Explanation:
In a committee setting, especially one where the head of the committee holds a significant position of power, there is a possibility that some members may not voice their opinions during controversial discussions. This could be due to fear of conflict, repercussions, or damaging their relationship with the committee head. In such situations, the head of the committee may end up directing the decisions for the entire team. This is particularly likely when the committee members have established high-level relationships with the committee head. Therefore, the decision-making process may not be as democratic or inclusive as it ideally should be, and the decisions made may not fully reflect the diverse perspectives and expertise of all committee members. This could potentially impact the robustness and effectiveness of the investment decisions made by the committee.
Choice A is incorrect. While it's true that having multiple members on a committee can lead to more robust decision-making due to the diversity of perspectives, this doesn't necessarily mean that the decisions will always be better than those made by an individual. The quality of decisions depends on the expertise and judgment of the individuals involved, not just their number.
Choice C is incorrect. Although reaching consensus in a group can sometimes be challenging, this isn't inherently problematic—consensus can be a strength if achieved through thoughtful discussion and mutual understanding.
Choice D is incorrect. Diverse opinions are generally beneficial in decision-making, as they help identify blind spots and improve the quality of the final decision. Confusion arises only when there is a lack of structure or leadership in managing those differences.
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Q.2592 A large investment firm manages multiple funds. The investment committee decides on the investment strategy and takes the final decision on the investment opportunities available in the market. While making the investment decision, the committee relies heavily on the past performance of a similar strategy. The Chief Investment Officer (CIO) heads the investment committee with fund managers as members. The firm carries out a performance appraisal of its fund managers quarterly, and the CIO heads the appraisal committee. Which of the following is the most appropriate statement with regards to the committee's role in deciding the investment strategy?
A
Since the committee consists of multiple members, the investment decision is more robust than that which would be made by an individual.
B
Members of the committee could sometimes not speak out during controversial scenarios, and the committee head may be able to direct the decisions for the whole team.
C
Since the committee consists of multiple members, reaching a consensus may be difficult.
D
Since the committee consists of multiple members, diverse opinions may cause confusion.