Taskmaster
Them's Fightin' Words: The Effects of Violent Rhetoric on Ethical Decision Making in Business
Joshua Gubler, Nathan Kalmoe & David Wood
Journal of Business Ethics, forthcoming
Abstract:
Business managers regularly employ metaphorical violent rhetoric as a means of motivating their employees to action. While it might be effective to this end, research on violent media suggests that violent rhetoric might have other, less desirable consequences. This study examines how the use of metaphorical violent rhetoric by business managers impacts the ethical decision making of employees. We develop and test a model that explains how the use of violent rhetoric impacts employees' willingness to break ethical standards, depending on the source of the rhetoric. The results of two experiments suggest that the use of violent rhetoric by a CEO at a competing company increases employees' willingness to engage in ethical violations while the use of violent rhetoric by employees' own CEO decreases their willingness to engage in unethical behavior. Furthermore, we find that participants who made less ethical decisions motivated by violent rhetoric used by a competitor's CEO did not view their decisions as less ethical than the other participants in the experiments. The results of these studies highlight potentially harmful unintended consequences of the use of violent rhetoric, providing knowledge that should be useful to managers and academics who want to increase employee motivation without increasing a willingness to engage in unethical behavior.
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A (Blurry) Vision of the Future: How Leader Rhetoric about Ultimate Goals Influences Performance
Andrew Carton, Chad Murphy & Jonathan Clark
Academy of Management Journal, forthcoming
Abstract:
One key responsibility of leaders involves crafting and communicating two types of messages - visions and values - that help followers understand the ultimate purpose of their work. Although scholars have long considered how leaders communicate visions and values to establish a sense of purpose, they have overlooked how these messages can be used to establish a shared sense of purpose, which is achieved when multiple employees possess the same understanding of the purpose of work. In this research, we move beyond the traditional focus on leader rhetoric and individual cognition to examine leader rhetoric and shared cognition. We suggest that a specific combination of messages - a large amount of vision imagery combined with a small number of values - will boost performance more than other combinations because it triggers a shared sense of the organization's ultimate goal, and, in turn, enhances coordination. We found support for our predictions in an archival study of 151 hospitals and an experiment with 62 groups of full-time employees. In light of these findings, we conducted exploratory analyses and discovered two dysfunctional practices: leaders tend to (1) communicate visions without imagery and (2) over-utilize value-laden rhetoric.
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Grant Gannaway et al.
Journal of Sports Economics, forthcoming
Abstract:
In this article, we examine the effect, on players, of a change in the technology for scoring points in the NBA, the introduction of the three-point line. While a naive prediction about the impact of this change suggests that it would disproportionately raise the productivity and value of guards who are more likely to shoot the ball from behind the three-point line, we show in a simple model that the strategic response of the defense leads the three-point line to increase the relative productivity of players who are more likely to shoot closer to the basket. We provide evidence that centers and forwards experienced increases in relative productivity with the introduction of the three-point line. Finally, we present evidence that the labor market in the NBA adjusted by increasing the demand for height in the NBA draft. Our results highlight the potential for strategic adjustments to affect the bias of technological change.
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The unintended consequences of the rat race: The detrimental effects of performance pay on health
Keith Bender & Ioannis Theodossiou
Oxford Economic Papers, July 2014, Pages 824-847
Abstract:
Although performance pay schemes have been linked to labour market productivity, one unintended consequence, suggested early by Adam Smith, is that performance pay is detrimental to health. Recent research has shown that there is a positive relationship between performance pay and injuries on the job. This article focusses on the consequences of performance pay on health and investigates if there is a link between performance pay and self-reported general health or specific illnesses. Using data from the British Household Panel Survey, this study uses survival analysis to show that being in jobs with a performance pay element increases the likelihood of health deterioration, ceteris paribus.
