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Money matters: Scott Campbell’s views on Thailand
written at the start of May 2004
Graham Macdonald
MBMG International Ltd.
Last month, MBMG invited Scott Campbell, the man whose
Growth Fund has been judged by S&P to be the best in its sector for
the last 6 years, to pay his first ever visit to Bangkok. Over the next
few weeks, we’ll be publishing Scott’s views on a number of topics,
starting appropriately enough, with Thailand.
Writing this week’s view from Bangkok I felt it was
prudent to look at this economy and market. Having given a presentation to
the British Chamber of Commerce and talked with a number of financial
adviser clients, it is pretty apparent the spectacular rise in the Thai
SET index of 100%-plus last year has renewed interest in the local equity
market. David Fuller, global investor and analyst has been very bullish
from London on this market and a buyer of LSE listed Thai funds. Once I
had managed to avoid the zillions of scooters but not the oppressive heat,
this is what I found.
This Buddhism dominated country of 60million-plus
population traditionally relied on agriculture and is the world’s third
largest exporter of rice. The currency is known as the baht and is
approximately 40 baht to 1US$. The economy is set to grow at 7-8% this
year as interest rates stay low with strong consumption. According to
Moody’s, Thailand’s external payments and fiscal position remains
strong, with no appreciable overall effect from the outbreak of the bird
flu. While public debt and contingent liabilities remain relatively high,
the post 1997 build-up in the public sector debt has been due primarily to
financial sector losses. Thailand’s strong export performance, high
international reserves and flexible macroeconomic policy framework also
gives authorities much more leeway to manage any external shocks as in the
late 90’s.
Thailand experienced a small trade deficit in March as
imports racked up record highs in tandem with the strong domestic economic
growth. However, last year exports grew to US$80.2bn and imports also rose
16% to US$75bn leaving a strong current account surplus. Exports have
grown 6% in 2002 and 16% last year after a decline of 7% in 2001. The
commerce ministry is expecting 15% export growth again this year and
Finance Minister Somkid Jatusripitak’s projections are for the current
account to remain in surplus for the next three or four years. According
to UBS Warburg economist Christa Janjic, “Thailand is firmly in the
league of the fast growing Asian export countries” and I have to agree.
Interest rates are low, real low. The government bond
yield curve looks remarkably like the US, with 1 month money at 1.05% and
10 year notes just under 5%. The business pages of the local papers had a
number of reports concluding that they will stay at these levels for the
rest of this year. Most observers say a rate hike is unlikely before the
general election early next year but the biggest impediment to a hike
appears to be excess liquidity.
The Asian crisis in 1997 hit Thailand hard. The
financial sector has now mostly stabilised as a result of institutional
and regulatory reforms, together with public fund injections into ailing
institutions, although according to Moody’s some residual weakness
remains. The Stock Exchange of Thailand’s (SET) index is dominated by
Banks and other financials, but interestingly has a whole sector entitled
Companies under Rehabilitation! The market cap of the index is US$107bn,
which is not small and the SET has skyrocketed from 350 at the start of
2003 to current levels around 670. This gain of 90% was significantly
higher as the index has eased back from above 700 in December. The index
should have support at 660 according to local stockbroker Tisco Securities
but they are concerned that a chart pattern has emerged with the relative
strength of SET versus the Asia Pacific region falling below its 50 day
moving average. This would be a significant negative relative indicator.
The baht peaked and has been in a pretty stable range of Bt45 to Bt35
since 1999. In summary, the SET trades on a PE of 10 times with earnings
forecast to grow 25% again this year. The economy has recovered from the
Asian crisis of 1997 and has significant reserves, a current account
surplus and big growth prospects. Interest rates will undoubtedly rise and
the boom in property and financial stocks will probably slow but exporters
are solid. Like all emerging markets there is political risk, so
conservatism is warranted, but Thailand appears to be in pretty good shape
and we should be buying into weakness subject to the important proviso
that key support levels hold. After all with such famous and delicious
dishes such as Phad Thai, Tom Kha Gai and Panaeng Gai as the real export
success story, how can they go wrong!
The above data and research was compiled from sources believed to be
reliable. However, neither MBMG International Ltd nor its officers can
accept any liability for any errors or omissions in the above article nor
bear any responsibility for any losses achieved as a result of any actions
taken or not taken as a consequence of reading the above article. For more
information please contact Graham Macdonald on graham@mbmg-international
.com
Snap Shots: A photographer’s nightmare
by Harry Flashman
Let me tell you about the time (a few years ago) when I
suffered from every photojournalist’s nightmare - taking two rolls of
film in for processing and getting no images back. Not one! The images
‘supposed’ to have been there included three portraits, a photo essay
on a band, a dinner for visiting dignitaries and a restaurant. Total
disaster!
