BBA Principles Management Decision Making Study Material notes

BBA Principles Management Decision Making Study Material notes: Concept of decision and decision making Types of decisions Programmed and Non-Programmed Decisions Strategic and Tactical Decisions Problem Identification Decision Making Process Specific Objective Choice of Alternative Evaluation of Alternatives Effective Decision Guidelines for Making Effective Decision Results Action Individual VS Group Decision Making :

MCom I Semester Human Resource Policies Practices Study Material

Decision Making

Decision making is an indispensible component of management process and a manager’s me 18 mied with making decisions after decisions. Managers see decision making as their Cena job because they constantly choose what is to be done, who is to do, when to do, where to do, and how to do. Looking at the role of decision making in management, William Moore has equated it with management when he says that “management means decision making. “Decision making, though permeates all managerial functions, is at the core of planning because it is the planning where major decisions are made which set the organisational tone. It is the stage at which major decisions regarding setting of organisational objectives, formulating major plans, laying down of policies, procedures, rules, etc. are made. Collectively, the decisions of managers give form and direction to organisational functions.

Decision making is both managerial function and organisational process. It is managerial function because it is a fundamental responsibility of every manager. It is organisational process because many decisions transcend the individual managers and become the product of groups, teams, committees, etc. In fact, more important decisions are made by group of managers rather by managers individually. Therefore, managers should develop decision making skills and acquaint themselves with the dynamics of decision making because of the following reasons:

1. Managers spend a great deal of their time in making decisions. In order to develop their decision-making skills, it is necessary that they know how to make effective decisions.
2. Managers are evaluated on the basis of quality of their decision making. To improve the quality of decisions, they should know how quality of decision making can be improved.

Concept of Decision and Decision Making

Before we go through the various aspects of decision making, it is essential to go through the concept of decision making. The word ‘decision has been derived from the Latin word decidere’ which means a cutting away or a cutting off, or in a practical sense’. Thus, a decision involves a cut of alternatives between those that are desirable, and those that are not desirable. The decision is a kind of choice of a desirable alternative. Lopez has defined a decision as follows:

Decision making is a process to arrive at a decision; the process by which an individual or organisation selects one position or action from several alternatives. Shull et al have defined decision makirig as follows:

Decision making, thus, is an act of projecting one’s own mind upon an opinion or a course of action. In decision making, three aspects of human behaviour are involved: (1) cognition-activities of mind associated with knowledge: (2) conation-the action of the mind implied by such words as willing, desire, and aversion; and (3) affectation the aspect cannot be arranged in advance. For example, if an organisation wants to take actions for growth, it may have several alternative routes like going for a grass-route project or taking over an existing company. In each situation, the managers have to evaluate the likely outcomes of each alternative to arrive at a decision. For evaluating the likely outcomes of these alternatives, the managers have to consider various factors, many of which lie outside the organisation. A common feature of non-programmed decisions is that they are novel and non-recurring and, therefore, readymade solutions are not available. Since these decisions are of high importance because of their long-term consequences, these are made by managers at higher levels in the organisation.

Strategic and Tactical Decisions

Organisational decisions are classified as strategic and tactical or operational. The distinction between strategic and tactical decisions is required because authority for tactical decision may be delegated to lower levels in the organisation while for strategic decision, it cannot be delegated lower than a particular level in the organisation. However, the distinction between strategic and tactical decisions is not as fine as a manager would wish because both these decisions attempt to achieve organisational objectives. Moreover, what might be a strategic decision for one organisation may be tactical decision for another. Therefore, the nature of both decisions can be understood by analysing them in detail.

Strategic Decision. Strategic decision concept is based on strategy which is a major action plan in an organisation. Therefore, strategic decision can be defined as follows:

1. The decision is a major one which affects the whole or major part of the organisation.
2. It contributes directly to the achievement of organisational objectives. Though all decisions try to contribute in this direction, strategic decisions contribute directly and other decisions are derived from these.
3. A strategic decision may involve major departure from earlier ones concerning some organisational practices; for example, change in product mix, expansion of business.

change in personnel policies, etc.

4. The strategic decision has normally three elements: (1) a course of action or plan

which specifies the work to be done to achieve the result, known as action element; (10 a desired result or objective to be achieved through the implementation of the decision, result element; and (ii) a commitment which directs some part of the organisation to undertake the course ot action, makes the personnel involved responsible for attaining the objective, and allocates resources to them, commitment element.

