Tuesday, February 27, 2024

Hire Those You Trust! But Actually It Is More Complicated

What is the relationship between trust and hiring? We all know the simple answer. Employers hire those who seem trustworthy, so trust and hiring are pretty much the same thing. But there is also a more complicated answer, and that one involves looking at how national cultures differ in the general trust levels. Suppose that two cultures differ in the level of trust – will employers in the high-trust culture hire more people than those in the low-trust culture? No, of course not, employers hire as many people as they need. But social trust levels still matter.

How they matter is the topic of research by Letian Zhang and Shinan Wang published in Administrative Science Quarterly. It involves a novel idea and some nifty analysis, and fortunately it is easy to summarize. Trust does not mean hiring more people, but it does mean hiring different people. The reason is that low social trust is associated with hiring for a specific job, with less expectation that the employee can develop new skills. High social trust means hiring for the firm, with an expectation that the employee can develop new skills and fill other jobs. High trust, then, means hiring for foundational skills rather than advanced skills. It means hiring an analyst for general math ability more than for skills in Laplace transformations.

This idea raises two questions. First, is it true? Using data on job postings from the European Union countries, Zhang and Wang found that it was indeed true. Employers in nations with high social trust hire based on more foundational skills than nations with low social trust. Moreover, the same multinational firm would hire more based on foundational skills in nations with high social trust than in nations with low social trust, so the same relation holds within employers as well. Job characteristics such as university education or work experience requirements reduced this effect but did not make it go away.

Second question, is it consequential? Well, look at the figure above. Nations in Europe differ quite a bit in social trust levels, as the horizontal scale shows (the range is from zero to one). The vertical scale is not so easy to understand, but perhaps it helps to know that a difference of 0.6 is less than the difference between attentiveness and mathematics (foundational skills), and electricity principles and Java (advanced skills). The figure shows that the average hire in each nation differs significantly by the trust level.

There are many possible consequences of these differences. We don’t yet know whether they all happen, but it is valuable to check each one. Hiring in high-trust nations means hiring for the long term and for multiple roles, giving greater room for personal growth and firm flexibility. Hiring in high-trust nations means less emphasis on specific expertise and credentials, so symbolic collection of certificates to get hired is unnecessary. Hiring in high-trust nations allows more diversity in teams doing a single task and better communication within teams, increasing creativity and productivity. Employers in low-trust nations may have lower access to all these benefits.

We do not know whether all these differences result from different levels of societal trust. Now that we know how societal trust changes hiring practices, we should be aware that they might exist, and both employers and employees might think of employment practices and careers differently.

Zhang, Letian and Shinan Wang. 2024. Trusting Talent: Cross-Country Differences inHiring. Administrative Science Quarterly, forthcoming.

Wednesday, January 31, 2024

Networks and Discrimination: Why Female Artists are Disadvantaged, and What They Can Do About It

It is not easy being an artist. Recognition of talent and creativity can be slow, sales only happen in small galleries, and initial sales are domestic and even local. The last thing artists need is discrimination in addition, but that is exactly what female artists get: a recent investigation showed that comparable paintings sell at a 42 percent discount if the artist is female.

Is there anything that can be done about such discrimination? This was the question that we (JungYun Han, Henrich R. Greve, and Andrew Shipilov) wanted to address with data on Korean artists and their exhibitions abroad. We found that female artists were less successful in exhibiting abroad, as expected, but that difference was not our main interest. Instead, we wanted to know whether we could identify anything in their careers that reduced or eliminated their disadvantage. We could.

An important step in the careers of many artists is a residency stay in which they share workspace in studios provided by the residency and also get to meet other junior and senior artists to gain inspiration and advice. Residency programs help artists succeed, which is exactly their purpose, but unexpectedly this was only true for female artists. Education in an elite art school provides top-notch technical training and artistic appreciation. Elite education helps artists succeed, which is exactly its purpose, but again there was a surprise: it benefited female artists more.

What is going on here? The best explanation for these two effects is not training, but social networks. Art residency programs and elite schools connect artists with others who can provide advice on how to approach galleries and even direct contacts to them. The best explanation for the male and female difference is that female artists have more to prove, so the benefit from a network tie is greater for them. In network effects we often see such effects – those who are accepted purely by who they are gain some benefit from a good social network, but not nearly as much as those who are discriminated against and need a social network to be introduced to the right people and become recognized for their achievements.

