Organizational Behavior – When Smart People Make Bad Decisions

I have been reading a lot lately on incentives for individuals within organization.  What motivates different folks, and of course how that affects group actions.  Interesting stuff and hopefully I’ll get an article posted on schipul.com related to individual incentives soon.

In a different email thread I was pointed to this article (linked below) by Art Berman with the Houston Geological Society (HGS is a client).  The full article is quite lengthy and is somewhat of a tragedy of beaucratic decision making regarding the Tsunami of December 2004.  The full article is worth a read.  My selected excerpts below specifically highlight elements of social psychology that relate to a broader range of situations where individuals apparently lacked incentive to speak up in a convincing manner.

Letters From Jakarta: Indian Ocean Nations Select a Tsunami Warning System

After 12 years of siege, the armies of King Priam awoke one morning to find their Greek opponents gone from the Plain of Troy.  A giant wooden horse stood alone outside the city.  Priam and his men decided to bring the horse inside the walls of Troy to celebrate their victory over the Greeks.  Not all of Priam’ s men, however, agreed with the decision. 

Chief among the king’ s counselors was an elder named Laöcoon.*  Laöcoon and his sons urged Priam to reconsider the decision and to investigate the situation more fully before bringing the horse into the city.  It seemed peculiar, Laöcoon argued, and out of character that the Greeks had departed for no apparent military reason and had left behind a gift.  In addition, he thought he heard sounds coming from inside the horse.  Laöcoon and his sons were killed by the Trojans. The horse was brought into the city and the Greek soldiers concealed within the horse emerged, sacked Troy, and won the Trojan War.

This excerpt below is almost painful to read – mostly because it is likely, inevitable, that gargantuan mistakes like this will occur again in the future!

History is full of astonishing examples of how great states and institutions often consciously pursued policies and strategies that were not in their best interests, and sometimes led to their downfall.  The Trojan horse is the archetypal example of the tendency for smart people to make bad decisions.

In her 1984 book The March of Folly: From Troy to Vietnam, popular historian Barbara Tuchman describes several outrageous examples of smart people who made poor or ill-informed decisions (Conway, 1998).  The Catholic Church managed to lose half of Christendom in the 16th century because seven Renaissance popes consistently ignored advice to abandon secular endeavors and end corrupt practices within the Church.  The British Empire lost America in a war of independence that no one in the North American colony initially wanted or supported, due to failure to adopt minimal measures to satisfy the clear and simple requests from the colonists.  During the decade leading up to World War II, the Japanese Empire convinced itself to attack Pearl Harbor as the best way to avoid violating its cardinal strategy of not becoming involved in a war with the United States!

I will leave conclusions on the Tsunami situation to people far more knowledgeable about nation states and geology than myself.  But after reading Art’s article, I found my mind jumped to something Bishop said at his IABC talk last month.

“Communication
(in the future) is instantaneous and simultaneous.  If you are not
instantaneous then you’re not there yet.  If your information is not
simultaneously available to everyone then you’re not there yet.” – Peter Bishop Ph.D., Futurist

Communication.  It just keeps coming back to communication which is why I remain interested in social applications of technology.  Like what we are trying to do with Tendenci.

For more fun, see:

Incentive Systems: A Theory of Organizations

Peter B. Clark, James Q. Wilson
Administrative Science Quarterly,
       Vol. 6,
       No. 2
       (Sep., 1961)
     ,
      
           pp. 129-166

View Article Abstract