Findings

Fine-tuned machine

Kevin Lewis

February 21, 2017

Those Closest Wield the Sharpest Knife: How Ingratiation Leads to Resentment and Social Undermining of the CEO

Gareth Keeves, James Westphal & Michael McDonald

Administrative Science Quarterly, forthcoming

Abstract:
Using survey data from CEOs and other top managers at large and mid-sized public companies in the U.S., as well as from journalists, we explore how ingratiation, a fundamental means of building and maintaining one's social capital, may trigger behavior that damages the social capital of the person being ingratiated. Although ingratiation, such as flattery or opinion conformity, may elicit positive affect from its target, we suggest it can also elicit a specific form of negative affect toward the target, which in turn can trigger interpersonal harm-doing. Focusing on ingratiation by top managers toward the CEO, we find that ingratiating managers are likely to develop feelings of resentment toward the CEO and that ingratiation may be especially likely to elicit resentment among top managers when the CEO is a racial minority or a woman. We also find that negative affect from ingratiation can induce interpersonal behavior that has the potential to damage the social capital of the influence target, as feelings of resentment that result from ingratiatory behavior can trigger social undermining of the CEO in the manager's communications with journalists.

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With great power comes shared responsibility: Psychological power and the delegation of authority

Michael Haselhuhn, Elaine Wong & Margaret Ormiston

Personality and Individual Differences, 1 April 2017, Pages 1-4

Abstract:
Despite the importance of delegation as a managerial tool, we know little about how leaders' characteristics affect their decision to delegate. In this paper, we demonstrate that, holding objective markers of power constant, a psychological sense of power predicts preferences for delegation. Specifically, individuals who feel relatively powerless are less willing to delegate decision making authority compared to those who feel powerful. We find support for this pattern in two studies. These results provide insight into the factors linking power and delegation.

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Serial correlation in National Football League play calling and its effects on outcomes

Noha Emara et al.

Journal of Behavioral and Experimental Economics, forthcoming

Abstract:
We investigate the strategic behavior of highly informed agents playing zero-sum games under highly incentivized conditions. We examine data from 3455 National Football League (NFL) games from the 2000 season through the 2012 season, and categorize each play as "rush" or a "pass." We find that the pass-rush mix exhibits negative serial correlation: play types alternate more frequently than an independent stochastic process. This is a seemingly exploitable strategy, and we find that this serial correlation, according to two distinct measures, negatively affects play efficacy. Our analysis suggests that teams could profit from more clustered play selections, which switch play type less frequently. Our results are consistent with teams excessively switching play types in an effort to be perceived as unpredictable.

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Going For Two: Optimizing Between Extra Points And Two Point Conversions In The NFL

Jonathan Hartley

University of Pennsylvania Working Paper, February 2017

Abstract:
In 2015, to make extra-point plays after touchdowns more uncertain, the NFL moved the extra-point distance from the 2-yard line to the 15-yard line. Since the rule change, the expected points from an extra-point attempt has fallen from 0.99 (averaging between the 2002 and 2014 NFL seasons) to 0.94 (averaging the 2015 and 2016 NFL seasons) while the expected points from the two-point conversion remains 0.95 (averaging between 2002 and 2016 NFL seasons). While the total number of two-point conversion attempts per season has almost doubled, most coaches still rarely attempt two-point conversions when it would be point-maximizing (and win-maximizing under risk-neutral or risk-seeking preferences). Using dynamic programming, this paper argues that this result is evidence of a conservative bias and that teams could improve expected wins by attempting more two-point conversions.

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March Madness? Underreaction to Hot and Cold Hands in NCAA Basketball

Daniel Stone & Jeremy Arkes

Bowdoin College Working Paper, January 2017

Abstract:
The hot hand bias is the widely documented bias toward overestimation of positive serial correlation in sequential events. We test for the hot hand bias in a novel real-world context, NCAA basketball tournament seeds. The seeds are determined by a committee that only has implicit incentives, but the committee's decisions are highly scrutinized by the media, fans, and other stakeholders. We find that, contra the hot hand bias, the committee underreacts to signals of momentum heading into the NCAA tournament. We note that the NCAA tournament has been highly popular and lucrative partly due to the "madness" (high frequency of wins by lower-seeded teams), which the bias we document contributes to.

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Understanding the (unexpected) consequences of unexpected recognition

Susanne Neckermann & Xiaolan Yang

Journal of Economic Behavior & Organization, March 2017, Pages 131-142

Abstract:
Unexpected, informal recognition is common in the workplace, but rarely analyzed by academics. The few existing studies have generated surprising results: no impact of selective recognition on future productivity for those workers who receive recognition, but increases in productivity for those who do not. We confirm those results for recognition in the form of a Thank you message and show that the same patterns hold true with unexpected financial recognition. Low-performing workers do better when others are recognized but they are left out. Previous studies have all argued that the pure relative performance information that is revealed through recognition drives these effects. We test this hypothesis with a treatment that has relative rank information only and show that this is indeed the case: financial or verbal recognition are not necessary to induce low performers to increase subsequent performance.

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The Microstructure of Work: How Unexpected Breaks Let You Rest, but Not Lose Focus

Pradeep Pendem et al.

