a look at Group Decision Making in Organizational Behaviour. We have a look at the types, theories & due diligence.

1. Group Decision Making
Types, Theories & Due Diligence
Plus case studies on:
Nestle, Tata Steel, Pixar &
Kasparov vs the World.
Presented by:
Arpita Baxi #104
Disha Dorkadi #107
Nitisha Goyal #108
Chirag Chauhan #303
Kushal Karamchandani #309
Chittesh Khilnani #310
Ishan Parekh #315

2. Group decision making
Types

3. Brainstorming
• In a typical brainstorming session, a half dozen to a dozen people sit
around a table.
• The group leader states the problem in a clear manner so that it is
understood by all participants.
• Members then "freewheel" as many alternatives as they can in a
given length of time. No criticism is allowed, & all the alternatives
are recorded for later discussion and analysis.
 Brainstorming, however, is merely a process for generating ideas.
The following two techniques go further by offering methods of
actually arriving at a preferred solution.

4. Typical example
Global Warming
cars/suvs not recycling
chopping down trees
Crazy weather
too many people
loss of polar ice caps
Dying of animals

5. Nominal Group Technique
• Group technique members are all physically present, as in a traditional
committee meeting, but operate independently. Specifically, a problem is
presented &then the following steps take place….
— Each member independently writes down his or her ideas on the problem.
— Members then present the idea to the group. Each member takes their
turn, presenting a single idea until all ideas have been presented &
recorded. No discussion takes place until all ideas have been recorded.
— The group now discusses the ideas for clarity & evaluates them
— Each group member silently & independently rank-orders the ideas. The
ideas with the highest aggregate ranking determine the final decision.

6. Brainstorming & NGT
• Brainstorming & NGT are most applicable when…
—Some members are very vocal.
—People work better in silence.
—Some members are reluctant to participate.
—There is concern that enough ideas will be generated.
—Some participants are new to the team.
—The issue is controversial and the discussion could
become heated.

7. Delphi Stages Delphi Processes
Round 1: Participants
are chosen. Initial data
is gathered.
Participants present their
views on the policy.
Round 2: A list of
possible alternatives is
compiled & distributed
to participants.
Ideas are synthesized & a smaller
number of possible policy
recommendations are compiled.
Round 3: An amended
list of alternatives is
distributed.
Ideas are fine
tuned by the participants.
Study Results One collective policy
is established.
The Delphi Method

8. The Delphi method
• Most applicable when an expert panel &
judgemental data is required
▫ Clear-cut solutions not possible
▫ The problem is complex, large, multidisciplinary
▫ Uncertainties due to fast development, or large time scale
▫ Opinions required from a large group
▫ Anonymity is required

9. Group decision making
Theories

10. Motivation to decide
 Cognitive Dissonance: we try to reduce the discomfort of dissonance.
 Consistency Theory: we seek the comfort of internal alignment.
 Commitment: we feel obliged to complete a public commitment.
 Certainty Effect: a certainty that becomes less likely has high impact.
 Choice-supportive bias: Distorting memories to make decisions seem
good.
 Confirmation Bias: we seek confirmation that we made a good decision.
 Scarcity Principle: we anticipate regret and so want what is scarce.

11. Thinking process
 Ambiguity Effect: We prefer a known probability to an unknown one.
 Bias Blind Spot: We do not compensate enough for our own bias.
 Elaboration Likelihood Model: We either think centrally or take
unthinking short-cut decisions.
 Heuristic-Systematic Persuasion Model: We either use short-cuts or
logic to interpret arguments.
 Hyperbolic discounting: We prefer short-term benefits.
 Information Bias: Seeking facts when making decision, even when they
are irrelevant.
 Information Processing Theory: Persuasion requires attention and
comparison with previous views.
 Source Credibility: Who we are likely to believe.
 Unconscious Thought Theory: Letting your unconscious do the thinking.

