Abstracts Business

Risk taking in individual and group decision making : problems of inquiry.

by James Eric. Michael

The growing complexity of contemporary technological society leads to an ever increasing need to rely on the process of group decision making in preference to individual decision making. Since 1961, a considerable number of studies have been published which are concerned with the specific question of whether there exist differences in the degrees of risk taking between individual and group decisions. Most of these studies have been based on the administration of the so-called "dilemma-cf-choice" questionnaire -developed by Wallach and Kogan in 1959 - to various experimental subjects in laboratory settings. It appears that the major pertinent researchers who used that questionnaire have assumed that it adequately simulates complex real-life decision making. However, this assumption appears to be questionable. Most of the studies that have been conducted since 1961 have indicated that group decisions have a significant tendency to be riskier than the average of the individual decisions which were made by the members of the groups prior to the group decision making. On the other hand, some of these studies have indirectly thrown considerable doubts on these findings, and it would appear that the risky shift in group decisions may be an artifact which - iv - results from the particular manner in which the dilemma-of-choice questionnaire frequently has been administered. Because the dilemma-of-choice questionnaire, furthermore, does not seem to be a suitable instrument if used for the investigation of complex risk taking by individuals and groups, it would appear, then, that there exists a definite problem of inquiry. In order to arrive at a better understanding of the phenomenon of complex risk taking, a theoretical analysis of a number of major variables has been undertaken. This analysis shows that past attempts to deal with complex risk taking have not done justice to the enormous complexity of the phenomenon. Furthermore, the conceptual framework that has been used in the past is naive and does not help to achieve a proper assessment of complex risk taking. The present paper suggests a new definition of decision-making involving risk and offers a neuu language as well as new tools for the analysis of complex risk taking. The creation of a more sophisticated conceptual framework permits a fresh approach to the investigation of the phenomenon. It is furthermore shown that such investigations would have to be field rather than laboratory studies. However, the question of what constitutes a "risky" decision is so complex that an objective assessment of "riskiness" frequently will be difficult, if not impossible. This difficulty is compounded by the fact that the nature of complex group decision making appears to be such that it might be impossible to say whether it differs in riskiness from individual decision making: Complex decision-making problems which would require group decision making are generally so involved that they would not allow for individual decision making to begin with. The conclusion is drawn that, for…