Decision Making at Scale: How Number of Decision Makers Influences Decision Speed

When a firm decides on new product investments, it must allocate scarce capital under uncertainty. The decision process can be centralized in one individual or distributed across many participants. Group size thus becomes a central variable: it shapes how information is processed, how preferences are reconciled, and how quickly a decision can be reached.

Speed is not the only evaluative dimension—accuracy, legitimacy, and robustness matter as well—but speed is uniquely sensitive to the number of decision makers. The question is therefore: how does decision speed vary with group size, and what governance mechanisms allow an organization to manage this relationship?

1. Key Variables and Definitions

To understand why decision speed changes with group size, it is useful to note that decision speed is the outcome of interacting factors that govern how information is processed, how participants communicate, how their actions are coordinated, and how their preferences are aggregated into a collective choice. By defining these variables explicitly, we can discuss their relationships, identify where bottlenecks arise, and propose how governance mechanisms can intervene to preserve or accelerate speed.

• Decision speed: the elapsed time between initiation of deliberation and issuance of a binding decision.
• Information processing capacity: the collective ability of decision makers to acquire, filter, and evaluate relevant information.
• Coordination cost: resources consumed in aligning activities, sequencing tasks, and ensuring that participants are informed.
• Communication load: the volume of messages exchanged among decision makers during deliberation.
• Preference aggregation: the process of reconciling heterogeneous individual preferences into a single collective choice.
• Governance mechanism: a formal or informal rule, structure, or tool designed to influence how the decision process unfolds.

2. Variable Interactions

The following stylized causal rules capture how these variables interact:

1. Group size ↑ → Communication load ↑
2. Communication load ↑ → Coordination cost ↑
3. Coordination cost ↑ → Decision speed ↓
4. Group size ↑ → Preference heterogeneity ↑
5. Preference heterogeneity ↑ → Time to aggregate preferences ↑ → Decision speed ↓
6. Information processing capacity ↑ (up to a point) → Robustness ↑, but beyond a threshold → Coordination cost ↑ → Decision speed ↓
7. Governance mechanisms (rules, representation, digital platforms) → Coordination cost ↓, Preference aggregation efficiency ↑ → Decision speed ↑

3. Cases of Different Decision Making Group Sizes

3.1 One Decision Maker

When authority rests with a single individual, decision speed is maximal, since communication and coordination are unnecessary. The main risks are bounded cognitive capacity and reliance on heuristics, which can produce systematic biases (Kahneman, 2011).

Governance mechanisms and variable effects:

• Structured templates for proposals → reduce information load and improve information processing capacity, indirectly stabilizing decision speed.
• Formal review calendars → decrease variability in coordination cost (by regularizing the process), thereby sustaining decision speed.
• Post-decision audits → increase information processing capacity over time by identifying and correcting biases, which can enhance both robustness and future decision speed.

3.2 Five Decision Makers

Involving five decision makers, such as the top management team, slows decision speed relative to one person, since communication and coordination are introduced. The benefit is higher robustness, as diverse expertise is pooled and errors challenged (Eisenhardt, 1989).

Governance mechanisms and variable effects:

• Explicit decision rules (majority vs. unanimity) → simplify preference aggregation, reducing aggregation time and sustaining decision speed.
• Structured agendas and time-boxing → lower coordination cost and cap communication load, thereby preserving decision speed.
• Designated facilitator → streamlines coordination and improves efficiency in communication, which directly supports decision speed.

3.3 One Hundred Decision Makers

With 100 participants (e.g., senior managers), communication becomes heavy, coordination costly, and preference heterogeneity pronounced. Decision speed drops significantly, and voting outcomes risk instability (List & Goodin, 2001).

Governance mechanisms and variable effects:

• Representative committees → reduce communication load and coordination cost by delegating deliberation, which increases decision speed.
• Digital platforms for asynchronous input → lower synchronous communication load, improve information processing capacity, and reduce coordination cost, thus moderating the decline in decision speed.
• Tiered decision rights → shorten preference aggregation time by filtering options at sub-group levels before escalation, thereby improving decision speed.

3.4 One Thousand Decision Makers

With 1,000 decision makers—the full workforce—communication and coordination costs become extreme, and preference aggregation nearly impossible. Inclusiveness is maximal, but decision speed collapses without intervention (Fishkin, 2009).

Governance mechanisms and variable effects:

• Deliberative polling or representative sampling → reduce communication load and coordination cost by collecting input from a subset, indirectly restoring some decision speed.
• Advisory rather than binding role for employees → decreases preference aggregation complexity, since aggregated preferences do not need to be translated into a collective decision, which preserves decision speed.
• Algorithmic aggregation tools → reduce preference aggregation time, improve efficiency of information processing capacity, and thereby increase decision speed relative to unstructured mass participation.

4. Conclusion

As group size expands from one to 1,000, decision speed declines due to the compounding effects of communication load, coordination costs, and preference aggregation. Governance mechanisms mitigate these effects, but always by shifting the balance between speed and inclusiveness.

The firm must therefore decide not only how to govern its decision process, but also what it values most: rapid action, broad participation, or a balance between the two. Governance design makes this trade-off explicit.