Rithik Gireesh

Sec- A

23rd January 2021

Organizational behavior

Prof. Anindita chatterjee

1. Some research suggests heard behavior increases as the size of the group

increases. Why do you think this might be the case? 

I think when the size of the group increases, heard behavior also increases
tremendously because people will naturally get inclined toward what the majority
does. When one person gets benefited from something then everyone in the group
would try to gain benefit from same source. So when there is a huge amount people
trying to pursue after the same thing, then the uncertainty and skepticism in other
people’s mind gets reduced, hence they would blindly follow like the others. And,
when a new person gets added and accepted by the group, he/she would be passively
forced to follow the other people and their want to fit in will eventually make them do
so. Thus the member is susceptible to conforming to the group norms. There are
considerable evidence that the group can place strong pressure on individual member
to change their attitude and behavior to conform to the set group standards.  Every
individual try to compare with other group members and try to be equal with them.
Thus population size dictates the behavior of the heard, so herd behavior increases as
group size increases.

2. The example of housing bubble and facebook’s IPO shos the potential
downsides of herd behavior. Can you think of examples in which herd behavior
might have upsides? 

Ans. In certain ways heard behavior do have benefits. So although there are negative
aspects to herd behavior, it brings unity and uniformity to a group and if taken
advantage of it in the right way there, it can have a positive impact. For example if
company could successfully infuse the benefits of their poroducts to the people then
they could raise a huge sale and again profits out of it. Heard behavior is also
beneficial for politicians to again votes and support if leveraged in the right manner.
In a office setting this could again help in achieving common goals and objectives.
3.  Shiller argues that herd behavior can go both ways: It explains the housing
bubble, but it also explains the bust. As they see others bidding down home
prices to abnormally low levels.” Do you agree with Shiller? 

Ans. Yes I absolutely agree with Shiller. As explained in the previous questions Herd
behavior has both, positive and negative sides to it. In terms of stock market, any
unfavorable news regarding any company could immediately drop their stock prices
and in the other way around if there is good news about any company there would be
an automatic raise in their stock prices. It holds both an opportunity to bloom an
economy, and destroy it. And it is same in other cases political parties, sales of
companies etc. so yes it could be argues that heard behavior can go both ways