Chapter No.7: The Role of Groups in Decision Making (University of Belize PDF)

UNIVERSITY OF BELIZE FACULTY OF MANAGEMENT & SOCIAL SCIENCE COURSE: Decision Making in Management (MGMT 4023) LECTURER: Dr. Romaldo Isaac Lewis (DBA) Chapter No.7; The role of groups in decision making and long term decision making methods and analysis OBJECTIVES After studying this chapter, you sho...

UNIVERSITY OF BELIZE FACULTY OF MANAGEMENT & SOCIAL SCIENCE COURSE: Decision Making in Management (MGMT 4023) LECTURER: Dr. Romaldo Isaac Lewis (DBA) Chapter No.7; The role of groups in decision making and long term decision making methods and analysis OBJECTIVES After studying this chapter, you should be able to understand: 1. Understand the role of groups in decision making and long term decision making methods and analysis 7.1) The role of groups in decision making and long term decision making methods and analysis This chapter continues with some of the issues raised in chapter 6 regarding how individuals evaluate options and apply judgement to reach a decision, but in the context of a group activity. It also considers decision making methods, which extend beyond the traditional strategic duration typical of most organizations, to consider decision making in the future. Collectively that body of work is known as ‘futures methodologies’. To begin with, we might define a group based on the ideas of Lewin, that it is comprised of individuals with some interdependency with each other (Gallos, 2006). In general, group decision making has historically been viewed from two perspectives of either viewing the group as a collection of individuals working together, or that through the group, an additional dynamic is achieved (Goncala & Duguid, 2008). In short, the early view was either to see the group as merely a collection of individuals or that there is a ‘group mind’ that emerges through the co-operation of those individuals (Allport (1924) & LeBon(1895) cited by Goncala & Duguid, 2008). These early views began to crystallize in the latter half of the twentieth century, with Lewin’s work of field theory and group dynamics and the views that there was an interdependency between a series of factors which reflect both individual, group and environmental issues. We could further attempt to categorize these approaches into three broad threads:  The first focused upon group communication methods – comprising the linear/functional theories of group decision making. These views are concerned with how groups achieve their tasks and tend to be progress and stage driven models. 1|Page This has been a popular approach to understanding group decision making as it is quite prescriptive in its views of decision making. Its most famous writers are Bob Tuckman (1965) and Aubrey Fisher (1980). There have been >100 observed models of group development in the literature (as variations of the generic stage models) which normally reflect key stages described as: Formation (forming), Control (norming), Work (norming), Ending (performing). Fisher’s (1980) approach describes Decision Emergence Theory (DET) where decisions emerge from group members’ verbal interactions but still are formed within stage development. Fisher’s work posits the four stages of Orientation (clarification, orientation, roles…), Conflict (proposals criticized, openness…), Emergence (consensual compromise), Reinforcement (commitment and unity towards the decision). The weaknesses of these approaches is that they are overly descriptive.  The second are interactional theories of group decision making – where the focus is upon the interaction of the individual members in the group and how this shapes the progress towards an outcome. The concepts underpinning these ideas were broadly presented in Chapter 6 and are concerned with individual interaction in a group context (including emotions and human bias). Key insights are from George Homans and his work on group behaviour (1950) and Wilfred Bion’s (1961) psychoanalytical work on individual interaction. A key outcome of this work was the finding that the more cohesive a group is, the more valuable the social approval or activity the members exchange with one another and the greater the average frequency of interaction of members. This is important for the effectiveness of lobby groups and the more individuals conform to emergent group norms, the more individuals feel part of the group dynamic. Additional work in this thread comes from Warren Bennis & Herbert Shepard (1956-61), who focused upon conflict and emotion in groups (dependency and independency), Edgar Schein and informal groups (19901993), who focused upon the role of informal groups and ‘cliques’ generally.  The third are structuration theories of group decision making – where the focus is upon the context of the individuals, the group and the problem presented and how this generates and sustains the emergent structures of decision making. Structuration approaches focus on the pre-context of individuals and background factors, the task, the group, the situation. It is an important view as it considers that reality is formed and reformed through group generative rules – much as was presented and discussed in chapter 5 with the SSM importance of a ‘worldview’. Similarly, Gilson & Shalley (2004) also identify a range of factors that shape effective group decision making. Firstly, is the design of the task for the group activity, including the relevance of the task to the individual, their individual attitude towards it and their willingness to participate in that decision making process (and with, therefore, each other) and the necessity for the organization to provide a supportive climate and culture. Secondly are group characteristics – that individual members have necessary experience and knowledge to complete the task assigned to the group; that group members have a secure tenure with the organization and that group members are willing to socialize with each other. Thirdly, if group members are given an expectation of being creative in their group decision making, then this antecedent is more likely to encourage the group to become creative. Additionally, creating an interdependency between individuals in the group is more likely to encourage new and better ways to help colleagues in the group activity. The number of staff involved should also be relatively small but also ensure sufficient knowledge and experience overlap between those involved (Howell, 2010). 