2015-03-27 Power and status significantly impact judgment and decision making.

 

 

 Dr. Nathanael Fast

nathanaelfast.com

 

Assistant Professor of Management and Organization, Marshall School of Business,

University of Southern California

 

 

 Power and status impact judgment and decision making.

 

A graduate of the Stanford University Program in Organizational Behavior, Professor Fast studies the effects of power and status on behavior, judgment and decision making, and the psychological foundations of culture. An experienced social entrepreneur, he has co-founded three nonprofit organizations addressing community and economic challenges in California’s Central Valley. His research has been referenced in a variety of business media including Business Week, Economist, Financial Times, and CNN.

1.  Your most prominent research to date focuses on how power in organizations affects judgment and decision-making. Can you give us an overview of this research? What initially attracted you to this area of inquiry?

A lot of my work is focused on trying to understand how having or lacking power changes individuals’ perceptions, attitudes, and decision-making. People often like to point to the common saying “power corrupts,” especially when observing a leader who makes a bad decision, but I wanted to understand the relationship between power and behavior more systematically. So my colleagues and I have been using scientific methods to unpack the various psychological consequences of power on those who have it. We’re finding that the effects have the potential to be adaptive in some cases and maladaptive in others. For example, one set of studies with Deb Gruenfeld, Niro Sivanathan, and Adam Galinsky reveal that power increases the tendency to experience illusory control. That’s adaptive in the sense that it gives people the gumption to act boldly and keep going when times get tough. However, it can also lead to an overestimation of one’s abilities when accuracy is important, leading to undesirable outcomes. More recently, I’ve been studying how power, in the form of control over resources and outcomes, interacts with things like self-perceived competence and social status to influence behavior.

I’ve been interested in power for as long as I can remember. One of my first memories of this interest was when I was a kid in Zaire (now the Congo), where my dad was a volunteer doctor. We lived there during the dictatorship of Mobutu Sese Seko and the notion that a leader would abuse and even kill those who disagreed with his policies was alarming to me. Ever since, I’ve been fascinated by the factors that predict whether leaders will abuse power or use it to benefit others.

 

 

2.   Bullying has historically been a problem in the Japanese public school system, one that has been linked to the suicides of some victims. Based on your research, what would you suggest to principals and policy makers for eradicating bullying in Japan? What, if anything, can the victims do to defend themselves? What can bullied employees do to improve their plight?

Bullying is a really big and complicated issue. One thing that has helped – and organizations like the Workplace Bullying Institute have led the way in this regard – is to name it. By giving bullying an official name, it becomes something that both victims and policy makers can point to as a problem that needs to be fixed. Another thing that individuals who are experiencing bullying can do is take some time away from the situation to collect their thoughts and come up with a strategy for how to deal with the situation. Resources like the Workplace Bullying Institute are helpful for those wanting to figure out their options. It’s then helpful to take the issue to the right people and frame it in terms of the organization’s self-interest rather than as an individual problem. It’s also very helpful to take that step as a group of people, rather than as an individual. It’s quite easy and tempting for higher-ups to simply blame the victim and label them as overly sensitive, but this is impossible to do when the message about bullying comes from a whole group of employees who care about the well being of the organization. As far as what policy makers can do, the first steps are to give it a name and raise public awareness of the problem.

 

3.   I was intrigued by your research described in the March 10, 2009, Time article on the illusion of personal control that power creates. Quoting you and your co-author Deborah Gruenfeld, the article notes, “Power may cause people to lose touch with reality in ways that lead to overconfident decision-making.” Can you tell us the circumstances under which this outcome is likely? What can companies do reduce the likelihood that those in positions of power will render over-confident decisions? What can those in power themselves do?

A few factors can make the illusory control stronger, like repeated successes and being surrounded by people who are unwilling to challenge the leader. When we never experience failure or opposition, we stop feeling the need to deliberate the pros and cons of a particular decision. So companies need to foster deliberative thinking among those in power. Those at the top can help themselves by becoming conscious of the tendency to experience illusory control as well as reminding themselves of their inadequacies and surrounding themselves with people who will be honest with them.

 

4.   When I first read about your research suggesting that the reason people may remain popular long after their has talent faded—if ever they had any to begin with—stems from the human desire to find common ground in conversations, a shared topic of interest, I was incredulous. Can you tell us about this research? Do you think the results would also be valid in a country like Japan, where the culture is vastly different from the West? What are the implications of these research findings for businesses?

We wanted to test a simple hypothesis—that the psychological tendency for people to form bonds by talking about things they have in common underlies the sociological finding that prominent ideas and people persist in popular culture longer than they “should” based purely on merit. We found that baseball players received more All-Star votes and accolades when their names had been mentioned in the media in prior years, controlling for performance. The tendency for people to talk about these players in online chat rooms was the mechanism that drove this effect. Interestingly, the one group of people that showed a different pattern was baseball “experts” (i.e., fans that know a lot about baseball). They tended to talk about the more interesting, higher-performing players, but only when they knew they were talking with another expert. In short, a lot of prominent ideas and celebrities might exist simply because they give us a way to connect with other people. It would be interesting to look at potential differences for this effect among individualistic and collectivistic cultures. That’s not something we’ve done yet.

 

5.   Research you published in The Journal of Experimental Social Psychology, suggested that blaming is contagious in organizations. To control this contagion, you suggest rewarding employees for their mistakes in a 2010 HBR blog article. Could you give us examples of some companies that have introduced such reward systems? What have been the benefits of the systems? How has their business impact been measured?

Of course it’s important to encourage the right kind of mistakes—those that foster learning that improves future performance. There are a number of companies that take a novel approach to failures. India's Tata group gives an annual prize for the best failed idea. Intuit, Eli Lilly, and P&G all view failures as an integral part of their businesses. The benefit of this approach is that it fosters a climate of psychological safety and, as Amy Edmondson shows through extensive research, this leads to better overall performance.

 

6.   I understand that you lived in North America, Europe, and Africa as you grew up. How were you able to live on three different continents as a child? Can you tell us about your experiences in Europe and Africa? How have they shaped your perspective of America? How have your life experiences influenced your research?

My dad was a doctor who loved to travel as well as help others, so he signed up to volunteer with an organization similar to Doctors Without Borders. In Belgium I went to an all French-speaking school and in the Congo, my siblings and I were the only Caucasian kids in the village. Those experiences forced me to become an avid student of individuals and groups to try to understand the underlying norms and principles that guide people’s behaviors. That led to a life-long interest in doing research that helps uncover the underpinnings of human behavior. Living abroad was a neat experience and I’m still thankful for that opportunity.