Harvard Working Paper, December 2016

Abstract:
How best to structure the work day is an important operational question for organizations. A key structural consideration is the effective use of breaks from work. Breaks serve the critical purpose of allowing employees to recharge, but in the short term, translate to a loss of time that usually leads to reduced productivity. We evaluate the effects of two types of breaks (expected versus unexpected), and two distinct forms of unexpected breaks, and find that unexpected breaks can, under certain conditions, yield immediate post-break performance increases. We test our hypotheses using productivity data from 212 fruit harvesters collected over one harvesting season yielding nearly 250,000 truckloads of fruit harvested over the course of 9,832 shifts. We provide a conceptual laboratory replication of these findings, showing that unexpected breaks lead to increased performance when they allow people to maintain attention on the focal task. Our results suggest that the characteristics of a break can lead the break to be experienced as an interruption, with all consequent negative outcomes, or as a rejuvenating experience, with positive post-break consequences.

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Do volatile firms pay volatile earnings? Evidence from linked worker-firm data

Michael Strain

Applied Economics, forthcoming

Abstract:
Despite the importance of earnings instability, little is known about its correlates or causes. This article seeks to better understand earnings instability by studying whether volatile firms pay volatile earnings and is the first to directly test the relationship using US linked employer-employee data. The article finds a positive and statistically significant relationship using within-firm variation. In addition, this article finds that lower earning workers are passed significantly more volatility from their employing firms than are higher earning workers.

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Is There a Doctor in the House? Expert Product Users, Organizational Roles, and Innovation

Riitta Katila et al.

Academy of Management Journal, forthcoming

Abstract:
We explore the impact on innovation that professional end-users of a product have as inventors, executives, and board members in a young firm. In contrast to prior literature, which has emphasized technology roles, we put the spotlight on the executive and governance roles that many professional users take in young firms. Using an extensive custom-collected dataset of 231 surgical instrument ventures over a 25-year period, we find that professional users strengthen innovation in some roles but block it in others. Physician-users are related with the increase in a firm's innovation when they take a technology role as inventors, and particularly when they take a governance role on the young firm's board. However, despite their frequent involvement in executive roles, physician-executives are less likely to be helpful, and especially likely to block innovation as chief executives. Our results emphasize professional users as a critical external dependency for a young firm's innovation, but show that a mismatch with a particular organizational role may have unanticipated negative effects on innovation. In their roles, users can be helpful by expanding the variety of solutions to the firm's innovation problems, but are significantly less helpful in just improving their selection. Our findings have implications for research on evolutionary perspective on user innovation, organizational roles in young firms, and entrepreneurial policy.

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Alternating individual and group idea generation: Finding the elusive synergy

Runa Korde & Paul Paulus

Journal of Experimental Social Psychology, forthcoming

Abstract:
Three experiments were designed to test the efficacy of ideation procedures that involved alternation of individual and group idea generation sessions (hybrid brainstorming) as compared to traditional individual and group ideation. The hybrid condition led to the best performance in terms of number of ideas generated. This effect was strongest in comparison to the group condition. A meta-analytic comparison involving all three experiments indicated that the hybrid condition outperformed both the alone and the group conditions. Since after each group idea exchange session there was an enhancement in the number of ideas generated in the alone session, the pattern of performance in the hybrid condition supported the cognitive perspective of group creativity (Nijstad & Stroebe, 2006; Paulus & Brown, 2007). Social cues in the form of the co-presence of other participants in the alone condition, the addition of practice sessions to all conditions, and an additional phase did not change the pattern of results. The results of the experiments support the original suggestion by Osborn (1953) that the most effective brainstorming process is one that involves a variation in individual and group ideation.

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Screening Spinouts? How Noncompete Enforceability Affects the Creation, Growth, and Survival of New Firms

Evan Starr, Natarajan Balasubramanian & Mariko Sakakibara

Management Science, forthcoming

Abstract:
This paper examines how the enforceability of noncompete covenants affects the creation, growth, and survival of spinouts and other new entrants. The impact of noncompete enforceability on new firms is ambiguous, since noncompetes reduce knowledge leakage but impose hiring costs. However, we posit that enforceability screens formation of within-industry spinouts (WSOs) relative to non-WSOs by dissuading founders with lower human capital. Using data on 5.5 million new firms, we find greater enforceability is associated with fewer WSOs, but relative to non-WSOs, WSOs that are created tend to start and stay larger, are founded by higher-earners, and are more likely to survive their initial years. In contrast, we find no impact on non-WSO entry and a negative effect on size and short-term survival.

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Trust in Direct Leaders and Top Leaders: A Trickle-Up Model

Ashley Fulmer & Cheri Ostroff

Journal of Applied Psychology, forthcoming

Abstract:
Low levels of employee trust in top leaders pose challenges to organizations with respect to retention, performance, and profits. This research examines how trust in top leaders can be fostered through the relationships individuals have with their direct leaders. We propose a trickle-up model whereby trust in direct leaders exerts an upward influence on trust in top leaders. Drawing on the group value model, we predict that direct leaders' procedural justice serves as the key mechanism in facilitating the trickle-up process. Further, this process should be particularly strong for employees high on vertical collectivism, and the trickled-up trust in top leaders should exert a stronger impact on employees' overall performance in the organization than trust in direct leaders. Multiphase and multisource data from 336 individuals support these hypotheses. The findings advance our understanding of trust and leadership by highlighting that trust in leaders at different levels does not form independently and that trust in leaders trickles up across hierarchical levels.


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