Social Psychology →
- 17 Dec 2009
- Working Paper Summaries
Integrity: Without It Nothing Works
"An individual is whole and complete when their word is whole and complete, and their word is whole and complete when they honor their word," says HBS professor Michael C. Jensen in this interview that appeared in Rotman: The Magazine of the Rotman School of Management, Fall 2009. Jensen (and his coauthors, Werner Erhard and Steve Zaffron) define and discuss integrity ("a state or condition of being whole, complete, unbroken, unimpaired, sound, in perfect condition"); the workability that integrity creates for individuals, groups, organizations, and society; and its translation into organizational performance. He also discusses the costs of lacking integrity and the fallacy of using a cost/benefit analysis when deciding whether to honor your word. Key concepts include: The personal and organizational benefits of honoring one's word are huge—both for individuals and for organizations—and generally unappreciated. We can honor our word in one of two ways: by keeping it on time and as promised, or if that becomes impossible, by owning up to the parties counting on us to keep our word in advance and cleaning up the mess our failure to keep our word creates in their lives. By failing to honor our word to ourselves, we undermine ourselves as persons of integrity, and create "unworkability" in our lives. Integrity is a necessary but not sufficient condition for maximum performance. There are unrecognized but significant costs to associating with people and organizations that lack integrity. Closed for comment; 0 Comments.
- 16 Dec 2009
- Working Paper Summaries
The End of Chimerica
Economic historians Niall Ferguson and Moritz Schularick of Freie Universität Berlin consider the problem of global imbalances and try to set events in a longer-term perspective. First published in 2009. Closed for comment; 0 Comments.
- 03 Dec 2009
- Working Paper Summaries
Walking the Talk in Multiparty Bargaining: An Experimental Investigation
Talk can unite, but it can also divide. In multiparty bargaining, communication can focus parties on a fair distribution of resources, but it can also focus parties on a competitive distribution of resources. As HBS professor Kathleen L. McGinn and coauthors Katherine L. Milkman and Markus Nöth show through experiments, at the onset of interaction the dominant logic in discussions—be it fairness or competition—strongly influences the equality of payoffs even in complex, full-information multiparty bargaining. Increases in the relative frequency of talk about fairness are associated with payoffs closer to an equal split. Talk about competitive reasoning has the opposite effect, driving payoffs away from an equal division, though these effects are less consistent than fairness talk effects. The researchers' results add critical insights to our understanding of the role of communication in multiparty bargaining. Key concepts include: In multiparty bargaining, as in two-party bargaining, communication may work in part through social awareness and in part by allowing players to threaten to walk away. Communicating the willingness to walk away, in conjunction with loss aversion by stronger players, may help weaker players convince stronger players to move toward a more equal split of the available surplus, but it also permits strong players to threaten weak players. In a competitive, multiparty game, communication may play a more nuanced role than observed in simpler bargaining contexts. Closed for comment; 0 Comments.
- 25 Nov 2009
- Working Paper Summaries
The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making
Gandhi once wrote that "a certain degree of physical harmony and comfort is necessary, but above a certain level it becomes a hindrance instead of a help." This observation raises interesting questions for psychologists regarding the effects of luxury. What psychological consequences do luxury goods have on people? In this paper, the authors argue that luxury goods can activate the concept of self-interest and affect subsequent cognition. The argument involves two key premises: Luxury is intrinsically linked to self-interest, and exposure to luxury can activate related mental representations affecting cognition and decision-making. Two experiments showed that exposure to luxury led people to think more about themselves than others. Key concepts include: Luxury does not necessarily induce people to be "nasty" toward others but rather causes them to be less concerned about or considerate toward others. Experiment 1 showed that when primed with luxury, people are more likely to endorse self-interested business decisions (profit maximization), even at the expense of others. Experiment 2 further demonstrated that exposure to luxury is likely to activate self-interest but not the tendency to harm others. Exposure to luxury goods may activate a social norm that it is appropriate to pursue interests beyond a basic comfort level, even at the expense of others. It may be this activated social norm that affects people's judgment and decision-making. Alternatively, exposure to luxury may directly increase people's personal desire, causing them to focus on their own benefits such as prioritizing profits over social responsibilities. Closed for comment; 0 Comments.
- 05 Nov 2009
- Research & Ideas
A Market for Human Cadavers in All but Name?
A shortage of cadavers has hampered medical education and training, a market that entrepreneurs are stepping forward to address. HBS professor Michel Anteby argues that scholars must learn more about the market dynamics of this uncomfortable subject in order to inform political debate. Closed for comment; 0 Comments.
- 01 Oct 2009
- What Do You Think?
Can the “Masks of Command” Coexist with Authentic Leadership?
