Group Decision making:

It is the process of making decision by groups that affect the welfare of the organization and the people in it. In a group, members effectively identify problems, choosing alternatives and evaluate decision. Such decisions are mostly unbiased and very effective.

Advantages and Disadvantages of Group decision making:

Advantages: The following are the advantages of group decision –making

1. Generate more information ideas and solutions.
2. Builds team feeling
3. Communicates information to more people, improving understanding and morale.
4. Increases commitment to the solution.
5. Shares responsibility
6. Builds interpersonal and leadership skill
7. Particularly suitable to non programmed decision making

Disadvantages: The following are some of the disadvantages of group decision making

1. Requires good group management and communication skills
2. Takes more time.
3. May create conflict between supporters of different views.
4. Dilutes responsibility, although the supervisor is ultimately accountable.
5. Domination of a vocal few, who talk the loudest and longest
6. Group think- a pressure to avoid disagreement or raise objection may occur.

Techniques of Group Decision Making:

Participation, communication, free flow of information, chances of interaction and respect for each individual member in group are the main factors that lead to improve decision making. The following are the technique used in group decision making:

1. Brain- Storming: It is a useful technique for generating ideas about possible causes of problems, and about potential solution to problems, once they have been identified. The objective of brain storming is to generate pool of ideas on a particular subject. The technique of brain storming includes a strict series of rules. They are as follows;

1. No idea is too ridiculous. Group members are encouraged to state any extreme or outlandish idea.
2. Each idea presented belongs to the group , not to the person stating it. In this way, it is hoped that group members will utilize and build on the ideas of other.
3. No idea can be criticized.
4. The good ideas are selected later.

2. Delphi Technique: A Delphi technique is a systematic means to obtain consensus from a group or panel of experts. In this technique participants are asked to give their ideas, suggestions and  views on the decisional problem. All responses are transcribed into a single document and the results are sent back to the panel members and then again their reactions to others’ views, ideas and suggestions are collected. The name of the participants is kept anonymous. A panel coordinator contacts each participant usually by mail questionnaire. After obtaining consensus, from the expert panel the decision will be made.

3. The Nominal Group Technique (NGT): NGT is a structured group meeting that proceed as follows:

A group of individuals (7 to 10) sit around a table but do not speak to one another. The problem is presented to them and they write their reactions, ideas, suggestions, and views on a sheet of paper. After this process is over, structured sharing of ideas takes place. Each person around the table presents his/her ideas. A person designated as recorder writes the ideas of various members on a blackboard. At the end of it, there is a list of ideas open for discussion. Each idea is discussed fully before moving on to the next one. The next stage involves independent voting in which each participant selects priorities by ranking or voting and final decision is made by the majority of the votes cast.

Quantitative tools for decision making:

Management decisions are also made by using quantitative tools. These tools are basically in use to give emphasis on the means or how best to reach the stated goals. Some important quantitative tools are as follows:

1. Linear programming: Linear programming is a mathematical technique for deciding among competing demands for limited resources. This tool is used to fine out the exact solution that will minimize costs or maximize gains. The application of linear programming determines the best ways to do the followings:

1. To distribute manufacturing goods from a number warehouses to a number of customers.
2. Making placement of personal to various jobs.
3. Preparing shipping schedule
4. Selecting a product mix in a manufacturing plant to make the best use of machine and labor hours available while maximizing the firm’s profit.

2. Probability: Probability is a statistical measure of the chance that a certain event will occur. It deals with the rational calculation of chances of specific outcomes from a course of action. Nowadays the use of probability calculation has been increased in decision making to calculate likelihood of certain events and to supply an estimate of the gain or loss for a decision that assist the manger in selecting the best decision for a given set of circumstances.

3. Queuing: Queuing theory is also called waiting theory .It is a mathematical decision-making technique for solving waiting –line problems. The main objective of this theory is to minimize the losses caused from waiting. This technique helps to take decision to minimize the line of customers, waiting to get the services from the organization.

4. Decision Tree: This technique is based on probability factors. A decision tree is a representation in graphic form of a number of possible futures events that may affect a decision. It is used to identify the strategy most likely to reach the goal. It shows all possible courses of action, their values, and the best return that can be produced. Thus, it enables the decision maker to evaluate alternatives in terms of the best estimates of future results.

5. Game Theory: Game theory is used to give reality to the situation. It is concerned with the formulation of a strategy against the competitor. This theory assumes that business situation have a strong similarity with games. Business games are played to formulate strategy that will provide maximum countering action. The outcome of the game is readiness of mangers to respond to the action of competitors. The mangers should try to know what a competitors’ strategy is, as well as the outcome of ever possible move that a competitor can make. This technique is thus, useful to analyze behavior of the competitors.

6. Operation Research: It is the application of scientific or mathematical methods to analysis and evaluation of alternative solution to a problem situation. It consists of bringing together available data on a specific problem, processing these data and obtaining quantitative reports of various potential courses of action. Thus, it provides data to the decision maker in choosing the solution which best satisfied the goals.

7. Simulation: Simulation is the process of experimentation with a model of some real system or situation in order to gain understanding or solve a problem in the real world. It is a means of gaining artificial experience through the use of model that gives the appearance or effect of reality. Thus, simulation models are empirical and not mathematical like operation research model. It is basically a systematic trial and error approach to complex problems.