5.7 Group Decision Making

Managers don’t need to make a decisions on their own.  It’s often best and sometimes necessary for decisions to be made in a group.

There are several types of groups in a firm.

Nominal group
This is a group in name only.  There is no organizational reporting structure for the members of this group.  The members are brought together to share ideas and then vote on a decision.  An example of this might be a naming group made up of employees from marketing, sales, and legal whose function is to come up with a name for new products.

Task force
This is similar to a nominal group in that there is no formal organizational structure for this group.  The group is brought together for a defined period of time to achieve a specific objective.  For example a cost-cutting task force may be created with members from R&D and manufacturing to find ways to reduce product costs.

Delphi group
This is a special kind of group in the way that it operates.  It’s members are brought together with a specific objective, like a task force, but using a specific method.  This is probably best seen by example.  Suppose the company want to forecast sales for next year.  A Delphi group might have members from manufacturing, sales, marketing, and economics.  Each member of the group will give their opinions and then each member will give a number (vote).  If there is no consensus, the process is repeated.  It is repeated until all members agree.

Group Think

There is a problem that can arise when making decisions as a group called “group think”.  Group think arises when members decide to get along with the group which can result in poor decisions.  The classical example of this is the Bay of Pigs disaster.  The most senior officials in the U.S. went along with a plan that ended up an embarrassing and costly failure.  Later, they all expressed that they didn’t like the plan but didn’t want to upset the group.