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Chapter 9 Foundations of Group Behavior Page 250

CHAPTER 9

Foundations of
Group Behavior

LEARNING OBJECTIVES (ppt9-1)

After studying this chapter, students should be able to:

1. Define group and differentiate between different types of groups.


2. Identify the five stages of group development.
3. Show how role requirements change in different situations.
4. Demonstrate how norms and status exert influence on an individual’s behavior.
5. Show how group size affects group performance.
6. Contrast the benefits and disadvantages of cohesive groups.
7. Contrast the strengths and weaknesses of group decision making.
8. Compare the effectiveness of interacting, brainstorming, nominal, and electronic
meeting groups.
9. Evaluate evidence for cultural differences in group status and social loafing, as
well as the effects of diversity in groups.

INSTRUCTOR RESOURCES

Instructors may wish to use the following resources when presenting this chapter:

Text Exercises
 International OB: Group Cohesiveness Across Cultures
 Myth or Science? “Are Two Heads Better Than One?”
 An Ethical Choice: How Groups Infect Your Deviant Behavior–and How to
Immunize Yourself
 Point/CounterPoint: All Jobs Should Be Designed Around Groups
 Questions For Review
 Experiential Exercise: Wilderness Survival
 Ethical Dilemma: Dealing With Shirkers

Text Cases
 Case Incident 1: “If Two Heads Are Better Than One, Are Four Even Better?”
 Case Incident 2: Herd Behavior and the Housing Bubble (and Collapse)

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 251

WEB
EXERCISES

At the end of each chapter of this Instructor’s Manual, you will find
suggested exercises and ideas for researching the WWW on OB topics. The
exercises “Exploring OB Topics on the Web” are set up so that you can
simply photocopy the pages, distribute them to your class, and make
assignments accordingly. You may want to assign the exercises as an out-
of-class activity or as lab activities with your class.

SUMMARY AND IMPLICATIONS FOR MANAGERS

Performance Among the most prominent properties related to group performance are


role perception, norms, status differences, size of the group, and cohesiveness.

Role perception and an employee’s performance evaluation are positively related. The
degree of congruence between the employee’s and the boss’s perception of the
employee’s job influences the degree to which the boss will judge that employee
effective. An employee whose role perception fulfills the boss’s role expectations will
receive a higher performance evaluation. 

Norms control behavior by establishing standards of right and wrong. The norms of a


given group can help explain members’ behaviors for managers. When norms support
high output, managers can expect markedly higher individual performance than when
they aim to restrict output. Norms that support antisocial behavior increase the
likelihood that individuals will engage in deviant workplace activities. 

Status inequities create frustration and can adversely influence productivity and


willingness to remain with an organization. Incongruence is likely to reduce motivation
and motivate a search for ways to bring about fairness (say, by taking another job).
Because lower-status people tend to participate less in group discussions, groups with
high status differences are likely to inhibit input from lower-status members and
reduce their potential. 

The impact of size on a group’s performance depends on the type of task. Larger groups
are more effective at fact-finding activities, smaller groups at action-taking tasks. Our
knowledge of social loafing suggests that managers using larger groups should also
provide measures of individual performance. 

Cohesiveness can influence a group’s level of productivity or not, depending on the


group’s performance-related norms. 

Satisfaction High congruence between a boss’s and an employee’s perception of the


employee’s job correlates strongly with high employee satisfaction. Role conflict is
associated with job-induced tension and job dissatisfaction.

Most people prefer to communicate with others at their own status level or a higher one
rather than with those below them. As a result, we should expect satisfaction to be
greater among employees whose job minimizes interaction with individuals lower in
status than themselves. 

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 252

The group size–satisfaction relationship is what we would intuitively expect: Larger


groups are associated with lower satisfaction. As size increases, opportunities for
participation and social interaction decrease, as does the ability of members to identify
with the group’s accomplishments. At the same time, having more members also
prompts dissension, conflict, and the formation of subgroups, which all act to make the
group a less pleasant entity of which to be a part.  

The chapter opens with a discussion on brainstorming. This idea generation technique
usually involves a small group of people who meet with the purpose of producing a
number of creative ideas for a specific project or problem. These sessions allow for a
variety of expression and are designed to elicit everyone’s input. Some of the problems of
brainstorming mirror the problems of groups without parameters.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 253

BRIEF CHAPTER OUTLINE

I. DEFINING AND CLASSIFYING GROUPS (ppt9-2)


A. Definition
1. A group is defined as two or more individuals, interacting and
interdependent, who have come together to achieve particular objectives.
2. Groups can be either formal or informal. (ppt9-3)
a. It is possible to sub-classify groups as command, task, interest, or
friendship groups.
b. An interest group. People who affiliate to attain a specific objective with
which each is concerned.
B. Why do people form groups? (ppt9-4)
1. There is no single reason why individuals join groups.
2. Our tendency to take personal pride or offense for the accomplishments of a
group is the territory of social identity theory.
3. Social identity theory proposes that people have emotional reactions to the
failure or success of their group because their self-esteem gets tied into the
performance of the group.

II. STAGES OF GROUP DEVELOPMENT (ppt9-5) (ppt9-6)


A. The five-stage model (Exhibit 9-1)
1. Forming:
a. Characterized by a great deal of uncertainty about the group’s purpose,
structure, and leadership.
2. Storming:
a. One of intragroup conflict. Members accept the existence of the group,
but there is resistance to constraints on individuality.
3. Norming:
a. One in which close relationships develop and the group demonstrates
cohesiveness.
4. Performing:
a. The structure at this point is fully functional and accepted.
5. Adjourning:
a. For temporary committees, teams, task forces, and similar groups that
have a limited task to perform, there is an adjourning stage.
b. Responses of group members vary in this stage. Some are upbeat,
basking in the group’s accomplishments. Others may be depressed over
the loss of camaraderie and friendships.
B. Problems with the five-stage model (ppt9-7)
1. Many assume that a group becomes more effective as it progresses through
the first four stages. While generally true, what makes a group effective is
more complex. Under some conditions, high levels of conflict are conducive
to high group performance.
2. Groups do not always proceed clearly from one stage to the next. Sometimes
several stages go on simultaneously, as when groups are storming and
performing. Groups even occasionally regress to previous stages.
3. Another problem is that it ignores organizational context. For instance, a
study of a cockpit crew in an airliner found that, within ten minutes, three
strangers assigned to fly together for the first time had become a high-
performing group.
4. The strong organizational context provides the rules, task definitions,
information, and resources needed for the group to perform.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 254

C. An alternative model: For Temporary Groups with Deadlines (ppt9-8)


1. Temporary groups with deadlines don’t seem to follow the usual five-stage
model. Studies indicate they have their own unique sequencing of actions (or
inaction):
a. This punctuated-equilibrium model is shown in Exhibit 9-2.
2. The punctuated-equilibrium model (Exhibit 9-2)
a. The punctuated-equilibrium model characterizes groups as exhibiting
long periods of inertia interspersed with brief revolutionary changes
triggered primarily by their members’ awareness of time and deadlines.
b. During Phase 1, the first meeting sets the group’s direction. This is the
first inertia phase. A framework of behavioral patterns and assumptions
emerges. These lasting patterns can appear as early as the first few
seconds of the group’s life span.
c. Phase 2 is a new equilibrium or period of inertia. In this phase, the group
executes plans created during the transition period.

III. GROUP PROPERTIES: ROLES, NORMS, STATUS, SIZE, AND COHESIVENESS


(ppt9-9)
A. Introduction
1. “A set of expected behavior patterns attributed to someone occupying a given
position in a social unit.”
B. Group Property 1: Roles (ppt9-10)
1. Introduction
a. All group members are actors, each playing a role.
b. “A set of expected behavior patterns attributed to someone occupying a
given position in a social unit.”
c. We are required to play a number of diverse roles, both on and off our
jobs. Many of these roles are compatible; some create conflicts.
d. Different groups impose different role requirements on individuals.
2. Role perception
a. One’s view of how one is supposed to act in a given situation is a role
perception.
3. Role expectations
a. How others believe you should act in a given situation.
b. How you behave is determined to a large extent by the role defined in the
context in which you are acting.
4. Role conflict
a. “When an individual is confronted by divergent role expectations”
b. It exists when compliance with one role requirement may make more
difficult the compliance with another.
5. An experiment: Zimbardo’s prison experiment (ppt9-11)
a. Conducted by Stanford University psychologist Philip Zimbardo and
associates.
b. What should you conclude from this prison simulation?
i. The participants had learned stereotyped conceptions of guard and
prisoner roles from the mass media and their own personal
experiences in power and powerless relationships at home.
ii. This allowed them easily and rapidly to assume roles that were very
different from their inherent personalities.
C. Group Properties 2 and 3: Norms and status (ppt9-12)
1. Introduction
a. All groups have norms—“acceptable standards of behavior that are
shared by the group’s members.” Norms tell members what they ought
and ought not to do under certain circumstances.
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Chapter 9 Foundations of Group Behavior Page 255

