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Linking Groupthink to Unethical Behavior in Organizations Ronald R. Sims
ABSTRACT. This paper is designed to do four things. First, the paper discusses the importance of groupthink in con- tributing to unethical behavior. Second, tbe paper discribes bow groupthink contributed to unethical bebavior in tbree organizations (Beecb-Nut, E. F. Hutton, and Salomon Brotb- ers). Tbird, symptoms of grouptbink (sucb as arrogance, overcommitment, and excessive loyalty to the group) will be presented alor^ witb two methods for programming conflict (devil's advocate and dialectic) into an organization and group's decisions. Finally, tbe paper introduces some prescriptions for reducing tbe probability of grouptbink.
Issues of corporate morality and business ethics are of concern to both management and their organiza- tions 0ansen and Von Glinow, 1985; Schermerhom etai, 1991). These issues include social responsibility, conflict of interest, payoffs, product safety, liability, and whistleblowing ([ansen and Von Glinow, 1985). On the popular front, many national newspapers and business magazines offer continuing glimpses of corporate and managerial misbehavior. Despite all the attention, such inquiries rarely and explicitly examine the link between organizational culture, and more specifically, "groupthink" and individuals who behave "unethically." It is far more common and dramatic to focus on individual culpability, a practice organizations may support out of sheer self- interest. However, greater knowledge of the role of groupthink in unethical actions may change attribu- tions of individual culpability.
The connection between groupthink and unethi-
Ronald R. Sims is Professor in the School of Business Administration at the College of William and Mary. His research interests include ethical behavior, experiential learning, employee and management training and development, and organizational transitions. His articles have appeared in a variety of scholarly and practitioner-oriented journals.
cal behavior could be especially helpful in under- standing the role of groupthink when individuals behave unethically as well as providing a basis for altering behavior in a more ethical direction. The purpose of this paper is to discuss the importance of groupthink in contributing to unethical behavior in organizations. The paper also will show how group- think contributed to unethical behavior in several organizations (Beech-Nut, E. F. Hutton, and Solomon Brothers). In addition, symptoms of groupthink such as arrogance, overcommitment, and excessive or blind loyalty to the group will be discussed along with two methods for programming conflict (devil's advocate and dialectic) into organization and group decisions (Cosier and Schwenk, 1991). Finally, the paper introduces some prescriptions for reducing the probability of groupthink. However, before discuss- ing the relationship between groupthink and un- ethical behavior, a definition of groupthink and several classic examples of groupthink in acdon are highlighted.
Groupthink Defined
Irving Janis (1972, 1982) laid the basis for a theory of causes and effects of groupthink, "a collective pattem of defensive avoidance" 0anis and Mann, 1977, p. 129). Janis described several shared charaaeristics of cohesive decision-making groups that have been responsible for some policy debacles. The following quotation from Janis and Mann (1977, p. 130) is a good example.
Many bistoric fiascoes can be traced to defective policy making on the part of govemment leaders who receive social support from their in-group advisors. A series of bistoric examples by Janis (1972) suggests tbat tbe following four groups of policy advisors, like Kimmel's in-group of naval commanders, were dominated by
Joumal of Business Ethics 11: 651-662,1992. © 1992 Kluwer Academic Publishers. Printed in the Netherlands.
652 Ronald R. Sims
concurrence seeking or groupthink and displayed charac- teristic symptoms of defensive avoidance: (1) Neville Chamberlain's inner circle, whose members supported the policy of appeasement of Hitler during 1937 and 1938, despite repeated warnings and events that it would have adverse consequences; (2) President Truman's advi- sory group, whose memben supported the decision to escalate the war in North Korea despite firm warnings by the Chinese Communist goverrmient that U.S. entry into North Korea would be met with armed resistance from the Chinese; (3) President Kennedy's inner circle, whose members supported the decision to launch the Bay of Pigs invasion of Cuba despite the availability of informa- tion indicating that it would be an unsuccessful venture and would dam^e U.S. relations with other countries; (4) President Johnson's close advisors, who supported the decision to escalate the war in Vietnam despite intel- ligence reports and other infonnation indicating that this course of action would not defeat the Vietcong or the North Vietnamese and would entail unfavorable political consequences within the United States. All these group- think dominated groups were characterized by strong pressures toward uniformity, which inclined their mem- bers to avoid raising controversial issues, questioning weak arguments, or calling a halt to soft-headed thinking.
There also is evidence that groupthink was at work in the Nixon entourage, which was responsible for the Watergate cover-up, although there is some question of the cohesiveness of this group Qanis, 1982).