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Paying It Forward vs. Rewarding Reputation: Mechanisms of Generalized Reciprocity
Wayne Baker & Nathaniel Bulkley
Organization Science, forthcoming
Abstract:
Generalized reciprocity is a widely recognized but little studied component of social capital in organizations. We develop a causal model of the multiple mechanisms that sustain generalized reciprocity in an organization, drawing together disparate literatures in the social, organizational, and biological sciences. We conduct the first-ever critical test of two key mechanisms: paying it forward and rewarding reputation. These are fundamentally different grammars of organizing, either of which could sustain a system of generalized reciprocity. In an organization, paying it forward is a type of organizational citizenship behavior (OCB) that occurs when members of an organization help third parties because they themselves were helped. Rewarding reputation is a type of OCB that occurs when peers monitor one another, helping those who help others and refusing to help those who do not. Using behavioral data collected from members of two organizational groups over a three-month period, we found that reputational effects were strongest in the short term but decayed thereafter. Paying it forward had stronger and more lasting effects. Dominant theories assume that rewarding reputation is the main cause of generalized reciprocity, but our analysis demonstrates that generalized reciprocity in an organization occurs for multiple reasons. We use the empirical findings to develop propositions about the mechanisms of generalized reciprocity in organizations and link these to management practices. Our study contributes to social exchange theory, macro-level prosocial behavior, OCB, positive organizational scholarship, and management.
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Multiple types of motives don't multiply the motivation of West Point cadets
Amy Wrzesniewski et al.
Proceedings of the National Academy of Sciences, 29 July 2014, Pages 10990-10995
Abstract:
Although people often assume that multiple motives for doing something will be more powerful and effective than a single motive, research suggests that different types of motives for the same action sometimes compete. More specifically, research suggests that instrumental motives, which are extrinsic to the activities at hand, can weaken internal motives, which are intrinsic to the activities at hand. We tested whether holding both instrumental and internal motives yields negative outcomes in a field context in which various motives occur naturally and long-term educational and career outcomes are at stake. We assessed the impact of the motives of over 10,000 West Point cadets over the period of a decade on whether they would become commissioned officers, extend their officer service beyond the minimum required period, and be selected for early career promotions. For each outcome, motivation internal to military service itself predicted positive outcomes; a relationship that was negatively affected when instrumental motives were also in evidence. These results suggest that holding multiple motives damages persistence and performance in educational and occupational contexts over long periods of time.
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Drew Creal et al.
University of Chicago Working Paper, May 2014
Abstract:
Using a proprietary dataset, we investigate whether the degree of international diversification affects firm value for U.S. multinational corporations (MNCs). Our analyses offer robust evidence that organizing a set of otherwise independent activities within a multinational network results in a value premium, relative to a benchmark portfolio of independent firms operating in the same country-industry footprint as the MNC. We also examine frictions and economic forces that plausibly give rise to this value premium and find forces related to equity market segmentation, exposure to various legal environments, and cost containment strategies affect the advantage of MNCs, relative to local competitors.
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Do non-competition agreements lead firms to pursue risky R&D projects?
Raffaele Conti
Strategic Management Journal, August 2014, Pages 1230-1248
Abstract:
This study investigates the impact of non-competition agreements on the type of R&D activity undertaken by companies. Non-competition agreements, by reducing outbound mobility and knowledge leakages to competitors, make high-risk R&D projects relatively more valuable than low-risk ones. Thus, they induce companies to choose riskier R&D projects, such that corporate inventions are more likely to lie in the tails of the inventions' value distribution (as breakthroughs or failures) and be in novel technological areas. This study uses data about U.S. patent applications from 1990 to 2000 and considers longitudinal variation in the enforcement of non-compete clauses. The results indicate that in states with stricter enforcement, companies undertake riskier R&D paths than in states that do not enforce non-compete agreements as strictly.