12. Deciding
 Augmenting Principle: evidence for a decision is accumulative.
 Bounded Rationality: we only use limited logic in decisions.
 Bias Correction: Well-meaning over-compensation.
 Explanatory Coherence: we like simple, explainable hypotheses.
 Filter Theory: we make choices through a series of selection filters.
 Involvement: when we are involved we need more information.
 Multi-Attribute Choice: we use various strategies for different types of
choice.
 Mere Exposure Theory: simple exposure makes us like things more.
 Perceptual Contrast Effect: we decide by comparing things.
 Priming: Setting up memory to be used later.

13. Group decision making
Due Diligence

14. • "The process of researching, understanding
and, in some cases, avoiding these risks is
known as due diligence.“
• Improving information will improve your ability
to make quality decisions
• Can save company from making costly mistakes.
• A reasonable investigation focusing on material
future matters

15. When it is carried
• corporate
mergers/acquisitions
• Or a major product
purchases/sales-sales
contracts, rental contracts,
employment contracts,
inventory lists, customer
lists, and equipment lists
Areas of
due
diligence

16. When it is conducted?
• Initial data collection
• evaluation commences when a business
opportunity first arises and continues
throughout the talks.
• Thorough detailed due diligence is typically
conducted after the parties involved in a
proposed transaction have agreed in principle
that a deal should be pursued and after a
preliminary understanding has been reached,
but prior to the signing of a binding contract.

17. How is Due Diligence Conducted?
checklist of
needed
information
Management
of the target
company
prepares
some of the
information
Financial
statements,
business
plans and
other
documents
are reviewed
interviews
and site visits
are conducted
research is
conducted
with external
sources --
including
customers,
suppliers,
industry
experts, trade
organizations,
market
research
firms, and
others.

18. How Much Due Diligence Needs to Be
Conducted?
is based on many factors-
• prior experiences
• the size of the transaction
• the likelihood of closing a transaction
• tolerance for risk
• time constraints
• cost factors
• resource availability.
• It is impossible to learn everything about a business but it is
important to learn enough such that you lower your risks to the
appropriate level and make good, informed business decisions.

19. Foci for due diligence study
• Who conducts due diligence?
• Commercial due diligence
• Technical due diligence
• Legal due diligence
• Financial due diligence
• Environmental due diligence

20. fast-changing business environment
• outsource the due diligence task to a reputable research firm.
• build an efficient in-house program within their legal,
marketing, or corporate security sectors
• It can only improve the odds. Risk cannot be totally
eliminated through due diligence and success can never be
guaranteed.

21. Group decision making
Case Study - Nestle

22. Example Case: Nestle
• Nestlé both formal and informal types of groups are
working.
• Formal groups are made for special tasks.
• Nestlé has fifteen basic principles for selection of
members of the groups.
• While selecting the persons, the management also
considers complementary skills and culture

23. • A criterion for the selection of leader of group is seniority.
• Top management tries to create positive competition between the
groups
• If the groups have to depend upon one another for completion of
task, then it induces cooperation instead of competition.
• Nestlé completely discourages intra-group competition to avoid the
coalition and groups within the groups.
• For avoiding intra-group competition, Nestlé gives rewards to
groups, basis upon the group performance evaluation.

24. Group decision making
• The groups perform brainstorming sessions by keeping
in view the objective or task of the group. All the
different ideas are recorded.
• Then in the later session, the individuals are asked to
clearly discuss their ideas.
• They are asked that they should be fully clear about their
own ideas so that it won’t take much time in discussion

25. Idea
Selection
Implementation
program
Sub-
objectives
Overall
objective

26. Post-Decision making
Group member starts work.
Meetings after short intervals to verify progress
If satisfactory situation is there then they
continue
If the sub-goals are not achieved then the group
leader tries to solve these problems.
If the problem is at group level then the group
leader tells the problem to the management.

27. Improving group performance
• Nestlé increases the cohesiveness by:
• Collective performance rewards and by including the small number
of persons in the group.
• Charted clear-cut responsibilities of group members are written
• Group members also have opportunity to hold meetings with
management.
• The evaluation of groups in Nestlé is a continuous process

28. Group decision making
Case Study – Tata Steel

29. Company Profile
• Established in 1907.
• India's second-largest and second-most
profitable company in private sector.
• Ranked seventh in the global steel sales.
• Tata Steel with Corus is the fifth largest
global steel producer with a combined
output of 23.5 MT.
• Tata Steel is among the lowest cost
producers of steel in the world.