To add a contemporary flavor to the discussion, consider the tragedy of the Space Shuttle Challenger. This decision was the product of a flawed group decision as much as it was a failure of technology. Strong pressures for uniformity also characterized the process surrounding the flawed decision of the Reagan administration to exchange arms for hos- tages with Iran and to continue commitment to the Nicaraguan Contras in the face of several congres- sional amendments Umiting or banning aid.
One may be tempted to assume that groupthink is pecuhar to group decision-making in government and military settings. However, evidence suggests that it frequently occurs in the business world. The design and marketing of the ill-fated Edsel automo- bile have been attributed to groupthink (Huseman and Driver, 1979). Similarly, die following example shows how another organization from the world of business succumbed to its pressures (Harvey, 1974).
The Ozyx Corporation is a relatively small industrial company. The president of Ozyx has hired a consultant to help discover the reasons for the poor profit picture of the company in general and the low morale and produc- tivity of the R&D division in particular. During the process of investigation the consultant becomes inter- ested in a research project in which the company has invested a sizable proportion of its R&D budget.
When asked about the project by the consultant in the privacy of their offices, the president, the vice president for research, and the research manager each describe it as an idea that looks great on paper but will ultimately fail because of the unavailability of the technology required to make it work. Each of them also acknowledges that continued support of the project will create cash flow problems that will jeopardize the very existence of the total organizatiorL
Furthermore, each individual indicates he or she has not told the others about his reservations. When asked why, the president says he cannot reveal his "true" feelings because abandoning the project, which has been widely publicized, would make the company look bad in the press. In addition, it would probably cause his vice presi- dent's ulcer to kick up or perhaps even cause her to quit, "Because she has staked her professional reputation on the project's success."
Similarly, the vice president for research says she cannot let the president or the research manager know her reservations because the president is so corrmiitted to it that "I would probably get fired for insubordination if I questioned the project"
Finally, the research manager says he cannot let the president or vice president know of his doubts about the projeCT because of their extreme commitment to the projects success.
All indicate that, in meetings with one another, they try to maintain an optimistic facade so the others will not worry unduly writing ambiguous progress reports so the president and the vice president can "interpret them to suit themselves." In fact, he says he tends to slant them to the "positive" side, "given how committed the brass are."
In a paneled conference room the research budget is being considered for the following fiscal year. In the meeting itself, praises are heaped on the questionable project, and a unanimous decision is made to continue it for yet another year.
Why do skilled, experienced, and ethical executives
Groupthink and Unethical Behavior 653
and employees occasionally make decisions like these, in which vital interests of their organization are likely to be hurt? By facilitating the development of shared illusions and related norms, groups make such decisions. Similar decision-making behavior can be directly tied to unethical actions committed in organizations.
Groupthink: A precursor to unethical behavior
What guides the behavior of managers and em- ployees as they cope with ethical dilemmas? Or keeping in line with the main focus of this paper, what results in the unethical behavior of some groups in organizations? Trevino (1986) has devel- oped a model that suggests that individuals' (and groups') standards of right and wrong are not the sole determinant of their decisions. Instead, these beliefs interact with other individual characteristics (such as locus of control) and situational forces (such as an organization's rewards and punishments and its culture). All of these factors shape individual and group decisions and behavior that results from them. Trevino's model shows how people can choose to engage in acts they consider unethical when the culture of an organization and its prevailing reward structure overwhelm personal belief systems.
As evidenced in Trevino's (1986) work, organiza- tional culture is a key component when looking at ethical behavior. It is the contention of this paper that the literature on "groupthink" Qanis, 1972) may help explain why some organizations develop cul- tures in which some individuals and groups know- ii^ly commit unethical acts, or ignore them even though they believe the activities to be wrong. The presence or absence of ethical behavior in organiza- tional members' actions is both influenced by the prevaihng culture (ethical climate) and, in turn, partially determines the culture's view of ethical issues. The organizational culture may promote the assumption of responsibihty for actions taken by individuals and groups, thereby increasing the prob- ability that both will behave in an ethical manner. Alternatively, the culture may diffuse responsibility for the consequences of unethical behavior thereby
making such behavior more likely. In addition, there is the increased potential for groupthink, a precursor to organizational countemorms and unethical be- havior.
Accordii^ toJanis,̂ roMpt/H'nfe is "a mode of think- ing that people engage in when they are deeply involved in a cohesive in-group, when the members' striving for unanimity override their motivation to realistically appraise alternative courses of action" 0anis, 1972). During groupthink small groups develop shared illusions and related norms that interfere with critical thinking and reality testing. Bales' (1950) studies of groups whose members did not previously know one another supports Janis' concept of groupthink. For the purposes of this paper, group- think occurs when a group places a higher priority on organizational countemorms that lead to organi- zational benefits, thus, encouraging and supporting unethical behavior. In addition, these countemorms are shaped and maintained by key organizational actors and the organization's reward system.
