Centralized Organization and Distributed Trust

bitcoin-2729807_1920[We’re pleased to welcome author Marc-David L. Seidel of the University of British Columbia. Seidel recently published an article in the Journal of Management Inquiry entitled “Questioning Centralized Organizations in a Time of Distributed Trust,” which is currently free to read for a limited time. Below,  Seidel reflects on the inspiration of his research:]

JMI_72ppiRGB_powerpointTechnology has always fascinated me. This fascination led to many interesting opportunities including working for the creator of the first Campus-Wide Information System (CUInfo) and the first online counseling service (Dear Uncle Ezra) well before HTML and the web existed. I learned the true potential of networked communication at this point, and was always trying to figure out ways to get non-technical people interested – yet frequently failed miserably.

In graduate school, while I was procrastinating on my dissertation on the airline industry, I started reading about proposals of the HTML specification and I started to feel outdated technologically. It struck me that this new protocol may finally help bring the potential of the internet to non-technical people. So I decided to learn how to develop an HTML webpage to “get back up to speed.” This ultimately led to me creating the first online airline portal (Airlines of the Web) in 1994 prior to the consumer commercialization of the internet. As others entered the online travel space, a distributed community formed. This was highly collaborative at the start. As the consumer internet started to commercialize, I was fascinated by the interaction of those interested in online enabled communication and those interested in online profit. That experience of seeing how communities formed online around a common interest, led me a bit later to co-creating the first crowdsourced telecom consumer information rates and fees database (ABTolls) with a mission of helping people get the best consumer information possible. All of those experiences, combined with my strong academic interest in organizational theory, led to my interest in Community Forms (C-Forms) of organization. It has been fascinating to watch the evolution of organizations as technology has enabled inexpensive direct peer to peer communication.

Similar to when I first learned of HTML in the early 1990’s, when I first learned of blockchain I got a very similar feeling including the need to “get back up to speed” and have immersed myself in the growing communities of people working on the technology. Through learning about the technology, and distributed trust more broadly, I have recognized that many of our assumptions about formal organization are being fundamentally challenged by shifts to distributed forms of trust – where individuals previously unknown to each other can enter into direct peer to peer trusted interactions with no need for a central organization to vouch for either of them.

Removing the need for central organizations in many domains is a drastic shift to many underlying assumptions of the theories in our field. So my goal with this piece is to introduce the basic concepts of distributed trust to the non-technically inclined in our field, and to highlight how we need to address the future which is coming quickly. Implicit assumptions about the legitimacy and power of central network positions no longer ring true. Many core aspects of our field are being called into question at a fundamental level. I hope reading the Generative Curiosity piece helps other scholars to start to recognize what is coming, and how their own individual research domains will be impacted. As the technology develops, insights from organizational theory can help to shape our joint future so that the societal impact of this shift is designed in such a way to ensure a better more equitable future for all.

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Trustworthy Marketing Mixes: A Study of Forestland Owners

[We’re pleased to welcome author Kelley Dennings of the American Forest Foundation, Washington, D.C.. Dennings recently published an article in Social Marketing Quarterly entitled, “Research Into Woodland Owners’ Use of Sustainable Forest Management to Inform Campaign Marketing Mix,” co-authored by Jennifer Tabanico. From Dennings:]

The article titled “Research Into Woodland Owner’s Use of Sustainable Forest Management To Inform Campaign Marketing Mix” came about through a partnership between the American Forest Foundation and Action Research. The American Forest Foundation (AFF) works on-the-ground with families, teachers, and elected officials to promote stewardship and protect our nation’s forest heritage. When AFF embarqued on the creation of a social marketinsmqa_23_1.cover.pngg campaign they brought on Action Research to learn more about the barriers and benefits woodland owners encounter with sustainable forest management. Action Research specializes in changing human behavior through the application of traditional marketing activities blended with cutting edge research findings from the social and behavioral sciences including psychology, sociology, and economics.

