Managing Under Uncertainty

Question:

Discuss about the Report for  Managing Under Uncertainty.

Answer:

Introduction

The purpose of this report is to discuss the concept of group formation and its influence on the decision-making. Therefore, three journal articles have been selected to better understand the concept of polarization in group decision making. Decision-making is the cognitive process where an individual applies his own knowledge and experience to find a solution for an impending problem or issue. It involves identification of various alternatives to resolve the problem and selecting the best alternative (Pettigrew, 2014). However, when an individual is faced with the decision-making situation, their decision-making ability is affected by his own understanding of the problem and their own capabilities. However, while making a decision as a group the rationality of the decision is enhanced as the information available and experience in decision-making is superior (Hwang & Lin, 2012). The report discusses various factors that come at play while making a decision as a group with the help of three journal articles.

The first article “Group Polarization in a Model of Information Aggregation” states that the decisions made by groups are extreme then the individual views of the members of the group, this process is called as group polarization. The article identifies that when the group takes a decision, it tends to polarised as compared to median individual rating of the decision taken by individual members of the group (Lu et al., 2012).The reason being group have superior knowledge as compared to the individual members of the group and group decisions are influenced by the common preferences of group members. Further, this article also presents various examples that show that allocation of actions made by an optimising decision maker varies as a function of the precision of the decision maker’s information. Similarly, for group a decision the polarization of decision becomes more polarized as the aggregation of rational information. Therefore, a group’s decision is the result of an optimization problem that rationally uses all the information available to individual group members (Roux & Sobel, 2015).

The second article, “The aggregation of preferences in group: Identity, responsibility, and polarization” discusses how group decision making processes might affect the economic decisions. The article has used experimental design to examine group identity and group decision making. The article suggests that magnitude and direction of polarization in group decision making depends on communication within the group and decision making structure. Decision making in group is governed by recognizing common outcomes for the both group identity and group treatments, so that group members can provide useful insights for collective decision making (Roselló et al., 2014). The article points out that even when a member in the group is given the full authority to make decisions, their decisions is still influenced by other members of the team. One of the reasons for such behaviour is associating with the team identity and sharing responsibility for the decision made by them. Further, polarization of decision is seen only on those cases where every member of the team has equal authority in decision making such as informal groups. Moreover, in formal or organizational groups, polarization of decision making is not found as a single individual has complete authority in decision making and open discussions are limited (Brady & Wu, 2010).

The third article “Group Polarization on Corporate Boards: Theory and evidence on Board Decisions about Acquisition Premiums” investigates how group polarization could influence board’s acquisition premiums. The article discusses that when the director’s support a high premium for acquisition the board members supports “focal premium” that even higher than the director’s projected premium, after discussion; and vice-versa. Further, group polarization decreases by demographic homogeneity between directors and minority expertise but is increased by board influence (Zhu, 2013).

Annotated Bibliography

 

ARTICLE SUMMARY

 

Reference

 

“Brady, M. & Wu, S. (2010). The aggregation of preferences in groups: Identity, responsibility, and polarization. Journal Of Economic Psychology, 31(6), 950-963. http://dx.doi.org/10.1016/j.joep.2010.08.002”

Article classification (academic conceptual, academic empirical)

The given article is academic empirical as the results of the study are based on laboratory experimentation using literature review and meta-analysis.

Journal ranking (ABDC quality journal listing)

Journal of Economic Psychology is ranked A (Abdc.edu.au, 2016)

Impact factor

2.76 (Researchgate.net, 2016)

Aim/Purpose of article

The aim of this article is to apply the theories and concepts related to group decision making into an integrated model.

Research methodology employed (qual, quant, mixed methods); sampling strategy and sample size employed; context of study eg location, industry; method of data collection methods employed; method of analysis employed.