2. The Hawthorne Studies (ppt9-13)


a. Experiments conducted between 1924 and 1932 by Elton Mayo at
Western Electric at the company’s Hawthorne Works in Chicago.
b. Studies conclude that a worker’s behavior and sentiments were closely
related.
c. As a follow-up the researchers began a second set of experiments in the
relay assembly test room at Western Electric.
d. In essence, workers in both the illumination and assembly-test-room
experiments were reacting to the increased attention they received.
e. A third study, in the bank wiring observation room, was introduced to
ascertain the effect of a sophisticated wage incentive plan.
f. Members were afraid that if they significantly increased their output, the
unit incentive rate would be cut, the expected daily output would be
increased, layoffs might occur, or slower workers would be reprimanded.
g. The norms the group established included a number of “don’ts.”
3. Conformity (ppt9-14)
a. There is considerable evidence that groups can place strong pressures on
individual members to change their attitudes and behaviors to conform
to the group’s standard.
b. Individuals conform to the important groups to which they belong or
hope to belong. However, all groups do not impose equal conformity
pressures on their members. Important groups are referred to as
reference groups.
c. The pressure that groups exert for conformity was demonstrated by
Solomon Asch. Groups of seven or eight people were asked to compare
two cards held by the experimenter. One card had one line, the other had
three lines of varying length. Under ordinary conditions, subjects made
less than one percent error. (Exhibit 9-3)
4. Deviant workplace behavior: (ppt9-15)
a. This term covers a full range of antisocial actions by organizational
members that intentionally violate established norms and that result in
negative consequences for the organization, its members, or both.
(Exhibit 9-4) (ppt9-16)
b. Deviant behavior depends on the accepted norms of the group—or even
whether an individual is part of a group.
D. Status (ppt9-17)
1. Status is a socially defined position or rank given to groups or group
members by others. We live in a class-structured society despite all attempts
to make it more egalitarian.
2. What determines status?
a. Status characteristics theory – differences in status characteristics create
status hierarchies within groups.
3. Status and norms (ppt9-18)
a. High-status members of groups often are given more freedom to deviate
from norms than other group members.
b. High-status people also are better able to resist conformity pressures.
4. Status and Group Interaction
a. Interaction is influenced by status
5. Status inequity
a. When inequity is perceived, it creates disequilibrium that results in
corrective behavior.
E. Group Property 4: Size (ppt9-19)
1. The size of a group affects the group’s overall behavior, but the effect
depends on the dependent variables: Smaller groups are faster at completing
tasks than are larger ones.
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Chapter 9 Foundations of Group Behavior Page 256

2. Social loafing is the tendency for individuals to expend less effort when
working collectively than when working individually.
3. Social loafing: (ppt9-20)
a. Causes of social loafing
i. A belief that others in the group are not carrying their fair share.
b. Preventing social loafing
i. Set group goals.
ii. Increase intergroup competition.
iii. Engage in peer evaluation.
iv. Select members who have high motivation and prefer to work in
groups.
v. If possible, base group rewards in part on each member’s unique
contributions.
F. Group Property 5: Cohesiveness (Exhibit 9-6) (ppt9-21)
1. Groups differ in their cohesiveness, “the degree to which members are
attracted to each other and are motivated to stay in the group.”
2. Cohesiveness is important because it is related to the group’s productivity.

IV. GROUP DECISION MAKING


A. Groups versus the individual (ppt9-22)
1. Strengths of Group Decision Making
a. Groups generate more complete information and knowledge.
b. They offer increased diversity of views.
c. This opens up the opportunity for more approaches and alternatives to
be considered.
d. The evidence indicates that a group will almost always outperform even
the best individual.
e. Groups lead to increased acceptance of a solution.
2. Weaknesses of group decision making
a. It is time consuming.
b. There is a conformity pressure in groups.
c. Group discussion can be dominated by one or a few members.
d. Group decisions suffer from ambiguous responsibility.
3. Effectiveness and efficiency
a. Whether groups are more effective than individuals depends on the
criteria you use.
b. In terms of accuracy, group decisions will tend to be more accurate.
4. Summary
a. Groups offer an excellent vehicle for performing many of the steps in the
decision-making process.
b. They are a source of both breadth and depth of input for information
gathering.
c. When the final solution is agreed upon, there are more people in a group
decision to support and implement it.
d. Group decisions consume time, create internal conflicts, and generate
pressures toward conformity.
B. Groupthink and groupshift (ppt9-23)
1. Groupthink is related to norms
a. It describes situations in which group pressures for conformity deter the
group from critically appraising unusual, minority, or unpopular views.
2. Groupshift
a. Groupshift, which describes the way, in discussing a given set of
alternatives and arriving at a solution, group members tend to exaggerate
the initial positions they hold.
3. Groupthink
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 257

a. The phenomenon that occurs when group members become so enamored


of seeking concurrence is that the norm for consensus overrides the
realistic appraisal of alternative courses of action and the full expression
of deviant, minority, or unpopular views.
b. In studies of historic American foreign policy decisions, these symptoms
were found to prevail when government policy-making groups failed.
4. Groupshift and group polarization
a. The groupshift can be viewed as actually a special case of groupthink.
The decision of the group reflects the dominant decision-making norm
that develops during the group’s discussion.
b. The greater occurrence of the shift toward risk has generated several
explanations.
a. Implications of groupshift:
i. Recognize that group decisions exaggerate the initial position of the
individual members.
ii. The shift has been shown more often to be toward greater risk.
C. Group decision-making techniques (ppt9-24)
1. Most group decision-making takes place in interacting groups.
a. In these groups, members meet face to face and rely on both verbal and
nonverbal interaction to communicate with each other.
b. Interacting groups often censor themselves and pressure individual
members toward conformity of opinion.
2. Brainstorming
a. It is meant to overcome pressures for conformity in the interacting group
that retard the development of creative alternatives.
b. In a typical brainstorming session, a half dozen to a dozen people sit
around a table.
3. The nominal group technique:
a. Restricts discussion or interpersonal communication during the
decision-making process
b. Group members are all physically present, but members operate
independently.
c. The chief advantage of the nominal group technique is that it permits the
group to meet formally but does not restrict independent thinking, as
does the interacting group.
4. The computer-assisted group or electronic meeting blends the nominal group
technique with sophisticated computer technology.
a. Up to 50 people sit around a horseshoe-shaped table, empty except for a
series of computer terminals.
b. Early evidence suggests electronic meetings don’t achieve most of their
proposed benefits. They actually:
i. Lead to decreased group effectiveness
ii. Require more time to complete tasks
iii. Result in reduced member satisfaction compared with face-to-face
groups
5. Each of the four group decision-making techniques has its own set of
strengths and weaknesses. The choice depends on what criteria you want to
emphasize and the cost–benefit trade-off. (Exhibit 9-7) (ppt9-25)

V. GLOBAL IMPLICATIONS (ppt9-26)


A. Structure and culture
1. Cultural differences do affect status.
B. Social loafing
1. It’s consistent with individualistic cultures.
2. It is not consistent with collective societies, in which individuals are
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 258

motivated by in-group goals.


C. Group diversity
1. Diversity appears to increase group conflict, especially in the early stages of
a group’s tenure, which often lowers group morale and raises dropout rates.
2. Evidence is accumulating that, over time, culturally and demographically
diverse groups may perform better, if they can get over their initial conflicts.
Why might this be so?
a. Surface-level diversity—observable characteristics such as national
origin, race, and gender—alerts people to possible differences in deep-
level diversity—underlying attitudes, values, and opinions.
3. In summary, the impact of cultural diversity on groups is mixed.
4. It is difficult to be in a diverse group in the short term.
a. However, if members can weather their differences, over time diversity
may help them be more open minded and creative, allowing them to do
better in the long run.

VI. SUMMARY AND IMPLICATIONS FOR MANAGERS (ppt9-27)


A. Performance
1. Among the most prominent properties related to group performance are role
perception, norms, status differences, size of the group, and cohesiveness.
2. Role perception and an employee’s performance evaluation are positively
related.
3. Norms control behavior by establishing standards of right and wrong.
4. Status inequities create frustration and can adversely influence productivity
and willingness to remain with an organization.
5. The impact of size on a group’s performance depends on the type of task.
6. Cohesiveness can influence a group’s level of productivity or not, depending
on the group’s performance-related norms.
B. Satisfaction
1. High congruence between a boss’s and an employee’s perception of the
employee’s job correlates strongly with high employee satisfaction.
2. Most people prefer to communicate with others at their own status level or a
higher one rather than with those below them.
3. The group size–satisfaction relationship is what we would intuitively expect:
larger groups are associated with lower satisfaction.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 259

EXPANDED CHAPTER OUTLINE

I. DEFINING AND CLASSIFYING GROUPS


A. Definition
1. A group is defined as two or more individuals, interacting and
interdependent, who have come together to achieve particular objectives.
2. Groups can be either formal or informal.
a. Formal groups—those defined by the organization’s structure, with
designated work assignments establishing tasks.
i. The behaviors that one should engage in are stipulated by and
directed toward organizational goals.
ii. An airline flight crew is an example of a formal group.
b. Informal groups—alliances that are neither formally structured nor
organizationally determined
i. Natural formations in the work environment in response to the need
for social contact.
ii. Three employees from different departments who regularly eat lunch
together is an informal group.
c. It is possible to sub-classify groups as command, task, interest, or
friendship groups.
i. Command groups are dictated by the formal organization.
(a) The organization chart determines a command group.
(b) Composed of direct reports to a given manager.
ii. Task groups are organizationally determined and represent those
working together to complete a job task.
(a) A task group’s boundaries are not limited to its immediate
hierarchical superior. It can cross command relationships.
(b) For instance, if a college student is accused of a campus crime, it
may require communication and coordination among the dean of
academic affairs, the dean of students, the registrar, the director
of security, and the student’s advisor.
(c) All command groups are also task groups, but the reverse need
not be true.
iii. An interest group comprises of people who affiliate to attain a specific
objective with which each is concerned.
(a) Employees who band together to have their vacation schedules
altered
iv. Friendship groups often develop because the individual members
have one or more common characteristics.
(a) Social alliances, which frequently extend outside the work
situation, can be based on similar age or ethnic heritage.
(b) Informal groups satisfy their members’ social needs.
(c) These types of interactions among individuals, even though
informal, deeply affect their behavior and performance.
B. Why do people form groups?
1. There is no single reason why individuals join groups.
2. Our tendency to take personal pride or offense for the accomplishments of a
group is the territory of social identity theory.
3. Social identity theory proposes that people have emotional reactions to the
failure or success of their group because their self-esteem gets tied into the
performance of the group.
a. Social identities help us understand who we are and where we fit in with

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 260

other people, but they can have a negative side as well. Probably the
biggest downside is that social identities encourage ingroup favoritism.
b. When do people develop a social identity? Several characteristics make a
social identity important to a person:
i. Similarity. Not surprisingly, people who have the same values or
characteristics as other members of their organization have higher
levels of group identification.
ii. Distinctiveness. People are more likely to notice identities that show
how they are different from other groups. Respondents in one study
identified more strongly with those in their work group with whom
they shared uncommon or rare demographic characteristics.
iii. Status. Because people use identities to define themselves and
increase self esteem, it makes sense that they are most interested in
linking themselves to high-status groups. Graduates of prestigious
universities will go out of their way to emphasize their links to their
alma maters and are also more likely to make donations.
iv. Uncertainty reduction. Membership in a group also helps some people
understand who they are and how they fit into the world.

