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KEY TAKEAWAY
Understanding decision-making traps can help you avoid and manage
them. Overconfidence bias can cause you to ignore obvious information.
Hindsight bias can similarly cause a person to incorrectly believe in their ability

to predict events. Anchoring and framing biases show the importance of the
way problems or alternatives are presented in influencing one’s decision.
Escalation of commitment demonstrates how individuals’ desire for
consistency, or to avoid admitting a mistake, can cause them to continue to
invest in a decision that is not prudent.
EXERCISES
1. Describe a time when you fell into one of the decision-making traps.
How did you come to realize that you had made a poor decision?
2. How can you avoid escalation of commitment?
3. Share an example of anchoring.
4. Which of the traps seems the most dangerous for decision makers and
why?

11.3 Decision Making in Groups
LEARNING OBJECTIVES
1. Understand the pros and cons of individual and group decision
making.
2. Learn to recognize the signs of groupthink.
3. Recognize different tools and techniques for making better decisions.
When It Comes to Decision Making, Are Two Heads Better Than One?
When it comes to decision making, are two heads better than one? The answer
to this question depends on several factors. Group decision making has the
advantages of drawing from the experiences and perspectives of a larger number of
individuals. Hence, they have the potential to be more creative and lead to a more
effective decision. In fact, groups may sometimes achieve results beyond what they
could have done as individuals. Groups also make the task more enjoyable for
members in question. Finally, when the decision is made by a group rather than a
single individual, implementation of the decision will be easier because group
members will be invested in the decision. If the group is diverse, better decisions may
be made because different group members may have different ideas based on their
background and experiences. Research shows that for top management teams, groups
that debate issues and that are diverse make decisions that are more comprehensive
[1]
and better for the bottom line in terms of profitability and sales.
Despite its popularity within organizations, group decision making suffers from
a number of disadvantages. We know that groups rarely outperform their best
[2]
member. While groups have the potential to arrive at an effective decision, they
often suffer from process losses. For example, groups may suffer from coordination
problems. Anyone who has worked with a team of individuals on a project can attest
to the difficulty of coordinating members’ work or even coordinating everyone’s
presence in a team meeting. Furthermore, groups can suffer from social loafing, or
the tendency of some members to put forth less effort while working within a group.

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