Global Issues: Culture and Nationality Influences on Ethical Awareness
Summary: Research has found that both culture and nationality influence the recognition of ethical
issues. One study found that Taiwanese sales agents perceived ethical issues associated with their
companies’ or competitors’ agents while U.S. sales agents perceived ethical issues with their colleagues.
A study comparing the ethical awareness Australians showed that Americans were more likely than the
Australians to identify an ethical problem in scenarios involving the withholding of information and the
misleading of an appraiser.
A third study asked global managers what to do: You are riding in a car driven by a close friend who
speeds and hits a pedestrian. There are no witnesses, and you can help your friend if you testify that he
was not speeding.
Responses differed widely. More than 90 percent of managers in Canada, the U.S., Switzerland, and
Sweden said that the rules were made for everyone and that they would not support their friend. Less
than half of the managers from South Korea, Venezuela, Russia, and China would refuse to support their
friend.
C. An Integrated Approach to Decision Making
Because of the unrealistic demands of the rational approach and the limited, short-term
orientation of the behavioral approach, neither is entirely satisfactory.
However, the worthwhile features of each can be combined into a practical approach to
decision making, shown in Figure 8.4.
The steps in this process are the same as in the rational approach; however, the conditions
recognized by the behavioral approach are added to provide a more realistic process.
In this synthesis of the two other approaches, the rational approach provides an analytical
framework for making decisions, whereas the behavioral approach provides a moderating
influence.
In practice, decision makers use some hybrid of the rational, behavioral, and integrated
approaches to make the tough day-to-day decisions in running organizations.
IV. GROUP DECISION MAKING IN ORGANIZATIONS
As we discussed in Chapter 7, people in organizations work in a variety of groups—formal and
informal, permanent and temporary, and various kinds of teams.
Therefore, we need to consider group decision making. The primary elements we will discuss are
group polarization, groupthink, and group problem solving methods.
A. Group Polarization
Members’ attitudes and opinions with respect to an issue or a solution may change during group
discussion.
Generally, group polarization occurs when the average of the group members’ post-discussion
attitudes tends to be more extreme than average pre-discussion attitudes.
Several features of group discussion contribute to polarization. Persuasive arguments can
encourage polarization.
Polarization can profoundly affect group decision making.
B. Groupthink
Highly cohesive groups and teams often are very successful at meeting their goals, although
they sometimes have serious difficulties as well. One problem that can occur is groupthink.
According to Irving L. Janis, groupthink is “a mode of thinking that people engage in when
they are deeply involved in a cohesive in-group, and when the members’ strivings for unanimity
override their motivation to realistically appraise alternative courses of action.”
When groupthink occurs, then, the group unknowingly makes unanimity rather than the best
decision its goal.
1. Symptoms of Groupthink
The three primary conditions that foster the development of groupthink are cohesiveness,
the leader’s promotion of his or her preferred solution, and insulation of the group from
experts’ opinions.
Figure 8.5 outlines the revised groupthink process.
A group in which groupthink has taken hold exhibits eight well-defined symptoms:
a. An illusion of invulnerability, shared by most or all members, that creates
excessive optimism and encourages extreme risk taking
b. Collective efforts to rationalize or discount warnings that might lead members to
reconsider assumptions before committing themselves to past policy decisions
c. An unquestioned belief in the group’s inherent morality, inclining members to
ignore the ethical and moral consequences of their decisions
d. Stereotyped views of “enemy” leaders as too evil to warrant genuine attempts to
negotiate or as too weak or stupid to counter whatever risky attempts are made to
defeat their purposes
e. Direct pressure on a member who expresses strong arguments against any of the
group’s stereotypes, illusions, or commitments, making clear that such dissent is
contrary to what is expect of loyal members
f. Self-censorship of deviations from the apparent group consensus, reflecting each
member’s inclination to minimize the importance of his or her doubts and
counterarguments
g. A shared illusion of unanimity, resulting partly from self-censorship of deviations,
augmented by the false assumption that silence means consent
h. The emergence of self-appointed “mindguards,” members who protect the group
from adverse information that might shatter their shared complacency about the
effectiveness and morality of their decisions
Groupthink often helps to explain why companies and governments sometimes continue to
pursue strategies and policies that are clearly failing.
2. Decision-Making Defects and Decision Quality
When groupthink dominates group deliberations, the likelihood increases that decision-
making defects will occur.
The group is less likely to survey a full range of alternatives and may focus on only a few
(often one or two).
In discussing a preferred alternative, the group may fail to examine it for nonobvious risks
and drawbacks.
The group may not reexamine previously rejected alternatives for nonobvious gains or
some means of reducing apparent costs, even when they receive new information.
The group may reject expert opinions that run counter to its own views and may choose to
consider only information that supports its preferred solution.
Finally, the group may not consider any potential setbacks or countermoves by competing
groups and therefore may fail to develop contingency plans.
Defects in decision making do not always lead to bad outcomes or defeats. Nevertheless,
decisions produced by defective processes are less likely to succeed.
CASE STUDY: The Role of Groupthink in the Financial Crisis
Summary: When an organization’s leaders and members allow themselves to be captured by their own
beliefs, they see only what they want to see. Many feel that groupthink explains the excessive credit
expansion that fueled the subprime mortgage meltdown and subsequent financial crisis.
1. How were the elements of groupthink illustrated in the financial crisis?
In groupthink, striving for unanimity overrides the motivation to realistically appraise alternative
courses of action. Alan Greenspan, who supported minimal intervention, was known to be
2. What could be done to reduce the effects of groupthink in the future?
Leaders could assign the role of “critical evaluator” to each group member to freely voice objections
and doubts. Leaders could refrain from expressing an opinion when assigning a task to a group. The
3. Do you think that increasing the diversity of the financial companies’ leadership would reduce
groupthink? Why or why not?
Yes. Similar people (age, race, education, gender, etc.) tend to think in the same way. Perhaps people
3. Prevention of Groupthink
Several suggestions have been offered to help managers reduce the probability of
groupthink in group decision making.
Summarized in Table 8.2, these prescriptions fall into four categories, depending on
whether they apply to the leader, the organization, the individual, or the process.
C. Participation
A major issue in group decision making is the degree to which employees should participate in
the process.
Numerous research studies have shown that whereas employees who seek responsibility and
challenge on the job may find participation in the decision-making process to be both
motivating and enriching, other employees may regard such participation as a waste of time and
a management imposition.
Whether employee participation in decision making is appropriate depends on the situation.
In tasks that require an estimation, a prediction, or a judgment of accuracy— usually referred to
as “judgmental tasks”—groups typically are superior to individuals simply because more
people contribute to the decision-making process.
In problem-solving tasks, groups generally produce more and better solutions than do
individuals. But groups take far longer than individuals to develop solutions and make
decisions.
If the problem to be solved is fairly straightforward, it may be more appropriate to have a single
capable individual concentrate on solving it.
An additional advantage of group decision making is that it often creates greater interest in the
task.
Participation in decision making is also related to organizational structure.
For example, decentralization involves delegating some decision-making authority throughout
the organizational hierarchy.
D. Group Problem Solving
A typical interacting group may have difficulty with any of several steps in the decision-making
process.
One common problem arises in the generation-of- alternatives phase: The search may be
arbitrarily ended before all plausible alternatives have been identified.
To improve the generation of alternatives, managers may employ any of three techniques to
stimulate the group’s problem-solving capabilities: brainstorming, the nominal group technique,
or the Delphi technique.
1. Brainstorming
Brainstorming is most often used in the idea-generation phase of decision making and is
intended to solve problems that are new to the organization and have major consequences.
The intent of brainstorming is to produce totally new ideas and solutions by stimulating the
creativity of group members and encouraging them to build on the contributions of others.
Brainstorming does not provide the resolution to the problem, an evaluation scheme, or the
decision itself. Instead, it should produce a list of alternatives that is more innovative and
comprehensive than one developed by the typical interacting group.
2. The Nominal Group Technique
The nominal group technique is another means of improving group decision making.
Whereas brainstorming is used primarily to generate alternatives, this technique may be
used in other phases of decision making, such as identification of the problem and of
appropriate criteria for evaluating alternatives.
This technique uses a cycle of idea generation, discussion, voting, which continues until an
appropriate decision is reached.
The nominal group technique has two principal advantages. It helps overcome the negative
effects of power and status differences among group members, and it can be used to explore
problems to generate alternatives, or to evaluate them. Its primary disadvantage lies in its
structured nature, which may limit creativity.
3. The Delphi Technique
The Delphi technique was originally developed by Rand Corporation as a method for
systematically gathering the judgments of experts for use in developing forecasts.
It is designed for groups that do not meet face to face. For instance, the product
development manager of a major toy manufacturer might use the Delphi technique to probe
the views of industry experts to forecast developments in the dynamic toy market.
The manager who wants the input of a group is the central figure in the process. After
recruiting participants, the manager develops a questionnaire for them to complete.
