The Arrogance of Power; Be True to Thy Founder's Selves; No Charitable Deed Unpunished
The Arrogance of Power
Being powerful has its perks. But the ability to relate to those without power isn't one of them. In Power and Perspectives Not Taken, appearing in Psychological Science, a group of scholars from Northwestern's Kellogg School of Management, New York University, and the Stanford Graduate School of Business ran several experiments to see how undergrads who were separated into "powerful" and "powerless" groups interacted with each other. The more powerful students were much more likely than those without power to ignore the perspectives of those around them, failing to acknowledge their privileged position and having trouble detecting the emotional states of their peers. The same people, though, who act brazenly when they have power tend to be just as compassionate when they are powerless, says coauthor Adam Galinsky, an associate professor of management at Kellogg: "This relationship is fundamentally psychological."
Be True to Thy Founder's Selves
Change or die? Make that change and die, say a group of professors from the Stanford Graduate School of Business, Yale School of Management, University of California-Davis, and Turkey's Sabanci University. In Organizational Identities and the Hazard of Change, published in Industrial and Corporate Change, the authors investigate the consequences of change at more than 150 start-ups founded in Silicon Valley since 1994. There are some things, they found, managers just don't want to mess with: Companies that decided to move away from their founder's blueprint for employee relations were three times as likely to fail as companies that stuck with their original employment model. The long-term stock values of companies that started out using a less-formal "star" system, say, only to grow into more bureaucratic procedures, tended to be one sixth that of companies that offered more stable work environments. Change may be necessary but not always good for business.
No Charitable Deed Unpunished
"Social responsibility" is the new corporate credo. But does charitable giving actually help businesses' bottom lines? A group of professors from Columbia University's Graduate School of Business and the Wharton School isn't so sure. In a working paper, A Model of Corporate Philanthropy, the professors examine the relationship between charitable donations and profits at more than 3,000 companies. After rating each company based on the frequency and size of its giving, their conclusion: In hypercompetitive, advertising-intensive industries like grocery stores, charitable giving seems to boost profits. But in businesses like steel that operate far from the media's glare, there is actually a negative relationship between philanthropy and profits.
This story appears in the March 19, 2007 print edition of U.S. News & World Report.