II. STAGES OF GROUP DEVELOPMENT


A. The five-stage model (Exhibit 9-1)
1. Forming:
a. Characterized by a great deal of uncertainty about the group’s purpose,
structure, and leadership.
b. Members are trying to determine what types of behavior are acceptable.
c. Stage is complete when members have begun to think of themselves as
part of a group.
2. Storming:
a. Characterized by intragroup conflict. Members accept the existence of
the group, but there is resistance to constraints on individuality.
b. Conflict over who will control the group.
c. When complete, there will be a relatively clear hierarchy of leadership
within the group.
3. Norming:
a. One in which close relationships develop and the group demonstrates
cohesiveness.
b. There is now a strong sense of group identity and camaraderie.
c. Stage is complete when the group structure solidifies and the group has
assimilated a common set of expectations of what defines correct
member behavior.
4. Performing:
a. The structure at this point is fully functional and accepted.
b. Group energy has moved from getting to know and understand each
other to performing.
c. For permanent work groups, performing is the last stage in their
development.
5. Adjourning:
a. For temporary committees, teams, task forces, and similar groups that
have a limited task to perform, there is an adjourning stage.
b. In this stage, the group prepares for its disbandment. Attention is
directed toward wrapping up activities.
c. Responses of group members vary in this stage. Some are upbeat,
basking in the group’s accomplishments. Others may be depressed over
the loss of camaraderie and friendships.
B. Problems with the five-stage model
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 261

a. Many assume that a group becomes more effective as it progresses


through the first four stages. While generally true, what makes a group
effective is more complex. Under some conditions, high levels of conflict
are conducive to high group performance.
b. Groups do not always proceed clearly from one stage to the next.
Sometimes several stages go on simultaneously, as when groups are
storming and performing. Groups even occasionally regress to previous
stages.
c. Another problem is that it ignores organizational context. For instance, a
study of a cockpit crew in an airliner found that, within ten minutes,
three strangers assigned to fly together for the first time had become a
high-performing group.
d. The strong organizational context provides the rules, task definitions,
information, and resources needed for the group to perform.
C. An alternative model for temporary groups with deadlines: The punctuated
equilibrium model (Exhibit 9-2)
1. Temporary groups with deadlines don’t seem to follow the usual five-stage
model. Studies indicate they have their own unique sequencing of actions (or
inaction):
a. The first meeting of the group members sets the group’s direction;
b. This first phase of group activity is one of inertia;
c. A transition takes place at the end of this phase, which occurs exactly
when the group has used up half its allotted time;
d. A transition initiates major changes:
e. A second phase of inertia follows the transition; and
f. The group’s last meeting is characterized by markedly accelerated
activity. This pattern, called the punctuated-equilibrium model, is shown
in Exhibit 9-2.
2. The punctuated-equilibrium model characterizes groups as exhibiting long
periods of inertia interspersed with brief revolutionary changes triggered
primarily by their members’ awareness of time and deadlines.
a. Phase I—The first meeting sets the group’s direction. This is the first
inertia phase. A framework of behavioral patterns and assumptions
emerges. These lasting patterns can appear as early as the first few
seconds of the group’s life span.
i. Then a transition takes place when the group has used up half its
allotted time.
ii. The group’s direction becomes fixed and is unlikely to be reexamined
throughout the first half of the group’s life.
iii. The group tends to stand still or become locked into a fixed course of
action.
iv. The group is incapable of acting on new insights in Phase 1.
v. The midpoint appears to work like an alarm clock, heightening
members’ awareness that their time is limited and that they need to
“get moving.” A transition initiates major changes.
vi. This ends Phase 1 and is characterized by a concentrated burst of
changes, dropping of old patterns, and adoption of new perspectives.
The transition sets a revised direction for Phase 2.
b. Phase 2 is a new equilibrium or period of inertia. In this phase, the group
executes plans created during the transition period.
c. The group’s last meeting is characterized by markedly accelerated
activity.

III. GROUP PROPERTIES: ROLES, NORMS, STATUS, SIZE, AND COHESIVENESS


Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 262

A. Introduction
1. “A set of expected behavior patterns attributed to someone occupying a given
position in a social unit.”
B. Group Property 1:Roles
1. Introduction
a. All group members are actors, each playing a role.
b. “A set of expected behavior patterns attributed to someone occupying a
given position in a social unit.”
c. We are required to play a number of diverse roles, both on and off our
jobs. Many of these roles are compatible; some create conflicts.
d. Different groups impose different role requirements on individuals.
2. Role perception
a. One’s view of how one is supposed to act in a given situation is a role
perception.
b. We get these perceptions from stimuli all around us—friends, books,
movies, television.
c. The primary reason that apprenticeship programs exist is to allow
beginners to watch an “expert,” so that they can learn to act as they are
supposed to.
3. Role expectations
a. How others believe you should act in a given situation.
b. How you behave is determined to a large extent by the role defined in the
context in which you are acting.
c. When role expectations are concentrated into generalized categories, we
have role stereotypes.
d. The psychological contract is an unwritten agreement that exists between
employees and their employer.
e. It sets out mutual expectations—what management expects from
workers, and vice versa.
f. It defines the behavioral expectations that go with every role.
g. If role expectations as implied are not met, expect negative repercussions
from the offended party.
4. Role conflict
a. “When an individual is confronted by divergent role expectations”
b. It exists when compliance with one role requirement may make more
difficult the compliance with another.
c. All of us have faced and will continue to face role conflicts. The critical
issue is how conflicts imposed by divergent expectations impact on
behavior.
d. They increase internal tension and frustration.
5. An experiment: Zimbardo’s prison experiment
a. Conducted by Stanford University psychologist Philip Zimbardo and
associates. They created a “prison” in the basement of the Stanford
psychology building. They hired two dozen emotionally stable, physically
healthy, law-abiding students who scored “normal average” on extensive
personality tests. Each student was randomly assigned the role of
“guard” or “prisoner.” To get the experiment off to a “realistic” start,
Zimbardo got the cooperation of the local police department: Police went,
unannounced, to the future prisoners’ homes, arrested and handcuffed
them, put them in a squad car in front of friends and neighbors, and
took them to police headquarters where they were booked and
fingerprinted. From there, they were taken to the Stanford prison. At the
start of the planned two-week experiment, there were no measurable
differences between those assigned to be guards and those chosen to be
prisoners.
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Chapter 9 Foundations of Group Behavior Page 263

b. The guards received no special training in how to be prison guards. They


were told only to “maintain law and order” in the prison and not to take
any nonsense. Physical violence was forbidden. To simulate further the
realities of prison life, the prisoners were allowed visits. Mock guards
worked eight-hour shifts; the mock prisoners were kept in their cells
around the clock and were allowed out only for meals, exercise, toilet
privileges, head-count lineups, and work details. It took the “prisoners”
little time to accept the authority positions of the guards, or the mock
guards to adjust to their new authority roles. After the guards crushed a
rebellion, the prisoners became increasingly passive. The prisoners
actually began to believe and act as if they were inferior and powerless.
Every guard, at some time during the simulation, engaged in abusive,
authoritative behavior. Not one prisoner said, “Stop this. I am a student
like you. This is just an experiment!” The simulation actually proved too
successful in demonstrating how quickly individuals learn new roles. The
researchers had to stop the experiment after only six days because of the
pathological reactions that the participants were demonstrating.
c. What should you conclude from this prison simulation?
d. The participants had learned stereotyped conceptions of guard and
prisoner roles from the mass media and their own personal experiences
in power and powerless relationships at home.
e. This allowed them easily and rapidly to assume roles that were very
different from their inherent personalities.
C. Group Properties 2 and 3: Norms and status
1. Introduction
a. All groups have norms—“acceptable standards of behavior that are
shared by the group’s members.” Norms tell members what they ought
and ought not to do under certain circumstances.
2. The Hawthorne studies
a. Experiments conducted between 1924 and 1932 by Elton Mayo at
Western Electric at the company’s Hawthorne Works in Chicago.
b. Studies conclude that a worker’s behavior and sentiments are closely
related.
i. The Hawthorne researchers began by examining the relationship
between the physical environment and productivity. Illumination and
other working conditions were selected to represent this physical
environment.
ii. The researchers’ initial findings contradicted their anticipated
results.
c. As a follow-up the researchers began a second set of experiments in the
relay assembly test room at Western Electric.
i. Observations covering a multiyear period found this small group’s
output increased steadily.
ii. It became evident this group’s performance was significantly
influenced by its status as “special.”
d. In essence, workers in both the illumination and assembly-test-room
experiments were reacting to the increased attention they received.
e. A third study, in the bank wiring observation room, was introduced to
ascertain the effect of a sophisticated wage incentive plan.
i. The most important finding of this study was that employees did not
individually maximize their outputs.
ii. Their output became controlled by a group norm that determined
what was a proper day’s work.
iii. Interviews determined the group was operating well below its
capability and was leveling output to protect itself.
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Chapter 9 Foundations of Group Behavior Page 264