5. The strategic decision is normally a non-programmed decision which is made under the condition of partial ignorance. The alternatives involved and the outcomes of these alternatives cannot be known in advance. This is so because strategic decision is to be taken in the context of environmental factors which are quite dynamic and uncertain.

Tactical Decision. Tactical or operational decision is derived out of strategic decision. It relates to day-to-day working of the organisation and is made in the context of well-set policies and procedures. The various features of a tactical decision are as follows:

1. Tactical decision relates to day-to-day operations of the organisation and has to be taken very frequently. The decision is mostly repetitive; for example, purchase of raw materials, assigning duties to employees, etc.
2. Tactical decision is mostly a programmed one. The decision is programmed through the prescription of policies, rules, procedures, etc. Therefore, the decision can be made within the context of these variables. Such prescriptions provide what to do in a particular case. When the case for decision making comes, the decision maker simply applies those prescriptions and decides the things.
3. The outcome of tactical decision is of short-term nature and affects a narrow part of the organisation. For example, purchase of raw materials in routine manner will affect production department for a short period because raw materials are purchased very frequently in the context of well-set policies.
4. The authority for making tactical decisions can be delegated to lower-level managers. This is done because of two reasons: First, the impact of tactical decision is narrow and of short-term nature. Therefore, the lower-level managers have adequate perspective to make such decisions. Second, by delegating authority for such decisions to lower-level managers, higher-level managers are free to devote more time on strategic decisions which are more important.

DECISION-MAKING PROCESS

When a manager makes a decision, it is in effect the organisation’s response to a problem. As such, decisions should be thought of as means rather than ends. Every decision is the outcome of a dynamic process which is influenced by multiple forces. This process is presented in Figure 10.1. However, this process should not be interpreted to mean that decision making is a fixed procedure. A process is basically a dynamic concept rather than static. Events and relationships are dynamic, continuous, and flexible and must be considered as a whole in which many forces interact; a force affecting others and being affected by others. Therefore, the decision-making process as presented in Figure 10.1 should be seen as sequential process rather than a series of steps to enable the decision maker to examine each element in the progression that leads to a decision. Moreover, the process reveals that it is more applicable to non-programmed decisions than to programmed ones. Problems that occur infrequently are unstructured, and are characterised by a great deal of uncertainty regarding their outcome, require the manager to utilise the entire process. For frequently occurring, structured problems, it is not necessary to consider the entire process. If a policy is established or a specific rule or procedure developed to handle such problems, it will not be necessary to develop and evaluate various alternatives each time the problem arises.

Specific Objective

The need for decision making arises in order to achieve certain specific objectives. Every action of human being is goal directed. This is true for decision making also which is an action. Therefore, the starting point in any analysis of decision making involves the determination of whether a decision needs to be made. In fact, setting of specific objective itself is an outcome of an earlier decision. However, since the objective setting is an outcome of earlier decision, this may not be considered truly as the first step of decision process but provides framework for further decisions. Problem Identification Since a particular decision is made in the context of certain given objectives, identification of problem is the real beginning of decision-making process. A problem is a felt need, a question thrown forward for solution. It is the gap between present and desired state of affairs on the subject-matter of decision. It is just like the diagnosis of patient by the doctor. When a doctor makes a diagnosis, he has a normal, healthy person and he also has a fairly clear concept of what a healthy person is. With this model as the desired result, he looks for disparities in the patient’s actual state of health or factors which indicate that his future health will fall short of normal. In the case of management decision, however, a manager cannot rely on a commonly accepted norm such as healthy person. The objectives, if set precisely and specifically on the subject-matter of decision, will provide clue in identifying the problem and its possible solution. Further, in management, a problem exists whenever one faces a question whose answer involves doubt and uncertainty. If there is no solution to the problem, it cannot be treated as problem from decision point of view. though the consequences of not solving this problem may be terrible. A problem can be identified much clearly, if managers go through diagnosis and analysis of the problem.

