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NFL Teams with Critical Mass of Women Executives Have Fewer Football Player Arrests
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October 11, 2020October 11, 2020Commerce

NFL Teams with Critical Mass of Women Executives Have Fewer Football Player Arrests

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Keeping players on the field and out of the courtroom is key for a team’s success. A new study provides a possible pathway to reduce off-the-job player misconduct and it starts at the top. The researchers, Profs. Mary Graham and Bhavneet Walia from Syracuse University along with Chris Robinson from Tulane University, have concluded that...

Mirror, mirror on the wall, who’s the fairest of them all? The answer: not the organizations led by narcissists. A new paper by Berkeley Haas Prof. Jennifer Chatman and colleagues shows not only the profound impact narcissistic leaders have on their organizations, but also the long-lasting damage they inflict. Like carriers of a virus, narcissistic leaders “infect” the very cultures of their organizations, the researchers found, leading to dramatically lower levels of collaboration and integrity at all levels–even after they are gone. The paper, “When ‘Me’ Trumps ‘We’: Narcissistic Leaders and the Cultures they Create,” in-press and published online by The Academy of Management Discoveries. It is co-authored by Charles A. O’Reilly of Stanford’s Graduate School of Business (MBA 71 and PhD 75), and former Berkeley Haas PhD student Bernadette Doerr. In previous research about toxic leaders, Chatman and her colleagues found that narcissistic CEOs have a dark side that reveals itself slowly over time. Their exploitative, self-absorbed behavior sets them apart from the charismatic, “transformational” leaders they are often confused with. They are also paid more than their non-narcissistic peers, and there’s a larger gap between their pay and those of other top executives in their companies, often because they are so good at unfairly claiming credit for other’s accomplishments. Narcissistic leaders get their companies involved in more lawsuits, as well, Chatman and her colleagues’ research has found. Narcissistic leaders have personalities that are profoundly grandiose, overconfident, and dishonest, credit-stealing, and blame-throwing, according to Chatman. They are abusive to their subordinates, think they are superior, don’t listen to experts, create conflict, and believe the rules simply don’t apply to them. They can explode in rage at any sign of disagreement or disloyalty. There’s always an “I” in their conception of the team. In their latest paper, Chatman and her colleagues conducted a series of five experiments on 1,862 test subjects, as well as a field study that included CEOs of major companies, to discern the impact of narcissists’ bad behavior. The results show not only that leaders high on the narcissism scale are less collaborative and ethical, but also that the cultures of the organizations they lead are less collaborative and ethical. Ultimately, the researchers revealed exactly how narcissists institutionalize less collaborative and ethical behaviors and create lasting damage on employee morale and performance. “Narcissistic leaders affect the core elements of organizations and their impact on society,” says Chatman, the Paul J. Cortese Distinguished Professor of Management. “Companies organize because they can do something together that no individual could accomplish alone. When narcissistic leaders undermine collaboration, they by definition reduce the effectiveness of an organization. Without integrity, an organization risks its very survival.” How narcissists affect organizations There’s a colorful saying that the “fish rots from the head down”–employees see leaders acting like jerks, and they become jerks, too. But it’s not a simple matter of mimicking the boss. “Narcissists don’t create narcissists,” Chatman says. “It’s not about doing what the leader does. It’s about the leader creating a culture that induces people to act less ethically and less collaboratively than they would otherwise, whether they’re narcissists or not.” That’s because a key driver of employee behavior is their organization’s culture, not just their leader, says Chatman, a pioneering researcher in the field. “Organizational culture outlasts any leader,” she says. “Even after a leader is gone, the culture that has been cultivated has a life of its own.” Narcissists infect the culture through the policies and practices that they directly influence, or–more often–that they fail to institute. They often choose not to put in place strong policies governing ethical behavior, conflicts of interest, and pay equity between men and women, as well as practices that promote teamwork and encourage people to treat others with civility and respect. On the flip side, they also frequently fail to sanction employees when they violate these shared norms. In effect, people get rewarded for less ethical, less collaborative behaviors, Chatman says. Actions such as these create lasting organizational damage. When people aren’t able to collaborate, collective accomplishments become harder to attain. Employees’ ability to learn, grow, and gain new expertise withers. When they see leaders take credit for every success and blame others for every failure, employees’ morale sinks and their self-confidence wilts. While there’s strong evidence that people who are overconfident and unethical generate lower financial performance and undergo more regulatory investigations of ethical breaches than those who are not, Chatman says the jury is still out about whether narcissistic leaders have a strong impact on long-term company performance. That’s because many external and competitive variables can affect stock prices, revenues, and profitability. Even so, Chatman argues, narcissists’ penchant for becoming embroiled in lawsuits and ethical breaches, being insensitive to risk because of their overconfidence, and creating low employee motivation is a recipe for poor organizational performance. Yet the mythology persists: Don’t bold, visionary leaders like Elon Musk of Tesla or Steve Jobs of Apple need to be a little bit narcissistic in order to have the self-confidence to launch innovative and supremely risky ventures? The answer is a definite no, says Chatman. “You can have confidence and be innovative, and not be self-involved, exploitative of others, overconfident, and risk-insensitive,” she says. “Bill Gates is a perfect countervailing example. But somehow, the lay public, especially in the U.S., has developed a view that leaders are supposed to be loud-talking and overconfident.” How to head off narcissistic leadership To avoid narcissistic leaders, one obvious solution is to simply not hire them, or allow them to move up. Organizations should put special measures in place to screen for these personality types, Chatman says. A common approach involves asking tough questions to uncover negative behaviors from a wide range of references, not just those a leader provides. However, narcissists are often savvy enough to recognize who is going to sing their praises and who isn’t, and will provide a selective list of references. In some cases, executive search firms are enlisted to go beyond references and try to uncover information that is harder to find. Still, wily narcissists can sometimes evade detection until they’ve been in place for a while. Using 360-degree evaluations from a wide range of employees can help surface self-absorbed leaders, Chatman notes. Once it becomes clear that a company has a toxic leader at the top, it takes unflagging effort from the board to rein in a narcissist’s worst tendencies, Chatman says. Unfortunately, many boards of directors don’t go far enough in that direction, which is part of the reason why companies have ended up with so many CEOs who are high on the narcissism scale. Chatman says that one of the best ways to mitigate the damage narcissistic leaders can cause is to base a significant part of their compensation and performance evaluation on the development of their people. Boards can also align a leader’s compensation to the performance of their team, and boards can devise ways to reward collaboration with peers. Measures such as these help ensure leaders cannot circumvent sharing credit and working with others. Chatman’s findings show that after a narcissist leader gets a strong foothold, removing them is only the first step in repairing the organization. “Boards can’t assume that simply by removing a leader, they will be able to change how people in the organization behave,” she says. “The culture leaders helped create will still be embedded in the policies and practices that reward people for prioritizing uncollaborative and unethical behaviors. Turning around this kind of culture will take explicit effort and likely a significant amount of time.”
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October 5, 2020October 7, 2020Commerce