f.Members were afraid that if they significantly increased their output, the
unit incentive rate would be cut, the expected daily output would be
increased, layoffs might occur, or slower workers would be reprimanded.
g. The norms the group established included a number of “don’ts.”
i. Don’t be a rate-buster, turning out too much work.
ii. Don’t be a chiseler, turning out too little work.
iii. Don’t squeal on any of your peers. How did the group enforce these
norms?
(a) The methods included sarcasm, name-calling, ridicule, and even
punches to the upper arm of any member who violated the
group’s norms.
(b) Members also ostracized individuals whose behavior was against
the group’s interest.
3. Conformity
a. There is considerable evidence that groups can place strong pressures on
individual members to change their attitudes and behaviors to conform
to the group’s standard.
b. Individuals conform to the important groups to which they belong or
hope to belong. However, all groups do not impose equal conformity
pressures on their members. Important groups are referred to as
reference groups.
i. The reference group is characterized as one where the person is
aware of the others; the person defines himself or herself as a
member, or would like to be a member; and the person feels that the
group members are significant to him/her.
c. The pressure that group exerts for conformity was demonstrated by
Solomon Asch. Groups of seven or eight people were asked to compare
two cards held by the experimenter. One card had one line, the other had
three lines of varying length. Under ordinary conditions, subjects made
less than one percent error. (Exhibit 9-3)
i. Will the pressures to conform result in an unsuspecting subject
(USS) altering his/her answer to align with the others?
ii. The experiment began with several sets of matching exercises. All the
subjects gave the right answers.
iii. On the third set, however, the first subject gave an obviously wrong
answer, the next subject gave the same wrong answer, and so did the
others until it got to the unknowing subject.
iv. The results obtained by Asch demonstrated that over many
experiments and many trials, subjects conformed in about 37% of the
trials; the subjects gave answers that they knew were wrong but that
were consistent with the replies of other group members.
v. Has time altered the validity of these findings of nearly 50 years ago,
and are they generalizable across cultures?
d. There have been changes in the level of conformity over time. Levels of
conformity have steadily declined.
e. Asch’s findings are culture-bound. Conformity to social norms is higher
in collectivist cultures than in individualistic cultures.
4. Deviant workplace behavior
a. This term covers a full range of antisocial actions by organizational
members that intentionally violate established norms and that result in
negative consequences for the organization, its members, or both.
(Exhibit 9-4)
b. Rudeness is on the rise and 12 percent of those who experienced it
actually quit their jobs.

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Chapter 9 Foundations of Group Behavior Page 265

c. When deviant workplace behavior occurs it can affect employee


commitment, cooperation, and motivation. This could lead to
performance issues and a lack of job satisfaction.
d. Someone who ordinarily wouldn’t engage in deviant behavior might be
more likely to do so when working in a group. A recent study suggests
those working in a group were more likely to lie, cheat, and steal than
individuals working alone. (Exhibit 9-5)
e. Deviant behavior depends on the accepted norms of the group—or even
whether an individual is part of a group.
D. Status
1. Status is a socially defined position or rank given to groups or group
members by others. We live in a class-structured society despite all attempts
to make it more egalitarian.
2. What Determines Status?
a. Status characteristics theory – differences in status characteristics create
status hierarchies within groups.
i. Status derived from one of three sources:
(a) The power a person wields over others
(b) A person’s ability to contribute to group’s goals
(c) Individual’s personal characteristics
3. Status and norms
a. High-status members of groups often are given more freedom to deviate
from norms than other group members.
b. High-status people also are better able to resist conformity pressures.
c. The previous findings explain why many star athletes, famous actors,
top-performing salespeople, and outstanding academics seem oblivious
to appearance or social norms.
4. Status and group interaction
a. Interaction is influenced by status.
b. High-status people tend to be assertive.
c. Status differences inhibit diversity of ideas & creativity.
d. Lower-status members tend to be less active.
5. Status inequity
a. When inequity is perceived, it creates disequilibrium that results in
corrective behavior.
b. The trappings of formal positions are also important elements in
maintaining equity. Employees expect what an individual has and
receives to be congruent with his/her status. For example: pay, office
space, etc.
c. Groups generally agree within themselves on status criteria.
d. Individuals can find themselves in a conflict situation when they move
between groups whose status criteria are different or when they join
groups whose members have heterogeneous backgrounds.
E. Group Property 4: Size
1. The size of a group affects the group’s overall behavior, but the effect
depends on the dependent variables: Smaller groups are faster at completing
tasks than are larger ones.
2. If the group is engaged in problem solving, large groups consistently do
better.
3. Large groups—a dozen or more members—are good for gaining diverse input.
4. Smaller groups—seven members—are better at doing something productive
with that input.
5. Social loafing is the tendency for individuals to expend less effort when
working collectively than when working individually.

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Chapter 9 Foundations of Group Behavior Page 266

6. A common stereotype about groups is that team spirit spurs individual effort
and enhances overall productivity.
7. In the late 1920s, a German psychologist named Max Ringelmann compared
the results of individual and group performance on a rope-pulling task.
a. Ringelmann’s results showed that groups of three people exerted a force
only two-and-a-half times the average individual performance. Groups of
eight collectively achieved less than four times the solo rate.
b. Increases in group size are inversely related to individual performance.
c. Replications of Ringelmann’s research generally support his findings.
8. Social loafing:
a. Causes of social loafing
i. A belief that others in the group are not carrying their fair share.
ii. The dispersion of responsibility and the relationship between an
individual’s input and the group’s output is clouded.
iii. There will be a reduction in efficiency where individuals think that
their contribution cannot be measured.
b. Preventing social loafing
i. Set group goals, so the group has a common purpose to strive
toward.
ii. Increase intergroup competition, which again focuses on the shared
outcome.
iii. Engage in peer evaluation so each person evaluates each other
person’s contribution.
iv. Select members who have high motivation and prefer to work in
groups.
v. If possible, base group rewards in part on each member’s unique
contributions.
F. Group Property 5: Cohesiveness (Exhibit 9-6)
1. Groups differ in their cohesiveness, “the degree to which members are
attracted to each other and are motivated to stay in the group.”
2. Cohesiveness is important because it is related to the group’s productivity.
3. The relationship of cohesiveness and productivity depends on the
performance-related norms established by the group.
4. If performance-related norms are high, a cohesive group will be more
productive.
5. If cohesiveness is high and performance norms are low, productivity will be
low.
6. How to encourage group cohesiveness:
a. Make the group smaller.
b. Encourage agreement with group goals.
c. Increase the time members spend together.
d. Increase the status of the group and the perceived difficulty of attaining
membership in the group.
e. Stimulate competition with other groups.
f. Give rewards to the group rather than to individual members.
g. Physically isolate the group.

V. GROUP DECISION MAKING


A. Groups versus the individual
1. Strengths of Group Decision Making
a. Groups generate more complete information and knowledge.
b. They offer increased diversity of views.
c. This opens up the opportunity for more approaches and alternatives to
be considered.

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Chapter 9 Foundations of Group Behavior Page 267

d. The evidence indicates that a group will almost always outperform even
the best individual.
e. Groups lead to increased acceptance of a solution.
2. Weaknesses of group decision making
a. It is time consuming.
b. There is a conformity pressure in groups.
c. Group discussion can be dominated by one or a few members.
d. Group decisions suffer from ambiguous responsibility.
3. Effectiveness and efficiency
a. Whether groups are more effective than individuals depends on the
criteria you use.
b. In terms of accuracy, group decisions will tend to be more accurate.
c. On the average, groups make better-quality decisions than individuals.
d. If decision effectiveness is defined in terms of speed, individuals are
superior.
e. If creativity is important, groups tend to be more effective than
individuals.
f. If effectiveness means the degree of acceptance the final solution
achieves, groups are better.
g. In terms of efficiency, groups almost always stack up as a poor second to
the individual decision maker. The exceptions tend to be those instances
where, to achieve comparable quantities of diverse input, the single
decision maker must spend a great deal of time reviewing files and
talking to people.
4. Summary
a. Groups offer an excellent vehicle for performing many of the steps in the
decision-making process.
b. They are a source of both breadth and depth of input for information
gathering.
c. When the final solution is agreed upon, there are more people in a group
decision to support and implement it.
d. Group decisions consume time, create internal conflicts, and generate
pressures toward conformity.
B. Groupthink and groupshift
1. Groupthink is related to norms.
a. It describes situations in which group pressures for conformity deter the
group from critically appraising unusual, minority, or unpopular views.
b. Groupthink is a disease that attacks many groups and can dramatically
hinder performance.
2. Groupshift
a. Groupshift describes the way of discussing a given set of alternatives and
arriving at a solution.
b. Group members tend to exaggerate the initial positions they hold.
c. Groups tend toward a risky shift.
3. Groupthink
a. The phenomenon that occurs when group members become so enamored
of seeking concurrence is that the norm for consensus overrides the
realistic appraisal of alternative courses of action and the full expression
of deviant, minority, or unpopular views.
b. It is a deterioration in an individual’s mental efficiency, reality testing,
and moral judgment as a result of group pressures.
c. Symptoms of Groupthink include:
i. Group members rationalize any resistance to the assumptions they
have made.