1. Diagnosis. The term ‘diagnosis’ has come from Medical Science where it is used as the process of identifying a disease from its signs and symptoms. A symptom is a condition or set of conditions that indicates the existence of a problem. For example, a patient has certain symptoms on the basis of which his disease can be identified. Symptoms occupy an essential place in the problem-solving process for they signal the existence of problem and guide the search for the underlying problem. For example, if an organisation has high turnover of its employees, it indicates that something is wrong with the organisation. The symptom of high turnover may provide the clue to the real problem and managers can overcome the problem by taking appropriate action (decision making involves in taking action). Often managers fail to diagnose the problem correctly and sometimes they treat symptom as problem. Therefore, they should do this exercise very carefully. Diagnosing the real problem implies knowing the gap between what is and what ought to be, identifying the reasons for the gap, and understanding the problem in relation to higher objectives of the organisation
2. Analysis. While the diagnosis of problem gives the understanding of what should be done in terms of decision making, analysis of problem takes it a step further. The analysis of the problem requires to find out who would make decision, what information would be needed, and from where the information is available. This analysis may provide managers with revealing circumstances that help them to gain an insight into the problem. The whole approach of analysis of problem should, however, be based around critical factors like the availability of information for making decision, criticality of decision, and the time available for making decision. For example, information may be available from external and Internal sources and some of the information may not be available at all. Similarly, thecriticality of decision will determine the level at which the decision can be made. Thus, diagnosis and analysis of problem requiring decision will clarify what is needed and where the alternatives for doing the thing can be sought.

Search for Alternatives

A thorough diagnosis defines both a specific problem and the situation in which the problem exists. With this definition in mind, a decision maker seeks possible solutions. A problem can be solved in several ways, however, all the ways cannot be equally satisfying. Further, if there is only one way of solving a problem, no question of decision arises. Therefore, the decision maker must try to find out the various alternatives available in order to get the most satisfactory result of a decision. Identification of various alternatives not only serves the purpose of selecting the most satisfactory one, but it also avoids bottlenecks in operation as alternatives are available if a particular decision goes wrong. However, it should be borne in mind that it may not be possible to consider all alternatives either because some of the alternatives cannot be considered for selection because of obvious limitations of the decision maker or information about all alternatives may not be available. Therefore, while generating alternatives, the concept of limiting factor should be applied. A limiting factor is one which stands in the way of accomplishing a desired objective. If these factors are identified, managers will confine their search for alternatives to those which will overcome the limiting factors. For example, if an organisation has limitation in raising sizable finances, it cannot consider projects involving high investment.

A decision maker can use several sources for identifying alternatives: his own past experience, practices followed by others, and using creative techniques. Past experience, applied in most cases of decision making, takes into account the actions taken by the decision maker in the past with obvious differences between the former challenges and the present one. The successful action of the past may become an alternative for the future. This is a very simple approach but has obvious limitations because there may be so much changes in the decision context that old action becomes totally irrelevant. Copying from the experience of others is another way of generating alternatives. Thus, alternatives used by successful decision makers can be thought of as alternatives of decision making. This is also practised by many organisations after making suitable amendments in the light of changed decision context. Importing of technology from foreign countries with suitable changes is good example of this type of alternatives. The third method of generating alternatives is through creative process where various exercises are taken to generate entirely new ideas. This aspect of search for alternatives will be discussed in a separate section of the chapter.

Evaluation of Alternatives

After the various alternatives are identified, the next step is to evaluate them and select the one that will meet the choice criteria. However, all alternatives available for decision making will not be taken for detailed evaluation because of the obvious limitations of managers in evaluating all alternatives. The energy of managers is limited and psychologically most of them prefer to work on plans that have good prospect of being carried out. In narrowing! down the number of alternatives, two approaches can be followed: constraint on alternatives and grouping of alternatives of similar nature. The decision maker develops a list of limits that must be met by a satisfactory solution. He may treat these limits as constraints, that is, he may check proposed alternatives against limits, and if an alternative does not meet them, he can discard it. In the second approach, various alternatives can be grouped into classes on some specific criteria important to decision making. A representative alternative from one group may be selected for future analysis. Then having found the group that shows up the best, decision maker can concentrate on alternatives within this group. This method is very helpful in decision making regarding the location of plant, warehouse, etc.