From his analysis of good and bad decisions made by such groups, Janis argues that antecedent condi- tions lead to a concurrence-seeking tendency (group- think) in small decision-making groups as depicted in Figure 1 (fanis and Mann, 1977).
Antecedents to groupthink are high cohesiveness and the insularity of the decision-making group, lack of methodological procedures for searching for appraising information, it may be led in a highly directive manner, and it may operate under condi- tions of high stress combined with low hope for finding a better solution than the one favored by the leader or other infiuential people. Particularly under stress, members of the group develop a number of cognitive defenses that result in a collective pattem of avoidance. These defenses include (1) misjudging relevant warnings, (2) inventing new arguments to support a chosen policy, (3) failing to explore ominous implications of ambiguous events, (4) for- getting information that would enable a challenging event to be interpreted correctly, and (5) misperceiv- ing signs of the onset of actual danger.
Table I lists the major symptoms of a group caught in groupthink (Janis, 1972). Evidence of most of these symptoms appear in the unedited transcripts of the deliberations of the people involved in the Watergate cover-up (Van Fleet, 1991) and records
654 Ronald R. Sims
Ant«oedent
1. High X Insulatton of the
a. Lack of methodical proowhirM for March &appr«iMl
4. Directive lead«rthip I 6. H i | h atreM wHh a low|
degree of hope for fittdiof a better aolutioii than the one Crrand by the leader or other influential persona
Symptomc of Krouptiuiik
1. niudon of
2. CoUecUve raticn- alizatian
8. Belief ht inhenot morality of the troop
4. 8tereot?pea of outsroups
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guarda
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1. Incomplete aurrgy of altematlTea
2. Incomplete mryey of di^edivea
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4. Poor hifonnation aearefa
6. S e l e c U ^ b l a a i n fntweeaing infovmation at hand
6. Failure to reappraise altemati^ea
7. Failure to work out oantingency plana
Decision Making: A Ffeydiological Analysis of Conflict, Choice, and Commitment by Irving L. Janis and L e m MamL Copyright • 1977 hy The FVee IVesa.
Fig. 1. Analysis of groupthink, based on comparisons of high- and low-quality decisions by policy-making groups.
on discrimination violations, horizontal or vertical price-fixing, and intentional securities fraud.
The flaws in the groupthink decision-making process often result in the kinds of ethical decision- making defects and outcome variables listed in Figure 2. Groupthink occurs in organizations that knowingly commit unethical acts Avhen the group is cohesive, a leader promotes solutions or ideas even if they are unethical, and the group has no internal rules or control mechanisms to continually prescribe ethical behavior.
Just like entering an. organization, employees entering a group are provided opportunities to become schooled in and committed to the group's goals, objectives, and ways of conducting business. Such commitment is the relative strength of an individual's identification with and involvement in a particular group. It usually includes the following factors that lead to the group characteristics in Figure 2: (1) group cohesiveness — a strong belief in the group's goals and values; (2) a willingness to exert considerable effort on behalf of the group; (3) a strong desire to continue as a group member, (4) excessive and almost blind loyalty to the group; (5) arrogance and overconfidence; (6) a bottom-line mentality; (7) insulation from ethical opinion and control; and (8) leader promotion of unethical solu- tions (that is, any behaviors that ensure that the group wins). This kind of commitment to the group then is not simply loyalty to a group. Rather, it is an
ongoing process through which group members express their concern for the group and its continued success and well-being even to die extent of com- mitting unethical actions.
A major factor contributing to the groups' defec- tive decision-making is that for each member of the cohesive group one particular incentive looms large: the approval or disapproval of his or her fellow group members and their leader. Notice in Figure 2 the six defects in the decision making of groups affected by groupthink. The group is likely to perceive few ethical alternatives and to ignore potential problems with the preferred alternative. The group may reject any opinion that does not support the preferred alternative, and it is unlikely to reconsider an alternative previously dismissed by the group, even in light of new evidence. Decisions made through such a process are not always unethi- cal, but there is a higher probability of dbe occur- rence of unethical behavior.
Groupthink can occur in decision making within almost any organization, as may have been the case at Beech-Nut, E. F. Hutton, and more recently at Salomon Brothers. The experiences provide exam- ples of how even the most reputable of companies can suffer from an ethical breakdown through groupthink and subsequent poor judgment.
