Groupthink

DEFINITION of 'Groupthink'

A phenomenon developed in groups and marked by the consensus of opinion without critical reasoning or evaluation of consequences or alternatives. Groupthink evolves around a common desire to not upset the balance of a group of people by creating conflict, with creativity and individuality considered potentially harmful traits that should be avoided.

BREAKING DOWN 'Groupthink'

Groupthink in a business setting can cause employees and their bosses to overlook potential problems in the pursuit of consensus thinking. Because individual critical thinking is deemphasized or frowned upon, employees may self-censor themselves and not bring up alternatives or risks for fear of upsetting the status quo.

RELATED TERMS
  1. Group Banking

    A plan offered by banks that generally provides incentives for ...
  2. Industry Group

    A classification method for individual stocks or companies, usually ...
  3. Group Term Life Insurance

    A type of insurance coverage offered to a group of people. This ...
  4. Group Health Insurance Plan

    An insurance plan that provides healthcare coverage to a select ...
  5. Conflict Theory

    A theory propounded by Karl Marx that claims society is in a ...
  6. Peer Group

    A group of individuals or entities who share similar characteristics ...
Related Articles
  1. Active Trading Fundamentals

    An Introduction To Consensus Indicators

    Learn how the herd is almost always wrong, or at least late in jumping on the bandwagon.
  2. Professionals

    Common Features

    CFP Online Study Guide Common Group Disability Insurance features
  3. Professionals

    Group Life Insurance: Common features

    Group Life Insurance: Common features
  4. Mutual Funds & ETFs

    Team Players Vs. All-Stars For Mutual Fund Management

    Mutual funds vary in terms of their management structures and one size generally does not fit all investors.
  5. Professionals

    Income Tax Implications of Group Life Insurance

    Income Tax Implications of Group Life Insurance
  6. Economics

    Insights On Creative Destruction and Technology

    Creative Destruction has a way of phasing out old technologies and inviting the new when applied to business models and economics.
  7. Professionals

    Tax Consequences

    Tax Consequences
  8. Financial Advisors

    How Financial Advisors Can Learn from Their Peers

    Advisor study groups can be a big help in building a top practice. Here's a guide to creating one.
  9. Forex Education

    Top 10 Forex Trading Rules

    These rules will help keep you grounded - and out of harm's way.
  10. Products and Investments

    When Do Alternatives Add Value to a Portfolio?

    Alternative investments continue to grow in popularity. But when do they really add value to a client's portfolio?
RELATED FAQS
  1. Should I offer alternative investments to my employees?

    Learn the pros and cons of employer-recommended alternative investments and why risky alternatives, such as hedge funds, ... Read Answer >>
  2. How are business decisions made in a partnership?

    Understand how partners in a business can tackle decision making, and learn the options available for partnerships to develop ... Read Answer >>
  3. What does a merger or acquisition mean for the target company's employees?

    Learn about the likely impacts of a mergers & acquisition deal on the target company's employees, their benefits and adjusting ... Read Answer >>
  4. Do employers use agency theory in labor relations?

    Learn more about how agency theory works and how it is used to illustrate relationships between principals and agents in ... Read Answer >>
  5. How is the principle agent problem manifested in the government?

    Learn more about the principal-agent problem and challenges this problem may create in the relationship between government ... Read Answer >>
  6. Is globalization purely an economic phenomenon?

    Take a look at the complex scope of the term "globalization", and learn why the term applies in many contexts beyond the ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center