2|Page As conceptual theory developed, so did different management methods to exploit group decision making potential. Brahm Kleiner (1996) provide a succinct summary of some of the more important of these methods – which are summarized in table 7.1 overleaf. Groups and their use in and by organizations has become very much the norm since the late 1970s. Most important decisions tend now to be taken by groups in organizations (with some notable exceptions). Method Brainstorming Brainwriting Buzz Sessions Quality Circles Description Advantages Disadvantages A free thinking and freedom oriented verbal interaction method, first developed by Osborn (1962). Develops a large range of ideas. Informality helps creativity, it’s cheap and fast Ideas are generally not screened (hence useful as a precursor to other subsequent methods), requires time, space and that staff involved are of similar position. A silent method, where staff write down their ideas – which others use to develop further ideas. Can generate more ideas that just brainstorming (but usually not of the same quality), does not need a facilitator (but see *). Supports staff who may be reluctant to articulate ideas for fear of ridicule, can work with large groups of disparate status members. Staff can ‘claim’ ideas not wishing others to be considered / developed from them. Requires a key leader to manager this issue*. Not all staff are comfortable with verbal writing. Only useful for large groups. A method of dividing large groups into smaller groups for the purposes of discussion. Works best when the problem is clear, the group size is small and manageable, when groups are working within near proximity, work within a time limit and operate informally. Can also be used in a range of contexts (political, economic, social etc.). Its unstructured nature can limit the results generated, some staff may not be comfortable expressing views publically and having many small groups formed from a large group requires a final co-ordination which requires a facilitator to manage effectively. Seeks to involve employees within the decision making process (as they will be more committed to the outcome). Nominal Group A combinatory method of Technique brainstorming and brain writing. Requires supervisors to be Involves staff on a long term basis in trained as group leaders and that at slowly changing groups enhancing some point they will act as commitment. Helps identify relevant gatekeepers of recommended operational concerns with solutions, and decisions (which could deflate provides some distance between the group morale). Requires the staff and their discussed Higher employee organization to embrace the practice training and social skill cohension development. By using written and oral input weaknesses of other method are mitigated. This can reduce conflict and tension in group dynamics. Increases creativity, promotes equality of participation, reducing the effect of dominant personalities and promote consensus. Has been adapted to an IT context. Lacks flexibility – only able to resolve one problem at a time. Requires time to prepare and cannot be a spontaneous method. 3|Page Peniwati (2007) further presents a very detailed overview of the criteria that can be used to judge the effectiveness of group decision making methods. These are summarized into a 16-point series of criteria (table 7.2): Table 7.2: Peniwati’s (2007) listing of assessment criteria to judge the effectiveness of Group Decision Making Methods Group maintenance: Leadership Effectiveness Group maintenance: Learning Problem Abstraction: Scope Problem Abstraction: Development of alternatives Structure: Breadth Structure: Depth Analysis: Faithfulness of Judgements Analysis: Breadth and Depth of Analysis (what if) Fairness: Cardinal separation of alternatives Fairness: Prioritizing of group members Fairness: Consideration of other actors and stakeholders Scientific and mathematical generality Applicability to intangibles Psychophysical applicability Applicability to conflict resolution Validity of the outcome (prediction) The methods presented in table 7.1 however, do not consider when they should be used by an organization. This is a key concern cited by Lowell (2010), that judgement in the use of group decision making methods is arguably not as important (as this can be learned and practiced) as being able to determine when to apply a given method. In other words, making organizational decisions when there is still some ambiguity about future issues (but not so much as to make decision making a ‘guessing’ process). 