Mixed methodology is employed to conduct research of the article. Radom sampling method is followed for selecting the sample where the number is totally determined by chance. Each session comprised of 12 participants and a total of 13 sessions were in run. The context of study is industry-based. Primary data collection is used for collecting data where the participants were assigned to specific roles in the experiment. A total of five rounds are made for each individual thereby giving a total of 282 wage effort or contracts. Data is collected on the main campus of Washington State University in Pullman. Hypotheses are framed as null and alternative hypothesis. Regression analysis is employed as the method of analysing data.

Research findings and conclusions drawn by researchers

According to the research findings, the individuals who were assigned with decision-making authority showed strong signs for making decisions in accordance with their partners. The teammates were restricted for communication wage levels or preferred effort.  The results state that there was no meaningful difference in the level of gift-exchange between No Communication and 2Way Asymmetric Relative to Individual. The null hypothesis was rejected for 1Way Asymmetric and 2Way Egalitarian. According to the Responsibility-Alleviation, Deciders bearing the burden of decision making might look for ways to alleviate their burden. The results further state that allowing a two-way communication rather than one-way mode shall impact the qualitative outcomes. The Deciders or decision makers are highly responsive to the non-deciders that indicate consistency between decider and non-decider.

Conclusions drawn by authors

Overall it is concluded that the differences in group-decision making structure significantly influences group behaviour. The authors’ further state that it would be too simple to hypothesize that the group decision making is in consistence and alignment from individual behaviour. The authors find it difficult to model the group behaviour as it is complex in nature.

 

CRITICAL INSIGHT

 

Significance

Significance of the article in relation to the topic generally, other articles in the literature, other articles in this bibliography assignment etc

The given article is significant as it investigates the ways in which team decision making and group identities impact economic decisions. It focuses on group polarization that helps in explaining group behaviour in real-life situations. The article is significant as it helps in explaining the factors that can lead to process gain in groups. It also explains the ways in which group thinking harms effective group decision making. One of the important factors that help group decision making in outperforming individual decision making is the interdependence.

 

Other articles in the literature help in carefully analysing the factors affecting decision making.  The researchers and psychologists explain the different theories of polarization such as persuasion, comparison and differentiation. A few studies have not observed the polarizing effects of groups on decision making (Kugler, Kausel, & Kocher, 2012). The articles also assess the techniques in which the group members can create many ideas through brainstorming to make decisions. Literature not just states the effects of group thinking, but also the ways and techniques to overcome decisions (Iyengar & Westwood, 2014).

 

The other articles in the bibliography assignment are related with the experiments related to group decision making.  The articles discuss the relationship between individual and group decision making without restricting the information structures. It is different from the chosen article as in the given articles, there is no interaction between group members (Roux & Sobel, 2015). The third article investigates group decision-making bias. The articles are supported using hypothesis on group polarization and its mechanisms (Zhu, 2013).

Strengths

Personal evaluation required rather than simply repeating any author’s suggestions.

The strength of this article is that it shall help in moving the theories and concepts related to group decision making into an integrated model. The assumptions or hypothesis made in the experiment are apt for the purpose of the study.  The results of the study are well explained considering all variables. The article can be used for conducting a study or future research.

Weaknesses

Personal evaluation required rather than simply repeating any author’s suggestions.

The article does not contain any critical discussion. The data collection procedures are not stated clearly if the sessions for experiment were through observation, interview or any other method. The article does not clearly state the theories and concepts. There could be a better presentation of the literature review for group decision making.

Limitations

Personal evaluation required rather than simply repeating any author’s suggestions.