 The reason? An internal camera malfunction. Never mind
camera breakdowns - this was nervous breakdowns!
The next night it was on again, another band, more
dignitaries plus some candids. My camera bag has more than one camera in
it, so camera number 2 was brought out. It failed after six shots! By this
stage I was sure this was the result of a personal vendetta, and I began
to try and remember anyone whose toes I had stood on during the week.
The important thing was to settle down and look at the
problem. Cameras are just machines and have to obey the laws of physics.
Settling down mentally and physically, and looking at camera 2 and then
doing some elementary diagnostics showed that the battery had failed.
Simple! This particular camera can be run in a full manual mode (no
electronics at all), but the shutter speed then becomes fixed at 1/250th
of a second. This was not going to be suitable for the night shots I had
to do.
“Thinking ahead,” I remembered that both the
cameras were interchangeable, so taking the battery out of the first
(disabled) camera, it was possible to get the second one going again. All
this was being done while bands were playing and people parading, waiting
to be shot for posterity! It was not a fun evening.
Why had this happened and what had gone wrong? Well,
the first camera had shattered its shutter, and in the second camera,
batteries are just batteries and so must eventually fail. But this was not
really the full story. I have to take some blame as well. Every
photographer should carry spare batteries as well as another roll of film.
Every photographer should also sit down every year and clean and service
his or her camera(s). Claiming overwork and too busy is no excuse!
Now if you do not feel confident enough to do this
basic maintenance, then you should get it done for you. It will certainly
reduce the chances of camera breakdowns, which at best are frustrating and
at worst diabolical in their consequences. (We just had a relative over on
holiday whose camera also failed to deliver, and all her holiday memories
are just that - memories. There are no photographic prints to take back.)
So how do you do all this maintenance? If you are a
camera whiz, then you can do it yourself, but you are probably much better
advised to visit the main agents for your brand of camera and let them do
it. However, putting fresh batteries in each year is a simple task that
you should do religiously. I suggest that on your birthday each year, you
give the camera a birthday too and fit fresh batteries. It won’t stop
shattered shutters, but it will fix battered batteries.
A cheap movie?
Most photographers also have an interest in moving pictures, and keen
amateur Ernie Kuehnelt brought the following to my notice. It’s in
Bangkok, but we all have reasons to go to the capital these days. It is
about a group called “House” that is screening ‘good’ movies, the
kind that are judged at Cannes and the like, as well as more mainstream
ones such as Finding Nemo or Kill Bill (starring Monica L?). The others
come from many countries, but have subtitles in Thai and English (or at
least the ones Ernie Kuehnelt saw had them). He also reported that the
ticket prices were very cheap. The venue is RCA in Bangkok and you can get
more details by going to www.houserama.com, but it is all in Thai, so have
your favourite Thai reader around! They bill themselves as Bangkok’s
only boutique movie theatre.
Modern Medicine: Unsafe sex and STD’s!
Are the tourists at fault?
by Dr. Iain Corness, Consultant
I read the following in a newspaper in
this country a couple of weeks ago, “A senior (Thai) health official
blamed unsafe sex by foreign tourists for a news report that many young
tourists, particularly those from Britain and Germany, went home with
sexually transmitted diseases (STD), including HIV.”
Apparently the acting permanent secretary of public
health said the government was already providing free condoms in about
60,000 places which offered sexual services. How interesting! I was always
under the impression there was no sex for sale here. Or have I got it wrong?
The report went on to say that 69 percent of British-born
men with heterosexually acquired HIV were infected through sex while abroad,
as were a quarter of women. “Of these men, 22 percent were probably
infected in Thailand,” the report said.
What all this means is simply that young people still
take risks, which quite frankly is the nature of young people everywhere.
What this report is also showing is that these young tourists didn’t bring
their STD’s here, they picked up their STD’s in Thailand and then took
them back home to the UK.
What has been glossed over is the fact that in the
horizontal folk dancing field, it takes two to tango. Nobody gets AIDS from
masturbation! The safe sex thing has to be practiced by both parties.
