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Business LibreTexts

7.3: Decision Making in Groups

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  • Learning Objectives

    1. Understand the pros and cons of individual and group decision making.
    2. Learn to recognize the signs of groupthink.
    3. Recognize different tools and techniques for making better decisions.

    When It Comes to Decision Making, Are Two Heads Better Than One?

    The answer to this question depends on several factors. Group decision making has the advantage of drawing from the experiences and perspectives of a larger number of individuals. Hence, a group may have the potential to be more creative and lead to more effective decisions. In fact, groups may sometimes achieve results beyond what they could have done as individuals. Groups may also make the task more enjoyable for the members. Finally, when the decision is made by a group rather than a single individual, implementation of the decision will be easier, because group members will be more invested in the decision. If the group is diverse, better decisions may be made, because different group members may have different ideas based on their backgrounds and experiences. Research shows that for top management teams, diverse groups that debate issues make decisions that are more comprehensive and better for the bottom line (Simons, Pelled, & Smith, 1999).

    Despite its popularity within organizations, group decision making suffers from a number of disadvantages. We know that groups rarely outperform their best member (Miner, 1984). While groups have the potential to arrive at an effective decision, they often suffer from process losses. For example, groups may suffer from coordination problems. Anyone who has worked with a team of individuals on a project can attest to the difficulty of coordinating members’ work or even coordinating everyone’s presence in a team meeting. Furthermore, groups can suffer from groupthink. Finally, group decision making takes more time compared to individual decision making, because all members need to discuss their thoughts regarding different alternatives.

    Thus, whether an individual or a group decision is preferable will depend on the specifics of the situation. For example, if there is an emergency and a decision needs to be made quickly, individual decision making might be preferred. Individual decision making may also be appropriate if the individual in question has all the information needed to make the decision and if implementation problems are not expected. On the other hand, if one person does not have all the information and skills needed to make a decision, if implementing the decision will be difficult without the involvement of those who will be affected by the decision, and if time urgency is more modest, then decision making by a group may be more effective.

    Figure 11.11 Advantages and Disadvantages of Different Levels of Decision Making

    Individual Decision Making Group Decision Making
    Pros Cons Pros Cons
    Typically faster than group decision making Fewer ideas Diversity of ideas and can piggyback on others’ ideas Takes longer
    Best individual in a group usually outperforms the group Identifying the best individual can be challenging Greater commitment to ideas Group dynamics such as groupthink can occur
    Accountability is easier to determine Possible to put off making decisions if left alone to do it Interaction can be fun and serves as a teambuilding task Social loafing–harder to identify responsibility for decisions