What phenomenon occurs when cohesive groups face significant pressure to make quality decisions?

Prepare for the ACCA F1 Certification Exam with detailed quizzes featuring multiple choice questions and explanations. Enhance your understanding and ensure success in your exam!

The correct answer is the phenomenon known as Groupthink. This concept refers to a situation in which a cohesive group prioritizes consensus and harmony over critical analysis and the consideration of alternative viewpoints. As a result, the group often makes suboptimal decisions because they are overly focused on maintaining unity and minimizing conflict.

Groupthink can lead to the suppression of dissenting opinions, the lack of critical evaluation of ideas, and a failure to bring in outside perspectives. Consequently, while the group may appear to be functioning well due to its cohesiveness, the quality of its decision-making suffers because critical analysis and diverse viewpoints are not adequately explored.

Understanding Groupthink is essential, especially in organizational settings, as it highlights the importance of fostering an environment where open dialogue and constructive disagreement are encouraged, thereby improving the overall decision-making process.

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