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Chapter 9 Foundations of Group Behavior Page 268

ii. Members apply direct pressures on those who momentarily express


doubts.
iii. Those members who hold differing points of view seek to avoid
deviating from group consensus by keeping silent.
iv. There appears to be an illusion of unanimity.
d. In studies of historic American foreign policy decisions, these symptoms
were found to prevail when government policy-making groups failed.
Examples:
i. Unpreparedness at Pearl Harbor in 1941
ii. The U.S. invasion of North Korea
iii. The Bay of Pigs fiasco
iv. The escalation of the Vietnam War
v. The Challenger and Columbia space shuttle disasters
vi. The failure of the main mirror on the Hubble telescope
e. Groupthink appears to be closely aligned with the conclusions Asch drew
from his experiments on the lone dissenter. The results were that
individuals who hold a position different from the majority are put under
pressure to suppress or change their true beliefs.
f. Groupthink does not attack all groups. It occurs most often where there
is a clear group identity, where members hold a positive image of their
group, which they want to protect, and where the group perceives a
collective threat to this positive image.
g. How to minimize groupthink:
i. Encourage group leaders to play an impartial role.
ii. Appoint one group member to play the role of devil’s advocate.
iii. Utilize exercises that stimulate active discussion of diverse
alternatives without threatening the group and intensifying identity
protection.
4. Groupshift and group polarization
a. There are differences between group decisions and the individual
decisions of group members.
i. Sometimes group decisions are more conservative. More often, they
lean toward greater risk.
c. What appears to happen in groups is that the discussion leads to a
significant shift in the positions of members toward a more extreme
position in the direction in which they were already leaning before the
discussion. Conservatives become more cautious, and the more
aggressive take on more risk.
d. The groupshift can be viewed as actually a special case of groupthink.
The decision of the group reflects the dominant decision-making norm
that develops during the group’s discussion.
e. The greater occurrence of the shift toward risk has generated several
explanations:
i. Discussion creates familiarization among the members. As they
become more comfortable with each other, they also become more
bold and daring.
ii. Most first-world societies value risk. We admire individuals who are
willing to take risks. Group discussion motivates members to show
that they are at least as willing as their peers to take risks.
iii. The most plausible explanation of the shift toward risk, however,
seems to be that the group diffuses responsibility.
iv. Group decisions free any single member from accountability for the
group’s final choice.
f. Implications of groupshift:

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Chapter 9 Foundations of Group Behavior Page 269

i. Recognize that group decisions exaggerate the initial position of the


individual members.
ii. The shift has been shown more often to be toward greater risk.
C. Group decision-making techniques
1. Most group decision-making takes place in interacting groups.
a. In these groups, members meet face to face and rely on both verbal and
nonverbal interaction to communicate with each other.
b. Interacting groups often censor themselves and pressure individual
members toward conformity of opinion.
c. Brainstorming, the nominal group technique, and electronic meetings
have been proposed as ways to reduce many of the problems inherent in
the traditional interacting group.
2. Brainstorming
a. It is meant to overcome pressures for conformity in the interacting group
that retard the development of creative alternatives.
b. In a typical brainstorming session, a half dozen to a dozen people sit
around a table.
c. The process:
i. The group leader states the problem clearly.
ii. Members then “free-wheel” as many alternatives as they can in a
given length of time.
iii. No criticism is allowed, and all the alternatives are recorded for later
discussion and analysis.
iv. One idea stimulates others, and group members are encouraged to
“think the unusual.”
3. The nominal group technique:
a. Restricts discussion or interpersonal communication during the
decision-making process.
b. Group members are all physically present, but members operate
independently.
c. Specifically, a problem is presented, and then the following steps take
place:
i. Members meet as a group but, before any discussion takes place,
each member independently writes down his or her ideas on the
problem.
ii. After this silent period, each member presents one idea to the group.
Each member takes his or her turn.
iii. The group now discusses the ideas for clarity and evaluates them.
iv. Each group member silently and independently rank-orders the
ideas.
v. The idea with the highest aggregate ranking determines the final
decision.
d. The chief advantage of the nominal group technique is that it permits the
group to meet formally but does not restrict independent thinking, as
does the interacting group.
4. The computer-assisted group or electronic meeting blends the nominal group
technique with sophisticated computer technology.
a. Up to 50 people sit around a horseshoe-shaped table, empty except for a
series of computer terminals.
b. Issues are presented to participants, and they type their responses onto
their computer screen.
c. Individual comments, as well as aggregate votes, are displayed on a
projection screen.
d. The major advantages of electronic meetings are anonymity, honesty,
and speed.
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Chapter 9 Foundations of Group Behavior Page 270

e. Early evidence suggests electronic meetings don’t achieve most of their


proposed benefits. They actually:
i. Lead to decreased group effectiveness
ii. Require more time to complete tasks
iii. Result in reduced member satisfaction compared with face-to-face
groups
5. Each of the four group decision-making techniques has its own set of
strengths and weaknesses. The choice depends on what criteria you want to
emphasize and the cost–benefit trade-off. (Exhibit 9-7)

VI. GLOBAL IMPLICATIONS


A. Structure and culture
1. Cultural differences do affect status.
2. Importance varies among cultures.
3. It is important to understand who and what holds status when interacting
with people from a culture different from one’s own.
B. Social loafing
1. It’s consistent with individualistic cultures.
2. It is not consistent with collective societies, in which individuals are
motivated by in-group goals.
3. In India, it has been observed that employees tend to loaf in competitive
situations when outcomes are not linked to individual efforts.
C. Group diversity
1. Diversity appears to increase group conflict, especially in the early stages of
a group’s tenure, which often lowers group morale and raises dropout
rates.
2. Evidence is accumulating that, over time, culturally and demographically
diverse groups may perform better, if they can get over their initial conflicts.
Why might this be so?
a. Surface-level diversity—observable characteristics such as national
origin, race, and gender—alerts people to possible differences in deep-
level diversity—underlying attitudes, values, and opinions.
3. In summary, the impact of cultural diversity on groups is mixed.
4. It is difficult to be in a diverse group in the short term.
a. However, if members can weather their differences, over time diversity
may help them be more open minded and creative, allowing them to do
better in the long run.

VII. SUMMARY AND IMPLICATIONS FOR MANAGERS


A. Performance
1. Among the most prominent properties related to group performance are role
perception, norms, status differences, size of the group, and cohesiveness.
2. Role perception and an employee’s performance evaluation are positively
related.
3. Norms control behavior by establishing standards of right and wrong.
4. Status inequities create frustration and can adversely influence productivity
and willingness to remain with an organization.
5. The impact of size on a group’s performance depends on the type of task.
6. Cohesiveness can influence a group’s level of productivity or not, depending
on the group’s performance-related norms.
B. Satisfaction
1. High congruence between a boss’s and an employee’s perception of the
employee’s job correlates strongly with high employee satisfaction.
2. Most people prefer to communicate with others at their own status level or a
higher one rather than with those below them.
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Chapter 9 Foundations of Group Behavior Page 271

3. The group size–satisfaction relationship is what we would intuitively expect:


larger groups are associated with lower satisfaction.

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Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 272

International OB
Group Cohesiveness Across Cultures

A recent study attempted to determine whether motivating work groups by giving


them more complex tasks and greater autonomy resulted in increased group
cohesiveness. Researchers studied bank teams in the United States, an
individualist culture, and a collectivist culture in Hong Kong. Regardless of their
culture, teams with difficult tasks and more freedom to accomplish them were more
tight knit and their performance was enhanced. 

However, the teams in individualist cultures responded more strongly to increases in


task complexity and autonomy, became more united and committed, and, as a result,
received higher performance ratings from their supervisors than teams from
collectivist cultures. Collectivists appear more sensitive to the moods of their co-
workers, so the motivation and positive mood of one group member is likely to spill over
to increase motivation and positive moods in others. Why do these cultural differences
exist? One explanation is that collectivist teams already have a strong predisposition to
work together as a group, so there’s less need for increased teamwork. This conclusion
is supported by other research showing collectivists are less likely to engage in social
loafing when working in groups than are individualists. 

What’s the lesson? Managers in individualist cultures may need to work harder to


increase team cohesiveness. One way to do this is to give teams more challenging
assignments and provide them with more independence. 

Sources: Based on R. Ilies, D. T. Wagner, and F. P. Morgeson, “Explaining Affective Linkages in Teams:


Individual Differences in Susceptibility to Contagion and Individualism-Collectivism,” Journal of Applied
Psychology 92, no. 4 (2007), pp. 1140–1148; E. M. Stark, J. D. Shaw, and M. K. Duffy, “Preference for
Group Work, Winning Orientation, and Social Loafing Behavior in Groups,” Group and Organization
Management 32, no. 6 (2007), pp. 699–723; and D. Man and S. S. K. Lam, “The Effects of Job Complexity and
Autonomy on Cohesiveness in Collectivist and Individualistic Work Groups: A Cross-Cultural Analysis,”
Journal of Organizational Behavior, December  

Class Exercise

1. Divide the class into teams of three to five students.


2. Have the groups go to: http://www.sciencedirect.com/science?
_ob=PublicationURL&_tockey=%23TOC
%236575%232009%23999799996%231024669%23FLA
%23&_cdi=6575&_pubType=J&view=c&_auth=y&_acct=C000059727&_version=
1&_urlVersion=0&_userid=108938&md5=a23938a4d73d32f084809e9eff830eab
and select article 10.
3. Although they should read the entire article, the important points are in the
Discussion section 4.0 and Practical Application in section 4.1.
4. Then go to http://www.geert-hofstede.com/.
5. Assign three countries or have the students select countries at random.
6. Compare the results of each country’s “individualistic” assessments.
7. Have the students determine the implications of the first article on management
practices in countries assessed in the Hofstede analysis.
8. Ask the groups to prepare a discussion for the class and to present their finding.
9. Open the class to discussion about the conclusions made.
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Chapter 9 Foundations of Group Behavior Page 273

10. The analysis by the groups will depend heavily on which countries are selected
for analysis. But, they should find which countries are highly individualistic and
which will apply the conclusion of the study toward the relationship between
cohesiveness and individualism.

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Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 274

Myth or Science?
Are Two Heads Better Than One?

Two heads are not necessarily always better than one. In fact, the evidence generally
confirms the superiority of individuals over groups when brainstorming. The best
individual in a group also makes better decisions than groups as a whole, though
groups do tend to do better than the average group member.

Research also indicates that groups are superior only when they meet certain criteria.
These criteria include:
1. Diversity among members. The benefits of “two heads” require that they differ in
relevant skills and abilities.
2. The group members must be able to communicate their ideas freely and openly.
This requires an absence of hostility and intimidation.
3. The task being undertaken is complex. Relative to individuals, groups do better
on complex rather than simple tasks.

Class Exercise

This will require you to buy Lego® blocks or borrow them from your children.

