.

Conditions Leading To Group-Think

How to Avoid Group-Think
- 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
- Second Solutions
- Beware of Time Pressure

DECISION-MAKING PITFALL 2:
Escalation of Commitment
- FACE BOOK
- NETFLIX
- GENERAL MOTORS
- In escalation situations, a decision is made to commit further resources to Turn the situation around.
- The bigger the investment and the more severe the possible loss, the more prone people are to try to turn things around.

4 key processes in the Escalation of Commitment Cycle:
1. Project Determinants
  - Are the objective features of the situation. Upon negative feedback the team members are ask whether the setback is permanent or temporary.
2. Psychological Determinants
  - Refer to the cognitive and motivational factors that propel people to continue with a chosen course of action.

Continue… 4 key processes in the escalation cycle
1. Social Determinants
  - Engaging in behavior and actions that they think will please most of the people most of the time, perhaps at the expense of doing the right thing, which may not be popular.
2. Structural Determinants
  - A project can itself become institutionalized, removing it from critical evaluation. It becomes impossible for teams to consider removal or extinction of the project.

Avoid Escalation of Commitment to a losing course of action!
- Set Limits-
- Avoid By Standard Effect
- Avoid Tunnel Vision
- Recognize Sunk Costs
- Avoid Bad Mood
- External Review

The Abilene Paradox
- Abilene Paradox- results from group members desire to avoid conflict and reach consensus at all costs.
- Pluralistic ignorance-members adopt a position, because they feel other members desired it.
- Self-limiting behavior
  - The presence of an expert
  - A strong argument
  - Lack of self-confidence
  - Conformity
  - Trivial decision
  - A faulty decision making climate

Abilene Paradox cont...
- How to avoid Abilene Paradox
  - Confront the issued in a team meeting
  - Conduct a private note
  - Minimize status differences
  - Utilize the scientific method
  - Provide a formal forum for controversial view
  - Take responsibility for failure

Group Polarization
- Group polarization- group discussion to intensify group opinion, producing more extreme judgments than might be obtained by pooling the individual.
- There are two psychological explanations for group polarization
  - The need to be right
    - Information dependent
    - Information influence
  - The need to be liked
    - Normative influence

Unethical Decision Making
- Unethical decision making can be a small scale or affect on lives and welfare of hundreds thousands of people.
  - Rational Expectations Model
    - Rational man model-undergirding virtually all economic theory and practice is the rational expectations model
    - False Consensus
    - Vicarious licensing
    - Desensitization

Accountability for behavior
- Accountability- is the implicit or explicit expectation that one may be called on to justify one’s beliefs, feelings, and actions to others.
- Following are consideration regarding accountability
  - Accountability to audience with known verses
  - Pre versus post-decision accountability
  - Out come accountability versus process accountability
  - Legitimate versus illegitimate accountability
    - Contemplation
    - Eliminate conflicts of interest
    - Create culture of integrity
    - Future self- orientation

Decision Making in Teams

Step 1 of 20

Decision Making in Teams

Individual Decision-Making Biases

Bias Continued

Individual Versus Group Decision Making in Demonstrable Tasks

…Tasks cont.

DECISION MAKING PIT FALLS GROUP THINK:

Unaniminity Creates Group-Think

Learning from History

Group-Think VS. Vigilant Decision Making

Conditions Leading To Group-Think

How to Avoid Group-Think

DECISION-MAKING PITFALL 2:

4 key processes in the Escalation of Commitment Cycle:

Continue… 4 key processes in the escalation cycle

Avoid Escalation of Commitment to a losing course of action!

The Abilene Paradox

Abilene Paradox cont...

Group Polarization

Unethical Decision Making

Accountability for behavior

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