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Article

Group Decision-Making  

R. Scott Tindale and Jeremy R. Winget

Group decisions are ubiquitous in everyday life. Even when decisions are made individually, decision-makers often receive advice or suggestions from others. Thus, decisions are often social in nature and involve multiple group members. The literature on group decision-making is conceptualized as falling along two dimensions: how much interaction or information exchange is allowed among the group members, and how the final decision is made. On one end, group decisions can be made simply by aggregating member preferences or judgments without any interaction among members, with members having no control or say in the final judgment. One the other end, groups’ decisions can involve extensive member interaction and information exchanges, and the final decision is reached by group consensus. In between these two endpoints, various other strategies are also possible, including prediction markets, Delphi groups, and judge–advisor systems. Research has shown that each dimension has different implications for decision quality and process depending on the decision task and context. Research exploring these two dimension has also helped to illuminate those aspects of group decision-making that can lead to better-quality decisions.

Article

Task Performance in Groups  

Christine Smith

When individuals decide to work together to complete a task, they often do so in the belief that the product of their collective effort will exceed that which could be accomplished alone. Task-performing groups are resource-rich entities in that members have access to one another’s uniquely possessed knowledge, skills, and abilities and can, in many instances, reduce each individual’s workload by dividing the labor among themselves. However, faulty interaction processes often hinder a group’s ability to utilize maximally the resources available to them, resulting in a performance that falls short of the group’s potential. For example, coordination loss occurs when group members fail to combine their efforts in an optimal manner. This type of loss is especially likely when the group task requires a high level of precision or has heavy cognitive demands. For example, coordination loss is especially problematic in the context of brainstorming groups, because group members are often asked to interact with one another while simultaneously generating ideas and processing the ideas generated by others. Motivation loss occurs when individual group members fail to give their best effort to the group’s endeavor. This type of loss, called social loafing, is especially likely to occur when individual group members believe that their contributions cannot be identified or evaluated. Alternatively, free-riding occurs when group members believe that their contributions to the group product are ultimately dispensable. Finally, group interaction can result in a performance that exceeds what is expected from a simple pooling of individual group members’ efforts, although instances of such are less frequently addressed and documented within the group performance literature. Synergistic or assembly bonus effects are likely when collective work conditions emphasize strong associations between individual effort and highly desirable outcomes, as in the case of Köhler motivation gains. Furthermore, synergistic effects have been documented in instances where groups have used their increased capacity to process information to identify patterns or draw conclusions that individuals alone would find challenging.

Article

Judgment and Decision-Making Processes  

Richard P. Larrick and M. Asher Lawson

The field of judgment and decision making (JDM) arose in psychology to test the rational assumptions posed in other fields such as economics and statistics. This has led to three major contributions of the field. First, to the extent that people systematically deviate from rational models, their decisions are less than optimal. This has consequences for both business practice and for assumptions in many professional fields, such as finance, medicine, and law. Second, the deviation from rational models has led JDM researchers to identify categories of psychological processes that do guide decision making. These include associationistic memory processes, psychophysical processes, emotional processes, and learning. Third, building on the first two contributions, the field of JDM has merged rational and psychological perspectives to explore ways to improve decision making. These methods include a variety of interventions known as nudges, choice architecture, debiasing, and the use of external aids such as algorithms and the wisdom of crowds. The three contributions of JDM help researchers in a number of fields analyze problems and design helpful solutions. Workplace examples include designing better processes for hiring and evaluation, goal setting, and employee retirement savings planning.