Beech-Nut. The admission by Beech-Nut, the second largest baby-food producer in the United States, that it
Groupthink and Unethical Behavior 655
TABLE I Symptoms of groupthink
Syptoms Potential Hazards
• Illusion of invulnerability, shared by all or most members of the group
Excessive optimism
Extreme risk taking
• Collective efforts to rationalize the group's course of action
• Unwillingness to reconsider assumptions
i i ^ are ignored
Group members recommit themselves to past policy decisions without considering alternatives
Unquestioned behef in the group's inherent morality Members are inclined to ignore the ethical and moral consequences of their decisions
Stereotyped views of those not in the group as "colored by naivete and impractical ideals"
• No attempt will be made to understand others' ethical concems
• Group members may underestimate others potential to contribute relevant information to goal accom- plishment
• Suppression of dissent within the group, by direct pressure on "disloyal" members
• Self-censorship of views that deviate from the group's apparent consensus
• Shared illusion of unanimity
• Emergence of self-appointed mind guards
• Group members hesitate to express any arguments g a i n s t any of the group's stereotypes, illusions, or commitments
• Group members falsely assume that silence means consent
• Group members are insulated from adverse informa- tion that might shatter their shared complacency about the effectiveness and morality of their decisions
Source: Adapted from Janis, I.J.: 1972, Victims of Groupthink (Boston: Houghton Mifflin, 1972)
sold millions of jars of "phony" apple juice shocked many company employees as well as industry executives. Since 1891, purity, high quality, and natural ingredients had served as the foundation of its corporate culture and had been a consistent marketing theme. What had caused Beech-Nut to stray from its heritage and reputation?
The answer to this question is complex. However, under- lying the company's ethical failure were strong financial pressures. Beech Nut was losing money and the use of the cheap, adulterated concentrate saved millions of dollars. Beech-Nut employees seemed to use two arguments to justify their actions: (1) They believed that many other
companies were selling fake juice, and (2) they were convinced that their adulterated juice was perfectly safe to consume. In addition, some employees took refuge in the fact that no conclusive test existed to determine natural from artificial ingredients. Although with regard to this latter point, Beech-Nut seems to have shifted the burden of proof around. Other juicemakers have been known to cut off suppliers if the supplier cannot demon- strate that their product is genuine. At Beech-Nut, senior management apparently told R&D that they would have to prove that an inexpensive supplier's product was adulterated before the company would switch to another supplier. Beech-Nut compounded their problems when
656 Ronald R. Sims
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Fig. 2. Groupthink and unethical decision-makir^ process.
government investigations began by "stonewalling" rather than cooperating, apparently in order to gain time to unload a $3.5 million inventory of tainted apple juice products. Thus while at first Beech-Nut appears to have been the innocent victim of unscrupulous suppliers, the company by its later actions changed a civil matter into criminal charges (Welles, 1988)
Strong pressures also characterize the process surrounding the unethical decision of E. F. Hutton's "check kiting."
E. F. Hutton. In 1985 the E. F. Hutton Group Inc., one of the nation's largest brokerage firms, pleaded guilty to two thousand counts of wire and mail fraud, paid a fine of almost $3 million, and put over $9 million into funds to pay back defrauded banks and investors. The court case focused the nation's attention on banks' overdraft poli-
cies, but it also provided an example of how groupthink can cause trouble for even the mightiest institutions. Hutton's crime involved a form of "check kiting." A money manager at a Hutton branch office would write a check on an account in bank A for more money than Hutton had in that account. Because of the time lag in the check-collection system, these overdrafts sometimes went undetached, and Hutton could deposit funds to cover the overdraft in bank A's account on the following day. Even if the bank noticed the overdraft, it was unlikely to complain, because Hutton was such an important customer and because certain kinds of over- drafts are fairly routine.
In any case, the Hutton manager would deposit the check from bank A into an account in bank B, where the money would start earning interest immediately. In effect, the scheme allowed Hutton to earn a day's interest on bank A's account without having to pay anything for it. A day's interest may not sound like much, but Hutton was getting as much as $250 million in free loans every day, and a day's interest on such a sum is substantial (Goleman, 1988; ASA Bankii^ Journal, 1987; Seneker, 1986).
More recently, wrongdoings by Salomon Brothers in the Treasury auction scandal provides another example of how groupthink can be linked to un- ethical behavior.
Salomon Brothers. A Chronology: How It All Unfolded
DEC. 1990 — Salomon submits bids in the names of customers who hadn't authorized them at an $8.57 billion auction of four-year notes. The bids enable the firm to buy 46% of the securities, breaching Treasury rules that bar individual bidders from buying more than 35% at any single sale.
FEB. 1991 — Through unauthorized ctistomer bids, Salomon buys 57% of securities sold at an auction of $9.04 billion of five-year Treasury notes.
