Findings

Jokers at work

Kevin Lewis

October 08, 2019

Are “Bad” Employees Happier Under Bad Bosses? Differing Effects of Abusive Supervision on Low and High Primary Psychopathy Employees
Charlice Hurst et al.
Journal of Business Ethics, September 2019, Pages 1149–1164

Abstract:
Psychopathy is typically seen as a trait that is undesirable in any context, including the workplace. But several authors have suggested that people high in psychopathy might possess resources that preserve their ability to perform well in stressful contexts. We consider the possibility that primary psychopathy is adaptive — for the employee, if not for the organization — under conditions of abusive supervision. In particular, we draw from the multimotive model of interpersonal threat (Smart Richman and Leary in Psychol Rev 116:365–383, 2009) and the theory of purposeful work behavior (Barrick et al. in Acad Manag Rev 38:132–153, 2013) to argue that high primary psychopathy individuals possess characteristics that enable them to experience higher levels of well-being and lower levels of anger than their peers under abusive supervisors. Based on a scenario study and a time-lagged field study, we found support for a model in which abusive supervision moderates the relationships between primary psychopathy and positive work-related outcomes (positive affect and engagement), such that these relationships are positive under conditions of abusive supervision and either diminished or negative under conditions of low abusive supervision. Abusive supervision also affected the relationship between primary psychopathy and anger in the field study such that high primary psychopathy individuals were less angry under more abusive supervisors. Thus, there appears to be some credence to the notion of a “psychopathic advantage” in that primary psychopaths do have access to greater psychological resources than their peers under abusive supervision. However, these findings also suggest that abusive supervisors may empower employees with characteristics that hold strong potential to damage the organization and its stakeholders.


Group leaders establish cooperative norms that persist in subsequent interactions
Ashley Harrell
PLoS ONE, September 2019

Abstract:
The temptation to free-ride on others’ contributions to public goods makes enhancing cooperation a critical challenge. Solutions to the cooperation problem have centered on installing a sanctioning institution where all can punish all, i.e., peer punishment. But a new, growing literature considers whether and when the designation of a group leader — one group member, given the sole ability to administer punishment — is an effective and efficient alternative. What remains unknown is whether and to what extent these group leaders establish cooperative norms in their groups via their own contributions to the public good, their use of sanctions, or both. Nor has past work examined whether leaders’ behaviors have lasting effects on non-leaders’ cooperation in subsequent interactions, outside of the leader’s purview. Here I show that leaders’ contributions to the public good predict non-leaders’ subsequent cooperation. Importantly, the effect is not limited to cooperation within the institution: the effect of leaders’ contributions continue to predict non-leaders’ contributions in a later interaction, where sanctions are removed. This process is mediated by non-leaders’ increased contributions in the institution, suggesting that leaders have effects on followers that shape followers’ subsequent behaviors. These effects occur above and beyond a baseline tendency to be influenced by non-leader group members; they also occur above and beyond the influence of peers in groups under a peer punishment institution. Results underscore how critical it is that groups install cooperative leaders: followers model their leaders’ cooperation choices, even in decisions external to the original institution and outside of the leader’s watch.


“I want to serve but the public does not understand:” Prosocial motivation, image discrepancies, and proactivity in public safety
Shefali Patil & David Lebel
Organizational Behavior and Human Decision Processes, September 2019, Pages 34-48

Abstract:
Scholars typically find that prosocial motivation is positively related to employee proactivity. However, we argue that in highly visible contexts such as public safety, this relationship is contingent on how employees think the public sees their jobs. Specifically, drawing on image discrepancy theories, we hypothesize that the relationship between prosocial motivation and proactive behavior is weakened when employees believe that the public fails to understand the difficulties of their jobs. This interaction is supported in multisource studies of 183 police officers across six agencies (Study 1a) and 238 firefighters across eight stations (Study 1b). In a time-separated, multisource study of 203 police officers at a metropolitan agency (Study 2), we further find that the interaction indirectly relates to proactivity via employees’ physical engagement. Overall, our studies highlight the importance of accounting not only for employees’ prosocial motivation, but also their perceived public image, especially in highly visible, high-risk contexts.


Toward an Understanding of Corporate Social Responsibility: Theory and Field Experimental Evidence
Daniel Hedblom, Brent Hickman & John List
NBER Working Paper, September 2019

Abstract:
We develop theory and a tightly-linked field experiment to explore the supply side implications of corporate social responsibility (CSR). Our natural field experiment, in which we created our own firm and hired actual workers, generates a rich data set on worker behavior and responses to both pecuniary and CSR incentives. Making use of a novel identification framework, we use these data to estimate a structural principal-agent model. This approach permits us to compare and contrast treatment and selection effects of both CSR and financial incentives. Using data from more than 1100 job seekers, we find strong evidence that when a firm advertises work as socially-oriented, it attracts employees who are more productive, produce higher quality work, and have more highly valued leisure time. In terms of enhancing the labor pool, for example, CSR increases the number of applicants by 25 percent, an impact comparable to the effect of a 36 percent increase in wages. We also find an economically important complementarity between CSR and wage offers, highlighting the import of using both to hire and motivate workers. Beyond lending insights into the supply side of CSR, our research design serves as a framework for causal inference on other forms of non-pecuniary incentives and amenities in the workplace, or any other domain more generally.


