Linking Groupthink to Unethical Behavior
in Organizations
ABSTRACT. This paper is designed to do four things. First,
the paper discusses the importance of groupthink in conrributing to unethical behavior. Second, the paper discribes
how groupthink contributed to unethical behavior in three
organizations (Beech-Nut, E. F. Hutton, and Salomon Brothers). Third, symptoms of groupthink (such as arrogance,
overcommitment, and excessive loyalty to the group) will
be presented along with two methods for programming
conflict (devil's advocate and dialectic) into an organization
and group's decisiolls. Finally, the paper introduces some
prescriptions for reducing the probability of groupthink.
Issues of corporate morality and business ethic~ are
of concern to both management and their organizations (Jansen and Von Glinow, 1985; Schermerhorn
et at., 1991). These issues include social responsibility,
conflict of interest, payoffs, product safety, liability,
and whistleblowing (Jansen 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 selfinterest. However, greater knowledge of the role of
groupthink in unethical actions may change attributions of individual culpability.
The connection between groupthink and unethiRonatd R. Sims is Professorin 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 oganizationat
transitions. His articles have appeared in a variety of scholarly
and practitioner-oriente~iournat~.
Journal of Business Ethics 11:651--662, 1992.
© 1992 KluwerAcademic Publishers. Printed in the Netherlands.
Ronald R. Sims
cal behavior could be especially helpful in understanding the role of groupthink when individuals
behave unethically as welt as providing a basis for
altering behavior in a more ethicat direction. The
purpose of this paper is to discuss the importance of
groupthink in contributing to unethical behavior in
organizations. The paper also ,5411show how groupthink 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 arid Sehwenk, 1991). Finally, the
paper introduces some prescriptions for reducing the
probability of groupthink. However, before discussing the relationship between groupthink and unethical behavior, a definition of groupthink and
several classic examples of groupthink in action are
highlighted.
Groupthink Defined
IrvingJanis (1972, 1982) laid the basis for a theory of
causes and effects ofgroupthink, "a collective pattern
of defensive avoidance" (Janis and Mann, 1977, p.
129). Janis described several shared characteristics 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 historic fiascoes can be traced to defectivepolicy
making on the part of government leaders who receive
social support from their in-group advisors. A series of
historic examples by JaMs (1972) suggests that the
following four groups of policy advisors, like Kimmet's
in-group of naval commanders, were dominated by
652
Ronald R. Sims
concurrence seeking or groupthink and displayed characteristic symptoms of defensive avoidance: (1) Neville
Chamberlain's inner circle, whose members supported
the policy of appeasement of Hider during 1937 and
1938, despite repeated warnings and events that it would
have adverse consequences; (2) President Truman's advisory group, whose members supported the decision to
escalate the war in North Korea despite firm warnings by
the Chinese Communist government 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 information indicating that it would be an unsuccessful venture
and would damage U.S. relations with other countries; (4)
President Johnson's close advisors, who supported the
decision to escalate the war in Vietnam despite intelligence reports and other information 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 groupthink dominated groups were characterized by strong
pressures toward uniformity, which inclined their members 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 (Janis,
1982).
To add a contemporary flavor to the discussion,
consider the tragedy of the Space Shuttle Challenger.
This derision 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 hostages with fran and to continue commitment to the
Nicaraguan Contras in the face o f several congressional amendments limiting or banning aid.
One may be tempted to assume that groupthink is
peculiar 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 automobile have been attributed to groupthink (Huseman
and Driver, 1979). Similarly, the following example
shows how another organization from the world of
business succumbed to its pressures (Harvey, 1974).
The OzTx Corporation is a relatively small industrial
compaW. The president of Ozyx has hired a consultant
to help discover the reasons for the poor profit picture of
the company in general and tile low morale and productivity of the R&D division in particular. During the
process of investigation the consultant becomes interested 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 organization.
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 president'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 committed 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.
W h y do skilled, experienced, and ethical executives
Grouptkink and UnethicalBehavior
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 employees 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 developed 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, organizational culture is a key component when looking at
ethical behavior. It is the contention of this paper
that the literature on "groupthink" (Janis, 1972) may
help explain why some organizations develop cultures in which some individuals and groups knowingly commit unethical acts, or ignore them even
though they believe the activities to be wrong. The
presence or absence of ethical behavior in organizar.ional members' actions is both influenced by the
prevailing culture (ethical climate) and, in turn,
partially determines the culture's view of ethical
issues. The organizational culture may promote the
assumption of responsibility for actions taken by
individuals and groups, thereby increasing the probability that both will behave in an ethical manner.
