Good Group Decision Making Article Review Example

Published: 2021-06-18 05:19:27
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Most management experts profess the efficacy of decision making in groups as compared to individuals. This review, however, would focus on certain Group Decision making concepts in the article by Jason Zweig by analyzing the positives and negatives of group decision making and applying these concepts to illustrations in the article.
This paper will begin by highlighting the positive aspects of decision making in a group. The most obvious aspects of group based decision making include a greater combined pool of knowledge, different perspectives that people within the group bring to the table, greater understanding of the rationale behind decisions, increased acceptance and an excellent training ground for the learners in the group. These combined facets, theoretically, ensure that a decision when taken in a group tend to be qualitatively better than an individual person’s decision.
However, Jason Zweig’s article tends to debunk this theoretical supposition. In this article, Zweig clearly highlights the fact that smart and honest people (as part of various committees) too made the same kind of glaring mistakes as their counterpart individuals. The surprising thing about this fact is that even individuals who were part of the investment committee at charities too made the same mistakes. Most of these committees could not even see through the fraud and deception perpetrated by Bernard Madoff until it was too late. One could surmise that most individuals invested in Madoff’s firm only because they saw well-heeled investment committees do the same. The same can be said about investment committees at most of the larger universities in the US. The author blames the dependence of these committees on investment fund managers for turning their investments illiquid. Zweig highlights this pattern at mutual funds, investment trusts and other financial committees as well. The reasons behind this failure of decision making in a group can be attributed to factors such as social pressures, domination by a select lobby within the group, logrolling (an individual manipulating the group through political wheeling), goal displacement and cohesiveness within groups. One or more of these factors could have been responsible in the failure of these investment committees to arrive at a correct decision. Further, since groups tend to use less information during decision making, lack of communication also acts as a severe impediment to the effective decision-making in a group. While studies on the subject point to the fact that the performance of a group tend to be inherently superior in all aspects of the performances of individuals on the same problem, the instances above clearly indicate that this may not be necessarily true. In sum, these studies do not consider the most important fact – these committees and trustee boards are human and they tend to make mistakes.
Zweig recommends five key approaches that committees and boards could use to improve decision making. Firstly, groups should measure and define the exact nature of success. This approach helps groups to understand the decision on an objective level. Secondly, committees should use neutral performance data of fund managers to evaluate their success. In doing so, committees should consider a number of points and use them to measure a fund manager’s effectiveness. Thirdly, committees should argue within themselves about the positive and negative points behind an investment decision. This approach helps individuals within the committee rationalize (or understand) the risk behind the investment. Fourthly, in evaluating prospective investment decisions or money managers it becomes useful for committee members to ask descriptive questions rather than questions that require a monosyllabic answer. Asking a series of such critical questions in a row can help expose any problems in the investment. Lastly, and most importantly, committees should describe a default position since this helps them channel the money into the right investment options. In case, the committee is faced with other high return options it becomes easy to consider these options and come up with a rational answer.
In conclusion, while group based decision making is a good concept in large fund management, mutual funds and similar institutions, it has its downside. Such problems result in bad decision making within committees and boards that, in turn, reflect on the various problems that affect individual investors or beneficiaries. These problems within group decision making can be mitigated to a large extent by effective communication within members combined with the five key approaches as put forth by Zweig.
Works Cited
Zweig, Jason. “How Group Decisions End Up Wrong-Footed” The Wall Street Journal. 25 Apr 2009. Web. 02 Dec 2014.

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