Managerial Psychology Group Decision Making

New Venture Problem A successful manager has decided to invest $40,000 of his own money in one of two business ventures. Investment X will either return a profit of $20,000 in one year or it will return no profit (the capital is safe). Investment Y is certain to return a profit of $10,000 in one year. If you were advising this manager, please circle the lowest probability of success for X that you would consider acceptable to invest in X rather than in Y? 10% 20% 30% 40% 50% 60% 70% 80% 90% • Solve the problem individually • Form groups of 3-4 and agree on a group answer Always Y Group Polarization • On pure opinion problems such as New Venture, there is no demonstrable right answer • Roughly equal factions tend to compromise, ie., they exchange information and influence • Dominant views become more extreme. This was called the “risky shift” until it was recognized that shifts occur in both directions • What accounts for polarization? Group Polarization Results Equal factions compromise Choose X Choose Y Dominant views become more extreme Choose X Choose Y Informational Effects • Selective Interpretation: even if equal numbers of arguments for each position are exchanged, arguments favoring our side are seen as more persuasive • Selective Presentation - arguments favoring the majority side are presented more frequently. 8 A arguments vs. 2 B arguments are seen as stronger than 4 A arguments vs. 1 B argument • Hidden Profiles - there are well-known and rare arguments; if rare arguments favor the majority, then group discussion will shift that way Hidden Profiles • Imagine you are in a group deciding between A and B. Each member has three pieces of information about the alternatives, with some pieces favoring A (A1, A2) and some favoring B (B1, B2, B3) • Person 1 has A1, A2, B1 Person 2 has A1, A2, B2 Person 3 has A1, A2, B3 • When will the group choose A? B? Normative Effects • Just being told the group average or distribution is enough to produce polarization • Self-image: people want to be distinctive in the approved direction • Extremity on our side of an issue is valued more than neutrality • Majority members make more extreme and forceful arguments and speak more freely • People are conservative in predicting others’ opinions, and later find out that others are a bit more extreme than they thought Groupthink: The Bay of Pigs Eisenhower assigns CIA to organize Cuban exiles. CIA begins to plan an invasion Jan, ‘61 Kennedy briefed by Dulles (CIA) and Lemnitzer (Joint Chiefs of Staff) Jan-Apr Advisory group meetings eventually approve CIA’s plan Invasion and disaster Apr 17 “How could we have been so stupid?” JFK Sorenson “A shocking number of blunders in the whole decision making process.” 1960 Major Miscalculations • No one will know, but press covered training, Fulbright gave warning • Exiles have high morale, but CIA lied to them, put down a mutiny • Castro’s army is weak, but CIA ignores evidence from State and British Intel • Invasion will touch off uprisings, but ignore State Cuban desk and Cuba poll • Can retreat to the mountains, but no one looked at a map Groupthink Theory (Janis) • Encouraged by: high cohesiveness, insulation, directive leader, stress, lack of systematic search and appraisal • Symptoms: illusion of invulnerability, collective group morality, out-group stereotypes, pressure on dissenters, self-censorship, mindguards, illusion of unanimity • Defective decision process: too few alternatives and objectives, poor search, selective processing, ignore risks, weak contingency plans Group Decision Process Ideal: Problem Search Divergence Disagreement Analysis Convergence Concurrence Action Groupthink: Problem Rapid convergence Action Academia: Problem Creative divergence No action Evaluating The Bay of Pigs • • • • Decision quality Motivation and mobilization Develop individual competence Develop group competence Evaluating The Bay of Pigs • Cohesive group held together • New decision procedures – everyone a skeptical generalist – norm of frank, open discussion – use of outside experts – break into subgroups – leaderless sessions – critical roles for RFK and Sorenson A Test: The Cuban Missile Crisis 1962 10/16 10/1610/22 10/22 10/28 • Soviet Union sends 20,000 troops with 1/3 of their warheads to Cuba • U-2 photos identify missiles • Executive Committee of the National Security Council meets and decides on a blockade and follow-up actions • Blockade • Khrushchev agrees to remove missiles What Happened? • Dissent and vigorous debate • No illusion of invulnerability • Active search: “Surely there was some course in between bombing and doing nothing” RFK Day 1 • Reversals of judgment: “Each of us changed his mind more than once that week on the best course of action to take” Sorenson • Many outsiders consulted • Concern over moral questions • Non-stereotyped view of Soviets Remedies For Groupthink • Cohesiveness through task motivation and standards of group process rather than social affiliation • Avoiding premature consensus process planning, norm of critical evaluation impartial leader, subgroups, precommitment generate >1 alternative, devil’s advocate outside experts, critique past decisions second-chance meeting: “Give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about” • Comfort with disagreement; mutual respect