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IAI Actuarial Core Principles · Business Management · Mission, business strategy, teamwork and time management

A Pune general insurer's reserving team of six has settled into agreed working practices and trusts each other. However, members now rarely challenge the team's reserve assumptions, and a senior actuary notices that alternative views are being suppressed to preserve harmony. Which risk of strong team cohesion does this best illustrate?

This illustrates groupthink. A cohesive team suppresses dissenting views to preserve harmony, so assumptions go unchallenged and decision quality suffers. It differs from social loafing, which concerns reduced individual effort, and from storming, which involves open conflict.

  1. ASocial loafing
  2. BGroupthinkCorrect
  3. CRole ambiguity
  4. DTeam storming
  5. Free-rider effect in pay

Explanation

Groupthink arises in cohesive groups where the desire for harmony overrides critical evaluation of alternatives. Social loafing is reduced individual effort, and storming is open conflict, neither of which is described.

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