FEB. — As a "practical joke" against a Salomon employee, a managing director persuades an unidentified customer to submit a bogus bid for $1 billion at the $11.01 billion auction of 30-year Treasury bonds. The plan goes awry, and the bid is actually submitted.
APRIL — In a $9.06 billion auction of five-year notes, Salomon exceeds the bidding limit with a 35% bid for its own account, in addition to a $2.5 billion bid for a customer and the repurchase of $600 million of that bid at the auction price.
Groupthink and Unethical Behavior 657
LATE APIUL — Paul Mozer, managing director in charge of government bond trading, informs Salomon Chairman John Gutfreund, President Thomas Strauss and Vice Chairman John Meriwether about the illegal bidding in February. No immediate action is taken.
MAY 22 — In the Treasury's $12.26 billion auction of two-year notes, Salomon effectively buys at least 44% of the issue. The firm bids $2 billion for a customer and repurchases $500 million from the customer at the auction price, in addition to "inadvertently" failing to disclose its own position of $497 million. Government investigators allege that Salomon may have controlled as much as 85% of the issue. Dealers charge that Salomon forced up prices to squeeze its competitors.
JUNE — SEC and Justice Department issue subpoenas to Salomon and certain clients.
JULY — Salomon reviews its government bond opera- tions and launches "full" investigation.
AUG. 9 — Salomon first discloses that it violated bidding rules in December, February and May and suspends Mr. Mozer, his top aide, Thomas Murphy, trader Christopher Fitzmaurice and clerk Henry Epstein.
AUG. 14 — Salomon discloses that Messrs. Gutfreund, Strauss and Meriwether knew of the violations in April and releases details of additional violations.
AUG. 16 — Messrs. Gutfreund and Strauss announce that they will resign at Aug. 18 board meeting. Warren E Buffet is named interim chairman.
AUG. 18 — The Treasury Department bars Salomon from participating in government securities auctions for customers' accounts, but allows the firm to continue bidding for its own accounts. Deryck C. Maughan, former head of Salomon's Tokyo operations, is named chief operating officer in charge of day-to-day opera- tions. Salomon board accepts resignations of Messrs. Gutfreund, Strauss and Meriwether and fires Messrs. Moser and Murphy (Siconolfi and Cohen, p. A4).
Mr. Gutfreund, a one-time bond trader, kept this tough-guy image to the end. After formally offering to resign, Mr. Gutfreund told top executives at a closed door meeting: "I'm not apologizing for any- thing to anybody. Apologies don't mean (expletive). What happened, happened." (Siconolfi and Cohen, 1991, p. A4) The same arrogance that enabled Mr. Gutfreund to build Salomon into the dominant force in the $2.3 trillion Treasury securities market also led to his becoming ensnared in a government trap
that became his and other key company executives undoing.
'Collusion and price fixing in the $2.3 trillion Treasury securities market have been routine for more than a decade, accordir^ to traders and top Wall Street executives (Siconolfi, et ai, 1991). The most prevalent and potential damaging practice has been the sharing of confidential information among an elite group of bond dealers about their bids at auctions of Treasury securities. Current and former traders at several prominent Wall Street investment banks say they regularly have shared secrets about the size and price of their bids at these muldbillion- dollar government auctions.
>Mr. Buffet, the interim chairman, conceded that Salomon's freewheeling, aggressive style probably contributed to its current difficulties. He said that style would be toned down. "There were aspects of the culture that could have contributed to that," Mr. Buffet said. "(It is) what some might call macho, some might call cavalier."
Everyone knows that selhngjars of "phony" apple juice is unethical. In addition, everyone who has a checking account knows that bouncit^ checks is wrong, and you do not have to be a financial wizard to know that writing bad checks is illegal. And finally, everyone now knows that illegal bidding in Treasury auctions is wrong. So how could some of the country's most sophisticated executives and money managers become involved in such unethical behavior? The answer in all likeUhood may well be groupthink. That is groupthink that may be fostered by what Wolfe (1988) refers to as the bottom-line mentality. This line of thinking supports financial success as the only value to be considered. It pro- motes short-term solutions that are immediately financially sound, despite the fact that they cause problems for others within the organization or the organization as a whole. It promotes an unrealistic belief in some organizational groups that everything boils down to a monetary game. As a result, such rules on ethical conduct are merely barriers, im- pediments along the way to bottom-line financial success.
