The Effect of Collective Decision-Making on Productivity: A Structural Equation Modeling

The purpose of this study is to examine the relationship between common rationality (as a factor of convergence of employees and managers), collective decision-making (as one of the important methods of participation), and productivity (as an important indicator of organizational success). Structural equation modeling (SEM) is used to investigate the strength of these relationships. After the distribution of 98 questionnaires among organizational experts we used Smart PLS 2.0 to analyze the data. The results show that the indirect relationship between common rationality and productivity through a mediating variable of collective decision-making is stronger than the direct effect of common rationality on productivity. It means that common rationality as a substantial asset for an organization could be used to improve productivity but if managers want to utilize this asset, they should apply it through another mediator which is collective decision-making. Collective decision-making could facilitate the relationship between common rationality and productivity by creating synergy among employees, reducing biases, increasing decision quality, and reaching the optimal decision. One of the goals that managers and employees of organizations pursue is the issue of productivity because productivity leads to the success of the organization. The basic questions in this field are how to create purposeful participation in practice among the employees of an organization and lead them to participate in decision-making, how to provide the basis for employee participation in decision-making, and what indicators and methods should be used. This article examines the consequences of collective decision-making on productivity in an organization. Due to the high importance and practicality of the issue of collective decision-making and its effect on productivity, a conceptual model of research on this issue was designed and analyzed by structural equation modeling. The results show that common rationality affects productivity through the mediating variable of collective decision-making. Therefore, managers must pay enough attention to collective decision-making to increase productivity in the organization.