The manager summarizes the responses and reports back to the experts with another
questionnaire. This cycle may be repeated as many times as necessary to generate the
information the manager needs.
The Delphi technique is useful when experts are physically dispersed, anonymity is desired,
or the participants are known to have trouble communicating with one another because of
extreme differences of opinion. This method also avoids the intimidation problems that
may exist in decision-making groups.
On the other hand, the technique eliminates the often fruitful results of direct interaction
among group members.
V. CREATIVITY, PROBLEM SOLVING, AND DECISION MAKING
Creativity is an important individual difference variable that exists in everyone. We describe it here
because it plays such a central role in both decision making and problem solving.
Creativity is the ability of an individual to generate new ideas or to conceive of new perspectives on
existing ideas.
Creativity can play a role in how a problem or decision situation is defined, what alternatives are
identified, and how each is evaluated. Creativity can also enable a manager to identify a new way of
looking at things.
A. The Creative Individual
Numerous researchers have focused their efforts on attempting to describe the common
attributes of creative individuals. These attributes generally fall into three categories:
background experiences, personal traits, and cognitive abilities.
1. Background Experiences and Creativity
Researchers have observed that many creative individuals were raised in an environment in
which creativity was nurtured.
2. Personal Traits and Creativity
The traits shared by most creative people are openness, an attraction to complexity, high
levels of energy, independence and autonomy, strong self-confidence, and a strong belief
that one is, in fact, creative.
3. Cognitive Abilities and Creativity
Cognitive abilities are an individual’s power to think intelligently and to analyze situations
and data effectively.
Intelligence may be a precondition for individual creativity. Creativity is also linked with
the ability to think divergently and convergently.
Divergent thinking is a skill that allows people to see differences between situations,
phenomena, or events. Convergent thinking is a skill that allows people to see similarities
between situations, phenomena, or events. Creative people are generally very skilled at
both divergent and convergent thinking.
B. The Creative Process
Individual creative activity actually tends to progress through a series of stages. Figure 8.6
summarizes the major stages of the creative process.
1. Preparation
The creative process normally begins with a period of preparation. To make a creative
contribution to business management or business services, individuals must usually receive
formal training and education in business.
Experiences that managers have on the job after their formal training has finished can also
contribute to the creative process.
In an important sense, the education and training of creative people never really ends.
2. Incubation
The second phase of the creative process is incubation—a period of less intense conscious
concentration during which the knowledge and ideas acquired during preparation mature
and develop.
A curious aspect of incubation is that it is often helped along by pauses in concentrated
rational thought.
3. Insight
Usually occurring after preparation and incubation, insight is a spontaneous breakthrough
in which the creative person achieves a new understanding of some problem or situation.
Insight represents a coming together of all the scattered thoughts and ideas that were
maturing during incubation.
It may occur suddenly or develop slowly over time. Insight can be triggered by some
external event or it can be a completely internal event in which patterns of thought finally
coalesce in ways that generate new understanding.
4. Verification
Once an insight has occurred, verification determines the validity or truthfulness of the
insight.
Verification may include the development of a product or service prototype.
Once the new product or service is developed, verification in the marketplace is the
ultimate test of the creative idea behind it.
C. Enhancing Creativity in Organizations
Managers who wish to enhance and promote creativity in their organizations can do so in a
variety of ways.
One important method for enhancing creativity is to make it a part of the organization’s culture,
often through explicit goals. This clearly communicates that creativity and innovation are
valued.
Another important part of enhancing creativity is to reward creative successes, while being
careful to not punish creative failures.
Summary and Applications
Decision making is the process of choosing one alternative from among several. Problem solving is
finding the answer to a question.
Programmed decisions are well-structured, recurring decisions made according to set decision rules.
Nonprogrammed decisions involve nonroutine, poorly structured situations with unclear sources of
information; these decisions cannot be made according to existing decision rules.
The classifications—certainty, risk, and uncertainty—reflect the amount of information available
regarding the outcomes of alternatives.
The rational approach views decision making as a completely rational process in which goals are
established, a problem is identified, alternatives are generated and evaluated, a choice is made and
implemented, and control is exercised. Evidence-based decision making is a recent restatement of the
need for rationality when making decisions.
The use of procedures and rules of thumb, suboptimizing, and satisficing characterize the behavioral
model. A variety of other behavioral processes also influence decision making in organizations.
Prospect theory suggests that people are more motivated to avoid losses than to make gains. The rational
and behavioral views can be combined into an integrated model.
Creativity is the capacity to generate new ideas. Managers can enhance or reduce creativity in their
organizations through various means.