How Group Dynamics Affect Decisions
One big factor affecting the quality of decisions is whether a decision involves a group. That’s because group dynamics can lead otherwise sensible individuals to make (or agree to) decisions they might not come to on their own.
At times the effects are positive, as when some group members help others overcome prejudices. But the dynamics of a group often have negative consequences. Since nearly every company relies on collective decision making in some contexts, executives need to be on the lookout for group biases and their undesirable results. Following are four common manifestations of the ‘group effect’ and some suggestions about how to counter them:
Many people go along with the group regardless of what they themselves might think as individuals. A famous experiment by psychologist showed how powerful this effect is. Asked to choose which of three lines was the same length as a prototype line, nearly every subject chose correctly when acting alone. But then Asch put each subject into a group of several confederates, all of whom had been instructed to pick the wrong line on one of the ‘tests’. Sure enough, almost 75 per cent of the subjects agreed with the group at least once — even though many later confessed they knew the group’s answer was wrong. In business, the tendency to conform often persuades dissenters to shut up rather than speak out. for example, invested $50 million in the film adaptation of
best seller The Bonfire of the Vanities. The result: a hugely expensive box-office bomb. “Many people involved … had doubts about the casting choices and changes in the storyline, but they never voiced these doubts to the director,” wrote Cabrillo College professor in a book on smallgroup communication. Meanwhile the director also had doubts “but because no dissent was voiced, he convinced himself that he had made the correct decisions.”
You’d think that a group would tend to moderate individual points of view. In fact, the opposite often occurs: in a phenomenon known as group polarization, deliberation can intensify people’s attitudes, leading to more extreme decisions. A study of U.S. federal judges, for example, found that judges working alone took a relatively extreme course of action only 30 per cent of the time. When they were working in groups of three, this figure more than doubled, to 65 per cent. The business implications? Imagine a company’s investment committee. If it’s composed of people with a generally cautious outlook, the group may make decisions that avoid risk altogether — or vice versa. Or imagine a go/no-go product-development decision. If group members making the decision are inclined toward innovation rather than conservatism, they may collectively decide to throw caution to the winds. A public example of group polarization may have occurred in 2013 in the U.S., when opposition to the Affordable Care Act led a group of Republicans in the House of Representatives to shut down the government in hopes of forcing negotiations over the Act’s implementation.