How Narcissistic Leaders Infect Their Organizations’ Cultures

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Mirror, mirror on the wall, who’s the fairest of them all? The answer: not the organizations led by narcissists. A new paper by University of California – Berkeley Haas School of Business Professor Jennifer Chatman and colleagues shows not only the profound impact narcissistic leaders have on their organizations, but also the long-lasting damage they inflict. Like...

Netflix, 0 Million and Black-Owned Banks
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September 23, 2020September 23, 2020Commerce

Netflix, $100 Million and Black-Owned Banks

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Recently, Netflix announced a plan to invest $100 million, or 2 percent of its cash holdings, in financial institutions that are Black-owned and support Black communities. This headline event is only the latest development for Black-owned banks: In early June, ahead of the Netflix announcement, investors pushed up stock prices, appearing to vote with their pocketbooks by supporting institutions that have the potential to decrease racial wealth gaps. This...

Private Health Insurers Paid Hospitals 247% of What Medicare Would
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September 23, 2020September 23, 2020Commerce, Health

Private Health Insurers Paid Hospitals 247% of What Medicare Would

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Prices paid to hospitals nationally during 2018 by privately insured patients averaged 247% of what Medicare would have paid, with wide variation in prices among states, according to a new RAND Corporation study. Some states (Arkansas, Michigan and Rhode Island) had relative prices under 200% of Medicare, while other states (Florida, Tennessee, Alaska, West Virginia...

Virtual Tourism Could Offer New Opportunities for Travel Industry, Travelers
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September 9, 2020September 9, 2020Commerce

Virtual Tourism Could Offer New Opportunities for Travel Industry, Travelers

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A new proposal for virtual travel, using advanced mathematical techniques and combining livestream video with existing photos and videos of travel hotspots, could help revitalize an industry that has been devastated by the coronavirus pandemic, according to researchers at the Medical College of Georgia at Augusta University. In a new proposal published in Cell Patterns, Dr....

Researchers Explore How Retail Drone Delivery May Change Logistics Networks
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August 30, 2020August 30, 2020Commerce

Researchers Explore How Retail Drone Delivery May Change Logistics Networks

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Researchers at The University of Texas at Dallas say drone technology has the potential to be a genuine game changer in the retail industry, with its promise to enable retailers to offer unheard-of delivery lead times and near-perfect delivery-time customization adaptability. In a new study, recently published online in Production and Operations Management, three faculty members...

How to Get Good at Disagreeing
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July 21, 2020July 21, 2020Commerce

How to Get Good at Disagreeing

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Do you hesitate to speak up when you disagree with the rest of the group? Are the others not saying anything either? Then you’re probably not maximizing your collaboration. But you can learn how to disagree more effectively. You may recognize yourself. You’re part of a group where everyone seems to agree more or less...

How “Progressive,” Millennial-Focused Workplaces Have Tried to Keep Employees’ Discrimination Claims Quiet
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July 7, 2020July 7, 2020Commerce

How “Progressive,” Millennial-Focused Workplaces Have Tried to Keep Employees’ Discrimination Claims Quiet

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In the weeks after George Floyd’s death, protests in support of social change have swept the country. Instagram feeds have been filled with images of Mr. Floyd, as well as Breonna Taylor and Ahmad Arbury, and pleas for donations to bail funds and protest updates populated many Twitter timelines. No shortage of fashion designers, brands,...

Retail Woes: A Running List of Fashion Bankruptcies
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July 7, 2020July 7, 2020Commerce

Retail Woes: A Running List of Fashion Bankruptcies

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On the heels of an array of retail bankruptcy filings that began to unfold over the course of the year in 2016, New York-based designer Bibhu Mohapatra and retailers The Limited, Wet Seal, and Payless all made headlines when they filed for Chapter 11 protection in early 2017. They were swiftly followed by a handful...

Global Success for Canadian Companies Depends on Prior R&D Investment, Receptiveness to New Learning
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July 7, 2020July 7, 2020Commerce

Global Success for Canadian Companies Depends on Prior R&D Investment, Receptiveness to New Learning

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Global success for Canadian companies depends on prior R&D investment, receptiveness to new learning, shows new study. Canadian companies that go international are known to be more productive and successful than those that don’t. New research has quantified the reasons why. It shows that about 80 percent of global companies’ productivity is due to what...