Having narrowed down the alternatives which require serious consideration, the decision maker will go for evaluating how each alternative may contribute towards the objectives supposed to be achieved by implementing the decision. Evaluation of various alternatives dissects an alternative into various tangible and intangible factors. Tangible factors are those which can be quantified because they are quite obvious like the cost per unit, investment required, output to be received, etc. Such factors can be measured easily, though their happening may not be measured with certainty: for example, demand projection at a given price in a particular alternative. As against these, intangible factors are mostly qualitative and cannot be measured in terms of quantity. Therefore, some definitions can be used for such factors. For example, in a plant location, various non-economic factors like psychological problem arising out of displacement of persons from the plant site, ecological balance, etc., have to be taken into account which cannot be quantified. In evaluating an alternative, both these factors have to be taken into account. For determining the impact of a factor, various quantitative techniques have been developed which will be discussed in a separate section of the chapter.

Choice of Alternative

The evaluation of various alternatives presents a clear picture as to how each one of them contributes to the objectives under question. A comparison is made among the likely outcomes of various alternatives and the best one is chosen Choice aspect of decision making is related to deciding the most acceptable alternative which fits with the organisational objectives. It may be seen that the chosen alternative should be acceptable in the light of the organisational objectives. Thus, it is not necessary that the chosen alternative is the best one. This concept is based on the satisficing approach rather than the maximising approach of decision making, to be discussed later in detail. In choosing an alternative, the decision maker can go through three approaches: experience, experimentation, and research and analysis.

1. Experience. Managers can choose an alternative based on their past experience if they have solved similar problems earlier. Reliance on past experience plays a larger part than it deserves in decision making. Managers rely more on experience than alternative methods of choice. Past experience has some benefits but it has certain limitation that it blocks making correct choice specially when the environmental factors are more flexible.
2. Experimentation. Experimentation which is generally used in scientific enquiry involves that a particular alternative is put in practice, result is observed, and the alternative giving the best result is selected. For example, many organisations go for test marketing of their products before the products are really introduced in the market. During test marketing, the actions can be taken to change product features which are not acceptable. Experimentation as a method for choice of an alternative can be used on a limited scale because of cost and time factor.
3. Research and Analysis. Research and analysis is the most certain method of selecting an alternative, specially when major decisions are involved. This approach entails solving a problem first by comprehending it. This involves a search for relationships between the more critical variables, constraints, and planning premises that bear the objectives sought. In the second stage, the alternative is broken into various components. Their Individual impact or objective is evaluated and the impact of all factors of an alternative is combined To find out the total impact of the particular alternative. The one having the most positive Impact is chosen. Since this requires making a lot of calculations, often the help of computer is taken. In fact, various computer-based models have been developed to make the choice of an alternative easier.

Though various approaches are available for choosing an alternative, the decision maker’s personal values and aspirations affect what alternative will be chosen. In fact, in one way, the decision making is the translation of one’s values and aspirations into action. Thus, the rational process of decision making is considerably affected by the personal factors. Further, managers should take into account the uncertainty of outcome of a decision. Therefore, they should be ready with alternative action if one fails. In order to do this. managers should often be ready with contingency plans.

Action

Once the alternative is selected, it is put into action. Truly speaking, the actual process of decision making ends with the choice of an alternative through which the objectives can be achieved. However, decision making, being a continuous and ongoing process, must ensure that the objectives have been achieved by the chosen alternative. Unless this is done, managers will never know what way their choice has contributed. Therefore, the implementation of decision may be seen as an integral aspect of decision.

Once the creative and analytical aspects of decision making through which an alternative has been chosen are over, the managerial priority is one of converting the decision into something operationally effective. This is the action aspect of decision making. The basic difference between decision making as an analytical process and action is that the former requires the use of conceptual skills since it translates the abstract ideas into reality. For example, suppose that there is a change in consumers’ tastes. This change is very abstract and cannot be seen unless some specific techniques and measurements are applied. How this change can provide opportunity to the organisation is mostly a conceptual exercise requiring managers to interpret what changes are taking place and what products or services will be preferred in the changed situation. Action, on the other hand, relates to putting a decision into practice so that objectives of decision are achieved. This practice will provide further feedback for evaluating the soundness of the decision and, if need be, a change in the decision.

Implementation of a decision requires the communication to subordinates, getting acceptance of subordinates over the matters involved in the decision, and getting their support for putting the decision into action. The decision should be effected at appropriate time and in proper way to make the action more effective. The effectiveness of action is important because it is only effective action through which organisational objectives can be achieved, and right decisions help in effective action.