The article encounters certain limitations because for conducting the group experiment, there was no communication between group members. Therefore, there is no clear evidence of group polarization. Limited support was provided for critical discussion on each subject.  The study also limits the research processes and there could have been a greater scope for conducting research using other methods

Conclusion

From the above discussion it can be concluded that polarization in group decision making plays an important role and greatly affects the rationality of decision making of a group. One of the biggest challenges that a group faces when making a collective decision is the effect of polarization that makes the group decision extreme as compared to the original views of the individual group members. One of the reasons why group polarization occurs is the idea of social comparison. In the process of group decision making, initially every member of the group approaches the process with feeling that their idea is superior. However, once the group members start to discuss the issue, the members learn that their views are median to the group views and not unique. Therefore, in order to present themselves as superior in thought, they suggest extreme position (either extremely conservative or extremely lenient). Another, reason why group polarization occurs is due to the persuasive argument view. According to this theory, as group starts to discuss the issue, they find the discussion is leading to no concrete solution and discussion is not moving beyond the initial thoughts and views presented. Therefore, to progress the discussion, group members suggests extreme positions and present their polarized views through persuasive presentations.

The polarization in group decision making is present in both formal and informal groups. However, the magnitude of polarization is more prevalent in informal groups as every member of the group has equal participation in the decision making process. While in formal groups where one member of the group has complete authority over the decision making, the effect of polarization is limited as the scope of extensive discussion is limited. However, the impact of polarization in decision making is not exclusive in formal groups where one member of the group has authority in the decision making due to the reason of group identity and sharing of responsibility of the outcomes of the decision made. The process of decision making is difficult to understand and when many members of a group are responsible for making a collective decision, the process becomes even more difficult to understand due to the complexity of human behaviour. In group decision making many concepts such as comparison, differentiation, and persuasion play an important role and that leads to polarization of the group decision making.

Personal Reflection

At the early stage of the group formation, I had the viewpoint that things will get haphazard because working with a number of members usually results in a chaotic situation. However, our team had only three members. All the members were easily coordinated and discussions were made easily if any kind of dilemma occurred at any point of time. It was thus, easy for us to come to a common decision. Reading the journals, it was understood that according to the unified model of collective decision, once the members of the team understood the treatment of each member with other members, a common understanding of the behavior can be known. I was also aware of the fact that if an individual has sole decision making power, the person can also affect the decision of the team. In fact, I faced the same situation while working as a team. However, I believe that it is very important to work collectively and come to a common decision.

As stated by Bess & Goldman, (2012), in a ‘minimal-team’, an individual who has the potential of leadership is usually assigned as a group leader. The person might misuse the power and without taking concern of any team member might come to a conclusion. In such cases, a situation of isolation is created and usually the members do not feel like working as a team. The degree of association and bonding always depends on how the team leader would treat each member of the team. There were no such circumstances in our team; all the members had equal opportunity of presenting their point of view. A rigid decision was made only when every member showed their positive concern.

As commented by Duncan (2013), that the unity of the members in a group is not only decided at the time of working together but also when the members are not working together. For instance, once due to some urgent work, it was not possible for me to attend the class. However, I asked the other team members to acknowledge every single detail that the professor would teach in the class. By this time, three of us came quiet close to each other and we share a good bonding. Two of them were readily agreed to help me and told me not to worry about anything and they would provide help. I was indeed elated by the way helped me to understood the things that were taught in the class. This was when I felt that the members were really helpful and three of us as a team will definitely make things happen better.

The degree of interaction and integrity always help to come to a better solution. As pointed out by Yukl, (2013), it is very important to arrive at a conclusion following three major steps. These steps are; explaining, decision making and then implementing. I would like to mention this from my personal experience that indeed these stages are important. It is very vital to explain the situation or scenario to the team members prior to making a decision. It is only on the basis of this explanation, proper judgmental decision should be made (House, 2016). Once, all the things are cleared and understood, the plan should be implemented into action. It was for the same reason; we used to call for meetings frequently and used to discuss our viewpoint on the matter. It was when all three of us came down to a particular decision; we used to carry on with the proposed project (Paulus, 2015).