Article

Multistable Perception  

Alexander Pastukhov

Multistable perception is produced by stimuli that are consistent with two or more different comparably likely perceptual interpretations. After the initial perception is resolved in favor of one of the interpretations, continued viewing leads to fluctuating subjective experience, as perception spontaneously switches between alternative states. Multistable perception occurs for different modalities, including visual, auditory, tactile, olfactory perception and proprioception, and various conflicting sensory representations, such as eye dominance, depth, motion, or meaning. Despite large differences, multistable stimuli produce quantitatively similar perceptual experience with stereotypical distribution of durations of dominance phases, similar dependence on the absolute and relative strength of competing perceptual interpretations, prior perceptual history, presentation method, attention, and volitional control, and so on. Taken together, this shows that multistable perception reflects the action of general canonical perceptual mechanisms whose purpose is to resolve the conflicting evidence and ensure a single dominant perception that can be used for action. Thus, it informs us about mechanisms of perceptual decision making, including the importance of feedback mechanisms in resolving perceptual ambiguity and the role of parietal and frontal regions in facilitating changes in perception. Multistable perception provides useful constraints for models, inspiring a plethora of models of perception that combine neurally plausible mechanisms, such as neural adaptation and inhibition, or are based on the idea of predictive coding. The sensitive nature of multistable perception makes a valuable experimental tool that can reveal even minor differences due to low- or high-level influences, including genetic or clinical cases. As such, it is an important tool in studying neural and behavioral correlates of consciousness as it dissociates perception from the stimulus.

Article

Organization Change  

George P. Huber and Jean M. Bartunek

A “change” is a difference in an entity’s state, condition, or property that occurs across an interval of time and can take place in multiple ways. The scope and variety of organization changes make evident that organization change is a familiar and crucial feature of society’s ecosystem. In this chapter we explore multiple types of changes that occur in and among organizations. To appreciate organizational change, it is necessary to understand organizations per se. Thus, we begin by summarizing pertinent literature that defines central characteristics of organizations. Following conventional usage, the term “organization” refers to a purposeful hierarchical human system whose members contribute their efforts or other resources to the system in order to acquire valued resources, such as their livelihood. Organizations are created for multiple types of purposes. Our emphasis is primarily on business organizations, which are created for the purpose of generating wealth for their creators and owners. After discussing organizations, we then turn to our main focus, organizational change. This refers, not only to changes at the organization level of analysis but also at other levels of analysis, ranging from individuals such as the organization’s chief executive officer to populations of organizations. We present topics that address contemporary understandings of organizational change. That is, we discuss sources of change in external organizational environments and organizational responses to such change. We then discuss varieties of organizational change, including population level changes, and changes within individual organizations, including changes initiated by middle managers, organizational learning and unlearning and top management change. Next we move to planned organizational change. This includes changes in culture as well as forms of organization development and forms of whole systems changes, as well as multiple dimensions, of these types of changes. Finally, we describe emerging topics in organizational change, including temporal dimensions, radical and continuous change, dialectical and paradoxical change, emergence, and decline, death and rebirth. Taken together, these topics suggest what organizational change research has explored up to the present. The topics also suggest agendas for new exploration.

Article

Psychological Responses to Scarcity  

Jiaying Zhao and Brandon M. Tomm

Scarcity is the condition of having insufficient resources to cope with demands. This condition presents significant challenges to the human cognitive system. For example, having limited financial resources requires the meticulous calculation of expenses with respect to a budget. Likewise, having limited time requires the stringent management of schedules with respect to a deadline. As such, scarcity consumes cognitive resources such as attention, working memory, and executive control and elicits a range of systematic and even counter-productive cognitive and behavioral responses as a result. Specifically, scarcity induces an attentional focus on the problem at hand, which facilitates performance by enhancing cognitive processing of information relevant to the problem, increasing the efficiency of resource use, and stabilizing the perception of value. Such prioritization of the problem at hand may seem advantageous, but it can produce undesirable consequences. For example, scarcity causes myopic and impulsive behavior, prioritizing short-term gains over long-term gains. Ironically, scarcity can also result in a failure to notice beneficial information in the environment that alleviates the condition of scarcity. More detrimentally, scarcity directly impairs cognitive function, which can lead to suboptimal decisions and choices that exacerbate the condition of scarcity. Thus, scarcity means not only a shortage of physical resources (e.g., money or time) but also a deficit of cognitive resources (e.g., attention, executive control). The cognitive deficits under scarcity are particularly problematic because they impair performance and lead to counter-productive behaviors that deepen the cycle of scarcity. In addition, people under financial scarcity suffer from stigmas and stereotypes associated with poverty. These social perceptions of poverty further burden the mind by consuming cognitive resources, weakening performance in the poor. Understanding the cognitive and behavioral responses to scarcity provides new insights into why the poor remain poor, identifying the psychological causes of scarcity, and illuminating potential interventions to stop the cycle of scarcity. These insights have important implications for the design and the implementation of policies and services targeting the populations under scarcity.