Results

When the decision is put into action, it brings certain results. These results must correspond with objectives, the starting point of decision-making process, if good decision has been made and implemented properly. Thus, results provide indication whether decision making and its implementation is proper. Therefore, managers should take up a follow-up action in the light of feedback received from the results. If there is any deviation between objectives and results, this should be analysed and factors responsible for this deviation should be located. The feedback may also help in reviewing the decision when conditions change hich may require change in decision. Therefore, a successful manager is one who keeps look at the objectives and results of the decision and modifies his decision according to the changes in the circumstances:

EFFECTIVE DECISION

The decision-making process goes through the various stages and the basic objectives of all these stages are to solve problem through the decision. The solution of the problem depends on how effectively the decision is made and implemented. Thus, an effective decision is one which is action-oriented, goal-directed, and provides efficiency in implementation. These three aspects of effective decision can be presented below.

1. Action Orientation. Decisions are action-oriented and are directed towards relevant and controllable aspects of the environment. Decisions are totally pragmatic in nature and their value is dependent on the success of the actions that follow. Decisions may be treated as an intervening variable which may ultimately lead to the end-result variables. From this point of view, decisions should ultimately find their utility in implementation. Therefore, the decision to be effective must specify the various actions which are to be taken to achieve the objective necessitating decision making.
2. Goal Direction. Organisations are goal-directed units and, therefore, any organisational process, including decision making, should be goal-directed to enable the organisation to meet its objectives. Naturally, the value of a decision and the associated action is related to the dispatch with which the goal is achieved. While the value of a decision is dependent on the attainment of a given goal or set of goals, such attainment is a function of both the accuracy of the decision and its implementation. In evaluating a decision, then, a distinction should be made between the effects of goal attainment brought about by better decision and those attainments arismg out of execution.
3. Efficiency in Implementation. An effective decision should provide the way in which it can be implemented. Therefore, decision making should take into account all the possible factors not only in terms of external context but also in internal context so that a decision can be implemented properly. Often the results are obtained by proper implementation of proper decision. Therefore, a brilliant decision may fail if it is not suitable for implementation by the organisation. From this point of view, three characteristics of an effective decision have been identified: (a) the viability of the decision; (b) the degree of congruency between prediction and the reality or viability of the solution as it occurs; and (c) the enthusiasm and skill with which the proposal is pursued-the attractiveness of the venture.5

Guidelines for Making Effective Decision

Any decision can be made effective if decision making process is followed properly. However, to make a decision effective, managers should take care of certain variables affecting their decision making and its implementation. The attempt should be to make a realistic decision rather than attempt an ideal decision. This can be done if following factors are taken into consideration:

1. Categorical Interpretation. At the very outset, it may be emphasised that logical decision can be made if the real problem is interpreted and identified with in-depth study and observation. Often what happens that managers do not analyse the problem carefully and they take symptoms as the problems. Moreover, they have a tendency to assume certain things without adequate basis and analysis. For example, many of the costs are assumed, sales are taken for granted, or a particular behaviour is always anticipated. These make the problem identification much difficult and the real problem necessitating decision making does not get adequate consideration. Therefore, in order to avoid such a situation, it is desirable that problem should be defined properly. It is often suggested that a problem is half solved if it is identified properly.
2. Application of Limiting Factor. Managers can do better if they apply the limiting factor principle. In choosing from among alternatives, the more a manager recognises and solves for those factors which are limiting and critical to the attainment of desired objectives, the more clearly and accurately he can select the most desirable alternative. In order to identify the limiting factors, the manager should take a complete analysis of external environment and strengths and weaknesses of the organisation. The analysis will bring out what the organisation can do and cannot do. Therefore, the manager can refrain from taking such a decision which cannot be implemented by the organisation. However, the concept of limiting factor is not static. Therefore, limiting factors may vary from one decision situation to another, or for the same decision situation over a period of time. For example, in the past, if availability of the funds was a limiting factor in a decision situation of acquiring a plant; in today’s context, delivery of plant may become a limiting factor. Such a factor be identified by complete analysis of decision situation.
3. Adequate Information. Information is the life blood of an organisation because all decisions are based on this. More is the quantity of reliable information, higher is the validity of decision. Therefore, every aspect of decision should be backed by sound and adequate proofs. If the facts underlying a problem are collected and care is taken to analyse the situation as well as the problem in the light of collected information, the basic spadework in making a decision is complete. However, there is a limit for collecting information because of time and cost factors. Therefore, manager must decide the extent to which he will go for further information. Generally, the manager should not go for additional information whose marginal contribution to decision making is lesser than its cost of collection. Beyond this, the manager should use his experience and common sense. However, problems come when the experience and common sense are used disproportionately. Managers often rely too much on their experience and common sense and they commit blunders. In the absence of adequate information, it is better to defer a major decision rather than making wrong decision because the cost of deferring decision will be lesser than making wrong decision.
4. Considering Others’ Views. While making decision, it is desirable that all alternatives are considered before arriving at a decision. Equally desirable is the fact that while making a decision, others’ views should also be considered adequately. Often what happens is that a decision is affected by preferences and values. Moreover, interpretation of many qualitative facts in an alternative is subject to personal judgement. Therefore, if various views on the same point are taken into consideration and given adequate weight, they will contribute to the quality of decision. Sometimes, many views may seem to be impractical but they may turn to be highly practical if time relevance is not ignored. The basic idea of taking others’ views is not that the manager will act accordingly but he must take into account the other alternatives as suggested by others. It is a very old saying that listen to everybody but do according to your judgment.
5. Timeliness. A decision to be effective must be made at proper time. A delay in decision making may result in loss of opportunities in this fast-changing environment. In fact, one of the reasons for slow growth of organisations is that they have not been able to make fast decisions, particularly the strategic ones. Therefore, decisions must be made within the time. In the context of role of quick decision, McCormack says that “the quick makers, almost always, have ume to recover from their mistake. As some mistakes are inevitable, this can be an invaluable advantage.” For this purpose, managers can set deadline by which they must arrive at decisions. However, what should be deadline for a decision depends on its nature. For example, strategic decision making requires more time as compared to operational decisions.