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Euphemisms and Ethics: A Language-Centered Analysis of Penn State's Sexual Abuse Scandal
Kristen Lucas & Jeremy Fyke
Journal of Business Ethics, July 2014, Pages 551-569
Abstract:
For 15 years, former assistant football coach Jerry Sandusky used his Penn State University perquisites to lure young and fatherless boys by offering them special access to one of the most revered football programs in the country. He repeatedly used the football locker room as a space to groom, molest, and rape his victims. In February 2001, an eye-witness alerted Penn State's top leaders that Sandusky was caught sexually assaulting a young boy in the showers. Instead of taking swift action against Sandusky, leaders began a cover-up that is considered one of the worst scandals in sports history. While public outcry has focused on the leaders' silence, we focus on the talk that occurred within the organization by key personnel. Drawing from court documents and internal investigative reports, we examine two euphemism clusters that unfolded in the scandal. The first cluster comprises reporting euphemisms, in which personnel used coded language to report the assault up the chain of command. The second cluster comprises responding euphemisms, in which Penn State's top leaders relied on an innocuous, but patently false, interpretation of earlier euphemisms as a decision-making framework to chart their course of (in)action. We use this case to demonstrate how euphemistic language impairs ethical decision-making, particularly by framing meaning and visibility of acts, encouraging mindless processing of moral considerations, and providing a shield against psychological and material consequences. Further, we argue that euphemism may serve as a disguised retort to critical upward communication in organizations.
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Employer Learning, Productivity, and the Earnings Distribution: Evidence from Performance Measures
Lisa Kahn & Fabian Lange
Review of Economic Studies, forthcoming
Abstract:
Pay distributions fan out with experience. The leading explanations for this pattern are that over time, either employers learn about worker productivity but productivity remains fixed or workers' productivities themselves evolve heterogeneously. We propose a dynamic specification that nests both employer learning and dynamic productivity heterogeneity. We estimate this model on a 20-year panel of pay and performance measures from a single, large firm. The advantage of these data is that they provide us with repeat measures of productivity, some of which have not yet been observed by the firm when it sets wages. We use our estimates to investigate how learning and dynamic productivity heterogeneity jointly contribute to the increase in pay dispersion with age. We find that both mechanisms are important for understanding wage dynamics. The dispersion of pay increases with experience primarily because productivity differences increase. Imperfect learning, however, means that wages differ significantly from individual productivity all along the life cycle because firms continuously struggle to learn about a moving target in worker productivity. Our estimates allow us to calculate the degree to which imperfect learning introduces a wedge between the private and social incentives to invest in human capital. We find that these disincentives exist throughout the life cycle but increase rapidly after about 15 years of experience. Thus, in contrast to the existing literature on employer learning, we find that imperfect learning might have especially large effects on investments among older workers.
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Vinit Desai
Academy of Management Journal, forthcoming
Abstract:
While research suggests that organizations can improve by investigating and learning from failures, some work finds that they may generate incorrect lessons or fail to learn. This study addresses the debate by turning attention to the processes that underlie learning, using attribution theory to highlight the way that decision makers interpret information about where failures occurred or who was involved. This approach is notable because it suggests that different organizations with similar experiences may have quite distinct reactions based on where that experience originates. Specifically, I predict that organizations learn less effectively when their failures are fairly concentrated in origin, meaning that failures typically involve a particular unit or even a specific individual, rather than when failures are more broadly dispersed. I also examine factors that intensify or ameliorate this effect, including an organization's size or its performance relative to aspirations. I test related hypotheses on a panel of hospitals that offered a specific surgical procedure within California from 2003 through 2010.
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Rory Eckardt, Bruce Skaggs & Mark Youndt
Journal of Management Studies, forthcoming
Abstract:
This research examines the comparative effects of production manager and worker turnover in service and manufacturing settings. We suggest that, due to the centrality of human-action in services and the ability of manufacturers to insulate the technical core, service and manufacturing companies are differentially dependent on and impacted by the loss of production manager and worker knowledge. The results from a survey of 150 service and manufacturing firms provide partial support for this notion and show that turnover impacts these organizations differently. More specifically, we find that: 1) the negative impact of production worker turnover on firm performance is greater in service settings than in manufacturing settings; and 2) the negative impact of production worker turnover on firm performance is greater than the impact of production manager turnover in service firms. In addition, our findings show that organizational capital moderates the turnover-performance relationship for production workers in service firms.