The acting permanent secretary of public health is
further quoted in the report, “They might have had sex, without
protection, with risk groups such as teenagers and those outside sex
services. Such groups still had low protection rates.” To be perfectly
frank, I do not believe that these groups are the ones offering sexual
favours to British tourists. The commercial sex outlets represent the pool
of infection into which the collective English willy is dipped. Or have I
got it wrong? The 22 percent of British tourists returning with STD’s are
invited to drop me an email if I have.
The study was apparently done between the years 2000 and
2002, which immediately makes me suspicious of its accuracy relating to
today. Much has been done regarding public education in Thailand, such as
that by Senator Meechai Viravaidya whom I saw carrying out condom promotions
in Nana Plaza in Bangkok, so I believe that the chances of our randy British
tourists getting their STD’s in Thailand are very much less than they were
three or four years ago. (Or at least I would certainly hope so!)
By the way, the Germans came in for a case of the pointed
finger as well, saying that a study of male German sex tourists in Thailand
showed that most were aged 30-40, single, with well-paying jobs and only
30-40 percent used condoms.
So where does all that lead us? Well, it points the way
(not the finger) to achieving a decrease in STD’s, and that is to look at
the source of infection in this country. Undoubtedly it is in the commercial
sex area where the bulk of the STD’s can be found, from Herpes to AIDS.
The full spectrum. Surely it behooves us all to educate the commercial sex
operators in safe sexual practices, and to have regular checks done on
practicing prostitutes, both male and female. And follow that up with active
treatment and further education.
Let the Brits and the Germans educate their own in safe sex. Let us
educate our own. Or is that too simple?
 Heart to Heart with Hillary
Dear Hillary,
Every weekend when I come back to work I find that someone in the office has
been using my computer to get on to the internet and visit porn sites. I have
asked if anyone knows, but like most things in the office, it seems to be
“nobody”. This upsets me as I do not go and look at such things and I would
not like the others in the office to think I do. I am a married woman in my mid
40’s and this upsets me so much. Why do they need to look at naked women like
that? It is so degrading. I think the others in the office (90 percent males)
laugh at me behind my back, but I really have to do something about it.
Suggestions?
Anti-Porn Prudence
Dear Anti-Porn Prudence,
I am a little worried about your work mates. 90 percent males, you have written.
What is the other 10 percent? Woman, beast or bird? No wonder they do funny
things like using your computer. You have let this blow so much out of
proportion that you are overlooking the simple and obvious, my Petal. To log on
to the net you have to give a password, right? Just change your password, and do
not tell anyone in the office. Do not check the little box to automatically
remember the password and they cannot use your computer to get their vicarious
thrills. However, you should also live and let live, but use other people’s
equipment, eh?
Dear Hillary,
I have a fifteen year old son and as he was growing up I was
worried that he might turn into a hoodlum as he was a bit of a tearaway when he
was younger. The problem is that he has gone the other way. Now he is lazy, says
he is bored all the time and just lolls around the house after school and at
weekends. How can a fit young fifteen year old boy be bored? Hillary, I don’t
know what to do. He used to like going to the movies or swimming, but lately he
just won’t get out from his own shadow. Have you any ideas?
Worried Mum
Dear Worried Mum,
This is your first or oldest child, I am sure, as any mother
who has older children could have set you right here. It is all part of growing
up, Petal, and unfortunately this growing up process does not stop until they
are aged about 35 years old for boys or 26 years old for girls. I am sure that
if young mothers were told about these things, there would be no further
problems with over-population! You just have to grin and bear it, I’m afraid.
I do suggest that perhaps you should look at joining some women’s groups, as
contacts with more experienced Mums could have saved you all this worry.
Dear Hillary,
Massage places seem to be everywhere and seem to be very
popular too. I went into one to have a foot massage and they were very insistent
that I take my sandals off before I even stepped inside. I was so annoyed with
them pointing at my feet I almost left there and then. Then I had the foot
massage and it was so painful I had to get the girl to stop. Is it always like
this, or did I go to the wrong place? If this is what they are like I cannot
imagine why they are so popular. The one I went to has all the conditions it can
cure on the window, and frankly I don’t believe it.
Fancy Feet
Dear Fancy Feet,
I will let you into a secret, my Poppet. Hillary doesn’t
like foot massages either! Perhaps Hillary has tender feet, but foot massages
are too painful for me. Maybe that’s the secret - there is so much joy and
relief when they stop! But there are many of my friends who swear by them (me, I
swear at them) and often go once a week. They do not appear to have many other
masochistic practices, so they must enjoy the experience. Foot massage has a
long history, going back to pre-Buddhist times, so I presume somebody,
somewhere, enjoyed it enough for it to remain a financially sound business
proposition right through till today.