The observance of above guidelines should not be taken to mean that chance element in decision making can be avoided altogether. The fact is otherwise. Since a decision’s impact is for future, the chance factor cannot be eliminated altogether. It can be reduced considerably if the above guidelines are followed. These will provide sound basis for making decisions.

INDIVIDUAL VS. GROUP DECISION MAKING

Every manager makes decisions in the organisation, either in his individual capacity or as member of a group. In fact, organisational decisions are combination of individual and group decisions. Both types of decisions have their positive and negative aspects. Therefore, the question arises: what are the situations in which individual decisions should be preferred and what are the situations in which group decisions should be preferred. Following is the analysis of situations for individual and group decisions.

1. Nature of Problem. If the policy guidelines regarding the decision for the problem at hand are provided, individual decision making will result in greater creativity as well as efficiency. Where the problem requires a variety of expertise, group decision making is suitable
2. Time Availability. Group decision making is a time-consuming process and, therefore, when time at the disposal is sufficient, group decision making can be preferred.
3. Quality of Decision. Group decision making generally leads to higher quality solution unless an individual has expertise in the decision area and this has been identified in advance.
4. Climate of Decision Making. Supportive climate encourages group decision making whereas competitive climate stimulates individual decision making. 5. Legal Requirement. Legal requirement also determines whether individual or group decisions have to be made. Such requirement may be prescribed by government’s legal framework or by the organisational policy.rules, etc. For example, many decisions have to be compulsorily made by board of directors (a group) or committee in companies.

When a manager makes a decision as an individual, he has to consider the steps involved in decision-making process and uses techniques for decision making. However, when he has to make decision as a group member, he has to consider group behaviour also. In group decision making, there can be either consensus among the members of the group, or the decision can be arrived at through simple majority unless the group prescribes any other mode of majority. Since many of the decisions are made in the organisations by the groups and these decisions are of significant consequences, many specific techniques have been developed for improving group decision making.

Techniques for Improving Group Decision Making

When posed with the need to solve a problem or make a decision, a group has a variety of decision-making techniques ranging from ordinary group interaction to improved techniques. Besides ordinary group interaction, a group can choose out of four techniques for improving the quality of information exchanged by group members in decision making and facilitate Interpersonal interaction. These techniques are brainstorming, nominal group technique, delphi technique, and consensus mapping.

1. Brainstorming. Brainstorming is a technique to stimulate idea generation for decision making. Originally applied by Osborn in 1938 in an American company, the technique is now widely used by many companies, educational institutions, and other organisations for building ideas. Osborn has defined brainstorming simply as ‘using the brain to storm the problem. Webster Dictionary defines brainstorming as “a conference technique by which a group attempts to find a solution for a specific problem by amassing all the ideas spontaneously contributed by its members.” For brainstorming, a group of 10 to 15 persons is constituted. The participants should be connected with the problem directly or closely, though they need not necessarily be from the same discipline. The process in brainstorming goes in the following ways:

(i)The problem on which decision is required is given to the group. Problem is stated clearly and precisely so that members of the group can focus their direct attention on it.