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Jeffrey Treem
American Behavioral Scientist, forthcoming
Abstract:
This study extends recent work exploring the affordances of social media in organizations by considering how social media may also operate as technologies of accountability. This perspective adopts a performative view of social media use in organizations and recognizes that the technologies not only display communication to organizational members but also, in doing so, potentially increase the accountability of workers. Using a case study of the implementation of a social media system inside a financial services company, this work explores how workers view social media in terms of various forms of accountability. The findings reveal that prior to implementation of the social media system workers expressed concern about the accountability social media would create, and that the reluctance to face the accountability associated with communications led to low use of the social media system.
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Jonathan Berk, Jules van Binsbergen & Binying Liu
NBER Working Paper, May 2014
Abstract:
We establish an important role for the firm by studying capital reallocation decisions of mutual fund firms. We show that firms add significant value by matching capital to labor. We find that, following the firm's decision to reallocate capital to one of its managers, future value added increases significantly. We find no evidence of a similar effect when a firm hires a manager from another firm. We conclude that an important reason why firms exist is the private information that derives from firms' ability to better assess the skill of their own employees.
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A View Inside Corporate Risk Management
Gordon Bodnar et al.
Duke University Working Paper, May 2014
Abstract:
A number of theories have been proposed to explain why firms hedge. Unfortunately, these theories are hard to test: While we might observe the hedges, it is hard to answer the question of "why" hedging occurs. Our paper attacks the "why" by directly questioning the managers that make the risk management decisions. Our results present a fresh, inside view of corporate risk management. Rather than hedging being conducted solely by "firms", our results suggest that personal risk aversion in combination with other executive traits plays a key role in whether a company hedges. As such, our results suggest an important deficiency in many modern theories of risk management which ignore the role of the individual manager.
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Do Interviewers Sell Themselves Short? The Effects of Selling Orientation on Interviewers' Judgments
Jennifer Carson Marr & Dan Cable
Academy of Management Journal, June 2014, Pages 624-651
Abstract:
Drawing on alternative perspectives about the automaticity of dispositional judgments, we examine whether the motivation to attract the other (i.e., selling orientation) in interpersonal first meetings (e.g., job interviews) helps or hinders the accuracy and validity of dispositional judgments. In a laboratory study (Study 1), we found that selling orientation reduced the accuracy of interviewers' judgments about applicants' core self-evaluations. Then, we investigated the real-world implications of selling orientation in a field study (Study 2) with two different samples (Samples A and B) and found that a selling orientation negatively influenced the predictive validity of interviewers' judgments. Specifically, when selling orientation was low, interviewers' judgments accurately predicted which applicants would be most (and least) successful as newcomers in the organization (in terms of citizenship, performance, and fit). However, when selling orientation was high, interviewers' judgments no longer predicted applicant outcomes. Together, these results suggest that making dispositional judgments in interpersonal first meetings is an effortful process that is hindered by focusing on other goals (e.g., selling). We discuss the practical and theoretical implications of these findings.
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Pia Ingold et al.
European Journal of Work and Organizational Psychology, forthcoming
Abstract:
The self-presentation tactics of candidates during job interviews and on personality inventories have been a focal topic in selection research. The current study investigated self-presentation across these two selection devices. Specifically, we examined whether candidates who use impression management (IM) tactics during an interview show more faking on a personality inventory and whether the relation to job performance is similar for both forms of self-presentation. Data were collected in a simulated selection process with an interview under applicant conditions and a personality inventory that was administered under applicant conditions and thereafter for research purposes. Because all participants were employed, we were also able to collect job performance ratings from their supervisors. Candidates who used IM in the interview also showed more faking in a personality inventory. Importantly, faking was positively related to supervisors' job performance ratings, but IM was unrelated. Hence, this study gives rise to arguments for a more balanced view of self-presentation.