These effects offer clear advice for how to help women succeed in art, and probably also in other kinds of entrepreneurship and work. They also offer a warning to society because such differences can only exist because of discrimination.

Han J, Greve HR, Shipilov A (2024) The liability of gender? Constraints and enablers of foreign market entry for female artists. Journal of International Business Studies.

Monday, January 22, 2024

If Women Can’t Network and Women Can’t Move, Why is it Better for Women to do Both?

Among the many disadvantages that women have at work, here is one that is often overlooked: they have fewer opportunities to form beneficial networks, and even if they succeed, they gain less benefit than men. This matters greatly for their careers because network ties to coworkers help employees gain skills,learn about opportunities, and execute plans. A particular disadvantage is women’s problems in getting brokerage positions in network. A network broker is connected to people who are not directly connected to each other. Brokers gain separate pieces of information quickly and can quickly assemble them to form opportunities.

Why is it hard for women to become brokers? To begin with, it is hard for anyone because it requires reaching beyond the immediate work group. It is also hard because people are suspicious of brokers and may be reluctant to share information with them. In fact, the most effective brokers are those who are not known to be brokers. For women, these suspicions are especially strong because of the gendered belief that women maintain closer relations with proximate friends and coworkers. As a result, they gain less access to brokerage and less benefit from brokerage.

Changing jobs has many of the same disadvantages, even if the job change is just a reassignment ordered by the employer. But here is the interesting part: when women move, the brokerage disadvantages disappear. Both disadvantages. Women who move gain brokerage positions just as easily as men who move, and women who move obtain the same performance benefits as men who move. This is a new discovery from a paper by Evelyn Zhang, Brandy Aven, and Adam Kleinbaum published in Administrative Science Quarterly. Their idea, which turned out to be true, is that moving gives “license to broker” because network ties in the new workplace are necessary, and maintaining contacts with the prior workplace is expected – especially for women, who are supposed to be more stable network partners than men (again a gendered belief). So in this case two wrongs make a right.

Interesting? Let us not see this as encouraging information though. Even when workers benefit from gendered beliefs like this, the beliefs still create a warped workplace where opportunities and rewards are unfairly distributed.


Zhang,Evelyn Y., Brandy L. Aven, and Adam M. Kleinbaum. License to Broker: How Mobility Eliminates Gender Gaps in Network Advantage. Administrative Science Quarterly, forthcoming.

Wednesday, October 11, 2023

Failing Once, Failing Twice: What Makes Firms Search for Radical Improvements?

Cynics would say that firms don’t look for opportunities as much as they should. Instead, it is problems that generate search for improvements. The cynics would be right – what we call problemistic search, triggered by disappointing profits, is a real thing and it is more frequent than search for opportunities. That is bad enough, but actually things are worse.

Research by Thomas Keil, Evangelos Syrigos, Konstantinos Kostopoulos, Felix Meissner, and PinoAudia published in Journal of Management shows that multiple goals complicate things even further. This is because problemistic search can be replaced by self-enhancement. Executives and organizations engaged in self-enhancement do not solve problems, but instead they look for reasons to claim that there is no problem to solve. Chief among these reasons, I mean excuses, is finding a secondary goal that shows higher performance.

Does this happen? There is ample experimental evidence that individuals self-enhance when given the opportunity. This research is novel in showing that organizations can self-enhance in response to very important goals, and self-enhancement has important consequences.

Pharmaceutical companies rely on drug approvals for their profits, so having drugs pass the late stages of the approval process is a primary goal. They also need a good research pipeline, so drugs moving through early-stage approval is a secondary goal. How to get many drugs and novel drugs? A key decision is whether to search in the proximity of their current expertise, or whether to move into new disease areas and acquiring candidate drugs from other firms. Proximate search is safe but is a questionable strategy for a firm with low performance. Distant search is riskier but is the way to renew a firm with low performance.

What the firms should do in response to low performance is trivially simple. If the internal research is good, stay with it and do a proximate search. Otherwise do distant search. The good news from the research by Keil and coauthors is that the pharma firms behave exactly like that. They turn to distant search when the performance from the current search is low.