This research is imperative as woodlands provide many environmental benefits such as clean air, clean water, recreational opportunities and wood products. However, keeping our forests healthy requires the support of private woodland owners that own the majority of America’s forests. The difficulty with this work is that harvesting trees without the advice of a forester can leave a landowner vulnerable. A forester ensures that the sustainable forest management actions meet the needs of the woodland owner as the forester makes recommendations depending on what the woodland owner wants to gain from their land.

What our findings showed is that trust is very important between a woodland owner and the forester. However, we found that advice from friends and family is highly trusted. Unfortunately this help may not always be the most accurate. This lack of trust is being addressed in the campaign’s marketing mix through peer networks and testimonials. Research into trust can help inform other campaigns outside of conservation and is very useful for those working in rural communities.

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Trust and Distrust in the Pursuit of Career Advancement

8616564123_9f697724c0_z[We’re pleased to welcome Joshua Marineau of North Dakota State University. Joshua recently published an article in Group & Organization Management entitled “Trust and Distrust Network Accuracy and Career Advancement in an Organization.”]

  • What inspired you to be interested in this topic?

The key interest I had with this study was wondering if it was beneficial to know your sources of liabilities—that is, do you really want to know who distrusts you at work? And if you did know, would you be better off?  This was an interesting question for me because there has been relatively little work in this area and this was an opportunity to test some new ideas. There is a lot of work which shows our social networks matter, but not much showing whether knowledge of the social network matters, and very little work on negative ties, such as distrust.  Here I found evidence that knowing your sources of trust and distrust can be quite beneficial, especially when it comes to being promoted at work.

  • Were there findings that were surprising to you?Current Issue Cover

In conducting this study, I was surprised that there wasn’t a clear positive moderation effect for network accuracy on performance related to increased chances for promotion. It seems that being accurate is very helpful, but this doesn’t benefit high performers much. One can benefit from either high accuracy or high performance; but together, there does not seem to be much advantage.

  • How do you see this study influencing future research and/or practice?

I hope this research has a modest influence on how scholars think about social networks in organizations, particularly when it comes to individual outcomes. Those that know their sources of positive and negative ties can benefit—this means that one’s position in the network is just one factor in explaining outcomes, therefore scholars might also consider how accurate the person is about their network. I believe this is one of the first studies to look at career advancement and network accuracy and one of the first to use negative ties (i.e., distrust). In terms of practice, knowing who trusts and distrusts you can actually be a good thing, and can pay dividends—suggesting that spending some energy getting to know your network can pay off, particularly if your performance is low!

The abstract for the paper:

Although there is some evidence individuals’ knowledge of the organization’s social network can be a valuable resource, providing advantages, it is unclear whether those advantages also relate to employee performance outcomes, such as career advancement. Thus, the question this study seeks to answer is “Does accuracy of the social network provide a unique resource unto itself, positively affecting one’s promotion in the organization?” This question is answered from a social exchange and social resources view using cognitive social structure-style data collected in the call center of a large U.S. restaurant equipment manufacturing firm. Evidence suggests that social network accuracy of the work-related trust and distrust networks increased the chances for promotion compared with the less accurate. In addition, trust and distrust network accuracy moderated supervisor-rated performance effects on promotion, such that accuracy is generally more beneficial for low compared with high performance individuals, increasing their chances of promotion. Contributions to research in career advancement, social networks, network cognition, and positive and negative tie perception are discussed.

You can read “Trust and Distrust Network Accuracy and Career Advancement in an Organization” from Group & Organization Management free for the next two weeks by clicking here. Want to stay current on all of the latest research from Group & Organization Management? Click here to sign up for e-alerts!

 *Image credited to Pal-Kristian Hamre (CC)

Taking a Closer Look at the Building Blocks of Psychological Contracts

GOM 39(6)_Covers.indd[We’re pleased to welcome Ultan P. Sherman of the University College Cork. Dr. Sherman recently collaborated with Michael J. Morley of the University of Limerick on their article “On the Formation of the Psychological Contract: A Schema Theory Perspective” from Group and Organization Management.]

