Team Decision Making: The Dynamic Effects of Team Decision Style Composition and Performance via Decision Strategy

Abstract

As teams continue to become more prevalent in modern-day organizations, researchers and organizations alike can benefit from a more nuanced understanding of teams’ decision-making process, which can ultimately impact organizational effectiveness. Although team processes are conceptualized as dynamic phenomena, they have largely been treated as static in research. In this study, we draw on the input-mediator-output-input and episodic team performance frameworks to advance a theoretical model of the dynamic, reciprocal effects of team rational decision strategy and team performance as well as the role of team composition of individual rational decision style. We sampled 320 participants in 85 teams competing in a 10-week business strategy simulation where teams made weekly strategic decisions that contributed to team performance. Teams composed of individuals with rational decision styles were more likely to adopt rational decision strategies, which led to better team performance. Additionally, results revealed a positive reciprocal effect between rational decision strategy and team performance such that teams with positive prior performance were more likely to engage in subsequent rational decision strategy. As hypothesized, team composition of members’ rational decision style was the primary determinant of team rational strategy during initial stages of team development, but the valence of outcome feedback (i.e., prior performance) took over as the stronger predictor of team rational strategy during later stages of team development. We contribute to the team and decision-making literatures by examining the dynamic process of team decision making and team performance.