7.2) Group decision making – is it really better? Evidence of whether the group is more or less effective than individual decision making, however, is not unequivocal (Moon et al, 2003). For example, recent conceptual development of group decision making methods have highlighted a number of key issues discussed in this chapter. Firstly, Goncalo and Duguid (2008) consider the role of attribution theory as an important group dynamic which shapes how effective the group is in resolving decisions and uncertainty. Attribution theory claims that individuals are likely to take credit for their success whilst attributing failure to external circumstances (Rogof et al, 2004). This is called the self-serving bias. Recent research evidence suggest that a similar attribution develops within the group dynamic of group decision making – that groups and organizations have a tendency to take credit for their success and attribute failure to their external environment (Goncalo & Duguid, 2008). 4|Page It has been argued that this tendency in individuals, when operating at the group level may help to encourage divergent thinking (Goncalo & Duguid, 2008). Divergent thinking will tend to generate a more diverse range of potential solutions to presented group problems and help mitigate the risk of groupthink (or convergent thinking). We consider groupthink as a dynamic group phenomenon shortly. The attributions of past successful decisions resolved and brought to the group discussion environment, can however have one of two outcomes. Firstly, it may lead to actual convergent thinking as group members build upon those attributed successes and narrow their range of possible options (as other options are too time consuming and risky to develop). This can lead to a continued group discussion for solutions but within a narrower and more focused theme. However, there is the counter intuitive argument that individual attributions of prior successful solutions, may actually generate a strong group dynamic to identify group solutions. Ongoing research is focused upon identifying those factors which can result in this group outcome (Goncalo & Duguid, 2008). Other issues that seem to shape group effectiveness when compared with individual effectiveness in decision making, is the prior exposure of individuals to the aim of the group task (Moon et al, 2003). For example, recent research suggests that groups tasked with being creative, perform more effectively when they are expected to be creative (Gilson & Shalley, 2004). 7.3) Group communication It was noted in Chapter 6, that communication between individuals is structured by rigidities between individuals. One well known framework to understand this is the so called Johari window (Luft ,1969). Perhaps most famously, the speech given by US Defense Secretary Donald Rumsfeld of February 12th, 2002 is illustrative of this: “As we know, there are known knowns, there are things we know we know. We also know, there are known unknowns, that is to say - we know there are some things we do not know. But there are also unknown unknowns, the ones we don’t know, we don’t know.” The Johari window has proven to be a useful instrument to understand communication between individuals. Much has been written on this model, although key issues relate to the level of information disclosure given to others unknown to us upon their meeting (the top left hand corner). As disclosure of information and understanding takes place much may be revealed by observing the reactions of other (top right hand corner or the bottom left hand corner). Of course there may also be uncertainty regarding what is known to all those involved in a group communication (the bottom right hand quadrant and obliquely referred to by the Rumsfeld quotation). In general, following the discussion in chapter 6 on psychoanalysis, disclosure is perceived to be a healthy cognitive pursuit, although we also noticed in chapter 5 and chapter 6, that disclosure of information can result in emergent dependencies with and to others, which can negatively affect decision outcomes. The model can also be used dynamically, where multiple windows interact as individuals work together in a group activity. 5|Page Friedman (2004) further identifies that many organizational difficulties do emerge through manager misperception of a causal relationship in a problem, then acting to correct that problem and therefore creating unintended consequences in the organization. Friedman (2004) further cites that there is a perseverance of belief here, whereby managers act rigidly preferring to use familiar solutions to problems, rather than explore the unknowns in a problem through communication (such as proposed by the Johari window). 7.4) Convergent thinking emergence in groups- The Abilene Paradox A concern with the effectiveness of group decision making and in particular how the group can generate, under certain circumstances, flawed decision outcomes, can be sourced partly to the decline of the protestant work ethic, but also as we have discussed to the range of individual concerns and biases discussed in chapter 6. However, there are additional difficulties that can emerge, in certain contexts (and groupthink is one potential outcome that can arise from some situational contexts and it should not be thought of as the most likely defect of group decision making), when individuals work in groups to resolve a problem. Consider for example the case of the ‘Abilene Paradox’ (Harvey, 1998: 2008) (Box 7.1). “On a hot afternoon visiting in Coleman, Texas, the family is comfortably playing dominoes on a porch, until the father-in-law suggests that they take a trip to Abilene [53 miles north] for dinner. The wife says, “Sounds like a great idea.” The husband, despite having reservations because the drive is long and hot, thinks that his preferences must be out-of-step with the group and says, “Sounds good to me. I just