When I registered as a Ph.D student many years ago, my supervisor at the time (and co-author on this paper) Prof. Michael Morley tasked me with reading five articles on the psychological contract. The very first article I read was by Denise Rousseau (2001). In her seminal paper she discussed the schematic principles of the psychological contract. Fourteen years after this paper was first published it still surprises me that the building blocks of the psychological contract has only received minor attention from researchers. Both Michael and I felt that revisiting the ‘psychology’ of the psychological contract would facilitate a deeper understanding of how the contract is created. It is funny to think that the very first article I read has significantly informed this paper.

Many of us will recall feelings of anxiety on our first day of work. Often this anxiety stems from the fear of the unknown. To allay this fear, new recruits often seek lots of information as a means of addressing the unanswered questions we hold about our new job (i.e. what is my team like?, do we work late into the evenings in this firm?, etc.). Our paper argues that the information gathered at the beginning of employment is used to make sense of a new job and it is from this process that a psychological contract emerges. Of course, a new recruit will seek out and interpret information differently depending on many different biases and individual motivations contained in their schema. The schema filters new information in light of past work experiences and individual motivations. Therefore, by understanding the elements of the schema and how it functions, we can gain a deeper insight into how the psychological contract is created.

We hope that this paper will guide future researchers along new lines of enquiry into how the psychological contract is created. We all have very unique and idiosyncratic work experiences that influence our perceptions of each subsequent employment. Exploring this ‘baggage’ will allow us to better predict behaviour in and around the employment relationship. Similarly, we encourage future researchers to more explicitly examine how information is used by new recruits at organisational entry. From a practical perspective, it is in the employers interest to know what sources of information are used, and not used, by new recruits at the beginning of their tenure with the firm.

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w_rms_blob_commonUltan P. Sherman is a lecturer in Organizational Behavior and Human Resource Management at the School of Management and Marketing, University College Cork, Ireland. His primary research interests lie broadly in the relationship between work and psychology focusing on issues such as the psychological contract, knowledge circulation and the meaning of work.

MichaelMorley_10[1]Michael J. Morley is Professor of Management at the Kemmy Business School, University of Limerick, Ireland. His research interests encompass international, comparative and cross-cultural issues in human resource management which he investigates at micro, meso and macro levels.

Thomas A. Wright on Incorporating Character in Business Education

cheating-1562136According to The Atlantic, between 2001 and 2010 the annual rate of scholarly article retractions increased by a factor of 11. A recent study published in Proceedings of the National Academy of Sciences took a closer look and found that out of the 2,047 retracted papers reviewed, 67.4% were the direct result of academic misconduct rather than genuine error. With scholarly transgressions on the rise, it comes as no surprise that many universities are taking action to stop collegiate dishonesty at the student level through implementation of strict plagiarism policing. In his Distinguished Scholar Invited Essay entitled “Reflections on the Role of Character in Business Education and Student Leadership Development” from Journal of Leadership and Organizational Studies, Thomas A. Wright of Fordham University discusses the importance of character and character leadership development in business education as a way of not only reducing academic misconduct misconduct but developing scholars’ search for life’s meaning.

From the introduction:

The role of character is critical in the development of our own, as well as our students’, search for life’s meaning (Frankl, 1984). JLOS_72ppiRGB_powerpointFocusing on the role of character, in both our teaching and research, four objectives are undertaken designed to highlight the importance of character and character leadership development in business education. First, a discussion of why character is relevant to business education assessment is provided though the 3-H (“head,” “heart,” and “hands”) approach to student learning (Hill & Stewart, 1999; Stuebs, 2011). While many academics traditionally focus on the “head” approach, we need to also focus on how students affectively (“heart”) and behaviorally (“hands”) learn about character. Second, considered within the context of what is character, an overview of how I have assessed character is presented emphasizing my “top-5” profiles in character approach to both personal and professional leadership development (Wright & Quick, 2011). Third, building on Bandura’s (1977) social learning model, I propose that a lack of positive role models constitutes one significant reason why we are today faced with such moral challenge in business education. My reflection closes with suggestions for the continued role of character education and research in both our classroom and beyond. A brief overview is provided next of why character is relevant to business education assessment.

