Featured Research

from universities, journals, and other organizations

Don't Stand By Me: When Involving An Interested Party May Not Be In Your Best Interest

Date:
September 16, 2009
Source:
Kellogg School of Management
Summary:
When business leaders leave organizations following poor decisions, constituents often find comfort in replacing them with insiders -- others familiar with the problem and original choices. But, new research shows that such decisions are best left to a completely unrelated, outside party, contrary to the natural inclination to go to an insider -- someone with personal connections to the old boss.

When business leaders leave organizations following poor decisions, constituents often find comfort in replacing them with insiders – others familiar with the problem and original choices. But, new research shows that such decisions are best left to a completely unrelated, outside party, contrary to the natural inclination to go to an insider – someone with personal connections to the old boss.

"Vicarious entrapment: Your sunk costs, my escalation of commitment" will appear in an upcoming issue of Journal of Experimental Social Psychology and is co-authored by Adam Galinsky and Brian Gunia of the Kellogg School of Management at Northwestern University and Niro Sivanathan of the London Business School. The study found that when new decision makers share a psychological connection with an initial decision maker, they may invest further in the failing programs of the first – even to their own financial detriment.

In this research, the authors explored a phenomenon they coined "vicarious entrapment." They proposed that the success of a two-decision solution was dependent on not just a physical separation, but a psychological separation of the decision makers. If the delegated decision maker was even subtly connected to the original – by sharing similar attributes like the same birthday or simply empathizing with the first decision maker, for example – he/she honored the original decision maker's commitments and made further investments in that person's losing decisions.

"We know humans are social beings driven to find attachments and connections to others. Research has shown that once a psychological connection forms between two individuals, they are more likely to cooperate and favor each other financially," said Galinsky, the Morris and Alice Kaplan Professor of Ethics and Decision in Management at the Kellogg School. "The current research suggests that they are also more likely to escalate on each others' failing decisions."

Galinsky and his colleagues' experiments examined psychological connectedness in three contexts: financial investments, personnel decisions and auctions. Even when participants faced a direct financial cost to themselves – and even among economics students trained in the irrationality of honoring sunk costs – the delegated decision maker followed the original decisions once a psychological connection was made with the original decision maker.

In one experiment on personnel decisions, participants awarded a larger raise to an underperforming candidate originally "hired" by another initial decision-maker, but only when they had taken the perspective of and empathized with the first decision-maker. Likewise, participants who shared the same birthday (i.e., had something "in-common") with an original auction bidder made many more bids and lost significantly more money than those who took over for a bidder with a different birthday.

"Business, and even political organizations trying to navigate their way out of decisions gone wrong should carefully consider integrating a true outsider – someone with no connections to prior leadership" said Gunia, also of the Kellogg School. "Although outsiders may take longer to understand the problem, their psychological disconnection with the past may enable them to act more decisively once they do. Our research suggests that an individual who shares even the most subtle connections with predecessors may act less independently."


Story Source:

The above story is based on materials provided by Kellogg School of Management. Note: Materials may be edited for content and length.


Cite This Page:

Kellogg School of Management. "Don't Stand By Me: When Involving An Interested Party May Not Be In Your Best Interest." ScienceDaily. ScienceDaily, 16 September 2009. <www.sciencedaily.com/releases/2009/09/090910142400.htm>.
Kellogg School of Management. (2009, September 16). Don't Stand By Me: When Involving An Interested Party May Not Be In Your Best Interest. ScienceDaily. Retrieved August 21, 2014 from www.sciencedaily.com/releases/2009/09/090910142400.htm
Kellogg School of Management. "Don't Stand By Me: When Involving An Interested Party May Not Be In Your Best Interest." ScienceDaily. www.sciencedaily.com/releases/2009/09/090910142400.htm (accessed August 21, 2014).

Share This




More Mind & Brain News

Thursday, August 21, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Do More Wedding Guests Make A Happier Marriage?

Do More Wedding Guests Make A Happier Marriage?

Newsy (Aug. 20, 2014) — A new study found couples who had at least 150 guests at their weddings were more likely to report being happy in their marriages. Video provided by Newsy
Powered by NewsLook.com
Charter Schools Alter Post-Katrina Landscape

Charter Schools Alter Post-Katrina Landscape

AP (Aug. 20, 2014) — Nine years after Hurricane Katrina, charter schools are the new reality of public education in New Orleans. The state of Louisiana took over most of the city's public schools after the killer storm in 2005. (Aug. 20) Video provided by AP
Powered by NewsLook.com
Researcher Testing on-Field Concussion Scanners

Researcher Testing on-Field Concussion Scanners

AP (Aug. 19, 2014) — Four Texas high school football programs are trying out an experimental system designed to diagnose concussions on the field. The technology is in response to growing concern over head trauma in America's most watched sport. (Aug. 19) Video provided by AP
Powered by NewsLook.com
Kids' Drawings At Age 4 Linked To Intelligence At Age 14

Kids' Drawings At Age 4 Linked To Intelligence At Age 14

Newsy (Aug. 19, 2014) — A study by King's College London says there's a link between how well kids draw at age 4 and how intelligent they are later in life. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
 
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:  

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:  

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile iPhone Android Web
Follow Facebook Twitter Google+
Subscribe RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins