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Agricultural Marketing Resource Center

Group Decision Making in Value-added Business Projects

 
Don Hofstrand
Co-director, Ag Marketing Resource Center
Iowa State University Extension
dhof@iastate.edu
Reviewed August 2009.

For value-added business projects to be successful, it is important that all of the project committee members be involved in decision-making. Members not involved in decision-making may work toward personal goals that are in conflict with the goals of the business project. Choosing the right method of making value-added project decisions increases the chances of making the right business decision.

Decision Making

Decisions that affect the future of the business are important to all members. Several ways to make these decisions are discussed below.

Autocratic Decision-Making

Autocratic decision-making by one person, often the leader, is the fastest and easiest way to make decisions. However, lack of ownership of the decision by the committee members is a major disadvantage. People tend to support and feel ownership of decisions they have had a voice in making. Conversely, they feel little ownership of decisions made by others. The autocratic approach works best for decisions where the individual parties don't feel a need to contribute or the time for making the decision is very short.

Democratic Decision-Making

“Let’s take a vote,” is the hallmark of the democratic approach to decision-making. The majority wins and the minority looses. This type of decision-making tends to split the team. The minority may not support or may even sabotage the decision. Also, the minority may criticize the decision if it does not do well. This is a good procedure for decision-making in large groups. Other methods are preferred for small groups. However, if the other methods cannot produce a decision, voting may be the only viable alternative.

Consensus Decision-Making

Consensus building relies on the belief that opponents will gravitate to your solution when they are provided with the right information. It involves educating the opposing party and having confidence that individuals will re-evaluate their position.  Consensus building works best when facts are used to outline the pros and cons of the decision. However, many decisions are not based on facts, but on attitudes, perceptions and emotions. Also, as the number of issues used for advocating or opposing a decision increases, it becomes increasingly difficult to achieve a consensus.

Collaborative Decision-Making

Collaboration is a process. With collaboration, all parties join together to constructively explore their differences in search of solutions that go beyond their separate visions. By debating the various perspectives, the complexity of the problem is recognized by all parties and new alternatives are discussed that consider the positions of everyone. All suggestions are considered before alternatives are ranked. No single position is sacrificed at the expense of another alternative. Although collaborative decision-making is the most time consuming, it is often the preferred method for making major business decisions.

Summary of decision-making methods:

  • Autocratic - Use for routine decisions where others don’t feel a need to be involved.
  • Democratic - Use for large group decision-making, or where consensus or collaborative decision-making is inappropriate or fail.
  • Consensus - Use for decisions where facts can be used to outline pros and cons.
  • Collaborative - Use for making major business decisions that require the support of everyone involved to be successful.

 

 

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