Reference no: EM133165912

Groupthink and the Leadership Continuum - Infinity Capital and I-Drive

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During the dot-com boom of the late 1990s, Virginia Turezyn the managing director of Infinity Capital, a Venture Capital Firm, recalled how she was sucked in by groupthink. Turezyn was initially skeptical about the stability of the dot-com boom, but after hearing about 'tech start-ups' turning into multimillion-dollar businesses, she didn't want Infinity Capital to miss out on the opportunity for high returns on their investment and decided to get into the market.

Turezyn was as surprised as anybody by how quickly she decided to invest big money into an unproven industry, when she allowed Infinity Capital to invest $4 million into I-Drive, an electronic data storage company. However, after the deal was completed, Infinity Capital became aware that I-Drive was currently giving the data storage away free, and as a result, the company was not making any money.

Turezyn recalls attending an I-Drive board meeting where she asked the young executive team how they intended to start turning a profit. They dismissed her concerns and said that if they charged for the data storage, they would lose all their customers. As an experienced investor and venture capitalist, Turezyn could not believe how naive she had been and knew that if she did not intervene and help I- Drive create a strategic plan, they would be out of business very quickly and Infinity Capital would lose their $4 million.

Discuss the case and Interpret Case Study and answer following questions in regard to the case study

1. Symptoms of Groupthink

2. Victims and Perpetrators

3. Advice on how to avoid Groupthink