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The reality of group decisions: do I say what I think or follow what others say?

Updated: Jun 26, 2019



I disagree with my colleagues… what now?

The previous two articles in the series have described incomplete information and social pressure as key determinants of poor quality decisions. Their effect can be worsened by the cascade effect.

Cascades arise when individuals ignore their own knowledge and support the judgement of other group members. Cascades can be informational – withholding unique information – and reputational – avoiding the disapproval of others.

The sequence of cascades

The problem with cascades arises when an early mover within the group has limited information, but nevertheless takes a decision. The follower weights his private information and the observed decision of the predecessor. If there is a group of people, then it is very likely that a person will ignore his own information and follow the predecessor. Any additional person giving public support strengthens the cascade, thus changing the position of a larger number of people.

Dominant but fragile

You can see how the cascade effect can easily lead to a mislead decision. On the plus side, cascades are fragile. Even though a cascade can start quickly, if a person with better information takes a stand in another direction, she can break the cascade (and potentially start a new one).

Is this irrational?

The behaviour of following the opinion of other group members is not irrational: each person is responding to the signals they receive in a rational manner.

There are two reasons for this; when someone sees another person (especially if she has the reputation for being a specialist, or is a high-status individual) making an error, then he is likely to think it is not really an error. The other reason is social pressure; intervening with a different opinion incurs the risk of appearing stupid or difficult. These reasons explain the dynamics within the group which reinforce the dominant behaviour.

This is the last article describing three key behavioural influences in group decision-making. Either separately or together they can have a strong impact on the quality of decisions in your organisation.

The series on decision-making continues. In the next articles, I will share examples of interventions that can help you lead more effective decisions in your team.

It is important to remember that the best solutions depend on the context of your organisation, contact me if you want to talk about the challenges of decision-making in your company.

Do you want to learn more about decision-making and how to become a more successful decision-maker? Get in touch giorgia@choiceanddesign.com

References:

  • Hirshleifer (1993). The Blind Leading the Blind: Social Influence, Fads, and Informational Cascades. IDEAS Working Paper Series from RePEc.

  • Sunstein and Hastie (2015). Garbage in, garbage out? Some micro sources of macro errors

  • Sunstein and Hastie (2015). Wiser. Getting beyond groupthink to make groups smarter. In. Boston, Massachusetts: Harvard Business Review Press


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