You would have heard about the power of collective wisdom. Have you ever given a thought to why there are boards, committees and benches of judges to decide important matters?

A collective decision takes different points of view into account and is said to be more balanced.

Decision-making in groups: meaning and different types of group decision

What is group decision-making?

The meaning of group decision-making is captured by the process of more than two people getting together to discuss and taking a decision on a matter.

There have been many questions about the efficiency or effectiveness of group decision-making over the years. There is no doubt that some benefits of the group decision-making process in an organization make a compelling case.

The biggest benefit of the group decision-making process is the advantage of collective experience and different perspectives. It allows different people to share their opinions about a problem as well as its possible solutions.

A group decision is the outcome of a group discussion. Compared to a decision taken by a single person where only one viewpoint prevails, a group decision brings in multiple perspectives and highlights various challenges and advantages. Thus, a group decision becomes more effective and sustainable.

For instance, a company’s CEO wanted to expand his business and decided to open outlets in several cities. He chose 10 major cities and went ahead with the process. But then sales only rose 25%, unlike the 150% increase that he had predicted.

Another company’s CEO, too, wanted to expand his retail network. Before doing so, he invited all the sales managers and other senior management members for a group decision-making session. They discussed and came to the conclusion that opening stores in high-growth tier-II cities would be ideal as the major cities already had a sizable presence of dealerships and retail stores. Their plan worked well and the company’s sales grew by over 200% within a year.

The first CEO went ahead with his individual ideas and insights, but the second CEO had the advantage of listening to dozens of ideas and opinions which made him identify and decide in favor of the best option.

Another advantage of group decision-making processes in an organization is that it makes all the group members feel valued and a party to the decision. They feel responsible for the decision and are likely to work wholeheartedly to make it work.

However, group decision-making processes in an organization also have a major disadvantage—Groupthink.

Have you ever seen herds of sheep or camel caravans?

If you have, then you would have noticed how the group of camels and sheep mindlessly follow the animal at the helm. While traversing the mountainous pastures, if the lead sheep falls into a gorge, then many others are likely to follow mindlessly.

Similarly, if the lead camel of a caravan moves off course, then the following camels are likely to follow him instead of sticking to the original course.

This is a risk that group-decision poses most of the time as the group members are likely to back the line of thought proposed by the CEOs or those in positions of power. Disagreements are usually concealed and that can lead to the wrong decision.

Another challenge posed by decision-making in groups is the inability to take timely decisions.

Timing is usually important in decision-making. However, decision-making in groups can lead to a lot of arguments, repeated discussions, and disagreements. Resolving these disagreements and coming to a commonly agreed solution can take a lot of time and in urgent situations, such a process might prove to be counter-productive to the organization or the entire decision-making process itself.

Conclusion

It is important for business managers to understand what is group decision-making, and the situations in which the group decision process can be effective.

Harappa Education’s Making Decisions course helps young business leaders and managers understand various aspects of group decision-making as well as other decision-making processes. 

It includes a section on the D-R-I Model, an effective and easy-to-learn process for making decisions. 

The course also makes you learn the art of reviewing decisions and implementing the right techniques that make your decision-making superior and more beneficial on the personal as well as the organizational levels. Sign up now and become a smart decision-maker.


Explore topics such as Ethical Decision Making, Decision Making Under Uncertainty, Group Decision Making Techniques from our Harappa Diaries blog section and develop your skills.

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