Beech-Nut's employees were under a lot of finan- cial pressures and instead of cooperating with govern- ment investigators they compounded their problems by "stonewalling" rather than cooperating. Hutton's employees were under a lot of pressure to make
658 Ronald R. Sims
money, and the company no doubt paid more atten- tion to profit figures than to how those figures were achieved. The practice may even have started acci- dentally, but once it got going, the money managers apparently wrote urmecessary checks solely to profit fi"om the check-kiting scheme as the money passed fi-om bank to bank.
Company employees evidently had the necessary company loyalty and commitment to enable group- think to come into play. Most important, once it became clear that high-level executives were not going to stop the scheme, employees became very good at ignorii^ any information that might lead them to conclude that the practice was illegal. An intemal Hutton memo recommended that "if an office is overdrafting their ledger balance consis- tently, it is probably best not to request an account analysis" (Goleman, 1985). Executives at Salomon showed group characteristics found in groupthink experiences; for example, they exhibited excessive or bhnd loyalty, a bottom-hne mentahty, arrogance and overconfidence, and a promotion of unethical solu- tions by its leaders. In addition, hke Beech-Nut and E. F. Hutton, Salomon Brothers also showed clear symptoms of groupthink, decision-making defects, and outcome variables depicted in Figure 2. In each organization individuals were willing to take the approach of, "let's all close our eyes to this problem."
In a sense, individuals and groups in Beech-Nut, E. F; Hutton, and Salomon Brothers committed unethical acts because of an overabundance of char- acteristics that didn't allow them to operate ethically in a large, free-wheeling organization. The values of organization members in all three organizations were important. That is, groupthink and the ensuing unethical behavior may have been precipitated by arrogance. Arrogance is the illegitimate child of confidence and pride found in groups experiencing groupthink. Arrogance is the idea that not only can you never make a mistake, but no one else can ever be right.
In Beech-Nut, E. F. Hutton, and Salomon Broth- ers this arrogance was an insurmountable roadblock to ethical behavior. The flipside of arrogance is the ability to shine, to star, while working within the limits of ethical policies and guidelines. Another reason why groupthink may have occurred in these organizations is that they lacked the value of ethical commitment. That is, a willingness to commit to a
goal that's bigger than they are — to keep acting ethically, even when there is a threat of failure, until they finally come up with ethical business decisions.
A third reason for the unethical acts committed by Beech-Nut, E. F. Hutton, and Salomon Brothers has to do with another human value — loyalty. It's something valued in all organizations. No one wants to work with anyone who has no concem for anyone or anything else. Loyalty counts in organizations; however, it should not be an unwillingness to question the unethical behavior of a group or organization. Groupthink occurs when arrogance, overcommitment and loyalty help a group to shine above the ethical interests of an organization.
When groupthink occurs, organizations like Beech-Nut, E. F. Hutton, and Salomon Brothers are more likely to strive for unanimity, ignore the voices of dissenters and conscience, and make decisions which result in unethical behavior. But by ignoring voices of caution and conscience and working with a bottom-hne mentality for short-term profit, all three companies' managers ended up severely damag- ing their company's reputation. To decrease the likehhood of unethical behavior, organizations must do a better job of promoting positive and ethical cultures, and reduce the probability of groupthink by programming conflict into decisions.
Programming conflict through devil's advocate and dialectic methods
Programmed confiict through the devil's advocate and dialectic methods can raise different opinions regardless of the personal feelings of the managers (Cosier and Schwenk, 1990) or members of groups into decisions. The usefulness of the devil's advocate technique was illustrated by Janis when discussing famous fiascos such as Watergate and Viemam. Janis recommends that everyone in the group assume the role of a devil's advocate and present a critique of the proposed course of action. This avoids the tendency of agreement interfering with problem solving while still serving as a precaution for the occurrence of unethical behavior. Potential unethical behaviors are identified and considered before the decision is final.
The conflict generated by the devil's advocate may cause groups to avoid false assumptions and closely adhere to guidehnes for ethical analysis in
Groupthink and Unethical Behavior 659
decisions. The devil's advocate raises questions that force an in-depth review of the group's decision making process. The devil's advocate is assigned to identify potential pitfalls or unethical behavior with a proposed course of action. A formal presentation to the key decision makers by the devil's advocate raises potential concerns. Evidence needed to address the critique is gathered and the final decision is made and ensuing behavior monitored. The devil's advo- cate decision program (Cosier and Schwenk, 1990) is summarized in Figure 3.
Cosier and Schwenk (1990) suggest that it is a good idea to rotate people assigned to devil's advo- cate roles. This avoids any one person or group being identified as the critic on all group decisions. The devil's advocate role can assist organizations like Beech Nut, E. F. Hutton, and Salomon Brothers avoid costly mistakes by hearing viewpoints that identify pitfalls instead of foster agreement.
