The Importance of Board Independence - a Multidisciplinary Approach
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The Importance of Board Independence (IVOR nr. 90) 2012/11.4.3.2:11.4.3.2 Structural faults in the organisation
The Importance of Board Independence (IVOR nr. 90) 2012/11.4.3.2
11.4.3.2 Structural faults in the organisation
Documentgegevens:
N.J.M. van Zijl, datum 05-10-2012
- Datum
05-10-2012
- Auteur
N.J.M. van Zijl
- JCDI
JCDI:ADS594845:1
- Vakgebied(en)
Ondernemingsrecht / Algemeen
Ondernemingsrecht / Corporate governance
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Janis distinguishes four different structural faults in the organisation, which all contribute to a higher likelihood of groupthink: (1) insulation of the group, (2) lack of tradition of impartial leadership, (3) lack of norms requiring methodical procedures and (4) homogeneity of members’ social background and ideology (Janis 1982: 244). Insulation of the group entails that the members of the group do not have opportunities to discuss the decisions with people from outside the ingroup. The lack of such an opportunity makes the members of the group rely more on the opinions of their fellow members (Janis and Mann 1977: 131). In this respect, it must be noted that laboratory tests revealed that the members of insulated groups rely more on hired external advisors than less insulated groups (Esser 1998: 131).
The lack of a tradition of impartial leadership captures the problem of a directive leader who wants to induce the other members of the group to conform to his decision. Such behaviour discourages dissent by other members in the group (O’Connor 2003: 1265). These theoretical implications of the lack of impartial leadership are confirmed by laboratory tests. Groups with impartial leaders consider less alternatives, use less additional information, report more self-censorship and more mind-guarding (Esser 1998: 131-132). Closely related to the impartial leadership issue is the problem of the lack of methodical procedures. The methodical procedures referred to by Janis comprise procedures for information search and a structural trade-off between options (Janis 1982: 249). The empirical results of research on this antecedent of groupthink showed mixed results. However, Esser reports that poorer decisions are made in procedures with a unanimity requirement instead of a majority voting rule (1998: 132).
Homogeneity of the group is the fourth example of structural faults in the organisation. When groups consist of members with the same social background or ideology, the decision-making process becomes faster, because homogeneous groups concur more easily (Janis 1982: 249-250). Groups with a moderate degree of heterogeneity in social background and ideologies suggest more alternatives and the group shows ‘constructive multiple advocacy, which means that the group will devote their deliberations to exploring the pros and cons of the two or more alternatives, rather than focusing on just one available option and gravitating toward a premature consensus’. Too high levels of group heterogeneity are not desirable, as heterogeneous groups suffer from communication problems and misunderstanding. However, these problems especially manifest in initial meetings, because the group members of different cultural backgrounds have to adapt to other people (Oetzel 1998: 206).