In today?s knowledge economy, there is an emphasis on group performance, such as in organizations? committees, yet this performance is prone to productivity deficits. Like many other groups, organizational committees are prone to irrational decision-making in the form of groupthink and group polarization. We review evidence that groupthink involves avoidance of contradictory information, biased information sharing, self-censorship, reducing information on the outgroup and poor information pooling. For example, committee members? conformity to the standards and expectations of an organization can lead them to withhold information that contradicts the organization?s ?traditional? viewpoint. In other instances of groupthink, committee members may withhold information from their seniors in order to shield them from opposing views. Committee members undergoing groupthink may also display bias in their information search, such that they seek only that information which supports the committee?s prevailing opinion. We also review evidence showing that highly cohesive groups, those isolated from outside influence, and those with forthright leadership, are most at risk of groupthink. Improving the structure of a committee and having a leadership style that is process-directive, rather than outcome-directive, can reduce groupthink. We also review evidence on group polarization, which involves a shift by a group to an extremely risky or an extremely conservative viewpoint as a result of members influencing each other. We also discuss the impact of novel information on group polarization. We provide an analysis of the impact of faulty decision-making on the downfall of the bank Northern Rock. We consider the possible lack of objectivity in elements of the bank?s decision-making. The fact that Northern Rock did not receive a sufficient amount of outside regulation may have exacerbated groupthink. We discuss the likely role of risky shift in the bank?s attitude to risk and also consider the possible impact of forthright leadership on groupthink within Northern Rock. Groupthink and group polarization pose a danger to organizations that are required to continuously create, update and utilise knowledge in their decision-making, and to implement change in order to compete in shifting markets.
|Title of host publication
|Proceedings of the 9th European Conference on Knowledge Management
|Place of Publication
|Reading, United Kingdom
|LAP LAMBERT Academic Publishing
|Number of pages
|Published - 2008