1. Create a simple model—a building, a plane, whatever—because you need to


provide Legos® to each team and individual to recreate it. (Three to eight sets.)
2. Count the number of Legos®, diagram the model, noting both the location, size,
and color of the Legos®. This will be your master.
3. Select two teams of three to five, and at least three individuals. The rest of the
class will observe and help you.
4. Give the groups and the individuals the same instructions on the exercise. Ask
them to tell you when they have completed the task.
5. Select one student to create a time chart on the board and record when each
unit—group or individual—begins to build and their completion time.
6. Select two students to be “certifiers”; they will go to the individual or team when
they are done and certify the accuracy of their model.
7. Select one student to monitor the model, which needs to be outside of the class,
in another location.

Instructions

1. This is a timed exercise. They have 30 minutes. The goal is to recreate the model
accurately and quickly.
2. They must visit the model in another room. They may not touch it, but they may
sketch it.
3. Teams may assign responsibilities any way they desire; all members may view
the model, but only one at a time.
4. Once they are ready to replicate the model they must notify you, and they may
NOT return to the model again.
5. They must build their replicates in your classroom and cannot take the Legos ®
with them.
6. Though teams have grown in popularity as a device for employers to organize
people and tasks, we should expect resistance to any effort to treat individuals
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Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 275

solely as members of a group— especially among workers raised in capitalistic


economies.

Discussion 

When you call time, some will be done, some will not, and some will be lost. Discuss
what type of task this was—complex or simple. Note the performance, time, and
accuracy. Discuss with the class why things turned out as they did. What happened
in the groups?    

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Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 276

An Ethical Choice
How Groups Infect Your Behavior–And How to Immunize
Yourself

Most organizations face scores of ethical decisions every day. When ethics and self-
interest align, the choice is easy. Very often, however, the two choices aren’t
perfectly aligned and we must choose between what is expedient and what is ethical.
What drives such choices? 

Given the topic of this chapter, it won’t be surprising to learn that one factor appears to
be groups. Earlier we discussed how individuals tend to engage in more deviant
behavior when working in groups than when they’re working alone. Here we’re
interested in a related group effect: how individuals respond to dishonesty they
perceive in the group. 

A recent research study suggested some surprising group dynamics, and some


implications for our own ethical behavior. First, whereas observing cheating on the part
of “in-group” members (people who are similar to us and we like and identify with)
increased an individual’s propensity to cheat, cheating on the part of “out-
group” members decreased it. 

Second, other research suggests that cheating in groups is reduced by making moral


standards explicit. This fits with research showing that drawing attention to moral
standards can reduce dishonesty in a group. In one condition, participants were asked
to read the Ten Commandments and were then given an opportunity to cheat. In the
other condition, participants were given the same chance to cheat, but without the
moral reminder. Participants in the first group didn’t cheat at all, whereas those in the
second group cheated a lot. 

As the authors of one of the studies notes, “Dishonest behavior can be contagious.” 


1. Given the findings of this study, it’s important to make sure our “in-group” is
honest. Should they be dishonest, we may be influenced by their behavior more
than we realize.
2. The findings on saliency also suggest actions we might take: Reminding
ourselves or other group members of ethical standards can have an effect on our
own or on our group’s ethical behavior.
3. It is dangerous to assume we’re not capable of unethical behavior. All of us are.
If we assume we’re above such behavior, we may be particularly likely to be
naïve about group factors that affect unethical behavior and to deny the
unethical nature of our own actions. The point: We’ll be better able to
resist group pressures toward unethical behavior if we’re open and honest with
ourselves about the pressures and temptations. 

Sources: Based on: F. Gino, S. Ayal, and D. Ariely, “Contagion and Differentiation in Unethical Behavior,”
Psychological Science 20, no. 3 (2009), pp. 393–398; and N. Mazar, O. Amir, and D. Ariely, “The Dishonesty
of Honest People: A Theory of Self-Concept Maintenance,” Journal of Marketing Research 45, no. 6 (2008), pp.
633–644.  

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Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 277

Class Exercise

1. Ask students to think abut groups they associate with. The groups can be at
their religious institution, at school, at work, or social groupings. For example,
the group could be people the student hangs out with on Friday or Saturday
night.

2. Ask the students to remember a decision the group made for a behavior that
was later found to be inappropriate. For example, the group that hangs out at
the local cafeteria on Friday and Saturday night might have seen a professor’s
car in the parking lot and, after discussion, decided to play a prank such as
deflating the car’s tires. Everyone in the group thought it would be great to see
the professor’s face when he came out and saw the flat tires.

3. Ask the students “Why did the group make this decision?” The students will use
chapter concepts to answer this question, including the effect of “groupshift,”
“cohesion,” “social norms,” and “conformity.” This is true in this example as well
as in positive group behaviors. Another way to look at it is that the group made
some assumption about what is true and made the decision based on the
assumption. Review this video:

http://www.youtube.com/watch?v=LHUKjn8E02k&feature=related

4. Ask students to assess if the decisions their groups made were based on
fallacies. If so, what was the fallacy? Why is it a fallacy? What could students do
to ensure that the fallacy does not cause a bad decision?

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Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 278

Point/CounterPoint
All Jobs Should Be Designed Around Groups

Point

Groups, not individuals, are the ideal building blocks for an organization. There are
several reasons for designing all jobs around groups. 

First, in general, groups make better decisions than the average individual acting
alone. 

Second, with the growth in technology, society is becoming more intertwined. Look at


the growth of social networking media such as Twitter, Facebook, and LinkedIn. People
are connected anyway, so why not design work in the same way? 

Third, small groups are good for people. They can satisfy social needs and provide
support for employees in times of stress and crisis. Evidence indicates that social
support—both when they provide it and when they receive it—makes people happier
and even allows them to live longer. 

Fourth, groups are very effective tools for implementation for decisions. Groups gain
commitment from their members so that group decisions are likely to be willingly and
more successfully carried out. 

Fifth, groups can control and discipline individual members in ways that are often
extremely difficult through impersonal quasilegal disciplinary systems. Group norms
are powerful control devices. 

Sixth, groups are a means by which large organizations can fend off many of the
negative effects of increased size. Groups help prevent communication lines from
growing too long, the hierarchy from growing too steep, and individuals from getting lost
in the crowd. 

The rapid growth of team-based organizations in recent years suggests that we may well
be on our way toward a day when almost all jobs are designed around groups. 

CounterPoint

Capitalistic countries such as the United States, Canada, Australia, and the United
Kingdom value the individual. Designing jobs around groups is inconsistent with the
economic values of these countries. Moreover, as capitalism and entrepreneurship
have spread throughout eastern Europe, Asia, and other more collective societies, we
should expect to see less emphasis on groups and more on the individual in workplaces
throughout the world. Let’s look at India to see how cultural and economic values shape
employee attitudes toward groups.

Over the years, there is a greater emphasis on individual achievement and competition
in India. To be successful in the myriad competitions and to get admission in good
schools and jobs, individual achievement is considered very valuable. Even in team
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Chapter 9 Foundations of Group Behavior Page 279

sports, people want to identify individuals as high achievers. When people are assigned
to groups, all sorts of negative things happen, including conflict, groupthink, social
loafing, and deviant behavior.

The Indian manager likes a clear link between individual effort and a visible outcome.
It’s not by chance that India, over the last 10 years, has produced a large number of
high achievers. It breeds achievers, and achievers seek personal responsibility. They
would be frustrated in job situations in which their contribution was commingled
and homogenized with the contributions of others.

Indian workers want to be hired, evaluated, and rewarded on their individual


achievements. They are not likely to accept a group’s decision on such issues as their
job assignments and wage increases, nor are they comfortable in a system in which the
sole basis for their promotion or termination is the performance of their group.

Though teams have grown in popularity as a device for employers to organize people
and tasks, we should expect resistance to any effort to treat individuals solely as
members of a group—especially among the youth.

Class Exercise

1. Discuss group versus individual grading with students.


2. Begin by polling them as to whether they would prefer a grade for this class (or
another specific class) based on their individual effort or on the effort of a five-
student group they belonged to. The class mix on this issue will vary.
3. Move the group-based grade students into groups; leave the individual-based
grade students. Have them create a list of three to five of the reasons for their
preference.
4. After 10–15 minutes, have the group-based students pick a spokesperson and
have them record their lists on the board. Once they are recorded, start an
“individual” list by asking the individual students, one at a time, for a reason,
going round robin until you have all of their responses.
5. Now, as a class, compare and discuss the reasons. How are the lists different?
The same? Is there a theme or themes emerging (groups—safety in numbers, it
is a hard class; individual—I want control of my grade, etc.).
6. Ask students if they think the reasons that seem to be emerging would:
 Be acceptable to other students in other classes in your school
 Be acceptable to other students when it came time to interview for jobs
 A way to get ahead in their careers (group effort rather than individual
effort being rewarded)

Alternate Class Exercise

1. Start as the above with steps one through three, however, instead of having the
groups/individuals create a list, give them one to three short papers to grade. It
(they) can be one(s) you wrote for this exercise or one from a previous class with
identifying marks removed. Each group/individual should all have the same
items to grade.
2. Give the assignment instructions and the learning objectives for the paper.
3. If possible, separate the individual graders from the group graders in separate
rooms while they perform the task. Ask them to record their start and end times
on the assignment. Tell them that when they have completed the task, to wait
where they are until you call them back into the room.

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Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 280

4. For the debrief, post your version of the graded assignment so students can
compare their work with yours.
5. Discuss the issues of group decision making as applied to their task. Where
were they effective or not? What were the problems?
6. Ask if they would prefer this to what typically happens in the college classroom
in terms of grading. Why or why not?

