Management Cult

Kevin Lewis

September 15, 2020

Sounds like a leader: An ascription-actuality approach to examining leader emergence and effectiveness
Margarida Truninger et al.
Leadership Quarterly, forthcoming


Aspiring leaders are often advised to look the part -- but what about sounding the part? This study supports and expands the ascription-actuality trait theory of leadership by proposing that vocal delivery matters for earning leadership opportunities, whereas leader competency matters for actual effectiveness in role. We tested hypotheses within an organizational simulation where 197 managers gave short campaign speeches to run for the organization's leadership positions. AI-informed voice-analytic technology was used to measure vocal delivery, while the 360° assessments from their actual organizations were used to measure leader competency and leader effectiveness. Results supported our hypotheses: Vocal delivery was positively associated with leader emergence, but not leader effectiveness. In contrast, leader competency was positively associated with leader effectiveness, but not leader emergence. Theoretical and practical implications are discussed.

The Deception Spiral: Corporate Obfuscation Leads to Perceptions of Immorality and Cheating Behavior
David Markowitz et al.
Journal of Language and Social Psychology, forthcoming


In four studies, we evaluated how corporate misconduct relates to language patterns, perceptions of immorality, and unethical behavior. First, we analyzed nearly 190 codes of conduct from S&P 500 manufacturing companies and observed that corporations with ethics infractions had more linguistically obfuscated codes than corporations without ethics infractions. Next, we tested perceptions of a company based on values statements modified by obfuscation (Study 2). Participants perceived low-obfuscation companies as more moral, warmer, and more trustworthy than high-obfuscation companies. Finally, behavioral experiments (Studies 3a and 3b) revealed that group members cheat more after reading a high-obfuscation values statement than a low-obfuscation values statement. The results provide evidence of a potentially troublesome cycle: corporate unethicality has linguistic traces, can affect how people appraise a company, and can change ethical behavior.

People with disagreeable personalities (selfish, combative, and manipulative) do not have an advantage in pursuing power at work
Cameron Anderson et al.
Proceedings of the National Academy of Sciences, forthcoming


Does being disagreeable -- that is, behaving in aggressive, selfish, and manipulative ways -- help people attain power? This question has long captivated philosophers, scholars, and laypeople alike, and yet prior empirical findings have been inconclusive. In the current research, we conducted two preregistered prospective longitudinal studies in which we measured participants’ disagreeableness prior to entering the labor market and then assessed the power they attained in the context of their work organization ∼14 y later when their professional careers had unfolded. Both studies found disagreeable individuals did not attain higher power as opposed to extraverted individuals who did gain higher power in their organizations. Furthermore, the null relationship between disagreeableness and power was not moderated by individual differences, such as gender or ethnicity, or by contextual variables, such as organizational culture. What can account for this null relationship? A close examination of behavior patterns in the workplace found that disagreeable individuals engaged in two distinct patterns of behavior that offset each other’s effects on power attainment: They engaged in more dominant-aggressive behavior, which positively predicted attaining higher power, but also engaged in less communal and generous behavior, which predicted attaining less power. These two effects, when combined, appeared to cancel each other out and led to a null correlation between disagreeableness and power.

Declining Business Dynamism among Our Best Opportunities: The Role of the Burden of Knowledge
Thomas Astebro, Serguey Braguinsky & Yuheng Ding
NBER Working Paper, September 2020


We document that since 1997, the rate of startup formation has precipitously declined for firms operated by U.S. PhD recipients in science and engineering. These are supposedly the source of some of our best new technological and business opportunities. We link this to an increasing burden of knowledge by documenting a long-term earnings decline by founders, especially less experienced founders, greater work complexity in R&D, and more administrative work. The results suggest that established firms are better positioned to cope with the increasing burden of knowledge, in particular through the design of knowledge hierarchies, explaining why new firm entry has declined for high-tech, high-opportunity startups.

A Puncher’s Chance: Expected Gain and Risk Taking in a Market for Superstars
Jordan Roulleau-Pasdeloup
Labour Economics, forthcoming


Do policies that decrease potential earnings at the top of the income distribution induce agents to alter their risk-taking behavior? To answer this question I collect data on Mixed Martial Arts pomotions. I exploit the fact that one promotion introduced such a policy, while its competitor did not. Using a standard Difference-in-Differences analysis, I find that fighters in the promotion that implemented the policy take significantly less risks after its inception. On top of being statistically significant, the effect is also economically significant: the decrease in frequency of risk-taking ranges from 10% to 26% in the treatment group.

