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Characteristics of Group Decision Making

The ever changing market that exists today has brought about the idea of bringing multiple individuals with diverse backgrounds together and creating work groups. These work groups are becoming the norm in many companies. Work groups are generally but in place to tackle projects that would be better served by a group rather than an individual. One of the most important functions of a group is the ability to make effective decisions.

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The text describes that a group decision implies that an agreement is made among the members to determine which course of action is most effective for achieving the group’s goal. The purpose of group decision making is to decide on well-considered, well understood, realistic action toward goals every member wishes to achieve (Johnson and Johnson, 2009). Not only is it important for the group to make a decision together, they need to focus on making the most appropriate decision for the matter at hand.

The text list five major characteristics of an effective group decision; the resources of group members are fully utilized, time is well used, the decision is correct or of high quality, the decision is implemented fully by all the required group members, and the problem solving ability of the group is improved, or at least not lessened (Johnson and Johnson, 2009). In this paper I will describe the group to which I belong and how the five characteristics of an effective group decision apply to the overall decision made by the group.

The group that I belong to was pulled together several months back to make decisions on pricing for our products. My company decided to pull associates from different departments like; sales, operations, finance, products and marketing and bring them together to come up with the best laid plan. The company has had to take a different approach to our pricing models after an amendment was brought to the floor at the last minute by a Senator to place yet another Regulation on banking.

This amendment was going to affect our customers (Banks and Credit Unions) by forcing debit card networks to place a cap on the amount of interchange that the Financial Institution could earn. As this would only apply to Regulated Banks, my group had to make a decision on how we would set prices between the Regulated and Non- Regulated Banks. Would we treat them equally or separate them just as the amendment did? Our goal was to utilize the knowledge of coming from different areas within the company and pull together an effective pricing plan; the plan was to be ready for implementation, pending he final rulings from the Government. First, I will apply the first characteristic of an effective group decision; the resources of group members are fully utilized. One component that was essential was the positive interdependence. Each individual had something different to offer the group, we each came with resources, “Resources are time, talents, money, information, and materials. The development of High Performance Teams will use considerable resources. Newly formed teams want to maximize the resources available to them” (Bodwell, 1999) that would help in the decision making process. Positive Resource Interdependence: Each member of the group has only a part of the information, resources, or materials necessary for his or her task. In this way, the members’ resources have to be combined so that the group accomplishes its goal” (INTIME, 2008). Each member came from a different area of the business; however we all support our customers in some fashion, allowing us to bring different outlooks to the customers need. For example, I am from the sales department as an account manager; I deal with our customers on a daily basis and hear their concerns about the upcoming Regulation.

Operations deals with the implementation and technology aspect of putting new pricing in to place. As you can see we each brought a different resource to the table. On the flip side, each member coming from a different area also became a hindrance, as each member had a conflicting goal. Pricing was an expert in pricing models, operations wanted to make sure they were good on an implementation schedule, Sales wanted what was best for the customer and to address concerns the customers were divulging, Finance was concerned about compliance, and Marketing was concerned about how and when the information would be announced to the customers.

This led to many conflicts throughout our decision making process. The second characteristic: Time is well used, was definitely an area of concern. We were pulled together without knowing the final rules to the regulation, or when they would be announced for that matter. Once the rules were released we did not know how much time we would have to implement the final rulings to stay within compliance. Despite not knowing these aspects the group consistently used face to face interactions as our main form of contact. We met once a week in a secluded conference room with no disruptions.

We utilized e-mail and phone conversations only when necessary between our face to face meetings. These e-mail where generally when updates came out that would give us new information to help in the process. Time being used well was an area that we gained consensus, the group agreed on the same course of action when it came to the time involved in making the decision. We agreed that our time was best spent in a meeting face to face where we could pull all of our resources together and come up with the best decision.

The third characteristic; the decision is correct or of high quality was extremely important to our bottom line. We had to make the best decision for our customer but remain in compliance with the new Regulation. In order to make the best decision we had to put the conflicting goals aside. Conflicting goals would have kept us battling it out and not allow us to utilize the time to our best ability. We came to the conclusion that we all needed to come together to decide what was ultimately best for our company and our customers.

We made the decision to come up with a two tiered pricing model, one would comply with the cap for Regulated Banks and the other would allow us to offer the Non-Regulated Banks the same model we have always used. The only thing we were waiting for was the final ruling to determine what that cap would be. The group was able to come to a consensus and we presented the new pricing model to our Executives. The next characteristic; the decision is implemented fully by all the required group members is a very important characteristic of decision making.

In order for the most effective decision to be made there needs to be a consensus on what is being decided. Effective Group Decision Making Techniques: One of the principle difficulties in group decisions is that there are several alternatives to consider; should the leader make the decision, should the leader delegate the decision to some other member of the group, should the group make the decision through some form of majority vote, or should all decisions involving the group be made by consensus (Borysowich, 2006)? This is something that the group struggled with in the beginning.