Dear Hillary,
I have been to Thailand a few times and am interested in
finding out more about being a monk. I believe there are some short courses.
Have you heard of them? I have always been impressed watching the monks in their
orange robes going along the streets with their begging bowls in the mornings.
Matthew
Dear Matthew,
I would recommend that you get the following books before going much further,
“Buddhism Explained” (ISBN 974-7047-28-4) by Khantipalo Bhikkhu, “Phra
Farang, An English Monk in Thailand”, by Phra Peter Pannapadipo, (ISBN
974-202-019-1) and “The Good Life. A guide to Buddhism for the Westerner” by
Gerald Roscoe, Asia Books, (ISBN 974-8206-56-4). Read these before ordering the
saffron robes, Petal. You will get all the information you will need and
important contacts as well. Good luck!
PC Blues - News and Views:
The unfortunate side-effects of Spam
We have been suffering form someone else’s attack this
past week. E-mails have been ‘returned’ to us that never came from
here. For example, e-mails have been returned to WinstonSmith @pattayamail.com,
and yet there is no Winston Smith here, and no-one else has such an e-mail
address here.
Perhaps you have suffered such mysteries. I have been
embarrassed by them.
Why is this, and what can be done about it?
First you must understand that all e-mail is processed
by mail servers (such programs or computers are called servers). When you
send an e-mail, it goes first to the e-mail server of your ISP (Internet
Service Provider), which decides what to do with it. Now all emails should
carry the address of the originator, and a reply address if this is
different. A well-behaved mail server will check that these details are
present and correct. It can determine whether these details are valid
addresses, not nonsense text, and it can determine whether the addresses
actually exist on the internet. A well-behaved server will do all of this,
and will check that the email actually came from the originating e-mail
address. ISP servers are usually well behaved.
All being well, the e-mail is sent to the mail server
for its addressee, which should be an address which actually exists on the
internet.
The recipient’s mail server should check for spam and
viruses: many do not. Well-behaved ones do. If spam or a virus is found,
well-behaved servers will return the e-mail to its ostensible sender,
and/or the reply address, with a polite note complaining of the content.
[Because of viruses, many people will innocently send emails with virus
attachments, and the note is to tell them to clean their machine of the
infection.]
Senders of spam do not want to publish their email
address, or they would be rapidly shut down. They therefore masquerade as
someone else. This strategy is also known as ‘spoofing’. Either they
use someone else’s email address, purchased from a seller of such lists,
or they guess at an address. Because mail servers can check that an email
address exists on the internet (or is likely to do so), they cannot just
make up random letters and numbers.
A common tactic is to choose a domain name - these
things are necessarily public knowledge - and prefix it with a likely set
of names. This is what Pattaya Mail has suffered.
What can be done about it?
This is more difficult. It is an international problem.
If your name has been taken in vain, you will be embarrassed, but you will
find it impossible to track down who has done this.
On a personal level you will want to apologise to the
person who returned your mail: Read carefully what I said above. The return
was almost certainly carried out by automatic software, and the recipient
probably was never troubled.
On a practical level, you don’t want these
‘returned’ mails clogging up your system. There should be a person who
manages your mail server: probably called sysadmin. Sysadmin should arrange
for incoming mail to be filtered so that these ‘returned’ mails are
logged and then discarded. This is an easy matter to do. Periodically, the
logs should be filtered, and a report sent to the organisations which keep
watch on spam traffic. They have the best hope of tracking those
responsible, and arranging that they be isolated, if not shut down. For
this, they need the log reports.
Your sysadmin filters are your front-line defences against spam and
viruses, so you are not asking anything new of sysadmin. Just another
filter for ‘returned’ mails.
Micro$oft cuts costs
Steve Ballmer, head of the Demon Empire, has sent a memo
to the staff calling for financial cut-backs.
It appears that the company has suffered falling income
over the past two years. If this is allowed to continue, the company will
run out of cash in about 15 years. Stopping the haemorrhage is therefore
not urgent, and can be achieved by wise planning.
Interesting facts appear in the fallout. For example,
each employee costs the company about $300,000 a year. That’s about
12,000,000 baht. The naive reader must appreciate that this money has to
pay for the office space an employee uses, the office furniture, the
computer equipment, electricity, water, roads, all general services,
pension rights and so on.