Article

Group Processes  

Charles Stangor

Group process refers to the behaviors of the members of small working groups (usually between three and twelve members) as they engage in decision-making and task performance. Group process includes the study of how group members’ characteristics interact with the behavior of group members to create effective or ineffective group performance. Relevant topics include the influences of group norms, group roles, group status, group identity, and group social interaction as they influence group task performance and decision-making, the development and change of groups over time, group task typologies, and decision-making schemes. Relevant group outcomes include group cohesion, process losses and process gains in performance, free riding, ineffective information sharing, difficulties in brainstorming, groupthink, and group polarization. Other variables that influence effective group process include group member diversity, task attractiveness, and task significance. A variety of techniques are used to improve group process.

Article

Judgment and Decision Making  

Priscila G. Brust-Renck, Rebecca B. Weldon, and Valerie F. Reyna

Everyday life is comprised of a series of decisions, from choosing what to wear to deciding what major to declare in college and whom to share a life with. Modern era economic theories were first brought into psychology in the 1950s and 1960s by Ward Edwards and Herbert Simon. Simon suggested that individuals do not always choose the best alternative among the options because they are bounded by cognitive limitations (e.g., memory). People who choose the good-enough option “satisfice” rather than optimize, because they are bounded by their limited time, knowledge, and computational capacity. Daniel Kahneman and Amos Tversky were among those who took the next step by demonstrating that individuals are not only limited but are inconsistent in their preferences, and hence irrational. Describing a series of biases and fallacies, they elaborated intuitive strategies (i.e., heuristics) that people tend to use when faced with difficult questions (e.g., “What proportion of long-distance relationships break up within a year?”) by answering based on simpler, similar questions (e.g., “Do instances of swift breakups of long-distance relationships come readily to mind?”). More recently, the emotion-versus-reason debate has been incorporated into the field as an approach to how judgments can be governed by two fundamentally different processes, such as intuition (or affect) and reasoning (or deliberation). A series of dual-process approaches by Seymour Epstein, George Lowenstein, Elke Weber, Paul Slovic, and Ellen Peters, among others, attempt to explain how a decision based on emotional and/or impulsive judgments (i.e., system 1) should be distinguished from those that are based on a slow process that is governed by rules of reasoning (i.e., system 2). Valerie Reyna and Charles Brainerd and other scholars take a different approach to dual processes and propose a theory—fuzzy-trace theory—that incorporates many of the prior theoretical elements but also introduces the novel concept of gist mental representations of information (i.e., essential meaning) shaped by culture and experience. Adding to processes of emotion or reward sensitivity and reasoning or deliberation, fuzzy-trace theory characterizes gist as insightful intuition (as opposed to crude system 1 intuition) and contrasts it with verbatim or precise processing that does not consist of meaningful interpretation. Some of these new perspectives explain classic paradoxes and predict new effects that allow us to better understand human judgment and decision making. More recent contributions to the field include research in neuroscience, in particular from neuroeconomics.

