Failure Analysis Of Enterprise Group Decision Making

The three cobbler is the top Zhu Geliang. It is reasonable to say that many people should participate in decision-making analysis. They should be able to produce extraordinary wisdom, but in practice they are not satisfied. The result of group decision is often more risky than personal decision making, and the probability of making mistakes is greater. It was to concentrate on wisdom and to work together. Why did it fail?

Multiplayer game of ordering dishes

Two people go to eat together, one is the rich, the other is the poor. What kind of food will they order? Is it expensive or cheaper? A top management team of a company will discuss a series of questions if they discuss whether they are ready to go public. For example, where to go on the market, what benefits can the company get after listing, what negative effects it brings, what benefits the listed companies bring to those who are better, and the negative effects of listing will affect people and their impact.

The common points of these two examples are that they are group decision making problems. For a decision making matter, if the people who participate in the decision are highly homogenous, then group decision making is equivalent to individual decision making. But in reality, the challenge of group decision is that individuals who participate in decision-making are often heterogeneous. Therefore, the group dynamics problem arises in the process of decision making -- the mutual influence relationship between participants determines the process and result of decision making, which is also the essence of group decision making.

In the decision making process of the poor and the rich, the dynamics of the two individuals are different.

The first scenario is that two people do not understand each other's wealth and think they are in the same class as themselves. The rich may be able to advocate their favorite and expensive dishes, but the mood of the poor is more complicated. He has at least two possible choices: first, he agrees with the rich's viewpoint and points out some expensive dishes that he may not like. He hopes to disguise his poverty by doing so. Most of them are considered as social people, starting from their social roles. Second, cheaper dishes and claiming that they like them are mostly considered as family members from the perspective of their own economic capacity.

If the poor choose the first option, the two will make the same decision, and the second will be divided, which seems to be the result of their preferences, not the wealth gap. Therefore, in the case of information asymmetry, everyone's starting point may be different behind the group's consistent decision making, and if the group fails to make a coherent decision, it may not be the reason on the surface that the individual says, and perhaps there is a deep meaning behind it.

The second scenario is: if two people understand each other's financial situation, the decision-making process is different. When the poor are ordering dishes, they may advocate choosing dishes that everyone likes, and the price is within the range of affordability. The mood of the rich may be more complicated. His opinion is more dependent on his mental state. When he is sympathetic, he will take care of his friend's face and show obedience; if he has revenge, he will deliberately embarrass the other side; if he is self centred, he will go his own way. Therefore, under the condition of symmetric information, the result of group decision depends largely on the psychological state, interest balance, value judgment and belief pursuit of group members.

If three or more people go to dinner together, what is the situation of ordering? This is to consider whether the purpose is just to satiate, or to be a kind of communication. What is the influence of everyone in the group? Is the culture of the group autocratic or democratic? The situation is more complicated. In the process of group decision making, participation in decision making members' interests, power relations, influence status, group culture and other factors will affect the final decision.

Who decides the success or failure of decision-making?

After the complicated decision process, whether the decision result can become a reality depends on the behavior or measure taken by the decision maker, but the result of the decision will affect the behavior of the person concerned. The feedback relationship between decision process and decision results determines the characteristics of "self success" and "self failure" of group decision making.

For a group with relatively high difference among members, the result of decision-making may not be the result of group cooperation, but there are some extreme differences: some people hope that the decision plan can achieve the goal, while others do not want it. And then there will be different situations.

If the decision is beneficial to everyone, the group will take all necessary actions to achieve the plan. At this point, the original decision was successful, but the premise of this success is that we all hope that the results of the decision-making can be realized, and we have adopted various means and measures for this purpose. Therefore, the decision-making is actually self - made.

For example, the State Administration decided to maintain a GDP growth of 8% a year, and the result would remain above 8%, because everyone would hope to achieve this goal and strive for it. The failure of decision-making is due to the fact that the result of decision is not what everyone wishes to achieve. People will take various measures to avoid it. If the result of decision is beneficial to some people and is unfavorable to others, the result of group final behavior is uncertain.

The phenomenon of "self success" and "self failure" of group decision mainly stems from the heterogeneity of group members. For example, there are thousands of participants in the stock market, and everyone's decision making is very different. Someone decides to buy a stock at a certain time and at a certain price, and with the development of the market, his decision may be proved to be successful.

But if the result of the decision is told to all participants in the stock market, the decision will not succeed. When everyone knows the result of the decision, it will change the dynamic process of the entire stock market, making the market change different from the prediction based on the original decision. In this way, people who originally operated according to the forecast would have difficulty in obtaining the expected revenue. Therefore, a "authority" can completely affect the behavior of others by issuing "wrong" decision results, so as to achieve their "correct" expectations.

