The dynamics of groupthink the cape coral experience. Groupthink theory and its implications for group decision making methods. Pdf groupthink has caused teams of qualified members to make some decisions with catastrophic consequences. Agents with anticipatory preferences, linked through an interaction. Twentyfive years of groupthink theory and research. Groupthink is a theory dedicated to understanding the decision making process in small groups. Our example for the groupthink and financial crisis in ireland, is mostly based on the report that was published from the commission for investigation into the banking sector in ireland nyberg, 2011, which concludes that bankers, regulators and others were in line with the norms of groupthink. Janis believed it affected decisionmaking to the point it overrides realistic and necessary points of view. This provides support for janis groupthink model as a good explanation of how faulty decision making occurs in groups. Groupthink is a common phenomenon in team discussions and decision making processes.
How to avoid groupthink nine suggestions for avoiding groupthink are the following janis, 1982. Collective delusions in organizations and markets roland bonabou princeton university this version. Academic research reinforces the idea that groupthink leads to bad groupdecisionmaking. Decision making processes at the individual level mainly deal with intrapersonal information and are bound by cognitive processing limitations. The management was unhappy about the decision but they argued that harmonious group thinking. The term groupthink originated in 1952 in fortune magazine by the author william whyte. Following from the concept of groupthink, coined by social psychologist irving l. Avoiding groupthink will help many professionals reach sounder business decisions. Groupthink can occur quickly and without detection, which makes groupthink extremely detrimental to team success. The welfare analysis differentiates group morale from groupthink and. Judgment in managerial decision making, 8th edition max h. And, finally, different group decisionmaking techniques can be used to limit the effects of groupthink and other problems inherent in shared decision making. Groupthink is a psychological dynamic that can occur in groups tasked with decisionmaking. This article defines groupthink and explains why it occurs among teams.
Thus the ingroup significantly overrates its own abilities in decisionmaking and significantly underrates the. Theoretical analysis of groupthink from janis and mann, decision making. Understanding groupthink provides a key to better decision making. Getting beyond groupthink to make groups smarter cass r. Groupthink learn about the negative impact of groupthink.
Intriguingly, groupthink has even been used to try to account for perceived antirightwing political biases of social psychologists redding, 2012. Lessons in decision making jfks legacy and groupthink have you ever been part of a group that was making an important decision and you felt uncomfortable with the direction things were headed. How to kill groupthink in your company venturebeat. Janis picked up and further developed the study many years. It was coined by psychologist irving janis in a seminal 1971 paper on the role of group decisionmaking in historic u. Apr 18, 2020 kendra cherry, ms, is an author, educational consultant, and speaker focused on helping students learn about psychology. Diverse perspectives on the groupthink theory a literary. First coined in 1972, the term specifically refers to. These results, however, do not represent particularly strong support for the groupthink model given that such factors would seem likely to produce defective decisionmaking even in the total absence of groupthink reactions. Gruppendenken ist ein moglicher prozess innerhalb einer gruppe. Leana 1985 studied the effect of cohesiveness and leaders behaviour on decision making in four. Contagious exuberance can also seize asset markets, generating investment frenzies and crashes. The theory, however, was not researched or clearly defined until around 1972 by irving janis. This video includes discussion of when group decision making is better than individual decision making, process loss, groupthink, and its.
The answers depend on employee acceptance of the decisionmaking process. Both moorhead and montanari 1986 and ahlfinger and esser 2001 found support for the proposition that groups with biased leaders were. Groupthink is a phenomenon developed in groups marked by the consensus of opinion without critical reasoning or evaluation of consequences or alternatives. Decision making stressors like extreme stress or limited time can increase the possibility of groupthink. This study also showed that the relationship between groupthink and defective decision making was insignificant. Guarding against groupthink in the professional work. Group dynamics and the study thereof can significantly contribute to understanding the decision making in corporate boards of directors. Groupthink, while it is thought to be avoided, does have some positive effects.
Insights and innovations in behavioral finance for fiduciaries anil suri, cio, multiasset class modeled solutions investment success can rest on tailoring an approach to meet an institutions unique financial goals. Groupthink is a psychological phenomenon born of our innate desire to conform with others. May 30, 2019 groupthink is a phenomenon developed in groups marked by the consensus of opinion without critical reasoning or evaluation of consequences or alternatives. Janis believes that groups frequently make decisions with profound consequences, and although he focused his efforts on foreign policy groups, the application of groupthink terminology resonates in many other decisionmaking groups. And, finally, different group decision making techniques can be used to limit the effects of groupthink and other problems inherent in shared decision making.
A case study by choi and kim shows that with group identity, group performance has a negative correlation with defective decision making. Eurozone groupthink and denial on a grand scale william mitchell1 university of newcastle, australia 1. Groupthink in the boardroom the good, the bad and the ugly. Ricciuti executive summary the groupthink psychological phenomenon widespread throughout the homeland security enterprise is a significant threat to the national security of the united states u. The aim of this research is to provide an overview of financial decision making and theory and practise according to which the decision has been taken. These results, however, do not represent particularly strong support for the groupthink model given that such factors would seem likely to produce defective. Groupthink is a term developed by social psychologist irving janis in 1972 to describe faulty decisions made by a group due to group pressures.
Pdf groupthink and quality of decisionmaking process among. Evaluating janis groupthink model of faulty decision making. But what emerged subsequent to groupthink was an area called judgment and decision making, which is one of the most important areas in all of psychology. Janis in the early 1970s, this study focuses on several detective groups in the south african police services. Thirtyfive years ago, yale psychologist irving janis published an essay in the yale alumni magazine explaining how a group of intelligent people working together to solve a problem can sometimes arrive at the worst possible answer. A brief history of groupthink features yale alumni. Academic research reinforces the idea that groupthink leads to bad group decision making. Groupthink, gerstandt believes, is the default state for most teams, but it can be overcome. Groupthink is a phenomenon in which the ways of approaching problems or matters are dealt by the consensus of a group rather than by individuals acting independently. How groupthink can cost your business and 3 corporate.