Alternatively, the culture may diffuse responsibility
for the consequences of unethical behavior thereby
653
making such behavior more likely. In addition, there
is the increased potential for groupthink, a precursor
to organizational counternorms and unethical behavior.
According toJanis, groupthink is "a mode of thinking 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"
(Janis, 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, groupthink occurs when a group places a higher priority
on organizational counternorms that lead to organizational benefits, thus, encouraging and supporting
unethical behavior. In addition, these counternorms
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 conditions lead to a concurrence-seeking tendency (groupthink) in small decision-making groups as depicted
in Figure 1 (Janis 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 conditions of high stress combined with low hope for
finding a better solution than the one favored by the
leader or other influential people. Particularly under
stress, members of the group develop a number of
cognitive defenses that result in a collective pattern
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) forgetting information that would enable a challenging
event to be interpreted correctly, and (5) misperceiving 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
Symptoms of
a~,~upthink
Autocedent
~n~fion~
1. I~h cohmdveneu
2. Insulation of the
group
3. Lack of methodical
precedure, for search
& appraisal
4. l ~ e
leademhip
5. l ~ h .tre~ with a low
degree of hope for
fmdin~ abetter
oolution than the one
favored by the leader
or ~the~ influential
1. llh~on d
invuln~'abili~
2. Collective raticmsliration
3. Boli~ in inh~r~It
morality of the group
4. 8tereotype~ d
.................
tendancy~2
7. Blumionof un~ntmlty
8. 8elf-appointed mind
8ymptoml of defective
L Inomnplete m~,ey of
altemstiv~
2. Incomplete m~-ey of
o~eeeiv~
8. Failure to e=Jm~.~
choice
4. ~d~m/ormat~on
5. 8electlve ~ in
N
proeeming information
at hand
llternat~vee
7. Failure to work out
~onttasency plans
l~rson~
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Dedmon Malm~. A P~ehologleal An~y~is of Oontli~, Choice, and Oomm~tmentby
Irving L. dsnis and LoonMann. Copyright* 1977 by The Free Dm~.
Fig. 1. Analysisofgroupthink, based on comparisons of high- and low-quality decisionsby policy-making groups.
on discrimination violations, horizontal or vertical
price-fLxing, and intentional securities fraud.
The flaws in the groupthink decision-making
process often result in the kinds of ethical decisionmaking defects and outcome variables listed in
Figure 2. Groupthink occurs in organizations that
knowingly commit unethical acts when 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 solutions (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 the extent of committing unethical actions.
A major factor contributirg to the groups' defective 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 unethical, but there is a higher probability of the occurrence 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 examples of how even the most reputable of companies
can suffer from an ethical breakdown through
groupthink and subsequent poorjudgment.
Beech-Nut. The admission by Beech-Nut, the second
largest baby-food producer in the United States, that it
Grouptkink and Unetkical BeMvior
655
TABLE I
Symptoms of groupthink
Syptoms
Illusion of invulnerability, shared by all or most
members of the group
Potential Hazards
• Excessive optimism
• Extreme risk taking
Collective efforts to rationalize the group's course of
• Warnings are ignored
action
Unwillingness to reconsider assumptions
® Unquestioned bdief in the group's inherent morality
Stereotyped views of those not in the group as
"colored by naivete and impractical ideals"
• Group members recommit themselves to past policy
decisions without considering alternatives
• Members are inclined to ignore the ethical and moral
consequences of their decisions
No attempt will be made to understand others' ethical
concerns
Group members may underestimate others potential
to contribute relevant information to goal accomplishment
• Suppression of dissent within the group, by direct
pressure on "disloyal" members
o Self-censorship of views that deviate from the group's
apparent consensus
Group members hesitate to express any arguments
against any of the group's stereotypes, illusions, or
commitments
Group members falsely assume that silence means
consent
• Shared illusion of unanimity
• Emergence of self-appointed mind guards
Group members are insulated from adverse information that might shatter their shared complacency
about the effectiveness and morality of their decisions
Source: Adapted fromJanis, I.J.: 1972, Victimsof Grouptkink (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, underlying 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 demonstrate 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
R o n a l d R . Sims
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 "che& 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 becanse certain kinds of overdrafts are fairly routine.