There is also bad news. They do this only when seeing disappointing performance on both the primary goal and secondary goal. Disappointing performance on the primary goal – the most essential one – is not enough to trigger distant search. Even worse, doing poorly on the primary goal and well on the secondary goal produces less distant search than doing well on both goals. For the sake of firm profitability, and for society getting necessary medicines, this is very problematic.

Self-enhancement is something we can understand and accept when we see it in individuals. It is a slightly childish thing to do, but people want to preserve their self esteem and want to look good in their own view, and that of others. Better than they deserve, even.

It is much harder to understand and accept self-enhancement by firms. Firms exist for practical reasons. They produce products and services, they develop improvements in products and services, and being good in actuality is much more important than being adept at self-enhancement. Unfortunately, this research is a reminder that there is self-enhancement in firms too. No doubt this is because the managers and executives of firms are people too, and the firms are lacking processes that control their individual self-enhancement.

Keil, T., E. Syrigos, K.C. Kostopoulos, F. D. Meissner, P. G. Audia. 2023. (In)Consistent Performance Feedback and the Locus of Search. Journal of Management forthcoming.

Wednesday, August 30, 2023

Talk is Expensive: When a Competitor Has Financial Ties to Media

We understand that media ownership can be translated into power, especially when a media outlet has a dominant owner and the context is politics. Rupert Murdoch, Fox, and Donald J. Trump are keywords that come to mind. That’s just a rich guy playing around with the governance of a nation, with no connection to the world of business competition, right? Wrong. Media ownership also affects competition among firms, and the effects are seen also when the ownership structure is more dispersed.

This is the main discovery made in a paper published in Administrative Science Quarterly byMark R. DesJardine, Wei Shi, and, Xin Cheng. Their starting point is the remarkable concentration in firm ownership that has happened following the growth in institutional investments in the form of fund management firms. These investors want to (in fact, are obliged to) maximize the returns of their holdings, so they will do whatever it takes to increase the value of the firms they own.

What does “whatever it takes” mean? This is where media ownership comes into play. An interesting feature of owning media firms is that media firms are involved in news gathering and reporting, which can influence the competitive balance of an industry. Hurt one firm, and the other gains. Report selectively, and the value of firms owned by the fund that also owns media outlets will increase. As a result, media talk is expensive for the competitors of firms that have a media connection in their ownership.

Such media effects are a very big deal because they show an illicit use of media ownership that tilts valuations of firms, and corresponding access to resources and success in markets, away from the products and services they provide. They can only happen as a result of unethical actions by media executives and editors.

The research they present has plenty of evidence. Media coverage turns negative when a competitor firm has financial links with the media. This effect is stronger for competitors with more similar product lines, so relevance increases negativity. The effect is stronger for competitors nearby, so proximity increases negativity. And, most perniciously, if the media company CEO has equity-based compensation, so the CEO gets paid more when the media company value increases, the effect is also stronger. In sum, negative media coverage is a result of financial links, and it is particularly negative when the competitive relations between firms are close and when the media company CEO is for sale.

Should we worry about this? People arguing that “talk is cheap” would not be too concerned about these findings. But media coverage has significant consequences for firms, especially for their access to financial resources, so seeing it can be tilted so easily means that there is one more area of competition that requires regulatory attention. We cannot have an economy and society in which consequential, expensive talk is for sale.

DesJardine, Mark R. , Wei Shi, and, Xin Cheng. 2023. The New Invisible Hand: How Common Owners Use the Media as a Strategic Tool. Administrative Science Quarterly, forthcoming.

Monday, August 28, 2023

When Your Calling Goes Silent: Journalists React to the Decline of Journalism

Occupations differ in so many ways, and often we don’t recognize these differences. I recently discussed the emphasis on precision and process in the Singapore educational system and made the point that the job market for nuclear plant operators is limited. Nuclear plant operation is an occupation that demands precision because mistakes are exceedingly costly, but there is no benefit in that occupation from other kinds of excellence. Other occupations require attention and stamina – think of truck drivers. Yet other occupations require investments in energy and devotion that go far beyond what most people will provide – think of orchestra musicians, and of journalists. People in such occupations often refer to their work as a calling.

When an occupation that requires a calling goes into dramatic change and even decline, what happens to the people in it? Journalism is currently in such a period, and research by Winnie Yun Jiang and Amy Wrzesniewski published in Administrative Science Quarterly has documented the effects on individual journalists. It is sad reading but provides important understanding.