Leana 1985 studied the effect of cohesiveness and leaders behaviour on. Groupthink is the name given to a theory or model that was extensively developed by irving janis 1972 to describe faulty decision making that can occur in groups as a result of forces that bring a group together group cohesion. To counter the everevolving threats to the nation, the. These fiascos include the bay of pigs, the pearl harbor attack, the north korea escalation, and the vietnam escalation. It also discusses how groupthink leads to team failure and identifies how managers. A key theme is that poorly structured groups, rather than dampening or canceling out individual. Nevertheless, the existence of groupthink and its influence on homeland security has not been thoroughly studied or evaluated. Groupthink is a psychological phenomenon that occurs within a group of people in which the. Groupthink definition groupthink refers to decisionmaking groups extreme concurrence seeking conformity that is hypothesized to result in highly defective judgments and outcomes. When groups go along to get along, the end result of the decisionmaking. Groupthink is clearly a destructive, limiting dynamic and is one that can affect trustees, just like any other group tasked with decision making. Jul 18, 2018 this video includes discussion of when group decision making is better than individual decision making, process loss, groupthink, and its antecedents, symptoms, and consequences. Groupthink is a common phenomenon in team discussions and decisionmaking processes.
This results in the direct importance of groupthink and how it can help or hinder an organization. Wiser is a well researched volume on how groups operate. Some cognitive biases are amplified in group settings e. While the books case studies relate to political fiascos they have implications for all types of decision making by groups, particularly financial decisions. In terms of group decision making, however, there is an additional level of complexity because of the need for the exchange of interpersonal information. According to janis, groupthink is detrimental to effective decisionmaking in that concurrence seeking becomes so dominant in a cohesive ingroup that it tends to override realistic appraisal of alternative. Group dynamics and the study thereof can significantly contribute to understanding the decisionmaking in corporate boards of directors. When people become assimilated to a group, they feel like insiders, but they also suppress their uniqueness and conform to the groups norms. Essentially, groupthink is the situation where, because of a desire for conformity and the need to minimize conflict, group dynamics stifle debate and critical reflection. First, ensure that the board is a place where decisions are challenged and debated. But what should be done when an investment committees or boards opinions and goals diverge. Janis 1972 developed the groupthink theory based on assessment of some of the worst decisions or. Groupthink is a term first used in 1972 by social psychologist irving l.
While there are too many to list them all, an example is the blind trust in. The financial issues at enron and worldcom are considered examples of. Groupthink is a concept introduced by irving janis 1972 to describe extreme consensus seeking tendencies in decisionmaking groups. For the financial crisis of 2008, there is specific evidence of collective overoptimism by. That said, there are a number of things that can be done to mitigate its presence and improve decision making. December 2011 abstract this paper investigates collective denial and willful blindness in groups, organizations and markets. Benabou 2012 develops a model to explain corporate cultures characterized by groupthink and provides several examples of negative consequences associated with groupthink. Maybe it was a business or academic committee, a social group, a church board, a government agency. Understanding the task at hand and people involved is important. In fact danny kahneman won the 2002 nobel prize based on his research into how rational people make irrational decisions.
J anis, 1989 hypothesizes that decision making groups are most likely toexperience groupthink when they are highly cohesive, insulated from experts, perform limited search and appraisal of information, operate under directed leadership, address reprint requests and cor. Groupthink in the boardroom the good, the bad and the. Evaluating janis groupthink model of faulty decision. The best way to do so, he said, is to strive for inclusion, not assimilation. Janis tested the theory against two decisions where groupthink was absent the marshall plan. Pdf groupthink in the south african police service. Groupthink is a theory dedicated to understanding the decisionmaking process in small groups. Is vigilant decision making the cureall for group decision making ills as janis 1982 argued. A brief history of groupthink features yale alumni magazine. What are the disadvantages of groupthink in decision making. The capability of an organisation to develop and progress depends heavily on the ability of its members to arrive consistently at appropriate. In this research the risks faced by any person or company in financial decision making and. Groupthink how to avoid in investing and portfolio management.
The financial crisis is a great example of groupthink within an entire industry. Janis believes that groups frequently make decisions with profound consequences, and although he focused his efforts on foreign policy groups, the application of groupthink terminology resonates in many other decision making groups. Whyte acknowledged that groupthink was a definition in progress. The research psychologist irving janis introduced the concept of groupthink in 1972 to describe extreme consensus seeking tendencies. The complexity of todays modern organizations has increased the need of for effective decisionmaking.
During times of high pressure, everyone may have some level of insecurity. It also discusses how groupthink leads to team failure and identifies how managers and project leaders can minimize the. Trust is an essential factor in teamwork, but too much trust can lead to selfcensorship and the phenomenon referred to as groupthink. Getting beyond groupthink to make groups smarter gives an indepth analysis of factors that influence how groups reach a certain decision and the various biases at play. Janis that refers to a psychological phenomenon in which people strive for consensus within a group. Groupthink is a dysfunctional decisionmaking process that happens when. Decision making is one of the major attribute of a good leader. This paper portrays the multiple facets groupthink has. Iain clacher, associate professor in accounting and finance, deputy. According to irving janis, the inventor of the groupthink concept, decisionmaking groups are most likely to experience groupthink when they operate under the following conditions. Oct 10, 2016 understanding groupthink provides a key to better decision making.
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