Effect Of Groupthink On Investing

     What is groupthink? There is a simple definition for it, but is it truly that simple? The term groupthink refers to the inclination of group members to have the same opinions and beliefs; it frequently leads to mistakes. It often occurs without an individual being aware of it. Conflict is considered to be a harmful element when related to groups, but conflict is good when considering groupthink because it helps to eliminate the existence of a groupthink. The explanation sounds simple enough, but it is more complex than the description given.

Group think is a phenomenon that occurs when group 's need for consensus supersedes the judgment of individual group members. Group think often occurs when there is a time constraint and individuals put aside personal doubts so a project can move forward or when one member of the group dominates the decision-making process.

Investing behavior should be driven by information, analysis, and self-discipline, not by emotion or ‘hunch.’

This case, as well as the previous two, are prime examples of how detrimental groupthink can have on the effect of your career or the lives of several others. It may not always be easy to recognize the dangers or altercations groupthink may have, which is why you should always appoint ‘mind guards’ to contradict the decisions made within a group setting. It is always beneficial to seek an outside source for their opinion, as it may be just the idea that the group has

Stephen King was quoted as saying, “The scariest moment is always just before you start.” A plane crash is bad enough; throw into the mix that the plane crash landed in a vast desert far away from anyone and anything. The team showed great cohesiveness in its ability to get through the groupthink and group shift behaviors. In this paper, groupthink and group shift behaviors will be discussed. This paper will cover points to show how through both behaviors the group will remain cohesive and put aside any individual needs and focus more on the needs of the group. Even though the situation will be tough, the team will plan, find harmony and put their brains together to find ways to survive.

Groupthink can and will creep into every group, no matter the size or type. Psychologist Irving Janis, the first person to coin the term groupthink, described eight symptoms of groupthink. These symptoms include illusions of invulnerability, collective rationalization, belief in inherent

3. Group think is a concept that involves individuals abandoning their critical senses and agreeing to group process even when they know it will have disastrous consequences. (Challenger disaster, Enron, Iraq war, etc.). Your will encounter these pressures in your work life and need to be prepared. Have you ever done something in a group that you would not have done if you were alone? What happened? How did you feel? What have you learned from this chapter that might help you avoid this behavior in the future, and avoid group think?

Decision making is affected by the Group Think because of the lack of openness that should be displayed and offered by everyone involved. The development of the organization is dependent on the ability of the group to make decisions that are thought through and not made solely on pressures and accepted or narrow minded ways that are not thought out.

According to Irving Janes (1972), groupthink occurs when a group makes an irrational decision because of group pressure fostering and the deterioration of ‘mental efficiency, reality testing, and moral judgement” (Irving, Janis, Victims of groupthink, p.9). Social influence is the effect that people have upon the beliefs or behaviors of others (Aaronson, 2004). Both groupthink and social influence theory have a factor in what

Irving Janis, a social psychologist, studied how social behavior is influenced in group settings. In 1972, he coined the name ‘groupthink’ to describe observed behavioral changes in individuals belonging to groups. Groupthink is characterized by a group’s pursuit for unity, often resulting in individual members disregarding or altering their own beliefs to coincide with the majority, or group’s, beliefs. This disregard or altercation ensures that the group stays unified; however, results in the group committing illogical actions without considering

The term groupthink in this report is defined as, the social psychological phenomenon that results in groups during pressure situations. This social psychology theory is broken down into eight signs. Illusion of invulnerability, Collective rationalization, Belief in inherent morality, Stereotyped views of out-groups, Direct pressure on dissenters, Self-censorship, Illusion of unanimity, Self-appointed “mindguards”. According to research conducted by Irving Janis, there are three conditions to groupthink. The first, "high group cohesiveness" which is the direction for a group to be in unity while working towards a goal, or to satisfy the emotional needs of its members. Secondly, the structural faults such as insulation of the group, lack

Groupthink theory often occurs without the group’s realization. Irving Janis formed 8 different symptoms that indicate groupthink. The first of these symptoms is illusions of vulnerability. This occurs when members of the group are overly optimistic and believe that nothing negative will arise from their decision. Janis describes it as taking great risks and acquiring the attitude of “everything is going to be OK, because we are a special group”. Secondly we have belief in inherent morality. This symptom is characterized as the groups thought that they could do no wrong. They believe that they have high morality, that they are right in all situations and they ignore the ethical consequences that could arise because of their decisions. As the third

Belief in inherent morality- Professionally expert people alleged what they know was ethically wrong, they ignored their own sense of responsibility by trusting their fellow members who allowed misconduct was right. The pressure of groupthink is very powerful in corporate organization, and it forces people toward uniformity of norms, often at the expense of their own personal values.

Furthermore, groupthink and group polarization also occurred in the movie. Groupthink is the tendency for members to reach solidarity, and the group often avoids questions that could lead to disputes (Iurchevici, 2016). In order for groupthink to occur, the group must be highly cohesive, in a group structure, and in a stressful situation (Kassin et al., 2013). All three of these were present in the movie, as the members of the group

This type of group mentality is referred to as “groupthink.” Group think, a concept discovered by Irving Janis, is the thought process that takes place among members of a cohesive group wherein they cease to consider their individual desires and instead respond according to group beliefs. This is done to ensure the solidity of the group. The members value this even more than their own views.