Final answer:
When a team is split on a decision, solutions involve either delegating authority to reduce transaction costs or engaging in group decision-making to minimize conformity costs, with each having its advantages and disadvantages.
Step-by-step explanation:
When a team is split and cannot make a decision, it is crucial to navigate this challenge thoughtfully. Coordination problems can arise, especially in large groups, when there is general agreement on goals but not on specific courses of action.
These issues magnify with the size of the group, making it difficult to satisfy everyone's individual preferences. One solution is delegating decision-making power to a single person or a select few, which can minimize transaction costs, the time and effort taken to reach a consensus. However, this could increase conformity costs, the loss of individual preferences in the decision.
To manage these costs, groups can also engage in collective decision-making, such as voting or deliberative methods. This approach could reduce conformity costs but may come with higher transaction costs. For instance, getting 300 people to agree on a restaurant might be impractical, leading to a default to the status quo and no restaurant being chosen. Another collaborative method includes each member contributing ideas to a common list and exchanging feedback, fostering cooperation and consensus.