Summing up. "Instructors seek case studies that provoke discussion on both sides of an issue and raise many questions. We seem to have found such an issue this month," says Professor Jim Heskett, reviewing nearly 80 insightful comments. (Online forum now closed; next forum begins November 4.) Closed for comment; 0 Comments.
- 24 Sep 2009
- Working Paper Summaries
“I read Playboy for the articles”: Justifying and Rationalizing Questionable Preferences
We want others to find us good, fair, responsible and logical; and we place even more importance on thinking of ourselves this way. Therefore, when people behave in ways that might appear selfish, prejudiced, or perverted, they tend to engage a host of strategies designed to justify questionable behavior with rational excuses: "I hired my son because he's more qualified." "I promoted Ashley because she does a better job than Aisha." Or, "I read Playboy for the articles." In this chapter from a forthcoming book, HBS doctoral student Zoë Chance and professor Michael I. Norton describe various means of coping with one's own questionable behavior: through preemptive actions and concurrent strategies for re-framing uncomfortable situations, forgoing decisions, and forgetting those decisions altogether. Key concepts include: Because people do not want to be perceived as (or feel) unethical or immoral, they make excuses for their shameful behavior—even to themselves. People cope with their own questionable actions in a number of ways, from forgoing certain experiences to rationalizing, justifying, and forgetting—a remarkable range of strategies allowing them to maintain a clear conscience even under dubious circumstances. Closed for comment; 0 Comments.
- 21 Sep 2009
- Research & Ideas
Excessive Executive Pay: What’s the Solution?
Now that the worst fears about economic meltdown are receding, what should be done about lingering issues such as over-the-top executive compensation? Does government have a role? Is it time we rethink corporate governance? HBS faculty weigh in. From the HBS Alumni Bulletin. Key concepts include: With White House support, congressional leaders are intent on shifting the balance of power in the boardroom away from management. Skeptics say more than two decades of well-meaning attempts to constrain ever-soaring corporate pay and to reform governance through legislation, regulation, and shareholder pressure have, for the most part, failed or even backfired. According to Professor Brian Hall, it is not a given that executive pay practices had a role in creating the financial crisis. Director independence on boards is a mixed blessing. Independence has a downside when directors don't understand the business, says Professor Jay Lorsch. We need to rethink corporate governance structure in fundamental ways for the 21st century, according to Professor Rakesh Khurana. Closed for comment; 0 Comments.
- 10 Sep 2009
- Working Paper Summaries
Feeling Good about Giving: The Benefits (and Costs) of Self-Interested Charitable Behavior
Helping others takes countless forms and springs from countless motivations, from deep-rooted empathy to a more calculated desire for public recognition. Social scientists have identified a host of ways in which charitable behavior can lead to benefits for the giver, whether economically via tax breaks, socially via signaling one's wealth or status, or psychologically via experiencing well-being from helping. Charitable organizations have traditionally capitalized on all of these motivations for giving, with a recently emerging focus on highlighting the mood benefits of giving—the feelings of empowerment, joy, and inspiration that giving engenders. Indeed, if giving feels good, why not advertise the benefits of "self-interested giving," allowing people to experience that good feeling while increasing contributions to charity at the same time? HBS doctoral candidate Lalin Anik, Professor Michael I. Norton, and coauthors explore whether organizations that seek to increase charitable giving by advertising the benefits of giving are making claims supported by empirical research and, most importantly, whether such claims actually increase donations. Key concepts include: Happier people give more and giving makes people happier, such that happiness and giving may operate in a positive feedback loop (with happier people giving more, getting happier, and giving even more). At the same time, charitable organizations should be concerned about the possibility of crowding out their donors' proclivity to donate in the longer term by incentivizing them (via gifts, etc.) in the short term. While offering donors monetary or material incentives for giving may undermine generosity in the long term, preliminary research suggests that advertising the emotional benefits of prosocial behavior may leave these benefits intact and might even encourage individuals to give more. Future research is needed to disentangle the possible costs and benefits of self-interested giving. The authors are actively engaging charitable organizations to conduct these studies. Closed for comment; 0 Comments.
- 24 Aug 2009
- Research & Ideas
SuperCorp: Values as Guidance System
In her new book SuperCorp, professor Rosabeth Moss Kanter details how vanguard companies such as IBM, Cemex, and Omron are rewriting the nature of the business enterprise and how firms will gain sustainable prosperity in the 21st century. Read our excerpt. Key concepts include: Grounding strategy in a sense of wider societal purpose provides many significant advantages and only a few potential disadvantages. Vanguard companies gain both a moral compass and an entire guidance system. To be strategic, a principles-based initiative must contribute to the fundamental way the company makes money, with customers and clients in mind. Closed for comment; 0 Comments.
