UNIT – III

COMMUNICATION
Communication is an important aspect of human behaviour. Communication is central to
everything that we do. Without communication an organization can’t function at all. No managers
can be successful without communicating effectively. Communication has been derived from the
Latin word “communis” which means common. Communication stands for sharing of ideas in
common. According to Keith Davis, “communication is a process of information and
understanding from one person to another.”
Elements of Communication
The process models of communication contain six main elements such as i) sender, ii) message,
iii) receiver, iv) feedback, v) channel, vi) noise or interference. As communication occurs, sender
and receiver interact by encoding/sending and decoding/receiving messages. Encoding means
putting the message into words or diagram or nonverbal signals so that it can be transmitted. The
receiver hears, reads or looks in order to decode or interpret the message.
Sender: Communication begins with sender, the individual who reacts to situations from a
unique vantage point, interpreting ideas and filtering experiences through their own perception.
Sender conceives his ides based on the accumulated attitudes, experiences, skills and cultural
conditioning. Message: The message is the idea of feeling transmitted from the sender to the
receiver to achieve understanding. It makes a connection between the sender and the receiver and
may be made up of signs, words and movement. The tone of voice, inflection, the rate of speech,
facial expression, touching and body movement may be misinterpreted by the receiver, or poorly
constructed message may lead to misunderstanding. The message the sender meant to send is not
always the message received.
Receiver: The receiver decodes or interprets the message to achieve understanding. In doing this,
the receiver also acts as an individual from a unique vantage point, interpreting the idea according
to a particular personal perception of the message. This perception is also the result of the
receiver’s unique background of experiences, beliefs and concerns. Interpretation of the same
message may vary between people.
Feedback: Feedback is an essential part of successful interpersonal communication. It is the
receiver’s response to the sender’s message, telling the sender how his message is being received
and helping by the receiver and confirms whether their perception of the message is correct. It can
be intentional or unintentional. Feedback:
 Provides continuity in the communication
 Indicates effective understanding or misunderstanding of the message
 Stimulates further communication and discussion.
Channel: A communication channel is the means of techniques used to signal or convey a
message for example, a conversation, letter, telephone call, e-mail or television program.
Sometimes these channels are internal to the organization; other channels are outside the
organization and are thus external channels. An appropriate channel suits the communication
purpose, the need of the sender, the message and the needs of the receiver. Different lines or
channels of communication are used inside an organization. Horizontal channels operate between
colleagues at the same level within the organization’s structures, while vertical channels move
communication up and down between different levels in the organization.
Noise: The message received is not necessarily the same as the message sent. Something other
than the intended message is received because noise or interference interrupts the intended
message. Noise or interference that interrupts the message or communication flow between sender
and receiver can lead to misunderstanding or to confused or ambiguous communication.

Types of Communication: There are nine patterns of communication:

Downward communication: It refers to the flow of communication from supervisor to the

subordinate. To improve downward communication, managers can present job instructions clearly
to subordinates, explain why things need to be done in a particular way so that people who
perform the jobs understand better. For example, clear staff regulations, rules, handbooks,
procedures manual etc. are the good examples of downward communication.
Upward communication: It refers to the flow is from the subordinate to the superiors. To
improve upward communication, screen upward messages so that the more relevant aspects of the
information are received by top management, provide the climate in which members can
communicate both positive and negative messages, detect biases when they occur, reduce status
difference and wherever possible, require quantified data to be submitted rather than provide
subjective information for decision making. For example, instituting suggestion scheme, union
leader voicing their demands to management, etc.
Lateral/Horizontal Communication: It takes place between or among members who are at the
same level in the organization. For example, two supervisors of the same department or different
department are discussing work matters with each other. To improve lateral communication, it is
desirable to establish openness and trust among members of various department, develop reward
systems that facilitate inter-departmental cooperation, learn that what the other departments are
doing by getting involved in interdepartmental meetings and, if possible design the organization
structure in such a way so that greater opportunities of interdepartmental contact exist.
Diagonal Communication: It refers to the flow of messages between persons who are in position
at different levels of the hierarchy and also in different departments. This type of communication
takes place under special circumstances.
Formal Communication: The channels of communication established formally by the
management are called formal communication. These are used for the transmission of official
messages within or outside organization. However it suffers from delay and also chances of
distortion.
Informal communication: Communication which takes place on the basis of informal or social
relations among people in an organization is known as informal communication. It is otherwise
known as grapevine communication. The grapevine has three main characteristics.
i) It is not controlled by management.
ii) ii) It is perceived by most employees as being more believable and reliable than formal
communication issued by top management.
iii) iii) It is largely used to serve the self interests of those people within it and it is one of
the quickest means of communication.
Verbal Communication: When the message is conveyed orally, it is called verbal
communication. It is most economical in terms of time and money.
Written Communication: Communication that takes place between people in written form is
called written communication. For e.g. memos, reports, bulletins etc.. It is permanent, tangible and
verifiable. But it is time consuming.
Nonverbal/Gestural communication: Communicating nonverbally with body movements , with
some gestures is known as nonverbal communication.
The types of nonverbal communication can be classified into seven categories:
i. Body movements or kinesics
ii. Physical characteristics
iii. Ching behaviour
iv. Vocal qualities or paralanguage
v. Use of space or proximity
vi. Artifacts
vii. Environment