(11) Each member is asked to give ideas through which the problem can be solved. Here the emphasis is on quantity of ideas and quality may follow later. The brainstorming session is meant to be a free, frank, and relaxed one to generate maximum number of ideas irrespective of qualities. Factors inhibiting the idea generation are pushed back. The basic theme behind idea generation is that though a big chunk of ideas collected during the session may not be worth while, yet a small percentage of it may provide sufficient useful list to work upon.

(iii) The members are expected to put their ideas for problem solution without taking into consideration any limitations-financial, procedural, legal, organisational or otherwise. Such limitations only act as deterrent to free flow of ideas because the participants will limit themselves in these limitations.

(i) Idea-evaluation is deferred to a later stage because it does not flow in the direction of idea generation. Hence, any criticism, judgement, or comment is strictly prohibited and the members are told to abstain from it. Anyone violating this is chided gently in order to generate genial atmosphere for free flow of ideas. Although brainstorming is useful for all types of decisions, it is more useful for simple, well-defined problems. It encourages enthusiasm and a competitive spirit among members in generating ideas: it also prevents group members from feeling hopeless regarding the range of possibilities in a given situation. Though brainstorming can result in many shallow and useless ideas, it can spur members to offer new ideas as well.

2. Nominal Group Technique. Nominal group technique (NGT) is a structured group meeting which restricts verbal communication among members during the decision-making process. It is meant to resolve differences in group opinion by having individuals generate and then rank a series of ideas in the problem exploration, alternative generation, or choice-making states of group decision making. The process in NGT goes as follows:

The NGT is widely used in health service, industry, education, and government organisations. This technique encourages creativity. prevents strong personality types from dominating the group, encourages continued exploration of the issues, provides a forum for the expression of the minority viewpoints, and gives individuals some time to think about the issues before offering solutions. 3. Delphi Technique. The name Delphi indicates a shrine at which the ancient Greeks used to pray for information about the future. In Delphi technique of decision making. members do not have face-to-face interaction for group decision. The decision is arrived at through written communication in the form of filling up questionnaires often through mail. In the conventional Delphi, a small group designs a questionnaire which is completed by a larger respondent group. The results are then tabulated and used in developing a revised questionnaire which is completed by the larger group. The results of the original polling are fed back to the respondent group to use in subsequent responses. This procedure is repeated until the issues are narrowed, responses are focused, or consensus is reached.

Delphi technique is quite useful where the problem does not lend itself to precise analytical techniques but can benefit from subjective judgements on a collective basis and members who may be experts in the area of the problem may not be able to have face-toface interaction. For example, what will be the trend of fashion in next year, the decision can be arrived at through Delphi technique. This technique can take the advantages of large number of experts in the field who might be geographically separated. The quality of decision may improve as the members can express their opinions freely. They can insulate themselves from the undue influence of others because of absence of face-to-face interaction. However, this technique is quite time-consuming and, therefore, can be used only in those cases where timing for decision making is not of prime importance.

4. Consensus Mapping. Consensus mapping technique of group decision making tries to pool the ideas generated by several task subgroups to arrive at a decision. The technique begins after a task group has developed, clarified, and evaluated a list of ideas. The facilitators encourage participants to search for clusters and categories of ideas. This search for structure includes the listing and discussion of alternative clusters and categories by the entire group or subgroups, and then production of a single classification scheme by group members working as a group or in pairs or trios. Then the facilitators consolidate the different schemes developed by subgroups into a representative scheme that acts as a ‘strawman map’ for the entire group. Group members then work to revise the strawman map into a more mutually acceptable solution. This exercise is repeated until the group as a whole arrives at a single, consolidated map and a final decision based on that.

Consensus mapping technique works best for consolidating results from several task forces or project groups and best suited for problems that are multidimensional, have interconnected elements, and many sequential steps.

