Groupthink

A tendency toward groupthink has been a chronic problem in the American automobile industry since the mid-50s. This was a key driver of the domestic automakers’ dramatic decline from the late-60s onward.

More recently, foreign automakers have tended to succumb to groupthink as well. One way this has manifested is by slavishly copying the structure and strategy of General Motors — what we call “GM envy.”

Automotive pundit Peter DeLorenzo (2019) essentially summed up groupthink by noting that despite “instances of intermittent brilliance,” the industry is “plagued by an oppressive layer of rote thinking and lemminglike behavior that is beyond frustrating and that has routinely wreaked havoc on the proceedings over the decades.”

Groupthink is a type of decision making where consensus opinion overrides critical thinking, outside perspectives and potential risks. The term was coined in 1972 by Yale University social psychologist Irving Janis (Kenton, 2018).

Janis found that even groups of intelligent people could succumb to groupthink due to a variety of factors, such as illusions of invulnerability, a charismatic leader, an us-and-them attitude that demonizes outsiders with opposing views, and the presence of “Mindguards” who censor information that raises questions about the proposed direction (Cherry, 2019).

Five other symptoms can also indicate groupthink: unquestioned beliefs, rationalizing away warning signs, self-censorship, illusions of unanimity and direct pressure to conform (Cherry, 2019).

Within the American auto industry, groupthink can be most obviously seen in individual failures, such as the Edsel and AMC Pacer. However, groupthink has heavily colored the overall way that domestic automakers have been managed — particularly as industry consolidation occurred after World War II.

Journalist Brock Yates argued that foreign automakers made significant inroads into the U.S. automobile market in the 1970s and 1980s because the Big Three’s management “placed a premium on cultural conformity, which helps explain the auto industry’s inability to maintain parity with the Germans and the Japanese even in the apparently simple area of design” (Yates, 1983; p. 88).

Yates didn’t use the term groupthink to describe this behavior, but instead invented his own — “Detroit Mind.”

U.S. automakers’ weak response to the changes sweeping the marketplace was also reflected in the automotive media, according to Yates. Stories in the industry trade journal Automotive News had more impact than coverage in national daily papers such as The New York Times. The problem here is that Automotive News has arguably emphasized access journalism that has rarely challenged Detroit groupthink in more than minor ways (go here for further discussion).

Yates’ critique was similar to that of John Z. DeLorean, whose book, On a Clear Day You Can See General Motors (Wright, 1979), may very well be the most brutal insider’s assessment ever written about the American auto industry. He described a corporate culture so conformist that failing to be a “team player” was a major — or even the only — reason that an executive did not get promoted.

“It didn’t mean he didn’t he was doing a poor job. It meant he didn’t fit neatly into a stereotype of style, appearance and manner. He didn’t display blind loyalty to the system of management, to the man or men doing the promoting. He rocked the boat. He took unpopular stands on products or policy which contradicted the prevailing attitude of top management” (Wright, 1979; p. 33).

One could argue that the conformity and insularity pointed out by Yates and DeLorean no longer exists a half century later in an industry racked by ferocious international competition. Today’s domestic automakers have become at least somewhat more competitive by trying to model themselves off of the best practices of leading foreign automakers.

Nevertheless, when you look at the recent strategies of General Motors, Ford and the now Stellantis-owned Chrysler, they still have remarkable similarities to those used in the 1960s. For example, Big Three product planning continues to be steeped in the mantra of “bigger, glitzier, more powerful.” The main difference is that the huge passenger cars of yore have been replaced by even bigger trucks and SUVs. Styling and brand management still take precedent over functional innovations, and automakers still drag their feet in accepting their social responsibilities — such as by responding to climate change.

To make matters worse, once iconoclastic foreign competitors have increasingly embraced GM envy. Thus, the irony of the U.S. automotive market having more major brands than in the 1970s and yet suffering from more groupthink. That has reduced the diversity of choices available to consumers and made it more difficult for the auto industry to respond to emergent social needs.

In the 1960s and 1970s at least some auto buff magazines such as Car and Driver could be counted on to question industry groupthink. Unfortunately, in recent decades all of the major legacy magazines have become so corporate that they have almost entirely lost their editorial bite (go here for further discussion).

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RE:SOURCES

• Cherry, Kendra; 2019. “How Recognize and Avoid Groupthink.” Very Well Mind. Posted March 16.
• DeLorenzo, Peter; 2019. “Thunderheads.” Auto Extremist. Posted May 19; accessed May 22.
• Kenton, Will; 2018. “Groupthink.” Investopedia. Posted January 6.
• Wright, J. Patrick; 1979. On A Clear Day You Can See General Motors. Wright Enterprises, Grosse Pointe, MI.
• Yates, Brock; 1983. The Decline and Fall of the American Automobile Industry.Empire Books, New York, NY.