hope your mother wants to go.” The mother-in-law then says, “Of course I want to go. I haven’t been to Abilene in a long time.” The drive is hot, dusty, and long. When they arrive at the cafeteria, the food is as bad as the drive. They arrive back home four hours later, exhausted. One of them dishonestly says, “It was a great trip, wasn’t it?” The mother-in-law says that, actually, she would rather have stayed home, but went along since the other three were so enthusiastic. The husband says, “I wasn’t delighted to be doing what we were doing. I only went to satisfy the rest of you.” The wife says, “I just went along to keep you happy. I would have had to be crazy to want to go out in the heat like that.” The father-in-law then says that he only suggested it because he thought the others might be bored. The group sits back, perplexed that they together decided to take a trip which none of them wanted. They each would have preferred to sit comfortably, but did not admit to it when they still had time to enjoy the afternoon. This is a famous example of another failure of group decision making which is related to, but not the same as groupthink (discussed shortly). In this case, this is an example of a non-conflict oriented problems where organizations can take decisions seemingly in contrast to what they are actually aiming to do. In short, as Harvey (1988) states there is an organizational inability to manage agreement. This is evidenced by a number of organizational symptoms: 1) Members in the group activity agree as individuals, with an issue or experience facing them 2) Members in the group activity agree as individuals, what would need to be undertaken to address the issue or experience facing them 6|Page 3) Members of the group activity as individuals, fail to communicate effectively with each other regarding the issue or experience facing them – and in doing so, a misperceived construct of the issue or experience facing them is generated. 4) Members of the group activity perpetuate and sustain the misperceived constructs leading them to take actions which individually contradict their views of the issue or experience facing them, but collectively seem to support the emergent group consensus. 5) Upon realization that an action was not undertaken for either individual or organizational benefit, anger and dissatisfaction arise and which can reoccur if the issues concerning the poor communication, are not addressed by the group. Harvey (1988) identifies a number of individual psychological drivers and factors from the group dynamic for this paradox (the occurrence of an event which seems to contradict expected logic). a. Action anxiety – that individuals feel anxiety as they prepare to take actions to initiate what they feel needs to be done in a given situation. In some situations, then this can result in individuals choosing to not act in this manner, but instead accept alternative (and inferior) actions to what they believe. Action anxiety arises therefore from: b. Negative fantasies – that confront the issue with the perceived correct course action will surface other difficulties that need resolution and which are perceived to be equally, if not more so, unpalatable. Negative fantasies arise from: c. Real risks – that individuals perceive the impact of negative fantasies will result in personal injury or loss and is to be avoided. d. Fear of separation – that individuals who choose to state what they believe to be right in a given situation, have the real risk of being perceived by others as different and ‘not a team player – thus they could be alienated or separated from the group. e. Risk reversal – by following the actions in (1, a, I and ii above), individuals do in fact run the high risk of being separated from the group (and which Harvey (1988) identifies as the paradox within the paradox). This is believed to occur as organizations (and people therein), by virtue of the lack of stressed emotion (chapter 6) as valuable to the operation of the organization, find it very difficult to connect with other parts (people) of the organization. Instead, when the ‘Abilene paradox’ manifests in organization, stress, anger and irritation with colleagues occurs. To address the paradox in organizations, Harvey (1988) recommends that there is a significant culture change required where highly charged language is negated (and in doing so, the perceived existential risk associated with fear fantasies is also negated). So words and supportive actions such as victim, collusion, conflict, confrontation, reality and knowledge are redeveloped and redefined so that effective and open communication is developed. For example, Schulz –Hardt et al (2002) stress the importance of viewing conflict as a productive factor in organizations, to mitigate biased information seeking in group decision making. 