Why We Don't Like Decisions Made by Groups
MANAGEMENT |

Why We Don't Like Decisions Made by Groups

A STUDY BY KOUCHAKI, SMITH AND NETCHAEVA REVEALS THAT, IN RESPONSE TO THE SAME UNFAVORABLE DECISION OUTCOME, A GROUP OF DECISION MAKERS IS PERCEIVED TO BE LESS FAIR THAN AN INDIVIDUAL

Decision-making is a crucial aspect of organizational life, and we know quite a lot about how group and individual decisions are made. Less is known, however, about how these decisions are received, and if potential differences exist when the decision maker is a group rather than an individual. For example, what happens when a worker receives a layoff notification? Would the fairness of such a decision be perceived differently if it were made by a group rather than an individual? Prior studies found that people think groups are less likely to be influenced by biases. What is still unknown is if the group’s decision is also more likely, or not, to be perceived as fair.
 
A paper by Bocconi Department of Management and Technology’s Ekaterina Netchaeva, Northwestern University’s Maryam Kouchaki, and Cornell University’s Isaac Smith (Not All Fairness Is Created Equal: Fairness Perceptions of Group vs. Individual Decision Makers, in Organization Science, Volume 26, Issue 5, doi: 10.1287/orsc.2015.0992) interestingly finds that people perceive groups to be less fair than individuals when receiving an unfavorable decision.
 
The authors decided to explore this topic while discussing the idea of the wisdom of the crowd. “The way we think about the wisdom of the crowd usually means that if you make a decision, you make a group decision because in this way it’s going to be a better and wiser decision. But then we started thinking of some instances when this might not be necessarily true” Netchaeva says. “Perhaps when a decision is made by a group rather than an individual, the perception of the final decision could be less positive. So if the group makes the decision and the decision is negative, this adds more of the savor taste”. Evidence of this intuition was found in two experimental studies. But then, to account for this difference in fairness perceptions, in another experiment the authors also show that it’s the mere presence of a group as a decision-making body that serves as a cue that increases the accessibility of negative group-related associations in the perceiver’s mind. A final test was made with a group of recently laid-off workers. The workers who received a layoff decision made by a group (compared to an individual) were not only more likely to perceive the decision as unfair, but also less likely to endorse the organization.
 
“The interesting thing about our study is that we think about the wisdom of the crowd as something good, but this is not a rule organizations should be following” Netchaeva explains. Sometimes it might be better to conceal who is behind the decision, if a group or an individual, so that individuals are less negatively inclined towards the decision maker.

by Paola Zanella

News

All News
  • An Era of Sharing Is also Coming for Innovation

    At the The Sharing Economy of Innovation conference, Monday at 5 p. m. in the Aula Magna Roentgen, the views of academia, policy makers and companies will be presented. Among the speakers Ilaria Capua and Diego Piacentini  

  • The Collection of Electronic Equipment Will Generate 15,000 Jobs in Ten Years

    On the eve of major changes in WEEE collection, a study by IEFE Bocconi for Remedia estimates the economic impact up to 2030  

Seminars

  November 2017  
Mon Tue Wed Thu Fri Sat Sun
    1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30      

Seminars      

All Seminars
  • Does it pay to be an optimist?

    Paul Schneider, USI BROWN BAG SEMINAR

    Meeting Room 2.e4.sr03 - Via Roentgen, 1

  • Il contratto di leasing finanziario
    Private Law

    Welcome address and conclusions: Giorgio De Nova, Professore Emerito Università degli Studi di Milano La tipizzazione del contratto di leasing finanziario Lorenzo Bertino, Università Bocconi La disciplina introdotta dalla L. 4 agosto 2017, n. 124 Emanuele Lucchini Guastalla, Università Bocconi Leasing e garanzie personali Giovanni Stella, Università di Pavia

    Room 24, via Sarfatti 25