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Finding the Balance Between Greed and Altruism

yin-yang-1024035-mAre greedy managers or altruistic managers more successful? The answer may not be so black and white. According to Katalin Takacs Haynes, Matthew Josefy, and Michael A. Hitt, authors of “Tipping Point: Managers’ Self-Interest, Greed, and Altruism” from Journal of Leadership and Organizational Studies, harmony between the two characteristics is actually the most beneficial to firm performance.

The abstract:

We explore the potential effects of managers’ greed and altruism on their behaviors and firm outcomes. Greed represents extreme self-interest whereas altruism reflects concern for others. We argue that managerial greed leads to a focus on short-term decisions JLOS_72ppiRGB_powerpointand short-term firm performance. Alternatively, managerial altruism normally produces a focus on longer term decisions and long-term firm performance. Managerial greed is also more likely to produce wrongdoing, whereas managerial altruism produces greater corporate citizenship behaviors. Managerial greed is likely to lead to turnover for non-performance–related reasons whereas managerial altruism is more likely to produce managerial turnover for performance reasons. Overall, we conclude that measured self-interest keeps managers focused on the firm’s goals and measured altruism helps the firm to build and maintain strong human and social capital. The extremes of either greed or altruism likely will harm firm performance. Thus, balance between managerial self-interest and managerial altruism leads to the greatest success.

You can read “Tipping Point: Managers’ Self-Interest, Greed, and Altruism” from Journal of Leadership and Organizational Studies for free by clicking here. Want to know about all the latest research like this from Journal of Leadership and Organizational Studies? Click here to sign up for e-alerts!

How Does an Organization’s Compensation System Affect Ethical Sales Behavior and Customer Lifetime Value?

[We’re pleased to welcome Pankaj M. Madhani of ICFAI Business School (IBS) in India. Dr. Madhani is the author of “Compensation, Ethical Sales Behavior and Customer Lifetime Value” which appeared in the most recent issue of Compensation and Benefits Review.]

An ethical climate of the organization can be reinforced by implementing an CBR_42_1_72ppiRGB_powerpointeffective sales compensation plan. A salesperson’s ethical behavior plays a critical role in forming, maintaining and sustaining long-term customer relationships. Ethical sales behavior increases customer satisfaction, trust, loyalty and eventually enhances customer lifetime value (CLV). The CLV approach quantifies the potential monetary value of customers over their lifetime and builds linkages between ethical sales behavior and the financial performance of the organization. An ethical sales practice is one of the drivers influencing and enhancing CLV. The purpose of effective sales compensation is to recognize the role fulfilled by salespeople to maximize CLV as a result of ethical sales behavior.

The frameworks developed in this research illustrates how the compensation practices of an organization influence ethical sales efforts and also shows that what a salesperson does influences customer acquisition, customer retention and customer expansion in the form of cross-selling/up-selling, which in turn affects customers’ CLV or their profitability to the organization. This research also provides a methodology for CLV calculation as well as its key dimensions. The research identifies various drivers of unethical sales behavior, looks at the optimal design for the sales compensation plan and develops various models for enhancing ethical behavior of salespeople and ultimately CLV.

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857da02a30227a2416653fe028aa8c16Pankaj M. Madhani earned bachelor’s degrees in chemical engineering and law, a master’s degree in business administration from Northern Illinois University, a master’s degree in computer science from Illinois Institute of Technology in Chicago, and a PhD in strategic management from CEPT University. He has more than 27 years of corporate and academic experience in India and the United States. During his tenure in the corporate sector, he was recognized with the Outstanding Young Managers Award. He is now working as an associate professor at ICFAI Business School (IBS) where he received the Best Teacher Award from the IBS Alumni Federation. He is also the recipient of the Best Mentor Award. His main research interests include sales force compensation, corporate governance, and business strategy.