Questions for Review

1. Define group. What are the different types of groups?


Answer:
 A group is defined as two or more individuals, interacting and
interdependent, who have come together to achieve particular objectives.
Groups can be either formal or informal. It is possible to sub-classify groups
as command, task, interest, or friendship groups.
 A command group is determined by the organization chart. It is composed of
direct reports to a given manager.
 Task groups—organizationally determined, represent those working together
to complete a job task.
 A task group’s boundaries are not limited to its immediate hierarchical
superior. It can cross command relationships. For instance, if a college
student is accused of a campus crime, it may require communication and
coordination among the dean of academic affairs, the dean of students, the
registrar, the director of security, and the student’s advisor. All command
groups are also task groups, but the reverse need not be true.
 An interest group is people who affiliate to attain a specific objective with
which each is concerned – employees who band together to have their
vacation schedules altered.
 Friendship groups often develop because the individual members have one
or more common characteristics. Social alliances, which frequently extend
outside the work situation, can be based on similar age or ethnic heritage.

2. What are the five stages of group development?


Answer:
 Exhibit 9–2 shows the five-stage group-development model:
 The first stage is forming.
o Characterized by a great deal of uncertainty about the group’s
purpose, structure, and leadership.
o Members are trying to determine what types of behavior are
acceptable.
o Stage is complete when members have begun to think of themselves
as part of a group.
 The second stage is storming.
o One of intragroup conflict
o Members accept the existence of the group, but there is resistance to
constraints on individuality.
o There is conflict over who will control the group.
o When complete, there will be a relatively clear hierarchy of leadership
within the group.
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 281

 The third stage is norming.


o One in which close relationships develop and the group demonstrates
cohesiveness.
o There is now a strong sense of group identity and camaraderie.
o The stage is complete when the group structure solidifies and the
group has assimilated a common set of expectations of what defines
correct member behavior.
 The fourth stage is performing.
o The structure at this point is fully functional and accepted.
o Group energy has moved from getting to know and understand each
other to performing.
 The fifth stage is adjourning.
o Group gets ready to disband.
o Attention is focused on wrapping up activities.

3. Do role requirements change in different situations? If so, how?


Answer:
 A role is a set of expected behavior patterns attributed to someone occupying
a given position in a social unit. Different groups impose different role
requirements of individuals.
 Role perception - An individual’s view of how he or she is supposed to act in
a given situation – received by external stimuli
 Role expectations - How others believe a person should act in a given
situation
 Psychological contract - an unwritten agreement that sets out mutual
expectations of management and employees
 Role conflict - A situation in which an individual is confronted by divergent
role expectations

4. How do group norms and status influence an individual’s behavior?

Answer:
 All groups have norms—acceptable standards of behavior that are shared by
the group’s members. Norms tell members what they ought and ought not to
do under certain circumstances. Norms are important because they:
o Facilitate the group’s survival.
o Increase the predictability of group members’ behaviors.
o Reduce embarrassing interpersonal problems for group members.
o Allow members to express the central values of the group and clarify
what is distinctive about the group’s identity.
 There is considerable evidence that groups can place strong pressures on
individual members to change their attitudes and behaviors to conform to
the group’s standard.
 Status is a socially defined position or rank given to groups or group
members by others. We live in a class-structured society despite all attempts
to make it more egalitarian. High-status members of groups often are given
more freedom to deviate from norms than other group members. High-status
people also are better able to resist conformity pressures. The previous
findings explain why many star athletes, famous actors, top-performing
salespeople, and outstanding academics seem oblivious to appearance or
social norms.

5. How does group size affect performance?

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Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 282

Answer:
 Group size does affect performance. More than 12 people are considered a
large group and seven or fewer are considered a small group. Groupthink is
the tendency for individuals to expend less effort when working collectively
than when working individually. The Ringelmann’s Rope Pull: greater levels
of productivity but with diminishing returns as group size increases, caused
by either equity concerns or a diffusion of responsibility (free riders)
 As a manager, you need to build in individual accountability. To prevent
social loafing, a manager can:
o Set group goals.
o Increase intergroup competition.
o Use peer evaluation.
o Distribute group rewards based on individual effort.

6. What are the advantages and limitations of cohesive groups?


Answer:
 Cohesiveness is the degree to which group members are attracted to each
other and are motivated to stay in the group. Cohesiveness has been linked
to productivity. When performance-related norms established by the group
are high, a cohesive group will be more productive than one that is less
cohesive. If cohesiveness is high and performance norms are low,
productivity will also be low.
 There are ways for managers to increase cohesiveness:
o Make the group smaller.
o Encourage agreement with group goals.
o Increase time members spend together.
o Increase group status and admission difficulty.
o Stimulate competition with other groups.
o Give rewards to the group, not individuals.
o Physically isolate the group.

7. What are the strengths and weaknesses of group (versus individual) decision
making?
Answer:
 Group strengths:
o Generate more complete information and knowledge
o Offer increased diversity of views and greater creativity
o Increased acceptance of decisions
o Generally more accurate (but not as accurate as the most accurate group
member
 Group weaknesses:
o Time-consuming activity
o Conformity pressures in the group
o Discussions can be dominated by a few members
o A situation of ambiguous responsibility

8. How effective are interacting, brainstorming, nominal, and electronic meeting


groups?
Answer:
Brainstorming is an idea-generating process designed to overcome pressure for
conformity. Brainstorming usually generates ideas but may not be in the most
efficient manner. Nominal Group Technique (NGT) works by restricting
discussion during the decision-making process. Members are physically present

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Chapter 9 Foundations of Group Behavior Page 283

but operate independently. Nominal groups usually outperform brainstorming.


Electronic Meeting uses computers to hold large meetings of up to 50 people.
The early evidence indicates that electronic meetings don’t achieve most of their
proposed benefits. Numerous studies have found that electronic meetings
actually lead to decreased group effectiveness, required more time to complete
tasks, and resulted in reduced member satisfaction when compared to face-to-
face groups.

9. What is the evidence for the effect of culture on group status and social loafing?
How does diversity affect groups and their effectiveness over time?
Answer:
 Cultural differences affect status and it varies between cultures. Managers
must understand who and what holds status when interacting with people
from another culture.
 Social loafing is most often in Western (individualistic) cultures. Diversity
affects groups such that increased diversity leads to increased conflict. It
may cause early withdrawal and lowered morale. If the initial difficulties are
overcome, diverse groups may perform better. Also surface diversity may
increase openness.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 284

Experiential Exercise
Wilderness Survival

You are a member of a hiking party. After reaching base camp on the first day, you
decide to take a quick sunset hike by yourself. After hiking a few exhilarating miles, you
decide to return to camp. On your way back, you soon realize that you are lost. You
have shouted for help, to no avail. It is now dark. And getting cold.

Your Task
Without communicating with anyone else in your group, read the following scenarios
and choose the best answer. Keep track of your answers on a sheet of paper. You have
10 minutes to answer the 10 questions.

1. The first thing you decide to do is to build a fire. However, you have no matches, so
you use the bow-and-drill method. What is the bow-and-drill method?
a. A dry, soft stick is rubbed between one’s hands against a board of supple
green wood.
b. A soft green stick is rubbed between one’s hands against a hardwood board.
c. A straight stick of wood is quickly rubbed back-and-forth against a dead
tree.
d. Two sticks (one being the bow, the other the drill) are struck to create a
spark.*

2. It occurs to you that you can also use the fire as a distress signal. When signaling
with fire, how do you form the international distress signal?
a. 2 fires
b. 4 fires in a square
c. 4 fires in a cross
d. 3 fires in a line*

3. You are very thirsty. You go to a nearby stream and collect some water in the small
metal cup you have in your backpack. How long should you boil the water?
a. Fifteen minutes
b. A few seconds
c. One hour
d. Depends on the altitude*

4. You are also very hungry, so you decide to eat what appear to be edible berries.
When performing the Universal Edibility Test what should you do?
a. Do not eat for 2 hours before the test.
b. If the plant stings your lip, confirm the sting by holding it under your tongue
for 15 minutes.
c. If nothing bad has happened 2 hours after digestion, eat half a cup of the
plant and wait again.
d. Separate the plant into its basic components and eat each component one at
a time.*

5. Next, you decide to build a shelter for the evening. In selecting a site, what do you
not have to consider?
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Chapter 9 Foundations of Group Behavior Page 285

a. It must contain material to make the type of shelter you need


b. It must be free from insects, reptiles, and poisonous plants.
c. It must be large enough and level enough for you to lie down comfortably.
d. It must be on a hill so you can signal rescuers and keep an eye on your
surroundings.*

6. In the shelter that you built, you notice a spider. You heard from a fellow hiker that
black widow spiders populate the area. How do you identify a black widow spider?
a. Its head and abdomen is black; its thorax is red.
b. It is attracted to light.
c. It runs away from light.
d. It is a dark spider with a red or orange marking on the female's abdomen.*

7. After getting some sleep, you notice that the night sky has cleared, and so you
decide to try and find your way back to base camp. You believe you should travel
north and can use North Star for navigation. How do you locate the North Star?
a. Hold your right hand up as far as you can and look between your index and
middle fingers.
b. Find Sirius and look 60 degrees above it and to the right.
c. Look for the Big Dipper and follow the line created by its cup end.*
d. Follow the line of Orion's belt.

8. You come across a fast-moving stream. What is the best way to cross it?
a. Find a spot downstream from a sandbar as the water will be calmer.
b. Build a bridge.
c. Find a rocky area, as the water will be shallow and you will have hand- and
footholds
d. Find a level stretch where it breaks into a few channels.*

9. After walking for about an hour, you feel several spiders in your pants. You don’t
feel any pain, but you realize some spider bites are painless. Which of these spider
bites is painless?
a. Black Widow
b. Brown Recluse *
c. Wolf Spider
d. Harvestman (Daddy Longlegs)

10. You decide to eat some insects. Which insects should you avoid?
a. Adults that sting or bite
b. Caterpillars and insects that have a pungent odor
c. Hairy or brightly colored one.
d. All of the above*

*Correct answer

Group Task

Break into groups of 5–6 people. Now imagine that your whole group is lost. Answer
each question as a group, employing a consensus approach to reach each decision.
Once the group comes to an agreement, write the decision down on the same sheet of
paper that you used for your individual answers. You will have approximately 20
minutes for the group task.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 286

Scoring Your Answers

Your instructor will provide you with the correct answers which are based on expert
judgments in these situations (www.wilderness-survival.net). Once you have received
the answers, calculate: (A) your individual score; (B) your group’s score; (C) the average
individual score in the group; (D) the best individual score in the group. Write these
down, and consult with your group to ensure that these scores are accurate.