7|Page 7.5 Convergent thinking emergence in groups- The Groupthink phenomenon Group decision making defects can also arise through other defects in the group dynamic. Perhaps the most famous example of this comes from Janis (1982) with ‘Groupthink’. In this particular context, the defect in the decision making process arises when concurrence thinking between group members arises, before a problem or solution has been sufficiently analyzed or evaluated (Chapman, 2006). Groupthink defects do not arise with all group decision making activities, just as the previously discussed ‘Abilene Paradox’ management outcomes, can also arise for certain organizational contexts. For Janis (1972 cited by Chapman, 2006), groupthink defects emerge when group members are operating in provocative situations with high levels of moral dilemmas or risks of materials losses. Group members strive for emotion agreement between them, which leads to concurrent thinking and high levels of cohesiveness between those group members. This though, is not a sufficient context for the emergence of groupthink – as in essence all groups reaching meaningful decision outcomes, must have reached some form of cohesiveness. Anxiety defense mode and groupthink symptom Defense mechanism Purpose as response to anxiety Keeping control of people and events Control – illusion of invulnerability Control compensation Collective rationalization Rationalization Selection, manipulation and explanation of the facts to allay fears. Not seeing what one does not wish to see. Illusion of unanimity Fantasy Mutual reassurance of support and agreement Denial – self censorship Repression Doubts pushed out of conscious thought Self-appointed mind guards Denial Control Feelings of concern or dread not acknowledge by self: others discouraged from expressing them as a means of protecting the group Pressure on dissenters Suppression control Others dissuaded from expressing doubts that might upset the status quo Escape – belief in the morality of the group Regression Inability or refusal to question the moral position of the group or to acknowledge other values or positions as a means of avoiding value conflict Projection displacement Rather than acknowledging own fears of responsibilities, attributing these to others, often in a derogatory manner that hints of outgroup inferiority or weakness Stereotyping of outgroups Addressing weaknesses in one area by attending to areas of greater strength. Table 7.3 – Symptoms of Groupthink and anxiety associations Source: Chapman (2006): Manz & Neck (1997) 8|Page For an excellent contemporary discussion of the emergence of groupthink due to the convergence of these antecedent factors, Badie (2010) has analyzed the US policy and political position with regards to the conflict with Iraq and the ‘War on Terror’. Chapman (2006) outlines two types of Groupthink phenomenon – Type 1 which is a pessimistic view about the possibility for the tasked group to resolve the problem and arises from ‘collective avoidance’ by the group (stressed induced to avoid failure). Type 2 groupthink is the opposite of this, that the group adopts an overly optimistic view of their ability to solve the tasked problem. It has been argued (see Chapman, 2006 for a full discussion) that prospect theory (chapter 6) plays a key role in shaping risk perceptions through expected losses and gains that determine judgement. Both contexts can generate the symptoms and flawed outcomes from groupthink. However, there remains some discussion of the full veracity of the original Janis groupthink framework. Koerber & Neck (2003) for example discuss the Whyte model of the original Janis Groupthink phenomenon, which seeks to replace the argument that group cohesiveness shapes the emergence of groupthink, with an argument of collective efficacy as a necessary but not sufficient antecedent condition. This is a type 2 argument, where the decision makers in the group have a collective belief about the ability of the group to resolve the tasked problem. In addition, Chapman (2006) also proposes that anxiety between group members tends to result in higher levels of concurrency between group members. Anxiety is a stress induced emotion that arises when individuals anticipate exposure to danger or risk, and is similar to fear but focused upon a future context, rather than an immediate one. This negative emotion has a detrimental impact upon the individual’s capacity to make informed and appropriate decisions. This has been labeled as Decision Conflict Theory (Janis and Mann (1977) cited by Chapman, 2006), where stress negatively affects information processing of individuals. Similarly, the Mood Maintenance Hypothesis (Isen & Patrick (1983) cited by Chapman (2006)) argues that decision makers in a positive mood tend to be risk averse and vice versa. The desire of decision makers to reduce their anxiety triggers inappropriate cognitive processes and in conjunction with others, flawed decision outcomes. Much as with the discussion on addressing the Abilene Paradox, to avoid this problem, managers must find ways to surface negative emotions – which as has been already noted, was stressed as an important aim for contemporary organizations to address. Other advice for mitigating the risks of groupthink emerging are to within groups (Manz & Neck, 1996): 9|Page  Encourage divergent views within the group  Support the open expression of concerns and ideas  Developing an awareness of limitations and threats  Recognizing each group member’s unique value  Recognition of the importance of views from outside the group  A frequent discussion of collective doubts  Pursuing the adoption of non-stereotypical views  Recognition of the ethical and moral consequences of decisions One proposed group decision making methodology which seeks to recognize both individual decision making factors and the role and function of the group dynamic that emerges when individuals work collectively on decisions is the Motivated Information Process in Groups model (MIP-G) model (De Dreu & Beersma, 2010). There is a recognition and acceptance that individuals make decisions with varying cognitive structures and procedures and in a similar fashion, the group dynamic also reflects shared antecedent and cognitive structures (such as ‘majority voting’). However, the MIP-G model also states that when group members have low confidence in the correctness of their understanding of a problem, they will initiate systemic information processing. This is called epistemic motivation. The reverse is also claimed to be valid, that when group members do have confidence in their understanding and ability to resolve a tasked problem, they are more likely to use familiar schemata and heuristics to resolve the situation. In the MIP-G model, co-operative motivation amongst group members supports epistemic motivation and deeper level thinking and a more useful range of decision outcomes. 