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Reallocation and Technology: Evidence from the US Steel Industry
Allan Collard-Wexler & Jan De Loecker
American Economic Review, forthcoming
Abstract:
We measure the impact of a drastic new technology for producing steel - the minimill - industry-wide productivity in the US steel industry, using unique plant-level data between 1963 and 2002. The sharp increase in the industry's productivity is linked to this new technology through two distinct mechanisms: 1) the mere displacement of the older technology (vertically integrated producers) was responsible for a third of the increase in the industry's productivity, 2) Increased competition, due the minimill expansion, drove a productivity resurgence at the surviving vertical integrated producers and, consequently, the productivity of the industry as a whole.
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Gone Fishing! Reported Sickness Absenteeism and the Weather
Jingye Shi & Mikal Skuterud
Economic Inquiry, forthcoming
Abstract:
A fundamental challenge in informing employer-employee agency problems is measuring employee shirking activity. We identify the propensity of employees to misreport health in order to exploit favorable weather by linking Canadian weather data and survey data on short-term spells of sickness absenteeism among indoor workers during the non-winter months. The results point to a clear tendency for reported sickness absenteeism to rise with the recreational quality of the weather. Comparing across workers suggests larger marginal weather effects where shirking costs are higher, which we show is consistent with employees' marginal utility of outdoor leisure increasing in the interaction of their health and weather quality. We discuss the implications of our findings for flexible vacation policies and survey respondents' trust in the confidentiality guarantees of statistical agencies.
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Big Data Investment, Skills, and Firm Value
Prasanna Tambe
Management Science, June 2014, Pages 1452-1469
Abstract:
This paper analyzes how labor market factors have shaped early returns on big data investment using a new data source - the LinkedIn skills database. The data source enables firm-level measurement of the employment of workers with technical skills such as Hadoop, MapReduce, and Apache Pig. From 2006 to 2011, Hadoop investments were associated with 3% faster productivity growth, but only for firms (a) with significant data assets and (b) in labor markets where similar investments by other firms helped to facilitate the development of a cadre of workers with complementary technical skills. The benefits of labor market concentration decline for investments in mature data technologies, such as Structured Query Language-based databases, for which the complementary skills can be acquired by workers through universities or other channels. These findings underscore the importance of geography, corporate investment, and skill acquisition channels for explaining productivity growth differences during the spread of new information technology innovations.
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Non-Executive Employee Ownership and Corporate Risk
Francesco Bova et al.
Accounting Review, forthcoming
Abstract:
Prior research documents a negative link between risk and executive holding of stock (generally positive link is observed for options). We find a similar negative relation for non-executive holding of stock. Our finding is consistent with the view that non-executives not only face significant incentives to reduce risk when they hold stock, but they are also able to affect corporate risk. While endogeneity cannot be ruled out fully, the results of a battery of tests suggest that it plays a limited role. A second robust result is that the documented relation becomes more negative as option-based executive compensation increases. Overall, corporate risk is related to the incentives created by stock and options held by both executives and non-executives, as well as interactions among those incentives.
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Kai Chi Yam, Ryan Fehr & Christopher Barnes
Journal of Applied Psychology, forthcoming
Abstract:
In this research, we draw from the stereotyping literature to suggest that supervisor ratings of job performance are affected by employees' start times - the time of day they first arrive at work. Even when accounting for total work hours, objective job performance, and employees' self-ratings of conscientiousness, we find that a later start time leads supervisors to perceive employees as less conscientious. These perceptions in turn cause supervisors to rate employees as lower performers. In addition, we show that supervisor chronotype acts as a boundary condition of the mediated model. Supervisors who prefer eveningness (i.e., owls) are less likely to hold negative stereotypes of employees with late start times than supervisors who prefer morningness (i.e., larks). Taken together, our results suggest that supervisor ratings of job performance are susceptible to stereotypic beliefs based on employees' start times.