Conversational receptiveness: Improving engagement with opposing views
Michael Yeomans et al.
Organizational Behavior and Human Decision Processes, September 2020, Pages 131-148


We examine “conversational receptiveness” - the use of language to communicate one’s willingness to thoughtfully engage with opposing views. We develop an interpretable machine-learning algorithm to identify the linguistic profile of receptiveness (Studies 1A-B). We then show that in contentious policy discussions, government executives who were rated as more receptive - according to our algorithm and their partners, but not their own self-evaluations - were considered better teammates, advisors, and workplace representatives (Study 2). Furthermore, using field data from a setting where conflict management is endemic to productivity, we show that conversational receptiveness at the beginning of a conversation forestalls conflict escalation at the end. Specifically, Wikipedia editors who write more receptive posts are less prone to receiving personal attacks from disagreeing editors (Study 3). We develop a “receptiveness recipe” intervention based on our algorithm. We find that writers who follow the recipe are seen as more desirable partners for future collaboration and their messages are seen as more persuasive (Study 4). Overall, we find that conversational receptiveness is reliably measurable, has meaningful relational consequences, and can be substantially improved using our intervention (183 words).

Property rights and resource use: Evidence from MLB starting pitchers
Marc Poitras & Daniel Sutter
Applied Economics, forthcoming


We conduct a unique test of the efficiency of property rights in major league baseball. The rights to the services of players are resources that can be possessed by the clubs or by the players themselves. This right was effectively reassigned from the club to the individual player when free agency was introduced in 1976. Players, however, only qualify for free agency after 6 years of service, and until that time a temporary property right is possessed by the club. In the absence of efficient bargaining, clubs that possess only a temporary right do not bear the full risk of injury or disability associated with using pitchers. Clubs in this situation can therefore have an incentive to overuse star pitchers. This theoretical prediction is supported by the statistical inferences of our econometric models.

Measuring Corporate Culture Using Machine Learning
Kai Li et al.
Review of Financial Studies, forthcoming


We create a culture dictionary using one of the latest machine learning techniques -- the word embedding model -- and 209,480 earnings call transcripts. We score the five corporate cultural values of innovation, integrity, quality, respect, and teamwork for 62,664 firm-year observations over the period 2001-2018. We show that an innovative culture is broader than the usual measures of corporate innovation -- R&D expenses and the number of patents. Moreover, we show that corporate culture correlates with business outcomes, including operational efficiency, risk-taking, earnings management, executive compensation design, firm value, and deal making, and that the culture-performance link is more pronounced in bad times. Finally, we present suggestive evidence that corporate culture is shaped by major corporate events, such as mergers and acquisitions.

Individualized pay-for-performance arrangements: Peer reactions and consequences
Dhuha Abdulsalam et al.
Journal of Applied Psychology, forthcoming


We contribute to understanding the previously unrecognized consequences of individualized employment arrangements on the relationship between pay and performance. Increases in the application of pay-for-performance (PFP) idiosyncratic deals (PFP i-deals) raise questions about how individualized PFP arrangements affect the performance of peers who do not receive such customized deals. As pay systems become more individualized, understanding the economic ramifications of how PFP i-deals affect peer performance is essential for understanding the total unit effects of implementing PFP i-deals. To examine these peer effects, we explored peer responses to PFP i-deals and identified boundary conditions on broad theoretical assumptions underlying the conclusion that PFP increases unit performance. We tested our predictions by applying multilevel random-coefficient discontinuous growth models to a sample of 451 peers nested in 117 business units of a for-profit health-care organization. Immediately after PFP i-deal implementation in the unit, the performance level of peers was negatively affected. Additionally, peer performance trends after PFP i-deal implementation were lower than they were before the PFP i-deal implementation. Our study also identified contextual factors that influence peer responses to PFP i-deal implementation.

Sparking Manufacturing Innovation: How Temporary Interplant Assignments Increase Employee Idea Values
Philipp Cornelius, Bilal Gokpinar & Fabian Sting
Management Science, forthcoming


Shop-floor employees play a key role in manufacturing innovation. In some companies, up to 75% of all productivity gains are the result of bottom-up employee ideas. In this paper, we examine how employee interplant assignments - short problem-solving jobs at other manufacturing plants within the same firm - influence employee-driven manufacturing innovation. Using unique idea-level data from a large European car parts manufacturer, we show that interplant assignments significantly increase the value of employees’ improvement ideas due to the short-term transfer of production knowledge and long-term employee learning. Both effects are amplified by assignments to plants that have high functional overlap (i.e., plants producing similar products using similar processes and machinery). One implication is that, for the purpose of employee-driven manufacturing innovation, assignments between peripheral plants with high functional overlap can be more effective than assignments to and from central plants. These findings are robust to several econometric tests. Our study provides novel and detailed empirical evidence of manufacturing innovation, and goes beyond previous research on the learning curve (learning by doing) by investigating how interplant assignments affect the value of employees’ improvement ideas (learning by moving).

Commitment in Organizations and the Competition for Talent
Thomas Cooley & Ramon Marimon
Review of Economic Studies, October 2020, Pages 2165-2204


We show that a change in organizational structure from partnerships to public companies - which weakens contractual commitment - can lead to higher investment in high return-and-risk activities, higher productivity (value added per employee) and greater income dispersion (inequality). These predictions are consistent with the observed evolution of the financial sector where the switch from partnerships to public companies has been especially important in the decades that preceded the 21st Century financial crisis.

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