At one point in the decision making process we decided to vote by majority. We soon found that this was not the best approach as the minority group did have valid opinions and it left ideas and opinions left out of the decision. “Decision making is by consensus. Consensus hopes for unanimous support. Individual team members may not fully agree with a team decision, but will fully support it” (Bodwell, 1999). Once realizing that consensus was the best way to reach the most effective decision we put a new came plan in place.

This leads me to the final characteristic; the problem-solving ability of the group is improved, or at least not lessened. My group learned a lot of lessons along the way one being that in order to solve a problem in a group setting that you should have consensus and team members should have individual accountability. During the process, my group definitely took on conflict, made decisions that ultimately we had to take a second look at, we started out with conflicting goals, but all of these setbacks made our group stronger and more equipped to make the right decision in the end.

Before coming to a consensus we made the mistake of holding a vote by majority, this led to us not looking at all opinions and ideas that in the end were important to finding the right decision for our company and our customers. The process also left each member with the tools to maintain individual accountability. Each member individually played a part in reaching the group’s goal. If it were not for the contributions of each individual in the group we would not have been as productive in the end. As the old saying goes, a team can sink or swim together.

I believe that the empowerment that was given to this group to make such an important decision for the company helped play role in improving our problem-solving abilities. The mistakes that were made, the collaboration that brought the team together to consensus and the accountability each member held themselves to, made each and every one of the group members more knowledgeable, more resourceful, and better equipped to face the next big group decision. One of the ineffective decisions that my group made during this process was when lack of skill became a hindering factor.

I say this because one very important aspect of making these pricing changes is to also make legal changes to customer agreements. While pricing caps play the biggest role in the new Regulation and the rule that followed, the language around exclusivity to one network provider also needs to be in compliance. The rule states that Financial Institutions are no longer able to have exclusivity to credit and debit networks, for example: you must have one credit network and one debit network that are unaffiliated.

While my company is strictly a debit network, the language in our agreements/contracts needs to shy away from the word “exclusive” in order to be in compliance. The group members not having the skills to make those type of changes resulted in us over looking that detail. While the rules are not expected to go into effect until late this year, it puts us in a scramble to make major changes to agreements. In the meantime our agreements are in compliance but it will cause us to have to revisit them in the future, making more work for our company and possibly the customers as well.

Looking back on the situation, I would have had an associate from our legal department apart of the group. This could have brought the resources we needed to manage this aspect of the decision making process. Instead we made an ineffective decision that shed light on the lack of skills involved in a group that had a major project on their hands. Cohesion in a group can go in both directions, in some cases this is a good trait of a group dynamic and in others it could be detrimental. To some degree you want a group to work well together and form a bond that will create a cohesive behavior.

On the other hand, there are several aspects of group cohesion which have a negative effect on group decision making and hence on group effectiveness. The problem with too much cohesion is that members may become too comfortable with each other. Groupthink is a factor of a group that is highly cohesive, and can lead to members avoiding disagreements, avoiding social challenges and everyone like to be a part of a group This is why group think can be so disastrous, group decision making without conflict almost always means that other viewpoints are being ignored.

According to the text, “Groupthink leads to concurrence seeking, characterized by group members inhibiting discussion in order to avoid any disagreement or arguments, emphasize agreement, and avoid realistic appraisal of alternative ideas and courses of action” (Johnson and Johnson, 2009). So while a group should work well together to reach a consensus on the final decision, the group should avoid such a cohesion that leads to ineffective decisions. The group that I belong to is a work group put together by my company to make a major decision that will impact the company and the customers that we make commitments to every day.

In order for my group to make an effective decision five characteristics need to be met; the resources of group members are fully utilized, time is well used, the decision is correct or of high quality, the decision is implemented fully by all the require group members, and the problem-solving ability of the group is improved, or at least not lessened. Like most companies, mine has utilized this idea for work groups to bring the knowledge and resources of individuals into a group setting to make effective decisions that will lead to a more productive goal. References

Johnson, D. W. , ; Johnson, F. P. (2009) Joining Together: Group Theory and Group Skills (10th ed. ). Upper Saddle River, NJ: Pearson Education Bodwell, D. (n. d. ): High Performance Teams, Retrieved July 4, 2011 from http://highperformanceteams. org/home. htm Borysowich, C. (2006). Effective Group Decision Making Techniques. Retrieved July 4, 2001 from http://it. toolbox. com/blogs/enterprise-solutions/effective-group-decision-making-techniques Intime (2008). Cooperative Learning. Retrieved July 4, 2011 from http://www. intime. uni. edu/coop_learning/ch4/types. htm

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