Journalism is threatened from all sides by digitalization. A good journalist is now someone who generates a lot of clicks on their online article. A good journalist is someone who can compete effectively with the social media types, who specialize in attracting clicks to media with very little content. A good journalist is someone who can accept low pay. After all, why should newspapers pay well when their business is to generate clicks to content pages that drop preference cookies and show advertising content?

Journalists confront these changes at every turn. Many lose their jobs, and some quit. Some try to find work that matches their skills, and others try to find work that matches their values (not necessarily the same thing). The problem is that when an occupation is a calling, it can be difficult to reinterpret work. When someone is forced to leave such an occupation, it can be painful – perhaps impossible – to reorient oneself as a worker. Some people find ways to move forward by specializing in some of the skills they have developed in that occupation. Others find that being asked to give up their focus on other skills, and to abandon the values that propelled them to seek that career, is simply too difficult, both in the thinking and the emotion.

Facing such threats, journalists are divided: some reinvent their careers by searching for meaning in new occupations, and others cannot find that meaning outside of journalism and thus face a truly unsolvable dilemma. What unites them is the sadness of realizing that their future will be different from their past and, in important ways, will be worse. For all of us who love meaningful careers in general, and journalism specifically, this is a painful story of coping and adaptation.

Jiang, Winnie Yun and Amy Wrzesniewski. 2023. Perceiving Fixed or Flexible Meaning: Toward a Model of Meaning Fixedness and Navigating Occupational Destabilization. Administrative Science Quarterly, forthcoming.

Tuesday, August 15, 2023

Language in Organizations: When and Why are Men Given Higher Performance Evaluations than Women?

Researchers are familiar with the gender gaps in performance evaluations of employees, and the promotion gaps that follow. Firms are aware of this too, and many of them take serious steps to become fair in their evaluations. Imagine looking inside one such firm - a Fortune 500 technology company committed to fairness - and seeing that they also differ in how men and women’s work is evaluated. How could that happen?

Research by Shelley J. Correll, Katherine R. Weisshaar, Alison Wynn, and JoAnne DelfinoWehner published in American Sociological Review shed light on how unfair evaluations happen. They looked at the scores given to men and women, and also examined the text of the performance assessments. They asked two questions: (1) Were workplace behaviors viewed similarly when done by women and men? (2) Were workplace behaviors valued similarly when done by women and men?

What is viewed and how it is valued are central components of performance assessment. And, in this firm, the answer to the two questions were “yes” to both questions for most of the nearly 90 workplace behaviors they studied. The interesting part is in the exceptions to this rule, because that is where gender bias is found.

Let’s start with what behaviors were viewed more often in men and women evaluations. For men, managing people was mentioned much more often, and nearly always positively. For women, communication style was mentioned much more often, and nearly always negatively. In fact, the (common) negative views of women’s communication style were the exact opposite of the (rare) negative views of men’s communication style. Women were too aggressive and outspoken, said the performance valuations, and men were too modest.

Does that match our everyday experience of how women and men communicate? Perhaps not, and maybe it suggests that they were held to different standards. Women are supposed to be modest and soft spoken; men are supposed to be assertive. This is so conventional that it is remarkable to find such a double standard in a firm committed to fair evaluation.

Now let’s see what behaviors were valued differently in men and women evaluations. This is also very conventional. Being a helpful person was viewed similarly often in men and women and typically produced the second-highest rating. A four out of five, so promotion possible but not a sure thing. Being a person who takes charge was much viewed more often in men and was strongly linked to a top rating in men but to a second-highest rating in women.

Again, we see the same convention play itself out. Men should communicate assertively, they should take charge, and they should be promoted for this. Women being helpful and taking charge is OK, but not great.

Language matters because it shapes thinking, which in turn affects how people are evaluated by others and given responsibilities at work. It is doubtful that a technology firm benefits from having evaluation and promotion practices that correspond to old-fashioned gender roles, and it is certain that such practices are not fair. To change them, it is necessary to change how managers view, value, and talk about behaviors at work.

Correll, S.J., K.R. Weisshaar, A.T. Wynn, J.D. Wehner. 2020. Inside the Black Box of Organizational Life: The Gendered Language of Performance Assessment. American Sociological Review 85(6) 1022-1050.