The identity model suggests that an individual is able to identify oneself with the team if the members of the team could easily relate themselves with the other members. In this matter, I would like to say that since three of us belonged to the same age group and were involved with the course, it was easy for us to co-relate with each other. We had lots of common topic to discuss. We were not friends at the beginning but when we were assigned as team members, our integrity increased and we develop a close bonding. In fact, there were situations when we used to discuss about our personal life as well apart from the academic boundary. We understood the importance of respecting each other both as an individual and as a friend as well. This is how we developed a group identity (Curseu et al., 2016).

There are a number of advantages of a team. As pointed out by Meindl, (2013), that in case of any kind of problematic situation, each and every team member is held responsible. This is a positive aspect for the individual members of the team. When an individual is a member of a group then the person is responsible for both the success and the failure of the group. In our case as well, three of us held equal responsibility of any kind of success or failure of any event. I think this approach is fair because when the members are present in a single group, they should be responsible for both success and failure of any event. At another instance, it was stated by House et al., (2012), that the leader of the team should have the decision making authority and all the other team members would have to abide by the decision of the leader. This is an old concept which is rigid in form and does not provide the scope of any kind of flexible decision (Tyssen, Wald & Spieth, 2013). However, this approach was not taken in our team. There was no formal team leader in our team but we all used to take decision simultaneously.

Decision making ability is also guided by the type of task given to the members of the team. Sometimes, the task that is given to the team proves to be challenging for the members individually (Gottfredson & Aguinis, 2014). It might happen that a particular task is known to a single member while others are not aware of the thing and is not confident enough about the task. In such cases, other members of the team rely and keep faith on the person who showed better knowledge towards the particular task. It is a better decision because when people work as a team, they automatically develop a certain faith towards each other. This faith is indeed important that results in fruitfulness of the entire activity (Ehrhart, 2015). In this respect, it can be mentioned that neither of the team members face any kind of such situation where only one person was only knowledgeable about the matter while others were not. Therefore, we did not face such situation at any point of time.

An important point that needs to be focused is that, it has been advised by Bess & Goldman, (2012), that in a team, it is very important to carry on face to face conversation with the team members. This facilitates understanding the point of view of each and every person. In case, if there arises any kind of confusion, it could be easily sorted out then and there. However, it has been suggested by Avolio & Yammarino, (2013), that in the era of technological advancement, keeping in touch with others has become easier. Indeed, we used to communicate with each other over text messages and phone calls. In case of any emergency we used to get in touch with each other easily.

I have also come across the term polarization in group which meant that the leader is responsible for the complete decision making procedure for the team and not the other members. This type of scenario has been in debate for a long time because polarization has been observed in political situation. According to the Social Comparison Theory, people are likely to express their consent towards a particular issue (Chemers, 2013). However, the final decision always depends on the leader. It completely depends on that particular person to take decision on behalf of other people who are depended on him. In this respect, it has to be mentioned that bargaining and negotiation goes side by side. The leaders at times ask the members about the approaches and decision that the leader should take into action.

Political leaders have been classified into two major groups, pro-social and anti-social (Deckard, 2012). The leaders that think about the society and its people before taking any kind of decision are the pro-social political leaders. On the other hand, those who think that their personal thinking and experience are enough to come to a conclusion and formulate a decision are basically, anti-social leaders. However, with my own experience as a team member I can come to the conclusion that no such polarization has been witnessed in our group. Our group was a small one where each and every member had equal participation in the decision making process. The complete team activity was a great lesson for me and other members of the team. I have gained lot of knowledge and practical experience that would definitely help me in future.

References

Abdc.edu.au,. (2016). ABDC Journal Quality List · Australian Business Deans Council. Abdc.edu.au. Retrieved 30 July 2016, from http://www.abdc.edu.au/pages/abdc-journal-quality-list-2013.html

Avolio, B. J., & Yammarino, F. J. (2013). Introduction to, and overview of, transformational and charismatic leadership. Transformational and charismatic leadership: the road ahead. London: Emerald Group Publishing Limited.

Bess, J. L., & Goldman, P. (2012). Leadership ambiguity in universities and K–12 schools and the limits of contemporary leadership theory. The Leadership Quarterly, 12(4), 419-450.

