Authority and consensus in group decision making with fallible individuals

Abstract

This paper compares the performance, in terms of expected opportunity loss of mistakes, of group decision making with fallible members, under different organization structures. These structures result from combining the decision mechanisms of authority and consensus with the communication networks of star, tree, and full network. Simulation results from Agent Based Modeling show that the authority (consensus) is preferred when the time to reach a group decision matters (not matters), and in organizational environments of high (low) risk and high (low) prospects of growth. Additionally, the results of the paper recommend that organizations that want to migrate from authority to consensus decision making, as defined here, should switch from the low-density tree like connecting network, common in hierarchical structures, to a high-density full network.