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EXAMINING GROUPTHINK PHENOMENON FOR THE DECISIONS MADE TO INVEST IN MAINLAND CHINA: AN EMPIRICAL STUDY OF TAIWAN'S ENTERPRISES

ABSTRACT The purpose of this study is to examine groupthink phenomenon of the decisions that are made to invest in Mainland China. As we know, many Taiwan's entrepreneurs are eager to moving on their production bases to China in the last two decades. The reason why they are doing so is primarily due to the benefit of lower labor cost. However, the decision making for a business investment to oversea is a very complicated issue, therefore it is often in charge by a group. But the ineffectiveness of group decision is always criticized, such as groupthink proposed by Janis in 1972. This phenomenon involves nondeliberate suppression of critical thoughts as a result of internalization of the group's norms. In this study, we intend to examine the decision made by the entrepreneurs under the framework of groupthink theory. The methods of survey and deep interview are used to conduct this empirical study. Firstly, 15 enterprises are surveyed for the significance of groupthink. The instrument used in this phase is Glaser's 40-item-groupthink scale. And then, four of them are chosen as the subjects for deep interview, two are the most significant and the others are the least significant. The result showed that the antecedents of groupthink are not the crucial factors to cause the failure of group decision. On the contrary, the seven defects are the main reasons to let group decision turn out to be bad. The interesting finding and its implications are further discussed in the following.