Micro$oft employees are famous for the cushy life they
lead. Free food and drink, of high quality, is provided. They have their
own choice of furniture and decorations, and generally are allowed to
arrange their workplace to their convenience. They are expected, of course,
to work hard, and they do so. Enlightened companies try to remove possible
distractions from their employees, and Micro$oft is a leader in this.
Perhaps another reason for this cost cutting is that the
company has suffered considerable financial penalties at the hands of the
courts, and is facing a massive fine from the European Union. It has also
been settling various private actions, such as that with Opera recently
reported.
Its new operating system, Longhorn (or is it Leghorn?),
will not be out for a few years yet, and so it has nothing new to sell at
the moment. It is currently scheduled for 2007.
Personal Directions:
Uncovering the secrets to effective performance management
by Christina Dodd
Quite often we look at management and the
subjects contained within in it and think – how complicated and difficult
they are. But if you take the subject apart, piece by piece, and examine it
logically, you will find it to be relatively easy to understand and to know.
Performance Management is one such subject that when mentioned, eyes begin
to roll back at the thought.
But it is quite simple when broken down, and in many ways
there are no secrets to implementing effective performance management.
Performance Management is a process which if implemented effectively should
ensure that employees and managers remain productive and motivated.
The actual process should hold no secrets. There are
simply a number of steps to be considered within the Performance Management
process, these being as follows:
1. Agree roles and responsibilities and the objectives
and targets that go with the role. Ensure that both the manager and the
employee know what success looks like in relation to each objective. Sales
targets are easy to quantify but project objectives may not be so easy to
define success.
2. Ensure the actions needed to achieve the targets and
objectives are agreed and achievable.
3. If some of the actions needed are deemed out-with the
capability of the person who has to achieve them, then create a development
plan in order that the person is trained accordingly.
4. Agree a review process by which each individual is
coached and supported to keep on track as regards both their objectives and
targets together with their development plan.
5. Mid and Year end appraisals should be simply a “tick
box” exercise holding no surprises. If there are then the process building
up to the appraisal is not working.
The secrets to Performance Management do not just lie
with the actual process but more with the skills and discipline needed to
make each of the steps work effectively. And it is the way these skills are
used, or not used, that can cause the whole performance management structure
to collapse.
At each of the stages there are challenges in any role.
Let us look at each step in turn.
1. Objective and Target Setting – The biggest challenge
here is where all the targets and objectives are handed down without any
consultation and support. If a manager does not take an employee through
their objectives and targets, then demotivation and in some cases panic can
set in. Employees need to understand exactly why they are expected to
deliver various objectives and what the manager’s exact expectations are.
The aim of this stage of the PM process is to ensure clarity and focus.
Leave people in the “fog” and they get lost! Do not simply “dump”
objectives on people.
2. Once the objectives are set then employees need to be
supported in being coached through exactly what they need to do in order to
achieve these objectives. Very capable people will need less support than
newer employees but all the same, time should be taken to coach them
effectively. Again the challenges here are one of the manager putting time
aside and in relation to the ability of the manager to coach effectively.
Most managers will advise and direct as opposed to coach
and as such they really need to look at their skill level in coaching.
Directing is quicker but can be very de-motivational and much less
effective.
3. Training. Everyone pays homage to training and
training plans but very few people actually deliver an effective training
plan. Managers usually abdicate responsibility for the training plan leaving
it to a training department or to the employees themselves. Even though
training needs are identified, the only solutions to meet these needs may be
the “sheep dip” approach of getting them on the menu of training events
supplied by training department. But are they specifically what is actually
needed? And what role does the manager take? Do they sit down with the
employee and agree learning objectives? Do they monitor progress against
these objectives? What about coaching the person post-training enabling them
to implement their newly found skills directly into the workplace?
4. In terms of reviewing an employee’s progress, does
the manager spend enough time with the employee? How well are they utilizing
essential field visit (distant managers) and review skills such as
contracting, coaching models such as grow and outcomes; use of the skill /
will matrix, behavioural analysis, giving and receiving feedback and of
course, motivational models such as Maslow’s and Carers? Field visits are
not just about going out with an employee for the day to check up how
“they are getting on” and sitting in on a few customer calls. There is a
lot more to it than that!
5. The aim of regular reviews and field visits is to
ensure that the employee keeps on track with regards their objectives and
targets. If the employee enters into an appraisal not knowing exactly what
they have done in terms of their objectives and targets or not knowing what
their manager is specifically going to say to them in the appraisal then the
performance management system has not worked and has to be reviewed to see
where the faults have originated.
