Tag Archive | Groupthink

It’s Grimm for Volkswagen

Schadenfreude is an emotion that many non-Germans are indulging in at the news that Volkswagen is not the squeaky clean corporation that everyone believed it was.
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How Do You Rate?

In January, the US Securities and Exchange Commission (SEC) announced that Standard & Poor’s Ratings Services (S&P) had agreed to pay almost $80 million to the SEC and other regulatory agencies for a series of federal securities law violations involving “fraudulent misconduct in its ratings of certain commercial mortgage-backed securities (CMBS)” [1]. S&P was also banned for one year from issuing ratings in the commercial bond market.

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In Like We Trust

A recent research report [1] suggests that an ethnically diverse group is better at making decisions than a group that are all alike. These results build on other studies that show that diverse groups in general are better at making decisions [2]. Irving Janis, who first identified the concept [3], argues that ‘homogeneity’ is one of the key prerequisites for Groupthink, which is a bad outcome. So all we have to do to prevent Groupthink is to insist on diversity, especially at the Board level?

Whoa, hold on, it is not as easy as that! It turns out that  it doesn’t come down to ‘diversity’ per se but ‘Trust’.

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Decisions – Best or Second Best?

A recent article in the Wall Street Journal (WSJ) was headlined “How You Make Decisions Says a Lot about How Happy You Are”. The journalist then asked the question, “Are you a ‘Maximizer’ or a ‘Satisficer’”? She then reported that ‘Satisficers’ are happier.

But what does this mean for business decision-making, if anything?

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