While the devil's advocate technique lacks what Cosier and Schwenk (1990) call an "argument" between advocates of two conflicting positions, the dialectic method can program conflict into a group's decisions while offsetting potentially unethical be- havior. The dialectic method calls for structuring a debate between conflicting views regardless of mem- bers' personal feelings. The benefits of the dialectic method are in the presentation and debate of the assumptions underlying proposed courses of action. False or misleading assumptions become apparent
1. A pnpoaed course of action is ganertited.
i 2. A devil's advocate Ondlvidusl or group) is assigned to critidis the proposal.
I 3. The critique is presented to key decision maken.
I 4. Any additions! infonnation reievant to the issues is gathered.
i 6. I l i e decision to adopt, modify, or discontinue the iiropossd eaane of
action is taken.
i 6. The decision is monitored.
Source: Cosier, R, A. and Schwenk, C. R: 1991, 'Agreement and Thinking Alike: Ingredients for Poor Decisions', Academy of Management Executive 4(1), pp. 69—74.
Fig. 3. A devil's advocate decision program.
and can head off unethical decisions that are based on these poor assumptions. The dialectic method shown in Figure 4 can help promote ethical deci- sions and counteract groupthink
Programming conflict into the group decision- making process allows dissent and can decrease the likelihood of groupthink and unethical behavior. Such conflict requires organizations to ensure that decisions are challenged, criticized, and alternative ideas are generated. Programmed conflict also in- sures that a comprehensive decision framework be- comes a part of the group decision-making process.
1. A proposed course of action is generated.
I 2. Assumptions imderlying the proposal are identified.
I 8. A conflicting oounterproposal is generated bssed on different sssimiptions.
I 4. Advocates of each position present and debate the merits of their
propoeais before key decision makers.
i 6. "Via decision to adopt either position, or some other position, e.g. a
compromise, is taken.
6. H e decision is monitored.
Source: Cosier, R. A. and Schwenk, C. R.: 1991, 'Agreement and Thinking Alike: Ingredients for Poor Decisions', Academy of Management Executive 4(1), pp. 69—74.
Fig. 4. The dialectic decision method.
Ck>nclusion
It has not been the intent of this article to suggest that groupthink is an easy phenomenon to over- come, especially since there is some evidence that the symptoms of groupthink presented in this paper tlorive in the sort of climate outlined in the following critique of corporate directors in the United States (Baum, 1986):
Many directors simply don't rock the boat "No one likes to be the skunk at the garden party," says (management consultant) Victor Palmieri. . . . "One does not make friends and influence people in the boardroom or else-
660 Ronald R. Sims
where by raising hard questions that create embarrass- ment or discomfort for management (p. 60).
In short, policy- and decision-making groups can become so cohesive that strong-willed executives are able to gain unanimous support for poor decisions. Still, organizations committed to ethical behavior in their organizations must work toward the reduction and prevention of groupthink. However, they must first understand what is meant by groupthink and that there is, indeed, a link between groupthink and unethical behavior. Specifically, the ultimate result of groupthink is that group members become iso- lated from the world around them. They read positive signs as a reaffirmation of their goals and intentions; they read negative signs as an indication that there are individuals who do not understand what they are doing and that these individuals should be ignored (and perhaps even punished). During this entire process, it is common to find the group changing to a belief that its ideals are humani- tarian and based on high-minded principles. As a result, no attempt is made by the members to chal- lenge or question the ethics of the group's behavior. A second common observation is high esprit de corps and amiability among the members. This often leads them to believe that those who question their approach or intentions are acting irrationally.
Quite often groupthink is only recognized after a group has made a disastrous decision. When this occurs, the members are apt to ask, "How could we have been so blind? Why didn't anyone call atten- tion to our errors?" Unfortunately, at the time the group was making its decision(s), it is unlikely that any criticism or questioning of its actions would have been given serious consideration. Laboratory studies using college students as subjects validate portions of Janis's groupthink concept. Specifically, it has been found that:
**Groups with a moderate amount of cohesive- ness produce better decisions than low- or high- cohesive groups. **Highly cohesive groups victimized by group- think make the poorest decisions, despite high confidence in those decisions (Callaway and Esser, 1984; Leana, 1985).
How can organizations like Beech Nut, E. F. Hutton, and Salomon Brothers overcome or deal
•with groupthink effectively? Hodgetts suggests a number of useful rules that can be employed:
First, the organization and its managers must encourage open airing of objections and doubts. Second, one or more outsiders should be invited into the group to challenge the views of its members. Finally, after reaching a preliminary decision, the group should hold a "second chance" meeting at which every member expresses, as vividly as possible, all his or her doubts and the group thinks through the entire issue again before making a fmal decision (p. 1,3, 4).