(A) Your individual score                                          


(B) Your group’s score                                          
(C) Average individual score in group                                          
(D) Best individual score in group                                          

Discussion Questions

1. How did your group (B) perform relative to yourself (A)?


2. How did your group (B) perform relative to the average individual score in the group
(C)?
3. How did your group (B) perform relative to the best individual score in the group
(D)?
4. Compare your results with those of other groups. Did some groups do a better job of
outperforming individuals than did others?
5. What do these results tell you about the effectiveness of group decision making?
6. What can groups do to make group decision making more effective?

Teaching Notes

1. Exercise instructions are detailed above.


2. When students have finished, select a group to share the results of their discussion.
Ask other groups how their results compare or contrast to that group’s.

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Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 287

Ethical Dilemma
Dealing with Shirkers

We’ve noted that one of the most common problems in groups is social loafing, which
means group members contribute less than if they were working on their own. We
might call such individuals “shirkers”—those who are contributing far less than other
group members.

Most of us have experienced social loafing, or shirking, in groups. And we may even
admit to times when we shirked ourselves. We discussed earlier in the chapter some
ways of discouraging social loafing, such as limiting group size, holding individuals
responsible for their contributions, and setting group goals. While these tactics may be
effective, in our experience, many students simply work around shirkers. “We just did it
ourselves—it was easier that way,” says one group member.

Consider the following questions for dealing with shirking in groups:

1. If group members end up “working around” shirkers, do you think this information
should be communicated to the instructor so that individual’s contribution to the
project is judged more fairly? If so, does the group have an ethical responsibility to
communicate this to the shirking group member? If not, isn’t the shirking group
member unfairly reaping the rewards of a “free ride”?

Answer: Yes, this information should be communicated to the instructor. Yes,


there is an ethical responsibility to communicate this to the shirking group member.
They should understand that they need to contribute to the overall goals. No one
should receive a “free ride.” Equity is important and everyone should do their fair
share in order to reap the rewards.

2. Do you think confronting the shirking group member is justified? Does this depend
on the skills of the shirker (whether he is capable of doing good-quality work)?

Answer: Yes, the shirker should be confronted since he/she is accountable to the
group. No, it does not depend on the skills since everyone can play a role and
participate based on his/her individual skill set. If he/she needs additional help,
other group members can accommodate.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 288

Case Incident 1
If Two Heads Are Better Than One, Are Four Even Better?

Shefali Singh, age 24, is a marketing manager for Coorg Coffee, a small chain of coffee
shops in the eastern Coorg area of Karnataka. Recently, Shefali’s wealthy uncle passed
away and left her, his only niece, Rs. 50 lakh. Shefali considers her current salary
adequate to meet her current living expenses, so she’d like to invest the money so that
when she buys a house in Bangalore she’ll have a nice nest egg to draw upon.

One of Shefali’s neighbors, Venkat, is a financial advisor. Venkat told Shefali that the
array of investment options is virtually endless. She asked him to present her with two
of the best options, and this is what he offered her:

1. A very low-risk AAA REC bond. With this option, based on the information Venkat
provided, Shefali estimates that after 5 years she stands virtually zero chance of losing
money, with an expected gain of approximately 5 percent over her capital.

2. A moderate-risk mutual fund. Based on the information Venkat provided her,


Shefali estimates that with this option, she stands a 50 percent chance of making
a profit of about 11 percent on her capital but also a 50 percent chance of losing about
Rs. 10 lakh.

Shefali prides herself on being rational and objective in her thinking. However, she’s
unsure of what to do in this case. Venkat refuses to help her, telling her that she’s
already limited herself by asking for only two options. While driving to her parents’
house for the weekend, Shefali finds herself vacillating between the two options. Her
older brother is also coming home this weekend, so Shefali decides to gather her family
around the table after dinner, lay out the two options, and go with their decision. “You
know the old saying—two heads are better than one,” she says to herself, “so four heads
should be even better.”

Questions

1. Has Shefali made a good decision about the way she is going to make the decision?
Answer: No, limiting the investment options to 2 variables is already not a sound
decision. Four heads may or may not be better than one. Groupthink may occur as
well.

2. Which investment would you choose? Why?


Answer: Option B, the moderate risk mutual fund has much more opportunity. She
is only 24 years old and has many years to invest and ride the cycles of mutual
funds. Mutual funds and stocks consistently outperform bond funds.

3. Which investment do you think most people would choose?


Answer: Option B. Mutual funds invested in a moderate risk category are fairly safe,
especially over the long run.

4. Based on what you have learned about groupshift, which investment do you think
Shefali’s family will choose?
Answer: Groupshift indicates that the family will move toward the more risky
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 289

investment, which is the mutual fund.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 290

Case Incident 2
Herd Behavior and the Housing Bubble (and Collapse)

It is sometimes easy to forget that, in many ways, humans are not unlike other animals.
Economist John Maynard Keynes recognized this when he commented, “Most,
probably, of our decisions to do something positive, the full consequences of which will
be drawn out over many days to come, can only be taken as the result of animal spirits
— a spontaneous urge to action rather than inaction, and not as the outcome of a
weighted average of quantitative benefits multiplied by quantitative probabilities.” 

When such “animal spirits” are particularly dangerous is at the collective level. One
animal’s decision to charge over a cliff is a tragedy for the animal, but it may also lead
the entire herd over the cliff. 

You may be wondering how this is applicable to organizational behavior. Consider the


recent housing bubble and its subsequent collapse. As housing prices rose ever
higher, people discounted risk, seemingly based only on observing what others were
doing. Homeowners and investors rushed to buy properties because everyone else was
doing it. Banks rushed to provide loans with little due diligence because, well, everyone
else was doing it. “Banks didn’t want to get left behind. Everybody lowered their
underwriting standards, no matter who they are,” said Regions Bank executive Michael
Menk. “As bankers that’s who we are; we follow the herd.” 

Yale Economist Robert Shiller called this “herd behavior” and cited research showing
people often rely heavily on the behavior of groups in formulating decisions about what
they should do. A recent study in behavioral finance confirmed herd behavior in
investment decisions and showed that analysts were especially likely to follow
other analysts’ behavior when they had private information that was less accurate or
reliable. 

Questions

1. Some research suggests herd behavior increases as the size of the group
increases. Why do you think this might be the case? 
Answer: The answer will be different from each student. But some similarities
may appear. For example, the reasons for the behaviors of the herd potentially
are more attractive as the herd grows in size. Groupshift on decisions makes
group members feel more protected from results. The feeling of conformity to
herd behaviors can make a member feel more a part of the group for social
belonging. Or, the larger the herd, the greater is the desire for cohesion to
solidify the group’s status and importance.

2. One researcher argues that “pack behavior” comes about because it has


benefits. What is the upside of such behavior?
Answer: The answer will be similar to that for question one.

3. Shiller argues that herd behavior can go both ways: It explains the housing
bubble, but it also explains the bust. As he notes, “Rational individuals become
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 291

excessively pessimistic as they see others bidding down home prices to


abnormally low levels.” Do you agree with Shiller?
Answer: This answer will depend on the students’ opinions.

4. How might organizations combat the problems resulting from herd behavior? 


Review the video: http://www.youtube.com/watch?
v=LHUKjn8E02k&feature=related
Students should recognize how making assumptions about what’s “true”
without a clear assessment of what is “real” will lead to the types of errant group
behavior described by Shiller.

Sources: Based on R. J. Shiller, “How a Bubble Stayed Under the Radar,” New York Times (March 2, 2008), p.
BU6; W. Hobson, “Reversal of Fortune,” Panama City News Herald (March 22, 2009), www.newsherald.com; P.
Leoni, “Pack Behavior,” Journal of Mathematical Psychology 52, no. 6 (2008), pp. 348–351; and J. Reiczigel, Z.
Lang, L. Róz 

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e
Chapter 9 Foundations of Group Behavior Page 292

EXPLORING OB TOPICS ON THE


WORLD WIDE WEB
Error! Hyperlink reference not valid.www.goto.com www.google.com
www.excite.com
www.lycos.com www.hotbot.com www.bing.com

1. Learn more about why people join groups, groupthink, group development, and other
topics at the Allyn & Bacon communication studies Web site found at
http://www.abacon.com/commstudies/index.html. Once there select the “small
group” entry and then choose two or three more topics to read. Choose the most
interesting topic and take the interactive quiz. E-mail your results to the
instructor.

2. Peer pressure can be a positive thing; it is really just a way to communicate


group norms. To learn more about how to use positive peer pressure to prevent
binge drinking on campus, visit:
http://www.csmonitor.com/1997/1027/102797.feat.learning.2.html.

3. Brainstorming is a group technique to encourage the development of creative


alternatives. Now that we know what it is, how do we do it? What would you do
if you were called upon to lead a brainstorming session? Visit this U.K. Web site
for an overview on how to conduct a brainstorming session
http://www.brainstorming.co.uk/tutorials/preparingforbrainstorming.html.
You might also be interested in visiting the home page of this same site found at
http://www.brainstorming.co.uk/ contents.html where you will find lots of
creativity exercises, puzzles, free training, articles and more. Make a list of the
five most important things you must do to prepare for a brainstorming session
and bring it to class. What is the link between social loafing and group
cohesiveness? Does one enhance or detract from the other? Write a two-page
paper on the topic. Conduct a Web page search with these two terms.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd


Authorized adaptation from the United States edition of Organizational Behavior, 14e

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