Functions of Communication

There are four major functions of communication. They are: Emotive, Motivation, Information
and Control.
Emotive: Through communication, employees can express their frustrations and satisfactions to
each other and to management. In addition, communication provides a mechanism for individuals
to compare attitude and resolve ambiguous about their jobs, their roles and areas of conflict
between groups and individuals. If an employee is dissatisfied with his pay, he will often
communicate with others informally, to determine whether the feelings are justified or not.
Motivation: A second major function of communication is to motivate, direct, control and
evaluate the performance of organizational members. Leadership is an influence process by which
supervisors attempt to control the behaviour and performance of subordinates. Communication is
the major vehicle of such control available to leaders. Hence, leadership activities, such as issuing
orders, rewarding behavior and performance, reviewing and evaluating performance, making job
and task assignments, and training and developing subordinates all involve communication.
Information: Communication serves a vital information function for decision-making. It is based
on technological orientation and facilitates information processing activities and ways to improve
the accuracy with which communication channels carry information going into individual, group
and organizational decisions.
Control: Organizations are attempting to control the activities of individuals through the design
and use of formal communication channels. Most types of programs or standard operating
procedures have a large communication component to them. Hence, formal communication
channels represent a major structural means of control within organizations.

Barriers to Effective Communication

Semantic Problems: The use of inappropriate language, symbols, and words may affect the
understanding capacity of the receiver. The sender must ensure that the proper words and language
are chosen to communicate the intended message so that there is no room for misinterpretation or
confusion as the receiver decodes the message exactly as it was encoded. Many words commonly
used in communication carry quite different meanings for different people. Two general kinds’ of
semantic problems present barriers to communication.
 Some words and phrases are so general or abstract that they invite varying interpretation.
 Semantic problem arise when different groups develop their own technical language.
Status Effects: Status effect also hinder communication in as much as people occupying
higher positions in the organization have a tendency to tell a lot to the subordinates but not to
listen. When people do not listen, they do not understand each other and thus effective
communication is blocked. Thus, the superior-subordinate status comes in the way of effective
communication taking place.
Physical Distraction: When people communicate with each other, noise may also enter in the
form of various types of distraction. Distractions may occur because of situational factors such
as constant telephone interruptions, people walking in and out of the room, or loud noises in
the background. Apart from these physical noises, certain peculiar mannerism of the speaker
may also be distracting to the listener and hide effective listening.
Information Overload: This refers to too much volume of information which is beyond the
level of a person to comprehend. Communication may be ineffective when too much
information is transmitted at one time or when complex information is presented within a short
time frame. The problem is compounded if the individual also has limited attention span and
poor memory retention. Managers are literally drowned in communication and unable to
attend to them fully. This includes variety of information received from different mode such as
e-mail, memos, official letters, reports, instructions, circular, telephone, meetings etc. is
required to attend.
Time Pressures: Time is always short, and this fact often leads to distortion in
communication. A major temptation when pressed for time is to short-circuit formal
communication channels. Because of time pressures, many messages are hastily and
inadequately communicated by managers, leaving the listener with much ambiguity and
confusion as to what has been said and what action should be taken. Since managers have to
deal with a large number of people on an ongoing basis within limited periods of time, giving
incomplete information and verbally transmitted short, telegraphic message seems inevitable.
Cultural Differences: Words, colors and symbols have different meanings in different
cultures and sometimes even between sub-cultures within a national boundary.
Trust Level: When there is lack of sufficient trust between the communicating parties,
selective listening takes place, resulting in ineffective communication. Complete information
is seldom exchanged under such circumstances and the withholding of information by one or
both parties will further aggravate the trust issue and impersonal problems. Evaluating
tendencies develop selective listening increases further and messages get distorted.
Selective Perception: People have a tendency to listen to only part of a message and “block
out” other information for a variety of reasons. One of the most important of aspect is a need
to avoid or reduce cognitive dissonance. Thus, people have a tendency to ignore new
information that conflicts with or denies already established beliefs, values, and expectations.
Selective perception occurs when the receiver values the context of the communication
including the role, identity, values, mood and motives of the sender (Perceptual Distortion).
Self-Concept: An individual’s motives and personality strongly influence the decoding or
symbolic interpretation process. An employee who has a highly felt need for advancement in
an organization and whose personality tend be to quite optimistic might read a smile and
casual comment from a supervisor as an indication that he is being groomed for promotion. A
person with low need for advancement and a pessimistic disposition may read nothing more
than a casual comment unrelated to anything else into the supervisor’s comment.
Absence of Two-way Communication: If communication is only one way – from top to
bottom or from superior to subordinate – without any feedback, would hinder communication
from taking place in an effective manner. For instance, the receiver might decode the message
in a way that was not intended. Neither the receiver nor the sender will then realize that the
message was misinterpreted until it becomes too late to rectify the situations. For example, An
