Groupthink and Rational Decision Making

In what specific ways does groupthink work against rational decision making at the

level of the group in formal organizations?

Group 5, Week 2 Assignment

Irvin Janis (1972) defines groupthink as a mode of thinking that people engage in when

they are deeply involved in a cohesive group, when the members’ striving for unanimity

override their motivation to realistically appraise alternative courses of action. All

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organizational level decision-making and planning occurs in a collaborative group

environment and relies on analysis, inputs, and recommendations from group members.

Thus organizational level decision-making is vulnerable to many negative group

influences such as groupthink. Some of the specific ways groupthink works against

rational decision making are:

Time Pressures: Decisions made within strict timelines can be subject to groupthink.

Unavailability of time can lead to the examination of few alternatives. For instance, after

an FDA audit, in an attempt to quickly push a drug to market, the regulatory decision

making group of pharmaceutical companies are forced to correct the errors within certain

stringent timelines. This lack of a thorough implementation of the rational decision

making process most often than not leads to the FDA requesting another audit thus

lengthening the drug development process. Two key studies by Isenberg (1981) and

Kelly and McGrath (1985) found that reduced time reduced the quality of group

decisions and products

Cohesion: Inasmuch as Cohesion is the fundamental working dynamics of teamwork,

highly cohesive groups can engage in groupthink. Mutual admiration, shared beliefs and

values etc. of group member’s can lead to negative cohesion. Most people are followers,

not leaders; they go with the flow. For instance most companies do not develop original

products. An example is in recent news Nokia is suing Apple over G.S.M. and U.M.T.S.,

that Nokia developed and apple used in their Iphones. (The New York Times, 2009). As

indicated by Mullen, Anthony, Salas, & Driskell (1994) when conditions promote

groupthink (e.g., directive leadership) high cohesiveness impaired decision quality.

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Illusion of Invulnerability: This when the group thinks they cannot go wrong. They

are excessively confident in their own abilities. They think their decisions are foolproof

and thus ignore warning signs. Ken Lay and his management team at Enron thought they

were masters of their universe and could get away with their schemes. The group places

excessive value of effectiveness on their decisions made and thus do not develop

contingency plans.

Stereotypes: This is when group members pay little attention to what other non group

members have to say. A typical example of gender stereotype is found in the Toyota

Company; the lack of an outside perspective is particularly striking in the case of

Toyota’s board. It is composed of 29 Japanese men—all of them Toyota insiders, none of

them independent.(The Economist, 2010).

Collective Rationalization: This is when the group ignores red flags and warning

signs in their decision making process because they believe nothing can go wrong with

their plan. An example is Toyota, Toyota’s board refuses to hire outside directors because

they believe Toyota has been doing well without them for years. However, their recent

crisis proves that an outsider might have questioned the status-quo and might have

brought new ideas to the table. (The Economist, 2009).

In conclusion, groupthink is the result of flawed procedures, poor leadership,

insulation, and an unmanaged desire for the maintenance of group cohesion and its good
feelings. These factors can be addressed positively and group decision making improved,
while groupthink is kept to a minimum.

References:

In Lawsuit, Nokia Says iPhone infringes Its Patents.(2009) Retrieved from

http://www.nytimes.com/2009/10/23/technology/companies/23nokia.html
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Time Pressure and Creativity in Organizations: A Longitudinal Field Study. Retrieved

from
http://www.hbs.edu/research/facpubs/workingpapers/papers2/0102/02-073.pdf

Chen Z., Lawson, R, Gordon, L, Mcintosh, B. (1996). Groupthink: Deciding with then
Leader and the Devil. The Psychological Record Journal, Vol. 46.

Accelerating into trouble.(2010) Retrieved from

http://www.economist.com/opinion/displaystory.cfm?story_id=15498249

Groupthink - How groupthink works, How to avoid groupthink. (n.d). Retrieved from
http://www.referenceforbusiness.com/small/Eq-Inc/Groupthink.html#ixzz0is9Qe946

Harrison, E.F. (1999). The managerial decision-making process (5th ed.). Boston, MA:
Houghton Mifflin Company.

Pichler, R. (n.d.). The Enron scandal. Retrieved from

http://www.internationalbusinessdays.eu/file/download/pdf/Enron.pdf