Positive Aspects of Group Decision Making

Every group decision making has some positive aspects in terms of better decision. commitment of people towards decision, better communication, and commitment but, at the same time, has some negative aspects in the form of time consuming and being costly. problem of outcomes, and undue pressure on conformity to norms. These aspects are presented below:

1. Pooling of Knowledge and Information. Since many individuals involved in group decision making, more data and information can be brought to bear on the decision. The group provides specialised inputs in defining variables and suggests alternatives that the individual alone is unlikely to come up with. Pooling of such knowledge and information is likely to improve the quality of decisions provided group dynamic factors are positive.
2. Satisfaction and Commitment. Individual satisfaction and commitment in group decision making are often enhanced. This may be caused by an attitude change regarding the alternatives as a result of discussion. It may also be caused by the development of group spirit as people discover similarities among themselves. People who share in an important activity like decision making feel more ownership than when they are excluded from it. Individuals’ satisfaction and commitment are important in effective implementation of the decision
3. Personnel Development. Group decision making is a source of development of individuals in the organisation. Learning is enhanced when one observes others, practises what has been seen, and experiences the positive rewards received for successfully repeating the new behaviour. These three learning factors are present in group decision making. Individuals can learn to know to gather data, evaluate it, generate alternatives, calculate risks, and choose the best solution by practising with others in group decisions. Thus, the problem of succession in the organisation can be overcome.
4. More Risk Taking. Every decision involves some kind of risk because a decision affects future events and individuals vary in terms of risk-taking aptitudes and capabilities; risk taking increases when these individuals are pooled in a group. Thus, the risk taking tends to be higher in group decision making. Higher risk taking generates in group decision making because (1 group is able to share information in an open environment; members become more familiar with the problem being discussed: initially they may be cautious about risk; and (1) if the outcome of the decision is negative, it is easy to pass the buck by individuals. Therefore, when amount of risk involved in a decision is significant, group decision making is more appropriate.

Negative Aspects of Group Decision Making

Group decision making has following negative features which may either affect the quality of decision or cost of decision:

1. Time-consuming and Costly. Inevitably, groups take more time to reach decisions than individuals. There are several reasons for this. (1) More ideas and opinions are held by the group members which must be discussed for decision making. (t1) Arrangements for the group meeting, place, format, and assembly must be made which are time-consuming. In all these things, cost is also involved. Thus, the total cost of group decision making would be cost of arrangement and cost of members’ time. Therefore, group decision making should be resorted to only when the matter cannot be decided by individuals separately.
2. Individual Domination. Because of the group dynamics prevailing in group interaction, some individuals dominate the group processes and have considerable bearing on decision outcomes. This may be because such individuals may enjoy higher status because of their ade, experience, expertise, or other influencing characteristics. Thus, what appears to be a group decision may actually be the individual decision ratified by the group. Domination of such persons may not necessarily improve the quality of decisions.
3. Problem of Responsibility. No doubt, group decision brings more commitment from members and its implementation is easier but this is true when the decision Implementation outcome is positive. When this outcome is negative, no one can be held responsible. A group decision is no one’s decision and no one is held individually responsible for that. In such a situation, groups may come out with ill-conceived or irresponsible decisions.
4. Groupthink. Groupthink is a type of thinking that occurs when reaching agreement becomes more important to group members than arriving at a sound decision. Groupthink is more likely to happen in cohesive groups because there is pressure for conformity to group norms and members avoid being too harsh in their judgements of fellow members. They try to avoid bickering and conflict, which they perceive as a threat to the team spirit. There are five reasons for the happening of groupthink. 0 There is development of an extraordinarily high sense of group cohesiveness. While cohesiveness is sometimes desirable, it is not desirable when a variety of opinions is as crucial as they are in decision making. (tl) The group isolates itself from the negative consequences which its decision may have on others outside the group. (ii) There may be unintentional setting of narrow constraints on the acceptability of decisions. Decisions that would affect the norms and structures of the group are unacceptable, even though the basic parameters of the decisions would be otherwise beneficial. (iv) The feeling of high degree of competence, team spirit, and agreement may mislead the group to seriously overestimate the collective wisdom and hence not a good decision. (u) Certain members may take the role of social leader of the group and they may protect the group from any facts, criticisms, or evaluations that might alter the illusion of unanimity and infallibility.

Groupthink not necessarily results in poor decisions but it simply increases the likelihood of such a decision by limiting discussion on various alternatives, evaluation of critical facts bearing impact on decisions, and adhering to similar decisions made in the past, though faulty.