examination question is one way communication which could easily get misinterpreted by
some students since attempts by students to seek clarifications in the examination hall is
usually discouraged.
Overcoming Barriers to Communication There are number of ways managers can minimize
a number of communication barriers. In general, communication can be improved in two
ways. First, the manger must sharpen his or her skills in manipulating symbols, that is, process
of encoding. This implies that the sender must take as much care as possible in choosing
symbols and establishing the context within which the message is transmitted. There are
number of techniques that are commonly employed by managers to accomplish these ends.
Active listening: It implies that the receiver of information engages in the following patterns
of behavior. a) stop talking since it is impossible to talk and listen at the same time, b) remove
the distracting elements as much as possible c) is patient and lets the other person say
whatever needs to be said, d) appreciate the emotion behind the speaker’s words and is
empathic, e) is attentive, f) creates a positive listening environment f) uses feedback
mechanisms to check understanding g) withholds judgment h) asks questions, i) reacts to the
message and not he person. Active listening takes a lot of energy and be perfected by
conscious and constant practice.
Follow up and Feedback: The process of feedback makes communication a two-way process.
In face-to-face situations, the sender should try to become sensitive to facial expressions and
other signs that indicate how the message is being received. It is often important to solicit
questions of clarification from the receiver. When more formal communication is involved, the
writer may specify specific forms and times for responding to insure feedback.
Parallel Channels and Repetition: A major principle of communication technology is to
provide parallel channels of communication that reinforce each other. Thus, a verbal request
may be followed up with a memo. In this way, the sender has ensured getting the attention of
the receivers and also ensured that the sender will have a record to refer to in case lie or she
forgets in its order.
Timing: A manager may ignore a memo or request simply because other problems are
pressing in at the same time. Two kinds of actions can be taken by management to ensure the
accurate reception of communication through timing. i) they may want to standardize the
timing of specific messages, ii) many organizations establish “retreats” or time away from
normal job pressures to transmit material, ideas and instructions to employees. This action
insures the undivided attention of the receivers.
Be patient and paying adequate attention: When choosing a style of language, the sender
must give a due consideration to the listener’s intention, and his background. Effective use of
language consists of tailoring one’s message for the context of the receivers in order to
maximize overall between the intended and received messages.
Communication and Information Centres: Running parallel to formal communication
channel in an organization is an informal network commonly called grapevines. They tend to
be a universal fact of life in all organizations. They have been used to serve not only
informational functions but also motivational functions as well. A number of employees needs
are served by the powerful reinforce. Effective communicators often combine formal and
informal (grapevine) channels of communication. Thus a manager may reinforce information
received through formal with an off-the record talk with key subordinates. In reverse directing,
he or she might reinforce and clarify a formal written with an informal chat session among
employees.
Exception principle and need to know: In order to deal effectively with the information
overload problem many organizations try to establish certain principles for actually limiting
the extent of communications. Many firms implement an “exception principle” in
communication channels. This principle orders that only communications regarding
exceptional derivations, from orders, plans, and policies be communicated upward on a routine
basis. Hence, upper levels of management will receive only that information which truly
demands their attention. A closely related principle involves downward communication. Here,
managers should be selective and transmit information on a “need to know” basis. In this way,
lower level personnel receive only communication that is immediately critical to carrying out
their tasks. The success of these two principles depends on the type of organization within
which jobs are carried out. They will be most effective in highly structured organizations
where tasks are relatively simple and routine. In less formal organization, in which work is
rather complex and not highly structured, communication needs to be as open and unrestricted
as possible.
Being empathetic in understanding: Good communicators are able to reduce the chance of
communication barrier and the associated problems by communicating with empathy – a
feeling and awareness of the other person and their point of view. A good communicator is
able to recognize emotions in others and respond appropriately. It is reported that empathy as
the foundation for the quality of a relationship. In a satisfying relations both parties have
empathy for the other person’s point of view and are also willing to provide appropriate and
sufficient feedback to achieve the understanding.
 Using feedback mechanisms: Since feedback involved both receiver and sender, it is
important to understand the conditions under which feedback session will be more effective
both from the sender’s and receiver’s perspective. For feedback to be most effective, the
person giving the feedback must:
 give specific and not general or vague feedback
 give feedback immediately or soon after the event has taken place rather than long after the
event has occurred
 give feedback on aspects that the receiver can rectify rather than on aspects over which the
individual has no control
 Be descriptive than evaluative
 Give feedback on a few critical issues where improvement is most urgently expected rather
than on a wide range of problem areas
 Examine your own motivation in giving the feedback
 Be sure that the receiver is ready to receive feedback
 Be non-threatening and disregard you superior status while offering feedback.
Minimize Physical distraction: Taking due care in minimizing the external noise, interruptions,
awkward mannerism, unusual and unwanted incidences etc facilitate to heighten the attention
levels of the members in attempting to satisfy a higher-level need can result in regression to a
lower-level need.
DECISION MAKING
Decision Making in Management

