Saturday, April 28, 2007

The science of business dominance


LONDON, England (CNN) -- As well as turning out ever-more qualified graduates with a burning desire to ascend the rungs of leadership, and researching specific issues related to commerce and economics, business schools have another key role.
Often ignored, yet none the less vital, it can be summed up as, in the modern management by-word, blue sky thinking.
It involves coming up with often very theoretical research and concepts which might seem tangential or even irrelevant to everyday business decisions, but have the potential to bring very real benefits to companies.
One such notion was explained in a recent lecture at the Stanford Graduate School of Business which looked at the vexed issue of how social hierarchies and displays of dominance can influence negotiations.
Much like a chest-beating gorilla or chimpanzee, it has long been documented that humans -- particularly, it has to be noted, men -- exhibit more subtle yet nonetheless unmistakable physical signs to try and assert their self-perceived alpha status, explained Lara Tiedens, associate professor of organizational behavior.
"We have all had experience seeing someone in a group who stands out, who seems more compelling, more able to get what they want -- in ways that may not have anything to do with their position," she said.
People can do this through signs such as adopting an open physical posture, gazing directly at others and leaning in towards others' personal space, and this can bring very real benefits in negotiations, Tiedens said.
"The person who displays dominance is seen as being more of the decision-maker and go-to person in their organization -- deserving of a higher position and socioeconomic status. We think of these people as deserving even more status ... not only do they have it, but they should have more."
The dominant person is also viewed as being more influential, Tiedens said: "Arguments made in the context of dominance displays are believed more, agreed with more, and impact others' behavior more."
Benefits and risks
However, for all those standing up tall and puffing their chests out as they enter a meeting, comes a warning -- dominating people can be seen as "less nice, less likeable, and less warm", and trying to assert dominance can be a risky strategy.
Elsewhere, Chicago University's Graduate School of Business has been tackling an even more fundamental issue, and one with even more lessons for the commercial world -- why don't people do what makes them happy?
The assumption that consumers and citizens are essentially rational creatures acting in their own best interests is at the very foundation of the market economy.
Unfortunately, as Christopher Hsee and Reid Hastie, respectively professors of behavioral science and marketing at the school, argue in a new paper, this is not necessarily the case.
The study (read the full paper here) shows that when presented with a range of options, most people consistently make bad decisions, thanks to everything from a poor prediction of their future needs to the problem of competing choices.
This has great implications for both business and government, the paper explains.
"Many social policies, such as free choice of health providers, retirement plans, and public offices, are built upon the assumptions that people know their own preferences and that what people choose must be in their best interests," it says.
"The behavioral-decision research findings we have reviewed here cast doubt on these assumptions and, therefore, on the derived policies They also give the old aphorism, 'Be careful what you wish for; you might receive it', a new significance.

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