The Role of Narcissistic Hypocrisy in the Development of Accounting Estimates
Matthew Hayes & Philip Reckers
Contemporary Accounting Research, forthcoming

Abstract:
In an experiment including experienced managers, we investigate how supervisor and subordinate narcissism influence a supervisor’s review of a subordinate’s accounting estimate. While narcissistic supervisors express greater liking for narcissistic subordinates (narcissistic tolerance), they nonetheless reject and revise the accounting estimates of narcissistic subordinates to a greater extent than they reject estimates of non-narcissistic subordinates (narcissistic hypocrisy), even when doing so inhibits the supervisor’s ability to reach a profit target. Our findings contribute to extant research in accounting and psychology. We demonstrate that narcissistic hypocrisy extends beyond the evaluation of others, and alters narcissists’ willingness to rely on other narcissists in a meaningful financial reporting decision. We also find that narcissistic hypocrisy is robust across age, gender and supervisory experience.


Open to offers, but resisting requests: How the framing of anchors affects motivation and negotiated outcomes
Johann Majer et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
Abundant research has established that first proposals can anchor negotiations and lead to a first-mover advantage. The current research developed and tested a motivated anchor adjustment hypothesis that integrates the literatures on framing and anchoring and highlights how anchoring in negotiations differs in significant ways from standard decision-making contexts. Our research begins with the premise that first proposals can be framed as either an offer of resources (e.g., I am offering my A for your B) that highlights gains versus a request for resources (e.g., I am requesting your B for my A) that highlights losses to a responder. We propose that this framing would affect the concession aversion of responders and ultimately the negotiated outcomes. We predicted that when a first proposal is framed as an offer, the well-documented anchoring and first-mover advantage effect would emerge because offers do not create high levels of concession aversion. In contrast, because requests highlight what the responder has to give up, we predicted that opening requests would produce concession aversion and eliminate and even reverse the first-mover advantage. Across 5 experiments, the classic first-mover advantage in negotiations was moderated by the framing of proposals because anchor framing affected concession aversion. The studies highlight how motivational forces (i.e., concession aversion) play an important role in producing anchoring effects, which has been predominantly viewed through a purely cognitive lens. Overall, the findings highlight when and how motivational processes play a key role in both judgmental heuristics and mixed-motive decision-making.


Cultures of Genius at Work: Organizational Mindsets Predict Cultural Norms, Trust, and Commitment
Elizabeth Canning et al.
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Three studies examine how organizational mindset — whether a company is perceived to view talent as fixed or malleable — functions as a core belief that predicts organizational culture and employees’ trust and commitment. In Study 1, Fortune 500 company mission statements were coded for mindset language and paired with Glassdoor culture data. Workers perceived a more negative culture at fixed (vs. growth) mindset companies. Study 2 experimentally manipulated organizational mindset and found that people evaluated fixed (vs. growth) mindset companies as having more negative culture norms and forecasted that employees would experience less trust and commitment. Study 3 confirmed these findings from more than 500 employees of seven Fortune 1000 companies. Employees who perceived their organization to endorse a fixed (vs. growth) mindset reported that their company’s culture was characterized by less collaboration, innovation, and integrity, and they reported less organizational trust and commitment. These findings suggest that organizational mindset shapes organizational culture.


The effect of management changes on winning in professional sports: Analysis using a dynamic lag adjustment model
Brian Goff, Dennis Wilson & David Zimmer
Managerial and Decision Economics, forthcoming

Abstract:
This paper examines whether coaching and general manager (GM) changes among three professional sports leagues — the National Football League (NFL), the Major League Baseball (MLB), and the National Basketball Association (NBA) — effect on‐field performance. Our empirical methodology uses team‐level data by season and adapts a lag adjustment econometric approach designed to resolve several statistical challenges that arise both in general managerial settings and in sports settings. Our main finding is that coaching changes in the NFL boost the number of wins per season by between 0.5 and 1.2 in each of the first five seasons. Coaching changes have smaller, but still positive, impacts in the MLB and NBA. For all the three leagues, we find that GM changes have no discernable impact on performance. A separate cross‐sectional analysis suggests that those small impacts stem from coaches and GMs having extremely compressed talent distributions. The data indicate that coaches and GMs, en masse, are important, but changing the people who occupy those positions rarely seems to move teams to different locations on the performance distribution.


Experimentation and Startup Performance: Evidence from A/B testing
Rembrand Koning, Sharique Hasan & Aaron Chatterji
NBER Working Paper, September 2019

Abstract:
Recent work argues that experimentation is the appropriate framework for entrepreneurial strategy. We investigate this proposition by exploiting the time-varying adoption of A/B testing technology, which has drastically reduced the cost of experimentally testing business ideas. This paper provides the first evidence of how digital experimentation affects the performance of a large sample of high-technology startups using data that tracks their growth, technology use, and product launches. We find that, despite its prominence in the business press, relatively few firms have adopted A/B testing. However, among those that do, we find increased performance on several critical dimensions, including page views and new product features. Furthermore, A/B testing is positively related to tail outcomes, with younger ventures failing faster and older firms being more likely to scale. Firms with experienced managers also derive more benefits from A/B testing. Our results inform the emerging literature on entrepreneurial strategy and how digitization and data-driven decision-making are shaping strategy.


Real Option Exercise: Empirical Evidence
Paul Décaire, Erik Gilje & Jérôme Taillard
Review of Financial Studies, forthcoming

Abstract:
We study when and why firms exercise real options. Using detailed project-level investment data, we find that the likelihood that a firm exercises a real option is strongly related to peer exercise behavior. Peer exercise decisions are as important in explaining exercise behavior as variables commonly associated with standard real option theories, such as volatility. We identify peer effects using localized exogenous variation in peer project exercise decisions and find evidence consistent with information externalities being important for exercise behavior.


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