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Using decision trees can improve investment decisions by optimizing them for
maximum payoff. A decision tree consists of three types of nodes. Decision nodes are
commonly represented by squares. Chance nodes are represented by circles. End
nodes are represented by triangles.
KEY TAKEAWAY
There are trade-offs between making decisions alone and within a group.
Groups have greater diversity of experiences and ideas than individuals, but
they also have potential process losses such as groupthink. Groupthink can be
avoided by recognizing the eight symptoms discussed. Finally, there are a
variety of tools and techniques available for helping to make more effective
decisions in groups, including the Nominal Group Technique, Delphi
Technique, majority rule, consensus, GDSS, and decision trees. Understanding
the link between managing teams and making decisions is an important aspect
of a manager’s leading function.
EXERCISES
1. Do you prefer to make decisions in a group or alone? What are the
main reasons for your preference?
2. Have you been in a group that used the brainstorming technique?
Was it an effective tool for coming up with creative ideas? Please share
examples.
3. Have you been in a group that experienced groupthink? If so, how did
you deal with it?
4. Which of the decision making tools discussed in this chapter (NGT,
Delphi, etc.) have you used? How effective were they?

11.4 Developing Your Personal Decision-Making Skills
LEARNING OBJECTIVES
1. Understand what you can do to avoid making poor decisions.
2. Learn what a project premortem is.
Perform a Project “Premortem” to Fix Problems Before They Happen
Doctors routinely perform postmortems to understand what went wrong with a
patient who has died. The idea is for everyone to learn from the unfortunate outcome
so that future patients will not meet a similar fate. But, what if you could avoid a

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