Article

Development of Judgment, Decision Making, and Rationality  

Maggie Toplak and Jala Rizeq

There is a long tradition of studying children’s reasoning and thinking in cognitive development and education. The initial studies in the cognitive development of reasoning were motivated by Piagetian models, and developmental age was thought to bring the gradual onset of logical thinking. The introduction of heuristics and biases tasks in adults and dual process models have provided new perspectives for understanding the development of reasoning, judgment, and decision-making skills. These heuristics and biases tasks provided a way to operationalize the systematic errors that people make in their judgments. Dual process models have advanced our understanding of the basic processes implicated in both optimal and non-optimal responders on several types of paradigms, including heuristics and biases tasks and classic reasoning paradigms. Importantly, these skills and competencies are generally separable from the types of higher cognition assessed on measures of intelligence and executive function task performance. Given the history of the study of reasoning in cognitive development, there is a need to integrate our understanding across these somewhat separate literatures. This is especially true given the opposite predictions that seem to be suggested in these different research traditions. Specifically, there is a focus on increasing logical development in the classic cognitive developmental literature and alternatively, there has been a focus on systematic errors in judgment and decision-making in the study of reasoning in adults. This article provides an integration of the two aforementioned perspectives that are rooted in different empirical and historical traditions. These considerations are addressed by drawing upon their research traditions and by summarizing more recent developmental work that has investigated these paradigms.

Article

Evidence-Based Decision-Making and Practice in Organizations  

Alessandra Capezio and Patrick L'Espoir Decosta

Evidence-based practice originated in medicine in response to a science-practice gap and an overreliance on clinical expertise in clinical decision-making. The same gap persists in other fields including in management, work, and organizations. Incorporating evidence-based practice in these fields will enable more critical thinking and more trustworthy evidence usage from multiple sources, and provide a more structured approach to decision-making and practice. An evidence-based approach in organizations is needed to reduce uncertainty, de-bias managerial decision-making and judgment, reduce the uncritical emulation of “best practice,” and ameliorate the impacts of advice and prescriptions from management gurus and consultants. However, surprisingly few business schools’ leadership and management development programs are evidence-based or teach evidence-based practice in their curricula. While evidence-based practice is more prolific in industrial and organizational psychology as an allied field to management, it too has room for growth. Building on existing work, a more encompassing capabilities framework for evidence-based decision-making and practice (EDMP) in organizations, management, and allied fields including industrial and organizational psychology is proposed. This framework can be used to develop leadership and management curricula and help promote an understanding in academia and the broader business community of the limitations of the dominant “craft” model of logic and practice in organizations that results in uncritical emulation, decision neglect, and action bias.

Article

Ethics in Work and Organizational Psychology  

Joel Lefkowitz

Adequately appreciating any area of applied ethics necessarily begins with indispensable foundations from moral philosophy and moral psychology, which are the bases for understanding normative ethical principles. (Otherwise, one could be reduced to the rote memorization of a near-infinite list of “dos and don’ts.”) Personal and social values also are critical as they shape people’s conceptions of ethics and morality. (For example, what constitutes a harm or a wrong? What is the right thing to do?) Traditionally in moral philosophy there have been three ways of answering those normative questions: from deontology (determining what is permissible based on absolutist ethical principles of right and wrong); consequentialism (assessing which alternative is best because it produces the greatest good [or least harm] for all those affected); and virtue theory (being virtuous). Yet, they have all been shown to have weaknesses. For example, what happens when principles are contradictory? What counts as a good? Who determines what is a virtue? And situations sometimes lend themselves more readily to one or another approach, so prudence suggests understanding and being prepared to use all. A person experiences an ethical problem when faced with a choice that challenges one or more of their ethical principles, with potential significant impact on the well-being of others. Professionals often experience ethical dilemmas, which entail having to make uncomfortable choices—choices one would rather not have to make at all. It helps to be able to recognize the form or structure of the dilemma (e.g., contemplating a self-serving act that will harm others). What makes the situation painful is that the person is motivated to some appreciable degree to “do the right thing” (otherwise they wouldn’t be experiencing a “dilemma”). Professionals such as work and organizational psychologists (WOPs) encounter a variety of ethical challenges in the different venues in which they work—as educators, researchers, practitioners, and administrators. Recent empirical survey data concerning ethical situations experienced and reported by WOPs have become available, illustrating that variety. The process of ethics education and training ought to entail becoming familiar with one or more of the several decision-making models for facilitating ethical reasoning that are available in the professional literature.