Brady, M. & Wu, S. (2010). The aggregation of preferences in groups: Identity, responsibility, and polarization. Journal Of Economic Psychology, 31(6), 950-963. http://dx.doi.org/10.1016/j.joep.2010.08.002

Chemers, M. M. (2013). Leadership research and theory: A functional integration. Group Dynamics: Theory, research, and practice, 4(1), 27.

Curseu, P. L., Schruijer, S. G., & Fodor, O. C. (2016). Decision rules, escalation of commitment and sensitivity to framing in group decision-making: an experimental investigation. Management Decision, 54(7).

Deckard, G. J. (2012). Contemporary leadership theories. Organizational Behavior in Health Care, 209.

Ehrhart, M. G. (2015). Self-concept, implicit leadership theories, and follower preferences for leadership. Zeitschrift für Psychologie.

Gottfredson, R. K., & Aguinis, H. (2014, January). Pruning and Refining Leadership Theories through Meta-analytic Structural Equation Modeling. InAcademy of Management Proceedings (Vol. 2014, No. 1, p. 11195). Academy of Management.

House, R. J. (2016). Path-goal theory of leadership: Lessons, legacy, and a reformulated theory. The Leadership Quarterly, 7(3), 323-352.

House, R., Javidan, M., Hanges, P., & Dorfman, P. (2012). Understanding cultures and implicit leadership theories across the globe: an introduction to project GLOBE. Journal of world business, 37(1), 3-10.

Hwang, C. L., & Lin, M. J. (2012). Group decision making under multiple criteria: methods and applications (Vol. 281). Springer Science & Business Media.

Iyengar, S. & Westwood, S. (2014). Fear and Loathing across Party Lines: New Evidence on Group Polarization. American Journal Of Political Science, 59(3), 690-707. http://dx.doi.org/10.1111/ajps.12152

Kugler, T., Kausel, E. E., & Kocher, M. G. (2012). Are groups more rational than individuals? A review of interactive decision making in groups. Wiley Interdisciplinary Reviews: Cognitive Science, 3(4), 471-482.

Lu, L., Yuan, Y. C., & McLeod, P. L. (2012). Twenty-five years of hidden profiles in group decision making a meta-analysis. Personality and Social Psychology Review, 16(1), 54-75.

Meindl, J. R. (2013). Reinventing leadership: A radical, social psychological approach. Social psychology in organizations: Advances in theory and research, 12, 159-203.

Paulus, P. B. (Ed.). (2015). Psychology of group influence (Vol. 22). Psychology Press.

Pettigrew, A. M. (2014). The politics of organizational decision-making. Routledge.

Researchgate.net,. (2016). Journal of Economic Psychology. Researchgate.net. Retrieved 30 July 2016, from https://www.researchgate.net/journal/0167-4870_Journal_of_Economic_Psychology

Roselló, L., Sánchez, M., Agell, N., Prats, F., & Mazaira, F. A. (2014). Using consensus and distances between generalized multi-attribute linguistic assessments for group decision-making. Information Fusion, 17, 83-92.

Roux, N. & Sobel, J. (2015). Group Polarization in a Model of Information Aggregation †. American Economic Journal: Microeconomics, 7(4), 202-232. http://dx.doi.org/10.1257/mic.20140252

Tyssen, A. K., Wald, A., & Spieth, P. (2013). Leadership in temporary organizations: a review of leadership theories and a research agenda. Project Management Journal, 44(6), 52-67.

Yukl, G. (2013). An evaluation of conceptual weaknesses in transformational and charismatic leadership theories. The leadership quarterly, 10(2), 285-305.

Zhu, D. (2013). Group polarization on corporate boards: Theory and evidence on board decisions about acquisition premiums. Strat. Mgmt. J., 34(7), 800-822. http://dx.doi.org/10.1002/smj.2039

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