Decision-making is an integral part of modern management. Essentially, Rational or sound

decision making is taken as primary function of management. Every manager takes hundreds and
hundreds of decisions subconsciously or consciously making it as the key component in the role of
a manager. Decisions play important roles as they determine both organizational and managerial
activities. A decision can be defined as a course of action purposely chosen from a set of
alternatives to achieve organizational or managerial objectives or goals. Decision making process
is continuous and indispensable component of managing any organization or business activities.
Decisions are made to sustain the activities of all business activities and organizational
functioning.

Decisions are made at every level of management to ensure organizational or business goals are
achieved. Further, the decisions make up one of core functional values that every organization
adopts and implements to ensure optimum growth and drivability in terms of services and or
products offered.
Definition of Decision Making

According to the Oxford Advanced Learner’s Dictionary the term decision making means - the
process of deciding about something important, especially in a group of people or in an
organization.

Ray. A. Kilian: “A decision in its simplest form is a selection of alternatives”.

Trewatha& Newport defines decision making process as follows: “Decision-making involves the
selection of a course of action from among two or more possible alternatives in order to arrive at a
solution for a given problem”.

Mary Cushing Niles: “Decision making takes place in adopting the objectives and choosing the
means, and again when a change in the situation creates a necessity for adjustment”.

Donald J. Clough: “The decision-making process involves a problem to be solved, a number of

conflicting objectives to be reconciled, a number of possible alternative courses of action from
which the “best” has to be chosen and some way of measuring the value or pay off of alternative
courses of action”.

As evidenced by the above definitions, decision making process is a consultative affair done by
professionals to drive better functioning of any organization. Thereby, it is a continuous and
dynamic activity that pervades all other activities pertaining to the organization. Since it is an
ongoing activity, decision making process plays vital importance in the functioning of an
organization. Since intellectual minds are involved in the process of decision making, it requires
solid scientific knowledge coupled with skills and experience in addition to mental maturity.

Further, decision making process can be regarded as check and balance system that keeps
the organization growing both in vertical and linear directions. It means that decision making
process seeks a goal. The goals are pre-set business objectives, company missions and its vision.
To achieve these goals, company may face lot of obstacles in administrative, operational,
marketing wings and operational domains. Such problems are sorted out through comprehensive
decision making process. No decision comes as end in itself, since in may evolve new problems to
solve. When one problem is solved another arises and so on, such that decision making process, as
said earlier, is a continuous and dynamic.

Significance of Decisions Making

Decisions that are taken in organization usually related to:

  Goals and objectives of organization
 Organizational structures and design
 Preparation of budgets
 To decide time period of projects
 Production related decisions (purchase of raw materials, quantity and quality of
products)
 Staff – (salaries, wages, working hours, promotions, transfers, performance appraisal)
 Marketing – (product, price, place, promotion, etc.)
 Research and Development.