Janis (1972) offers the following prescriptions for helping managers reduce the probability of group- t h i n k
A. Leader Prescriptions 1. Assign everyone the role of critical evalua-
tion. 2. Be impartial, do not state preferences. 3. Assign the devil's advocate role to at least
one group member. 4. Use outside experts to challenge the
group. B. Organizational Prescriptions
1. Do not automatically opt for a "strong" culture. Explore mediods to provide for diversity and dissent, such as grievance or complaint mechanisms or other intemal review procedures.
2. Set up several independent groups to study the same issue.
3. Train all employees in ethics (these pro- grams should explain the underlying ethi- cal, legal p r a k e and Drake, 1988), group- think-prevention techniques, and devil's advocate and dialectic methods.
4. Establish programs to clarify and commu- nicate values.
C. Individual Prescriptions 1. Be a critical thinker. 2. Discuss the group's deliberations with a
trusted outsider and report back to the group.
D. Process Prescriptions 1. Periodically break the group into sub-
groups to discuss the issues. 2. Take time to study external factors.
Groupthink and Unethical Behavior 661
3. Hold second-chance meetings to rethink issues before making a commitment.
4. Periodically rotate new members into groups and old members out.
Note that all the suggestions encourage group mem- bers to evaluate alternatives critically and discourage the single-minded pursuit of unanimity, which is a key component of groupthink. By making use of the above prescriptions organizations can give employ- ees the confidence to be on the lookout for group- think and act with the understanding that what they are doing is considered correct and will be supported by top management and the entire organization.
Maier (1970, 1973) suggests that organizations should realize that the actions of leaders in groups often can "make or break" the decisions made in that group. Therefore, organizations should ensure that group leaders are trained to develop the following skills:
1. Learn to state the problem or issue the group is dealing with in a nondefensive, objective manner.
2. Supply essential facts and clarify any con- straints on solutions.
3. Draw out all group members. Prevent domi- nation by one person and protect members from being attacked or severely criticized.
4. Wait out pauses. Don't make suggestions and/ or ask leading questions.
5. Ask stimulating questions that move the dis- cussion forward.
6. Summarize and clarify at several points to mark progress.
Notice that these skills are not vague attitudes, but specific behaviors. Thus, they are subject to training and practice. There is good evidence that this quality training can be accomplished through role-playing, and that it can help counteract groupthink
Organizations must also ensure that they do not support financial success as the only value to be considered. Such an attitude will not promote a bottom-hne mentality and an unrealistic belief that everything boils down to a monetary game. By not emphasizing short-term revenues above long-term consequences, organizations will create a climate in which individuals and groups understand that un- ethical behavior is unacceptable. In addition, organi-
zations must be willing to take a stand when there is a financial cost to any group's decision. This stand will discourage ethical shortcuts by its members.
In order for values to provide the ethical "rules of the road" employees organizations must ensure that they are stated, shared, and understood by everyone in an organization. Formal programs to clarify and communicate important ethical values can help accomplish this objective in organizations and coun- teract groupthink. In addition, organizations should pay proper attention to employee recruitment, selec- tion, and orientation.
The values of prospective employees should be examined and discussed, and the results used in making selection decisions. A person's first encoun- ters with an organization and its members also "say" a lot about key behefs and values. Every attempt should be made to teach them "the ethical way we do things here." Organizations also should develop appropriate training and development opportunities to establish and maintain skills in programmed con- flict methods. In addition, values can and should be emphasized along with other important individual attributes.
Finally, organizations can make use of progressive rewards to encourage ethical behavior by individuals and groups. Rewards in the form of monetary com- pensation, employee benefits, and special recognition can reinforce individual values, counteract group- think, and maintain enthusiasm in support of ethical organizational values. Organizations can find crea- tive ways to reward employees for displaying ethical values that are considered essential to organizational success.
In conclusion, organizations can take a number of steps to reduce the probabihty of groupthink. They can develop strong norms of critical appraisal. Group leaders can abstain from pushing their own views and using their influence, and instead encourage genuine debate. Groups can attempt to avoid isola- tion by involving more than one group in the decision-making process. Finally, an important key to counteract groupthink is to program conflict into the decision-making situation (Cosier and Schwenk, 1990; Janis, 1989). The specific impact of groupthink on the behavior of employees covered in this paper are illustrative rather than exhaustive. The paper has simply tried to familiarize the reader with some of the important ones and with the related issues.
662 Ronald R. Sims
Remember, ethical behavior foundations are first established when an organization commits itself to success that results from ethical behavior by its members.
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School of Business Administration, Williamshurg, VA 23185,
U.SA.