- 20 Aug 2009
- Working Paper Summaries
A Decision-Making Perspective to Negotiation: A Review of the Past and a Look into the Future
The art and science of negotiation has evolved greatly over the past three decades, thanks to advances in the social sciences in collaboration with other disciplines and in tandem with the practical application of new ideas. In this paper, HBS doctoral student Chia-Jung Tsay and professor Max H. Bazerman review the recent past and highlight promising trends for the future of negotiation research. In the early 1980s, Cambridge, Massachusetts, was a hot spot on the negotiations front, as scholars from different disciplines began interacting in the exploration of exciting new concepts. The field took a big leap forward with the creation of the Program on Negotiation, an interdisciplinary, multicollege research center based at Harvard University. At the same time, Roger Fisher and William Ury's popular book Getting to Yes (1981) had a pronounced impact on how practitioners think about negotiations. On a more scholarly front, a related, yet profoundly different change began with the publication of HBS professor emeritus Howard Raiffa's book The Art and Science of Negotiation (1982), which for years to come transformed how researchers would think about and conduct empirical research. Key concepts include: Even as it has transitioned from decision analysis to behavioral decision research to social psychology, the decision perspective to negotiation has remained central to practitioners and academics alike, offering both practical relevance and the foundation for exciting new lines of research. Some of the most recent directions being pursued are surprises that early contributors to the decision perspective could have never predicted, as negotiation scholars engage with other disciplines and draw insights from diverse fields ranging from philosophy to neurobiology. Such collaboration is a healthy sign for an ongoing line of negotiation research. Closed for comment; 0 Comments.
- 17 Aug 2009
- Research & Ideas
Quantifying the Economic Impact of the Internet
Businesses around the advertising-supported Internet have incredible multiplier effects throughout the economy and society. Professor John Quelch starts to put some numbers on the impact. Open for comment; 0 Comments.
- 05 Aug 2009
- Working Paper Summaries
Authority versus Persuasion
In directing employees, managers often face a choice between invoking authority and persuasion. In particular, since a firm's formal and relational contracts and its culture and norms are quite rigid in the short term, a manager who needs to prevent an employee from undertaking the wrong action has the choice of either trying to persuade the employee or relying on interpersonal authority. In choosing between persuasion and authority the manager makes a cost-benefit trade-off. This paper studies that trade-off, focusing in particular on conflicts that originate in open disagreement. Key concepts include: Persuasion and authority can be both substitutes and complements. In particular, authority and persuasion are substitutes when authority is highly effective but complements when authority is not very effective. Persuasion is attractive on projects where effort or motivation is more important. The reason is that (under the assumption that executing a good project is more valuable than executing a bad project) the employee will exert extra effort if he or she believes more in the project. The manager also relies more on persuasion (without authority) when employees have higher pay-for-performance incentives. Closed for comment; 0 Comments.
- 20 Jul 2009
- Research & Ideas
Markets or Communities? The Best Ways to Manage Outside Innovation
No one organization can monopolize knowledge in any given field. That's why modern companies must develop a new expertise: the ability to attract novel solutions to difficult or unanticipated problems from outside sources around the world. A conversation with Harvard Business School professor Karim R. Lakhani on the keys to managing distributed innovation. Key concepts include: Many organizations find they cannot monopolize knowledge in any given field of endeavor. Firms need to consider three key factors in deciding to pursue either a community- or market-based external innovation model. Successful models developed by Apple, InnoCentive, SAP, and TopCoder create incentives for many entrants to generate a variety of products and services on a platform. The firm's role is to define the boundaries of the platform and then encourage entry and innovation by outsiders. Closed for comment; 0 Comments.
- 09 Jul 2009
- Working Paper Summaries
Performance Pressure as a Double-Edged Sword: Enhancing Team Motivation While Undermining the Use of Team Knowledge
Why do teams often fail to use their knowledge resources effectively even after they have correctly identified the experts among them? Project teams are a prominent feature of the knowledge-based economy, and member expertise has long been recognized as an important resource that can greatly affect team performance, but only to the extent that it is accurately recognized and used to accomplish the objective. The step between recognizing others' expertise and then actually applying it to achieve a collective outcome, however, is highly problematic: Even when individuals know who holds relevant task expertise, they are often unwilling or unable to give the experts appropriate influence over the group process and outcomes. HBS professor Heidi K. Gardner takes a multidisciplinary approach to develop theory explaining how interpersonal dynamics in teams affect members' use of each other's distinct knowledge, ultimately leading to differential performance outcomes. Key concepts include: Teams facing significant performance pressures tend to default to high-status members at the expense of using team members with deep knowledge of the client, with detrimental effects on team performance. The more important the project, the less effective the team: Excessive performance pressure results in the team reverting to less effective ways of divvying up influence over its end product, in turn leading to lower performance ratings for the whole team. Team process is important in enabling organizations to harness knowledge resources for the benefit of maintaining strong relations with their clients. Closed for comment; 0 Comments.