Types of Decisions:

The following are the main types of decisions every organization need to take:
 Routine and Basic (strategic) decisions: Routine decisions are related to the general
functioning of the organization. They do not require much evaluation and analysis and can
be taken quickly. Ample powers are delegated to lower ranks to take these decisions within
the broad policy structure of the organization. Basic (Strategic) decisions are important
which affect objectives, organizational goals and other important policy matters. These
decisions usually involve huge investments or funds. These are non-repetitive in nature
and are taken after careful analysis and evaluation of many alternatives. These decisions
are taken at the higher level of management.
 Tactical (Policy) and operational decisions: Decisions pertaining to various policy
matters of the organization are policy decisions. These are taken by the top management
and have long term impact on the functioning of the concern. For example, decisions
regarding location of plant, volume of production and channels of distribution (Tactical)
policies, etc. are policy decisions. Operating decisions relate to day-to-day functioning or
operations of business. Middle and lower level managers take these decisions. An example
may be taken to distinguish these decisions. Decisions concerning payment of bonus to
employees are a policy decision. On the other hand if bonus is to be given to the
employees, calculation of bonus in respect of each employee is an operating decision.
 Organizational and personal decisions: When an individual takes decision as an
executive in the official capacity, it is known as organizational decision. If decision is
taken by the executive in the personal capacity (thereby affecting his personal life), it is
known as personal decision. Sometimes these decisions may affect functioning of the
organization also. For example, if an executive leaves the organization, it may affect the
organization. The authority of taking organizational decisions may be delegated, whereas
personal decisions cannot be delegated.
 Major and minor decisions: Another classification of decisions is major and minor.
Decision pertaining to purchase of new factory premises is a major decision. Major
decisions are taken by top management. Purchase of office stationery is a minor decision
which can be taken by office superintendent.
 Individual and group decisions: When the decision is taken by a single individual, it is
known as individual decision. Usually routine type decisions are taken by individuals
within the broad policy framework of the organization. Group decisions are taken by group
of individuals constituted in the form of a standing committee. Generally very important
and pertinent matters for the organization are referred to this committee. The main aim in
taking group decisions is the involvement of maximum number of individuals in the
process of decision- making.
 Programmed and non-programmed decisions: Programmed decisions are concerned
with the problems of repetitive nature or routine type matters. A standard procedure is
followed for tackling such problems. These decisions are, generally, taken by lower level
managers. Decisions of this type may pertain to e.g. purchase of raw material, granting
leave and supply of goods and implement decision relate to difficult situations for which
there is not easy solution. Non-programmed decisions relate to difficult situations for
which there is no easy solution. These matters are very important for the organization for
the organization. For example, opening of a new branch of the organization or a large
number of employees absenting from the organization or introducing new product in the
market etc., are the decisions which are normally taken at the higher level.
The following are the main difference between programmed and non-programmed
decisions.
Programmed Decisions Non-Programmed Decisions
These decisions are taken by lower These decisions are taken by top
executives. management.
These decisions consume less time and These decisions consume long time and
require less efforts require great efforts
These are concerned with routine problems These are concerned with unique problems
These are repetitive in nature These are non-repetitive in nature
These are simple and have less impact on These are complex and have huge impact on
the organization. the organization
These are taken based on the pre established No pre established policies and procedures
policies and procedures are used
Information regarding these decisions is Information regarding these decisions is not
readily available. easily available.
Rational Decision Making: Rational decision can be defined as “a method for systematically
selecting among possible choices i.e. based on reasons and facts”. In a rational decision making
process, a business manager will often employ a series of analytical steps to review relevant facts,
observations and possible outcomes before choosing a particular course of action. Rational
decision making brings a structured or reasonable thought process to the act of deciding. The
choice decide rationally makes it possible to support the decision maker by making the knowledge
involved with choice of open and specific. This can be very important when making high value
decisions that can benefit from the help of tools, processes or the knowledge of experts.
Characteristics of Rational Decision Making: The following are the main characteristics of
rational decision making:
a. Decision making will follow a process or orderly path from problem to solution.
b. There is a single best or optimal outcome. Rational decisions seek to optimize or
maximize utility.
c. The chosen solution will be in agreement with the preferences and beliefs of the decision
maker.
d. The rational choice will satisfy conditions of logical consistency and deductive
completeness.
e. Decision making will be objective, unbiased and based on facts.
f. Information is gathered for analysis during the decision making process.
g. Future consequences are considered for each decision alternative.
h. Structured questions are used to promote a broad and deep analysis of the situation or
problem requiring a solution.
i. Risk and uncertainty are addressed with mathematically sound approaches.
In the ideal case, all rational decision makers would come to the same conclusion when presented
with the same set of sufficient information for the decision being made. This would suggest
that collaborative decision making will often employ a rational decision making process.