7.6 Futures forecasting and decision making The last section of this chapter is to introduce briefly some additional concepts that are not usually found in management decision making texts, but which offer a range of additional insights for the manager seeking to make effective decisions in the long term. This includes a body of work called ‘Futures Methodologies’, and which are in essence concerned with supporting decision making significantly into the future (i.e. beyond the range of what may normally be the concern of a strategic decision maker). Fascinating lighting offers an infinite spectrum of possibilities: Innovative technologies and new markets provide both opportunities and challenges. An environment in which your expertise is in high demand. Enjoy the supportive working atmosphere within our global group and benefit from international career paths. Implement sustainable ideas in close cooperation with other specialists and contribute to influencing our future. Come and join us in reinventing light every day. The first of these reconsiders an issue presented in chapter 2 regarding data forecasting. It was noted in that chapter that some management data can exhibit seasonal variations, but the driver for those motivations was not examined. We can now consider this more broadly as a business ‘cycle’. These are combined pressures and forces that have (varying) periodicity in the economy. A number of them have been identified as: 10 | P a g e  The Joseph Kitchin cycle (1861-1932) – concerned with the acquisition and development of organizational inventory (3-4 years and is otherwise called the well-known ‘boom / bust’ cycle). It is believed that information lacks and the diffusion of it, also contributes to this business cycle.  The Clement Juglar cycle (1819-1905) – concerned with the increase and decrease in fixed investment in plant equipment and machinery (and argued to persist over a 7-11-year period)  The Simon (Smith) Kuznets cycle (1901-1985) – is concerned with the migration and investment in construction and capital build projects (and is argued to persist over a 15-25-year period). His work laid the foundation for development economics and revealed problems with Keynesian economics in the long term.  The (Nikolai) Kondratieff cycle (or Long Wave Cycle or K wave) –is concerned with significant structural change in an economy, such as that brought about by new innovations diffusing through society with strong positive externalities (this is argued to persist over a 48-60-year period). They have long term changes for the fabric of society, although clear empirical evidence remains unclear and is not widely accepted as an economic trend.  There are also been identified innovation cycles, such as Gerhard Mench’s metamorphosis theory (1979) whereby an economic recession and depression trigger growth (argued to be undertaken over an18 year cycle and which focus upon the exhaustion of a given innovation in society, which is then replaced by another innovation(s)). He views economic development as occurring in S shaped pulses rather than long K waves. So there is stable growth followed by periods of instability, uncertainty and crisis. Utterback & Abernathy’s (1974) theories on innovation processes and their rates of change. After Kitchin’s well known boom and bust cycle, the next most familiar of these cycles is that of the Russian Economist Nikolai Kondratiev. He was required to investigate the Great Depression in the capitalist economy by Joseph Stalin and prove it would be the fall of that method of market management. By considering the rise and fall in identified key commodity prices over a several hundred years, he did manage to prove that the Depression would be a significant negative factor for capitalism, but also that it would recover from this. Unhappily, this news was not greeted positively by Stalin and Kondratiev was fired from his posting and ultimately, dispatched to Siberia. If a manager was aware of their economic environment’s ‘position’ in the ‘cycle’ - it would provide indicative strategic decision making guidance. For example, for the Kitchin cycle, on the upswing (application side) the manager can anticipate changes in capacity and could change company gearing, review inventory levels and assess market share development. There would also be scope for opportunities for the service of those innovative industries. 