Group c c ~
Group
C h ~
lo~aty to ~
sro~
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-willinsneuto zurt cc~u~bl, *~0r~m~behalt ~
me
the srou~
Leader promotiono( une~!~] ~olution
Bo'ctom-lln~ mentality
~mptoma
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e~
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3.
4.
6.
l ~ U o n
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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 Banking Journal, t987; Seneker,
1986).
1
Def~c,~
2. No ~ n t ~ z z
cf pre~erret ~ - ~ !
Ll~a-m~
3o No reer.zm~tlon d ~
~Zical ~ t ~ m ~
4. Rejectionc / d i m m ~ ~ t c ~
6. W'm at all ccQto
I
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OU~Q
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i
Unethleal deckions
L~er ~
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I
I
Soureo: Adapted from Gre~wyM ~ &
*Grout~-lr~
I 4 y p o ~ in N ~ I of T ~ , "
Croup & O r s a n ~ t i ~
Studio, VoL 7, No. 4 (Decemb~ 1982), pp. 429-444.
More recently, wrongdoings by Salomon Brothers
in the Treasury auction scandal provides another
example o f how groupthink can be linked to unethical behavior.
Salomon Brothers. A Chronology: How It All Unfolded
Fig. 2. Groupthink and unethical decision-making 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 Mille 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 o f E. F. Hutton's
"check kiting."
E. 1:. 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 batiks and investors. The court case
focused the nation's attention on banks' overdraft poll-
D E C 1990 - Salomon submits bids in the names of
customers who hadfft 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. t99t -- Through unauthorized customer bids,
Satomon 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 unident~ed 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.
APR/L -- 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.
G r o u p t k i n k a n d UnethicaI B e k a v i o r
APRIL
- - Paul Mozer, managing director in
charge of government bond trading, informs Salomon
ChairmanJohn Gutfreund, President Thomas Strauss and
Vice Chairman John Meriwether about the illegal
bidding in February. No immediate action is taken.
LATE
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. Goven3ment
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.
M A Y 22 --
- - SEC and Justice Department issue subpoenas to
Salomon and certain clients.
JUNE
- Salomon reviews its government bond operadons and launches "full" investigation.
JULY
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.
A U G . 9 --
A U G . I4 -- Salomon discloses that Messrs. Gutfreund,
Strauss mad Meriwether knew of the violations in April
and releases details of additional violations.
Messrs. Gntfreund and Strauss announce that
they will resign at Aug. 18 board meeting. Warren E.
Buffet is named interim chairman.
AUG. i6 -
i 8 -- 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,
fbrmer head of Salomon's Tokyo operations, is named
Chief operating officer in charge of day-to-day operations. Salomon board accepts resignations of Messrs.
Gutfreund, Strauss and Meriwether and fires Messrs.
Moser arid Murphy (Siconolfi and Cohen, p. A4).
AUG.
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 anything 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
657
that became his and other key compa W executives
undoing.
Collusion and price fixing in the $2.3 trillion
Treasury securities market have been routine for
more than a decade, according to traders and top
Wall Street executives (Siconolfi, et al., 1991). The
most prevalent and potential damaging practice has
been the sharing of confidential informafon 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 multibilliondollar 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 selling jars of "phony" apple
juice is unethical. In addition, everyone who has a
checking account knows that bouncing checks is
wrong, arid 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 likelihood may well be
groupthink. That is groupthink that may be fostered
by what Wolfe (1988) refers to as the b o t t o m - l i n e
mentality. This line of thinking supports financial
success as the only value to be considered. It promotes short-term sohitons 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, impediments along the way to bottom-line financial
Success.
Beech-Nut's employees were under a lot of financial pressures and instead of cooperating with government investigators they compounded their problems
by "stonewalling" rather than cooperating. Hutton's
employees were under a lot of pressure to make
658
Ronatd R. Sims
money, and the company no doubt paid more attention to profit figures than to how those figures were
achieved. The practice may even have started accidentally, but once it got going, the money managers
apparently wrote unnecessary checks solely to profit
from the check-kiting scheme as the money passed
from bank to bank.
Company employees evidendy had the necessary
company loyalty and commitment to enable groupthink 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 ignoring any information that might lead
them to conclude that the practice was illegal. An
internal Hutton memo recommended that "if an
office is overdrafting their ledger balance consistently, 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
blind loyalty, a bottom-line mentality, arrogance and
overconfidence, and a promotion of unethical solutions by its leaders. In addition, like 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 dose 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 characteristics 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 Brothers 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 concern 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-line mentality for short-term profit, all
three companies' managers ended up severely damaging their company's reputation. To decrease the
likelihood 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 conflict 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 Vietnam. 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 guidelines for ethical analysis in
Groupthink and UnethicaIBehauior
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 advocate 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 devit's advocate roies. 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 tech~uique 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 behavior. The dialectic method calls for structuring a
debate between conflicting views regardless of members' 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
i. A proposed course of action is generated.