The following are the types of decisions on the basis of time every organization needs to
take:

a. Short-Term Planning The word short-term emphasizes on short time spells of about
ninety days to a maximum of one year. Here, the focus of plan is only on achieving an
objective. The nature of these types of plans is tactical and is implemented on some
higher frameworks. Proper short-term planning is the key to success for sales
managers. In short-term planning, the time taken for each and every activity is
calculated because this type of a planning is often merged along with the departmental
plans, where every step has some fixed amount of time.
 b. Medium-Term Planning: The medium term planning involves setting slightly longer
term objectives. Here, the key focus is on determining all the problems associated with
a plan that’s been operational for some time, and then modifying the existing plan
according to the requirement. This results in the organization’s product getting a
progressive growth in the market.
c. Long-Term Planning: Long-Term planning is the combination of small-term planning
and medium-term planning. This kind of planning is generally implemented in large
organizations, because they create a plan only once in a long time-span of 2-3 years.
Any changes in such plans are made only because of any change in market statistics.
Some useful steps undertaken while selecting a perfect sales plan:
 Determine the customer’s needs for a particular product.
 Try to build the product according to the customer’s needs.
 Build a strategic plan under the expert guidance of senior officials.
 Build a short-term plan, implement it and then convert it into a medium-term plan,
if the results meet the expectations.
 At the end of one medium-term plan, analyze the results and if found positive, then
implement it as a long-term goal.
It is a crucial step for an organization to select the appropriate plan, because the overall growth
of a new product is totally dependent on the initial plan and employee knowledge.

Participative Decision-making
Participative leadership, also known as democratic leadership, is one of the four participative
decision-making styles where employers invite employees to take a part in organizational
decision-making. While this leadership style is not as common in the corporate world, some
professions require this type of attitude, e.g., social workers, arbitrators, group therapists, and
facilitators. Some of the most famous examples of participative leaders in the corporate world
include Donald Trump, Bill Gates, Bob Diamond, James Parker and John Stahl.
Definition: In the Participative Leadership Style, the leader encourages his subordinates to
contribute their ideas or opinion in the group situations and share responsibility in them.
There are four types of participative decision-making with democratic (or participative) leadership
being only one of them. All of these styles are somewhat similar and have similar advantages and
disadvantages. They are
1. Collective Decision Making: Collective decision-making is a form of leadership style
where all decisions are taken by the group, and the responsibility for these decisions is
also entirely on the group. One of the characteristics of collective leadership is that during
 the decision-making process the group must develop clear lines of authority that define
the responsibilities of each member.

2. Democratic or Participative Decision Making: Democratic or participative

leadership encourages participation of all members, but the final decision is taken by the
leader. The leader collects all the ideas and opinions from the group members and then
takes the final decision by himself. Once the leader has taken the decision, he
communicates the same to his subordinates and tries to resolve the objections if any.
3. Autocratic Participative Decision Making: Under this leadership style, the authority of
final decision making rests with the leader alone, who makes decisions on the basis of the
solutions obtained through the discussions with group members. Here, the leader collects
all the ideas and opinions from the group members and then arrive at a final conclusion.
The difference between the democratic and autocratic decision making is that in the latter
the decision making is fast since it is goal-directed whereas the democratic style is
people-oriented and hence the decision making is slow. Thus, the results are obtained
faster in the case of the autocratic participative decision making.
4. Consensus Decision Making: Under this style, the leader gives up his responsibility to
take decisions on the group members and arrive at the final conclusion through a majority
of the group.
Generally, the group members are involved in setting goals, problem-solving, and team building.
But the authority of final decision-making rests with the leader himself.
Process of Participative Decision Making

While participative leadership comes in several flavors, there is a common pattern that is present
in most of these types:

 the leader facilitates the conversation;

 the leader openly shares information and knowledge necessary for decision-making;
 the leader encourages people to share their ideas;
 the leader synthesizes all the available information and solutions suggested by the team;
 The leader comes up with the best possible solution and communicates it back to the
group.