30. Group Decision Making at Tata Steel
• High degree of employee involvement.
• Company Belief: Union is an asset to the
management.
• Employees of tata steel represented by
independent trade unions.
• Effort to stay in touch with the employees.
• Ensure: Continuous performance
improvement.
• Closer association of employees with
management began in 1919.
• Formalized in 1956.

31. Joint Consultation System (JCS)
• JCS existing for past 50 years.
• Objective: Ensure employee participation at all
levels including top management.
• Purpose:
Increase
Productivity
Better
understanding
to the employees
of their role and
importance
Satisfy the urge
for self
expression

32. Three-tier system at Tata Steel
• Study operational results and
production problems
• Improve productivity and
discipline and economize
cost
• Encouragement of
suggestions
• Improvement of working
conditions also
Joint Department
Councils
• Discharge special function
Joint Works Councils
• Advising management on production
and welfare
Joint Consultative
Council of Management

33. MD Online
• Forum between MD and employees of company.
• Share concerns of employees.
• MD on first working day of month
communicates performance of organization.
• Uses webcast and receives feedback.
• Hotmail: An e-communication channel.
• Feedback provided in 48 hours.

34. The Experience
• TISCO's experience with workers' participation
has been satisfactory.
• 1957-1972 : 14,104 suggestions
• 70% of them implemented.
• Covered a wide range of topics and issues.
• The councils have been successful in involving
workers equally in the process of production.

35. Group decision making
Case Study – Pixar

36. Company Profile
• An American computer animation film studio
• Based in Emeryville, California
• Won a number of awards
26 Academy
Awards
7
Golden
Globes
3
Grammy
awards

37. • CGI-animated feature films
• Photo Realistic Render Man: Personalized
Image rendering API
Toy Story
A Bug’s life
Finding
Nemo
The
Incredible
Cars
Up

38. Four stages of Pixar Process
Development:
Creating the
storyline
Pre-
production:
Addressing
technical
challenges
Production:
Making the
film
Post
production:
Polishing the
final product
Each stage in the Pixar process involves Typical group decision making technique

39. Factors leading to excellent group
decision making
Clear values
Constant
communication
Routine
postmortems
Regular injection
of outsiders to
challenge the
status quo
Employees set
free to express
their ideas
‘All for one, one
for all’

40. Group Decision Making
• Its managers give its directors a lot of autonomy.
• Even though directors have autonomy, they get
feedback from others.
• Pixar uses a process for “postmortems” on the
major aspects of movies after they’re completed.

41. • Restart approach
• Extensive educational programme: Improves
organizational judgment.
• Giving people opportunities to fail together and
to recover from mistakes together.

42. Group decision making
Case Study – Kasparov vs the World

43. Introduction
• Kasparov vs the World was a game of chess
played in 1999 over the internet.
• Playing white, Garry Kasparov faced over
50,000 players from 75 countries.
• After 62 moves played over 4 months, Kasparov
won the game.

44. • A good example of decision making process of
groups can be greater then for one person who is
smarter than the group.
1. Karpov vs the world (1996)
2. Kasparov vs the world (1999)

45. Decision Making for the world team
• A new IT system by microsoft to enable better
coordination
• Official forum to discuss & coordinate ideas
• 4 official advisors to the world team (incl. 2
grandmasters)
• Publicly accessible analysis tree; showing
moves, countermoves; arguments & refutations
• Fascinating case study in the power of collective
collabration

46. How it worked
• Public analysis decision
tree
• Basic idea – anyone could
vote for the preferred next
move
• On a typical move – over
5000 votes were registered
• 10% moves – bad; 2.4%
moves – illegal !

47. • In Kasparov’s own words,
“it is the greatest game in the history of chess. The
sheer number of ideas, the complexity and the
contribution it has made to chess make it the most
important game ever played.”