659
aM can head off unethical decisions that are based
on these poor assumptions. The dialectic method
shown in Figure 4 can help promote ethical derisions and counteract groupthink.
Programming conflict into the group decisionmaking process allows dissent and can decrease the
Iikelihood of groupthink and unethical behavior.
Such conflict requires organizations to ensure that
decisions are challenged, criticized, and alternative
ideas are generated. Programmed conflict also insures that a comprehensive decision framework becomes a part of the group decision-making process.
1. A proposed course of action is generatocL
Assumptions underlying the proposal are identified.
3. A ccroflicting oountorpropoaM is generated based on different assumptions°
4. Advoe~to~ of each position present mad debate the merits of theile
proposals before key doeiBion makerg.
S. The docision to adopt either position, er some other position, e.g. a
compromise, is teket~
t
6. The decision is monitore&
Source: Cosier, R. A. and Schwenk, C. tk: 1991, 'Agreement
and Thinking Mike: Ingredients for Poor Decisions',Academy
ofManagementExecutive4(1), pp. 69--74.
Fig. 4. The dialectic decision method.
2. A devil% advocate Cmdivldual or group) is assigned to criticizethe proposal.
3. Tho critique is presented to key decision makers.
t
4. Any addition~ il~ormation r~lovlmt to the issues is gathered.
8. The decision to adopt, modify, or discontinue the proposed com~e of
action is taken,
6. The decision is monltorecL
Source: Cosier, R. A. and Schwenk, C. tL: 1991, 'Agreement
and Thinking Alike: Ingredients for Poor Decisions',Academy
ofMar~agementExecutive4(1), pp. 69-74.
Fig. 3. A devil's advocate decision program.
Conclusion
It has not been the intent of this article to suggest
that groupthink is an easy phenomenon to overcome, especially since there is some evidence that the
symptoms of groupthink presented in this paper
thrive 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 embarrassment 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 isolated 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 bdief that its ideals are humanitarian and based on high-minded principles. As a
result, no attempt is made by the members to challenge 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 attention 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 ofJanis's groupthink concept. Specifically, it
has been found that:
**Groups with a moderate amount of cohesiveness produce better decisions than low- or highcohesive groups.
**Highly cohesive groups victimized by groupthink make the poorest decisions, despite high
confidence in those decisions (CaUaway 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 arid the group
thinks through the entire issue again before making a
final decision (p. 1, 3, 4).
Janis (1972) offers the following prescriptions for
helping managers reduce the probability of groupthink:
A. Leader Prescriptions
1. Assign everyone the role of critical evaluation.
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 methods to provide for
diversity and dissent, such as grievance or
complaint mechanisms or other internal
review procedures.
2. Set up several independent groups to
study the same issue.
3. Train all employees in ethics (these programs should explain the underlying ethica1, legal (Drake and Drake, t988), groupthink-prevention techniques, and devil's
advocate and dialectic methods.
4. Establish programs to clarify and communicate 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. ProcessPrescriptions
1. Periodically break the group into subgroups to discuss the issues.
2. Take time to study external factors.
Grouptkink and UnethicalBehavior
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 members 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 employees the confidence to be on the lookout for groupthink 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 acfons 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 constraints on solutions.
3. Draw out all group members. Prevent domination 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 discussion forward.
6. Summarize and darify 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-line mentality and an unrealistic bdief that
everything boiJs 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 unethical behavior is unacceptable. In addition, organi-
661
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 counteract groupthink. In addition, organizations should
pay proper attention to employee recruitment, selection, and orientation.
The values of prospective employees should be
examined and discussed, and the results used in
making selection decisions. A person's first encounters with an organization and its members also "say"
a lot about key beliefs 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 conflict 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 compensation, employee benefits, and special recognition
can reinforce individual values, counteract groupthink, and maintain enthusiasm in support of ethical
organizational values. Organizations can find creative 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 probability of groupthink. They
can develop strong norms of critical appraisal. Group
leaders can abstain from pushing thdr own views
and using their influence, and instead encourage
genuine debate. Groups can attempt to avoid isolation 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 (his 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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