Merits and Demerits of Participative Decision Making

Participative leadership model is very much in vogue these days with many supporters promoting
its advantages:
  All of the members of the team feel valued and in control;
 The team tends to perform better because the members are more committed to achieving
the goals and objectives of the organization;
 The team performs well even when the leader is absent;
 Increased group morale;
 Decreased competitiveness.

However, there are a number of serious disadvantages to be considered as well:

 The members may feel social pressure to conform to group domination;

 Decision-making may take a long time;
 High unnecessary costs;
 Incompetence;
 Indecisiveness;
 Inefficiency.

Group Decision:
Group decision making is a type of participatory process in which multiple individuals acting
collectively, analyze problems or situations, consider and evaluate alternative courses of action,
and select from among the alternatives a solution or solutions. The number of people involved in
group decision-making varies greatly, but often ranges from two to seven. The individuals in a
group may be demographically similar or quite diverse. Decision-making groups may be relatively
informal in nature, or formally designated and charged with a specific goal. The process used to
arrive at decisions may be structured or unstructured. The nature and composition of groups, their
size, demographic makeup, structure, and purpose, all affect their functioning to some degree. The
external contingencies faced by groups (time pressure and conflicting goals) impact the
development and effectiveness of decision-making groups as well.
In organizations many decisions are made after some form of group. Group decision-making
should be distinguished from the concepts of teams, teamwork, and self managed teams. Although
the words teams and groups are often used interchangeably, scholars increasingly differentiate
between the two. The basis for the distinction seems to be that teams act more collectively and
achieve greater synergy of effort. Katzenback and Smith spell out specific differences between
decision making groups and teams:

 The group has a definite leader, but the team has shared leadership roles
 Members of a group have individual accountability; the team has both individual and
collective accountability.
  The group measures effectiveness indirectly, but the team measures performance directly
through their collective work product.
 The group discusses, decides, and delegates, but the team discusses, decides, and does real
work.

Group Decision Making Methods: There are many methods or procedures that can be used by
groups. Each is designed to improve the decision-making process in some way. Some of the more
common group decision-making methods are Brainstorming, Dialectical Inquiry, Nominal Group
Technique, and the Delphi technique.

Brainstorming: Brainstorming involves group members verbally suggesting ideas or alternative

courses of action. The "brainstorming session" is usually relatively unstructured. The situation at
hand is described in as much detail as necessary so that group members have a complete
understanding of the issue or problem. The group leader or facilitator then solicits ideas from all
members of the group. Usually, the group leader or facilitator will record the ideas presented on a
flip chart or marker board. The "generation of alternatives" stage is clearly differentiated from the
"alternative evaluation" stage, as group members are not allowed to evaluate suggestions until all
ideas have been presented. Once the ideas of the group members have been completed, the group
members then begin the process of evaluating the utility of the different suggestions presented.
Brainstorming is a useful means by which to generate alternatives, but does not offer much in the
way of process for the evaluation of alternatives or the selection of a proposed course of action.

One of the difficulties with brainstorming is that despite the prohibition against judging ideas until
all group members have had their say, some individuals are hesitant to propose ideas because they
fear the judgment or ridicule of other group members. In recent years, some decision-making
groups have utilized electronic brainstorming, which allows group members to propose
alternatives by means of e-mail or another electronic means, such as an online posting board or
discussion room. Members could conceivably offer their ideas anonymously, which should
increase the likelihood that individuals will offer unique and creative ideas without fear of the
harsh judgment of others.

Dialectical Inquiry: Dialectical inquiry is a group decision-making technique that focuses on

