Management Notes

Reference Notes for Management

Initial research on risk taking found that group discussion leads to

Initial research on risk taking found that group discussion leads to


A. more caution than individuals would take.
B. more risk than the average individual would take.
C. enhanced group members’ initial leaning.
D. group moderation

The Correct Answer Is:

B. more risk than the average individual would take.

The correct answer is B. more risk than the average individual would take.

Group discussions have been a subject of extensive research in the context of risk-taking behavior. When individuals engage in group discussions, they often exhibit a tendency to take on more risk than they would as individuals.

This phenomenon is commonly referred to as “risky shift” or “group polarization.” Several factors contribute to the phenomenon of group discussions leading to more risk-taking behavior, and this explanation will delve into the details.

Group discussions typically lead to more risk-taking behavior for the following reasons:

i. Social Comparison:

In a group setting, individuals tend to compare their own opinions and actions to those of their peers. When they perceive that the group as a whole is inclined towards taking more risks, they may feel compelled to conform to the group’s norm.

This desire to fit in and not appear overly cautious can result in an increase in the level of risk an individual is willing to take.

ii. Diffusion of Responsibility:

Group discussions can create a diffusion of responsibility, where individuals may feel less personally accountable for the consequences of their decisions. This diffusion of responsibility can make individuals more willing to endorse riskier choices as they feel the collective group will share the burden of any negative outcomes.

iii. Amplification of Arguments:

Group discussions often lead to the amplification of initial arguments or inclinations. If one individual in the group expresses a slightly more risk-oriented opinion, others may follow, resulting in a cascading effect where each subsequent participant may adopt increasingly riskier positions.

iv. Enhancement of Pre-existing Biases:

In a group, people who already have a natural tendency to take risks may find reinforcement and validation for their viewpoints. This can further push the group towards riskier decisions as these individuals contribute to the overall group consensus.

Now, let’s examine why the other answer choices are not correct:

A. More caution than individuals would take:

This answer is not correct because the research on group discussions, as mentioned, typically shows the opposite effect of individuals becoming more risk-prone in a group setting.

It is not common for group discussions to make individuals more cautious.

C. Enhanced group members’ initial learning:

While group discussions can contribute to enhanced learning through the exchange of information and perspectives, this is not typically linked to risk-taking behavior.

Group discussions can result in a more informed decision, but that does not necessarily lead to enhanced caution in the context of risk.

D. Group moderation:

Group moderation refers to the process of guiding or controlling a group’s discussion to ensure it stays on track or follows certain rules.

It does not directly address the outcome of risk-taking behavior in group discussions. Therefore, it is not a suitable explanation for why group discussions lead to more risk.

In summary, the correct answer is B because research has consistently shown that group discussions tend to make individuals more inclined to take risks due to social comparison, diffusion of responsibility, the amplification of arguments, and the reinforcement of pre-existing biases.

This phenomenon is commonly referred to as the “risky shift” and is a well-documented aspect of group decision-making processes.

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