The only surprises that should be delivered are the good
ones like an increase in pay that was unexpected or a better car! If
employees are “in the dark” about what to expect at their appraisal,
then I would hate to be in the shoes of the manager who is conducting the
appraisal when it comes to their turn!
Performance Management is a simple, uncomplicated
process, but one which needs discipline and a great degree of skill to
implement effectively. Get it right then you are on the way to success; get
it wrong and you can look forward to a really stressful year end appraisal.
“In anything at all, perfection is finally attained not when there is
no longer anything to add, but when there is no longer anything to take
away.” — Antoine de Saint-Exupery
For more details about our life coaching services,
personal and professional skills development programs, please email me
directly at [email protected] or visit our website
www.asiatrainingassociates.com
Until next time, have a fabulous week … and remember, It really DOES
matter!
Psychological Perspectives:
Groupthink revisited
by Michael Catalanello,
Ph.D.
In a recent editorial, the New York
Times apologized to its readers for failing, before the Iraq war, to
adequately question the widespread belief that the Iraqi president Saddam
Hussein was concealing weapons of mass destruction (W.M.D.s). As we now
know, this belief has turned out to be unfounded. No such weapons have
surfaced, and the intelligence used to support the contention has been
refuted by both by the American Senate’s 9-11 Commission and it’s
counterpart in the U.K., the Butler Commission.
The New York Times was not alone in failing to
critically examine the prevailing view that Saddam represented an imminent
threat. The belief that Iraq was concealing illegal weapons programs was
widespread. Of course, the U.S., U.K., and Australian governments were so
convinced of the existence of a threat that they willingly launched a
military invasion to overthrow the government, without full U.N. support
for the decision.
Even President Bush’s Democratic rival for the
presidency Senator John Kerry voted in favor of the Iraq war. Like many
others, he based his decision on information gathered by the most
sophisticated intelligence networks in history. Other leaders, even some
who opposed the war, seemed to agree. Saddam was armed and ready to attack
us.
Most people were wrong.
How could seasoned intelligence professionals make such
a huge blunder? How could savvy political leaders be so mislead? And what
about our journalists? We assume that they, above all, are trained to be
critical thinkers, to maintain skepticism, to ask the tough questions and
thoroughly examine the information they receive. Yet, some of our brightest
journalists failed to adequately question the authorities on this matter.
How could this happen?
An interesting concept known as “groupthink” has
been proposed by some to explain this curious episode. While it would be
simplistic to suggest groupthink as a comprehensive explanation of the
misjudgment about Iraq’s weapons capability, it seems timely to revisit
this interesting theory from the archives of social psychology.
Groupthink is a term coined by Irving Janis in 1982 to
describe a defective group decision-making process. This process occurs
when a group is more concerned with achieving consensus of opinion than
with considering information needed for informed decision making.
Uniformity of opinion, then, takes precedence over informed analysis of
information and careful consideration of options.
Historical examples of groupthink in high places abound.
In one famous example, American President Richard Nixon and his advisors
made the decision to initiate a cover-up following the 1972 arrest of the
Watergate burglars who were associated with the president’s reelection
campaign. Even as the cover-up began to unravel in the press, Nixon and
those in his inner circle continued to maintain the charade. Apparently,
the group failed to consider the implications or anticipate the eventual
outcome, the President’s impeachment and resignation from office. The
Watergate debacle has been identified as a classic case of groupthink.
In Janis’ view, groups are most subject to groupthink
when they enjoy a high degree of cohesiveness. Groups that are headed by
directive leaders, composed of people from similar backgrounds, who are
isolated from others, and whose procedures are unsystematic are at greatest
risk for groupthink. Such groups usually express an exaggerated belief that
their positions are morally correct. There is social pressure within such
groups toward agreement and uniformity, and away from dissenting points of
view.
As a consequence, groups with these characteristics
often fail to comprehensively consider alternatives to action, and the
risks involved in the preferred choice. They fail to gather the necessary
information before making a decision, and exhibit selective bias in
processing the information at hand. Contingency plans are often neglected.
As a result, according to Janis, these groups experience a high probability
of making bad decisions.
Faulty opinions and decision making by groups is, no
doubt, a complex affair. Janis’s insight is but one tool for
understanding how societal pressures toward conformity can be detrimental
to the process of effective decision making.
Dr. Catalanello is licensed as a psychologist in his home State of
Louisiana, USA. He is a member of the Faculty of Liberal Arts at Asian
University in Jomtien. Address questions or comments to [email protected]
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