ensuring full consideration of alternatives. Essentially, it involves dividing the group into
opposing sides, which debate the advantages and disadvantages of proposed solutions or
decisions. A similar group decision-making method, devil's advocacy, requires that one member
of the group highlights the potential problems with a proposed decision. Both of these techniques
are designed to try and make sure that the group considers all possible consequences of its
decision.
Nominal Group Technique: The nominal group technique is a structured decision making
process in which group members are required to compose a comprehensive list of their ideas or
proposed alternatives in writing. The group members usually record their ideas privately. Once
finished, each group member is asked, in turn, to provide one item from their list until all ideas or
alternatives have been publicly recorded on a flip chart or marker board. Once all proposals are
listed publicly, the group engages in a discussion of the listed alternatives, which ends in some
form of ranking or rating in order of preference. As with brainstorming, the prohibition against
criticizing proposals as they are presented is designed to overcome individuals' reluctance to share
their ideas. Empirical research conducted on group decision making offers some evidence that the
nominal group technique succeeds in generating a greater number of decision alternatives that are
of relatively high quality.
Delphi Technique: The Delphi technique is a group decision-making process that can be used by
decision-making groups when the individual members are in different physical locations. The
technique was developed at the Rand Corporation. The individuals in the Delphi "group" are
usually selected because of the specific knowledge or expertise of the problem they possess. In the
Delphi technique, each group member is asked to independently provide ideas, input, and/or
alternative solutions to the decision problem in successive stages. These inputs may be provided in
a variety of ways, such as e-mail, fax, or online in a discussion room or electronic bulletin board.
After each stage in the process, other group members ask questions and alternatives are ranked or
rated in some fashion. After an indefinite number of rounds, the group eventually arrives at a
consensus decision on the best course of action.
Advantages and Disadvantages of Group Decision Making
The effectiveness of decision-making groups can be affected by a variety of factors. Thus, it is not
possible to suggest that "group decision making is always better" or "group decision making is
always worse" than individual decision-making. For example, due to the increased demographic
diversity in the workforce, a considerable amount of research has focused on diversity's effect on
the effectiveness of group functioning. In general, this research suggests that demographic
diversity can sometimes have positive or negative effects, depending on the specific situation.
Demographically diverse group may have to over-come social barriers and difficulties in the early
stages of group formation and this may slow down the group. However, some research indicates
that diverse groups, if effectively managed, tend to generate a wider variety and higher quality of
decision alternatives than demographically homogeneous groups.
Despite the fact that there are many situational factors that affect the functioning of groups,
research through the years does offer some general guidance about the relative strengths and
weaknesses inherent in group decision making. The following section summarizes the major pros
and cons of decision making in groups.

Advantages: Group decision-making, ideally, takes advantage of the diverse strengths and
expertise of its members. By tapping the unique qualities of group members, it is possible that the
group can generate a greater number of alternatives that are of higher quality than the individual.
If a greater number of higher quality alternatives are generated, then it is likely that the group will
eventually reach a superior problem solution than the individual.

Group decision-making may also lead to a greater collective understanding of the eventual course
of action chosen, since it is possible that many affected by the decision implementation actually
had input into the decision. This may promote a sense of "ownership" of the decision, which is
likely to contribute to a greater acceptance of the course of action selected and greater
commitment on the part of the affected individuals to make the course of action successful.

Disadvantages:

There are many potential disadvantages to group decision-making. Groups are generally slower to
arrive at decisions than individuals, so sometimes it is difficult to utilize them in situations where
decisions must be made very quickly. One of the most often cited problems is groupthink. Irving
Janis, in his 1972 book Victims of Groupthink, defined the phenomenon as the "deterioration of
mental efficiency, reality testing, and moral judgment resulting from in-group pressure."
Groupthink occurs when individuals in a group feel pressure to conform to what seems to be the
dominant view in the group. Dissenting views of the majority opinion are suppressed and
alternative courses of action are not fully explored.

Research suggests that certain characteristics of groups contribute to groupthink. In the first place,
if the group does not have an agreed upon process for developing and evaluating alternatives, it is
possible that an incomplete set of alternatives will be considered and that different courses of
action will not be fully explored. Many of the formal decision-making processes (e.g., nominal
group technique and brain-storming) are designed, in part, to reduce the potential for groupthink
by ensuring that group members offer and consider a large number of decision alternatives.
Secondly, if a powerful leader dominates the group, other group members may quickly conform to
the dominant view. Additionally, if the group is under stress and/or time pressure, groupthink may
occur. Finally, studies suggest that highly cohesive groups are more susceptible to groupthink.
Group polarization is another potential disadvantage of group decision-making. This is the
tendency of the group to converge on more extreme solutions to a problem. The "risky shift"
phenomenon is an example of polarization; it occurs when the group decision is a riskier one than
any of the group members would have made individually. This may result because individuals in a
group sometimes do not feel as much responsibility and accountability for the actions of the group
as they would if they were making the decision alone.

Decision-making in groups is a fact of organizational life for many individuals. Because so many
individuals spend at least some of their work time in decision-making groups, groups are the
subjects of hundreds of research studies each year. Despite this, there is still much to learn about
the development and functioning of groups. Research is likely to continue to focus on identifying
processes that will make group decision-making more efficient and effective. It is also likely to
examine how the internal characteristics of groups (demographic and cognitive diversity) and the
external contingencies faced by groups affect their functioning.