11 | P a g e At the peak of the upswing in the cycle, the changes in productive capacity slow, there is a change corporate gearing, a need to reduce inventory and consolidate. As the ‘wave breaks’ and the economy enters the downswing (learning is exhausted and new innovations cluster), the manager needs to avoid sensitive markets, organize for low growth, expect the impact of new technology to become evident and there should be a corporate priority to maintain high liquidity. Other futures forecasting methodologies include the Delphi method. This is concerned with using the views of acknowledges experts to consider the impact of future trends and developments in an economy, to anticipate long term investment for organizations and governments. The methodology involves identifying participants (say between 5-20 people) who then receive the circulated subject of study. The facilitator then receives comments on the perceived importance of identified factors and from these constructs a questionnaire, which is then recirculated and returned (all undertaken anonymously). The areas of analysis of areas of convergence and divergence are noted and the questionnaire is reconfigured focusing upon that convergence (or it could also be divergence) and again it is recirculated. This is repeated until general consensus is obtained (typically involving anything between 2-10 rounds). The method is therefore one of successive iterations of a constructed and reconstructed questionnaire. The primary motive is to seek to find consensus amongst a group of experts which is likely to be better than any single individual opinion. There are also variations on this methodology (where the search can be to identify consistent divergence in views). Delphi is an effective futures forecasting methodology when problems are not clearly analytical – but subjective, which require contributions from many diverse and / or difficult to ‘get together’ individuals, when many individuals are required and resource constraints limit group meetings. There may also be resistance to face-toface meetings between some experts which this method avoids. Day & Bobeva (2005) view the Delphi method and other discussed group decision making methods as noted in Figure 7.2, which can also be undertaken using web based media too. Activity 7.1 presents a thought activity to explore group decision making methods: For each of the following situations recommend a group decision making method and discuss the advantages and disadvantages of that method, for the present situation. 1. The Board of a large organization wish to identify long term future trends (circa 20 years beyond the present time) in the development of the market(s) for their products. 2. The Board has been convened to discuss a pressing new competitor, who has launched a new product into the market. The Board must decide who to invite to an organizational meeting to review implications of this competitive change and how to manage that meeting. Long term forecasting, often called ‘foresight analysis’, has been undertaken for a period for a period of time by both governments and organizations. It was the Japanese government which published the first of their Delphi foresight initiatives in 1971, which is repeated every five years (Cuhls, 2001). It was adopted by many other governments in the 1990s as a way to guide strategic priorities for investment and development (Anderson, 1994). Daheim & Uerz (2006) further discuss the increase in importance of a corporate engagement with these futures methodologies, with a German corporate lead (being taken up by Siemens, Thyssen-Krupp and BASF). 12 | P a g e In their European survey of organizations which had implement corporate foresight (CF) initiatives, the median age of practice was 10 years and the role of external consultants in the process was in general a necessary, but not sufficient condition for the implementation of CF. Four types of CF are observed in practice with the European sampled firms of: 1. ‘The Collecting Post’ – a practice which views CF as a peripheral activity, undertaken by individuals periodically within the organization. 2. ‘The Observatory’ – a practice which views the CF activity as a specialized task, performed by dedicated staff who are effectively networked in the organization. 3. ‘The Think Tank’ – a practice which views CF as an organizational wide activity, with multiple aims and goals. 4. ‘The Outsourcer’ – a practice which views CF as an organizational activity involving external consultants, within a changeable project team and given high visibility. For the sampled organizations, the primary aims of the CF activities were identified as supporting strategic decision making, aiding the long term planning of the organization, developing an ‘early warning system’ of potential difficulties within the organization and improving the innovation process within the organization. To close this chapter, we can also acknowledge more unexpected (and controversial) forecasting methodologies such as Science fiction – which is a form of story-telling – and which presents a sequence of events that might result in a given scenario. Quite a few scientists write science fiction (hence drawing upon their knowledge – such as Alastair Reynolds (ex-CERN) although the most famous is Arthur C. Clarke and his prediction of geostationary artificial satellites. Such work is both mind expanding and mindset changing. A more detailed discussion of this area of decision making requires greater development than this small section permits. For the interested reader, further more detailed narrative on futures methodology is provided by Tonn (2003) and Porter (2004). 7.7 Summary This chapter has presented a view of group decision making from the perspective of chapter 6 – that individuals exhibit key cognitive processes and adopt specific mental modes, plus a group dynamic can emerge under certain circumstances, that further misdirects the efforts of effective group decision making. This primarily focuses upon difficulties in both management agreement and disagreement amongst decision makers (as Type I and Type 2 groupthink). Key proposals for responding to and managing these issues were presented in the discussion. Finally, the chapter closed by identifying, for further reading, futures forecasting methodologies and their increased uptake across both international governments but also large corporate organizations. 13 | P a g e