chris.barry
17-08-2009, 09:56 AM
Psychological studies have shown that people confronted with uncertainty tend to look to others for cues on how to behave. The psychologist Robert Cialdini calls this phenomenon "social proof." Social proof helps to explain some of the most startling paradoxes in human behavior.
For instance, bystander apathy: The larger the crowd of bystanders at the scene of an accident, the more likely no one will help the victims. Social proof theory tells us that everyone hesitates to help because each individual in the group imitates the behavior of all the others. If everyone else is passive, each bystander will erroneously pick up a signal that there is no emergency.
Mr Cialdini explains in his book Influence: Science and Practice: "If a lot of people are doing the same thing, they must know something we don't. Especially when we are uncertain, we are willing to place an enormous amount of trust in the collective knowledge of the crowd."
Managers trying to figure out how to react to new situations don't pick just any companies in their industry to follow. They typically look to their most successful peers, who have repeatedly proved their ability to make the right decisions in the past. In other words, they engage in benchmarking. Usually this is wise.
Managers rightly assume that those with the most successful track record have the best information and base their decisions on deep understandings of situations. However, when fundamental changes occur, looking to others within one's industry, especially market leaders, can be a recipe for the demise of everyone in the industry....
Entire article here (http://www.news.com.au/business/story/0,27753,25670321-5012426,00.html)
For instance, bystander apathy: The larger the crowd of bystanders at the scene of an accident, the more likely no one will help the victims. Social proof theory tells us that everyone hesitates to help because each individual in the group imitates the behavior of all the others. If everyone else is passive, each bystander will erroneously pick up a signal that there is no emergency.
Mr Cialdini explains in his book Influence: Science and Practice: "If a lot of people are doing the same thing, they must know something we don't. Especially when we are uncertain, we are willing to place an enormous amount of trust in the collective knowledge of the crowd."
Managers trying to figure out how to react to new situations don't pick just any companies in their industry to follow. They typically look to their most successful peers, who have repeatedly proved their ability to make the right decisions in the past. In other words, they engage in benchmarking. Usually this is wise.
Managers rightly assume that those with the most successful track record have the best information and base their decisions on deep understandings of situations. However, when fundamental changes occur, looking to others within one's industry, especially market leaders, can be a recipe for the demise of everyone in the industry....
Entire article here (http://www.news.com.au/business/story/0,27753,25670321-5012426,00.html)