- 06 Jul 2009
- What Do You Think?
Are You Ready to Manage in an Irrational World?
It is becoming clear that human behavior is much less rational than we assumed, says HBS professor Jim Heskett. Judging from replies to this month's question, there are many nuances to managing in an irrational world. (Online forum now closed. Next forum begins August 7.) Closed for comment; 0 Comments.
- 01 Jul 2009
- Working Paper Summaries
File-Sharing and Copyright
The researchers argue that file-sharing technology has not undermined the incentives of artists and entertainment companies to create, market, and distribute new works. The advent of new technology has allowed consumers to copy music, books, video games, and other protected works on an unprecedented scale at minimal cost. Such technology has considerably weakened copyright protection, first of music and software and increasingly of movies, video games, and books. While policy discussion surrounding file-sharing has largely focused on the legality of the new technology and the question of whether declining sales in music are due to file-sharing, the debate has been overly narrow. Copyright protection exists to encourage innovation and the creation of new works—in other words, to promote social welfare. This essay analyzes the landscape and identifies areas for more research. Key concepts include: Digital technology has lowered the cost of producing movies and music and allowed artists to reach their audience in novel ways. It's difficult to argue that weaker copyright protection has had a negative impact on artists' incentives to be creative. File-sharing has not discouraged authors and publishers. The publication of new books rose by 66 percent over the 2002-2007 period. Since 2000, the annual release of new albums has more than doubled, and worldwide feature film production since 2003 is up by more than 30 percent. How markets for complementary goods (such as concerts, electronics, and communications infrastructure) have responded to file-sharing remains largely unexplored in academic research. Closed for comment; 0 Comments.
- 03 Jun 2009
- Working Paper Summaries
It Is Okay for Artists to Make Money…No, Really, It’s Okay
When art and commerce are mentioned in the same sentence, many people become bad tempered or think something needs fixing. This paper argues that more artists ought to make more money more often. HBS professor Robert Austin and theater dramaturg Lee Devin identify and undermine three fallacies about art and commerce, and suggest that it is necessary to carry on a more careful and less emotional conversation about the tensions between art and business and to overcome a general aversion to business common among artists and their patrons. They also stress the need to develop better theories about how art and commerce can achieve integration helpful to both. Key concepts include: The interests of art, artists, and business can be best served if more commerce enters into the world of art, not less. There are three fallacies, often implicit, about relationships between art and commerce: (1) art is a luxury and an indulgence, (2) art is clearly distinguishable from "non-art," and (3) commerce dominates and corrupts art, and subverts its purpose. Good art should achieve appropriate commercial value consistently, not just occasionally. A conversation takes place when art and commerce are in tension, a conversation in which neither artists nor managers should dominate. Closed for comment; 0 Comments.
- 21 May 2009
- Working Paper Summaries
Do Friends Influence Purchases in a Social Network?
In spite of the cultural and social revolution in the rise of social networking sites such as Facebook and MySpace (and in South Korea, Cyworld), the business viability of these sites remains in question. While many sites are attempting to follow Google and generate revenues from advertising, will advertising be effective? If friends influence the purchases of a user in a social network, it could potentially be a significant source of revenue for the sites and their corporate sponsors. Using a unique data set from Cyworld, this study empirically assesses if friends indeed influence purchases. The answer: It depends. Findings are relevant for social networking sites and large advertisers. Key concepts include: There is a significant and positive impact of friends' purchases on the purchase probability of a user. However, there are significant differences across users. Specifically, this social effect is zero for 48 percent of the users, negative for 12 percent of the users, and positive for 40 percent of the users. "Moderately connected" users exhibit "keeping up with the Joneses" behavior. On average, this social influence translates into a 5 percent increase in revenues. Highly connected users tend to reduce their purchases of items when they see their friends buying them. This negative social effect reduces the revenue for this group by more than 14 percent. This finding is consistent with the typical fashion cycle wherein opinion leaders or the elite in the fashion industry tend to abandon one type of fashion and adopt the next in order to differentiate themselves from the masses. Closed for comment; 0 Comments.
The ‘Luxury Prime’: How Luxury Changes People
What effect does luxury have on human cognition and decision making? According to new research, there seems to be a link between luxury and self interest, an insight that may help curb corporate excesses. Roy Y.J. Chua discusses findings from his work conducted with Xi Zou of London Business School. Closed for comment; 0 Comments.