Therefore, in real life, the actual result is often different from the original decision. One important reason is the interaction relationship between the members of the group, so that group decision making has "self success" and "self failure". Rather than the result of group decision, it is rather the result of group interaction, that is, the so-called "future guidance, now change the future". {page_break}

Incapable of objective group decision making

For all the people involved in the decision, whether the goal is clear or vague is single or multiple problems. Different people will give different answers. Goals and programmes will also be different, sometimes even antagonistic, leading to the delay in forming final decisions. At the beginning of the article, an example of whether the top management team is ready to go public is mentioned. For the purpose of "listing", everyone has his own abacus and practice.

For example, large shareholders think that listing can make themselves rich overnight; the old ministers who take part in Entrepreneurship think that listing means that they will soon be replaced by professional managers, which is a political means for large shareholders to squeeze out small shareholders. Large shareholders promise to protect minority shareholders' interests through share dividends. Small shareholders are worried that they will quit the management class, and because the management system is not perfect, they can not avoid the big shareholders deliberately shorting the company and avoiding the dividend.

The composition and relationship of decision groups often determine the conclusion and process of decision-making. For example, for groups that are prone to "herding", the opinions of leaders will become the dominant opinion; for those groups that are prone to "Matthew effect", the first opinions and the opinions of a few authoritative persons are often strengthened.

In addition, the interest relationship between group members, and whether they belong to a single strategy or a repeated strategy relationship will affect their opinions. For example, policymakers who are in a favorable position seldom consider the feelings of those who are in a low position. In turn, those with low status take into account the fact that they often turn to the former in the future and will not agree with the former's opinions.

The urgency of decision-making time also forces groups to adopt different decision-making procedures. Faced with major and urgent decisions, centralized decision-making may be more appropriate; conversely, democratic decisions can be made through multiple communication and continuous feedback.

The knowledge background and characteristics of the decision-makers will also affect the efficiency and result of decision making. For example, the group of Engineering origin tends to have clear logic, single objective and clear objectives, and easy to draw conclusions quickly; liberal arts groups often have their own views and reasons.

Whether group decision making is reasonable or not is closely related to the participation of decision-makers in terms of values, knowledge scope and ethics. For example, people who understand the market rule of electronic products will not be deceived by false appearance after the market ownership has reached saturation. They believe that the market needs to have prospects and purchase the production line. People who do not understand this rule often make "short-term behavior" decisions. In addition, different conclusions can be drawn from different knowledge. For example, for the diversified development of enterprises, the market risk prevention theory holds that this is "the east does not brighten the Western light", which helps to disperse the market risk of single products, while the resource capability theory thinks that this will exacerbate the short board restriction function of enterprises and lead to gradual failure of enterprises.

The choice of theoretical framework and method tools is also very important. In 1960s, managers were enthusiastic about case analysis, mapping to the enterprise, relying on intuition and logical reasoning to make decisions; from 60s to 90s, the academic level of managers was greatly improved, and the data analysis was more important in decision-making. Now the concept of business mode was popular, and managers began to focus on whether the decision results had more commercial returns. With the global economic change brought by the financial crisis, managers are more concerned with decision-making from the perspective of global challenges and business ethics. Therefore, objective decisions do not exist, and all decisions are the result of relative value analysis and judgment.

Create conflict in decision making process

How to prevent group decision making mistakes? In order to make group decision process free from group thinking restrictions, we must create reasonable conflicts in groups. If conflicts occur in a harmonious atmosphere, there will be higher quality predictions and estimates, and finally an excellent decision can be made.

In order to maximize differences among groups, people with different professional backgrounds and different styles of thinking should be selected when making decisions. If members of a group can think differently in different ways, they may produce conflicting ideas. Of course, these conflicts can only be concerned with solving decision-making problems, rather than interpersonal conflicts among members.

Brainstorming is the most common way to create conflicts. It can be based on expert group decision making, so that members of the group can excite creativity as much as possible, generate as many ideas and plans as possible, and can also query the proposed ideas and schemes one by one, and analyze their practical feasibility.

In order to avoid the herd effect in group decision making and prevent premature formation of consensus opinion, the best way is to arrange an "outsider" or "Challenger". He will specifically challenge others' arguments, explore support arguments and challenge others' logic, and provide a series of constructive criticism. This method can ensure the clear thinking of group decision making and prevent the decision-making process from being irrational.

As the two way of decision making, strong management of personal decisions and relatively mild group decision-making have their rationality. If the competitive environment of a company has entered a relatively mature stage, it is relatively advantageous to rely on group decision making. The management level of the enterprise will have enough time to communicate and fully consider all kinds of circumstances, so as to work out the best solution.

But if the enterprise is in a period of change, or there is a new technology that can change the competition pattern, and there are many uncertain factors in the situation, the information needed to make the decision is not enough. At this time, the enterprise must have a visionary and bold figure to make personal strategy, and run it in a stronger spirit to all levels of the enterprise. In crisis juncture, slow group decision is obviously useless.