If organizations are going to be successful at attracting good members and good clients or customers, they have go beyond showing how they are different from other, similar organizations.

They have to take that extra step, and demonstrate why these differences are meaningful.

“Meaningful difference”

“Meaningful difference” is an important concept in both organizational theory and actual business practice. “Meaningful difference” is how we sustain competitive advantage, and often also how we sustain our reason for being. After all, if other organizations and products are just like ours, why would ours matter?

How organizations and managers create and maintain “meaningful difference” has been on my mind as I’ve been talking with ThisGuy about a challenge his business is facing. ThisGuy has a new competitor that aims to grab his market share by imitating ThisGuy’s product.

This new competitor is creating a problem for ThisGuy, because he isn’t quite sure whether his organization, his product or his own voice is, in fact, different in any meaningful way. (I know, it seems crazy, but it is actually a problem!)

I’ve been trying to work through the problem in the abstract so that I can help with the problem in real life. Let me start by unfolding the issues. Then, I’ll share the real-life specifics.

Meaningful Difference, in theory

Managing the tension between being similar and being different from others is an ongoing organizational challenge.

Organizations, especially new ones, go to great lengths to look like other organizations in their niches/markets, so that they can be recognized for being a certain type (e.g., bank vs. restaurant) and so they look legitimate. At the same time, organizations try to emphasize what makes them distinctive, in part because this gives them a way to be distinctive and in part becuase it gives stakeholders a reason to chose that organization over others.

Usually, when organizations are trying to find ways to be meaningfully different, they focus on authenticity… on aligning who they are with what they believe with what they do.

Being authentic, being ‘who we are’, requires us to express both what’s similar about us as well as what’s distinctive about our identities. The assumption is that any characteristics that define ‘who we are’ as organizations, whether these characteristics are similar to others’ or distinctive to us, are somehow meaningful. If they weren’t meaningful, the organization wouldn’t be part of the organization’s self-definition. The presence of these characteristics in the organization’s self-definition is proof that they matter.

If an organization is continually striving for authenticity, for aligning who it is with what it believes with what it does, the organization will always be working to express its meaningful differences.

Authenticity is an engine for sustaining differences that are meaningful.

These meaningful differences matter, because they give customers and members a reason to pick your organization over others.

In the marketplace, organizations that sustain meaningful differences (by being authentic) establish competitive distinctiveness. Organizations that cannot sustain meaningful differences can easily be replaced by other organizations. The competitive business challenge is to find and sustain meaningful differences.

Meaningful Difference, in practice

Now here’s the real-life example.

• ThisGuy has a small, profitable online business going — a market niche which his site has been serving effectively for a few years now.

He’s got 4 people working part-time to help him generate and edit content and to manage technology and fulfillment issues. In addition to his ‘real’ job, ThisGuy guides the site’s content and perspective. It is his expertise that shapes the site’s voice and that adds unique value to the content.

• It appears that the strategy of the competitive site is to copy ThisGuy’s business, lock, stock and Tshirt.

As ThisGuy sees it, there is not that much currently differentiating the two sites– they both are serving the exact same small niche, they both are offering content to fill clients’ needs, both going after similar targeted advertisers.

• It takes some expertise to understand clients needs and to know how to serve them, but it appears to This Guy that TheOtherGuy has expertise similar to his own.

Moreover, TheOtherGuy has a perspective on/philosophy about the niche that is similar to ThisGuy’s own. The two Guys don’t even have different styles– the content of both sites has a similar voice.

• Well, it’s actually even worse than that…it seems pretty apparent to ThisGuy that TheOtherGuy has been combing through ThisGuy’s content, taking the most popular posts (and the comments attached to them) and mining them for ideas.

[How does ThisGuy know that? Well, one giveaway is that funny terms used by ThisGuy pop up in TheOtherGuy's posts. True, ThisGuy did not register the phrase "The Manwich Generation" to talk about dads who care for their aging fathers, but doesn't it seem like more than a coincidence that the phrase turns up on TheOtherGuy's site?]

From ThisGuy’s perspective, it’s only a matter of time and focus before TheOtherGuy mines ThisGuy’s site, generates a similar ‘bulk’ of content, adds a bit of his own patter, and steals his market.

Meaningful Difference: Does it always exist?

What, if anything, can ThisGuy do about the new competition?

What I keep coming back to in my conversation with ThisGuy is the issue of ‘meaningful distinctiveness’. I’ve been asking him things like:

• Is there anyway that you, ThisGuy, are meaningfully different from TheOtherGuy? (No, he says.)

• Is there anything meaningfully different in what you present on your site? In how your site looks? (No, he says. When someone copies you … )

• Is there anything meaningfully different in the ways that you understand the market and the product? (No, he says. TheOtherGuy is so much like me it’s almost freaky.)

The only difference ThisGuy can see is that his site has been running for two years, and he’s just got more content on it.

Ultimately, ThisGuy is suggesting that there is nothing meaningfully different that he has to offer.

Could this really be true?

I have so much invested in the ideas that:

(1) if you are authentic, you will be different, and
(2) “who you are’ is inherently meaningful,

I can hardly believe that emphasizing his own authentic self and authentic perspective might not be enough for ThisGuy to remain competitive.

While I have a few other more tactical suggestions about how he could use his catalog and archives to create some distinctive products, truth is these will be easy for TheOtherGuy to copy, eventually.

What else can ThisGuy do to sustain create his competitive advantage?

See Also:

What’s going on at my favorite Starbucks?
Response to 9/11 Tragedy Revealed Business Schools’ Values
Organic Discount or Competency Penalty? The real reason organic wines sell for less

[Jan 21: In light of yesterday's Supreme Court Decision, I'm re-posting this serious & pop-culture critique of the anti-democratic argument that Corporations Are People. Scott Klinger writing over at Alternet, sets out what it would/should mean for corporations really to be treated as "persons" and thus have the same responsibilities as people too. Me, I'd like these corporate persons to be held to the same contribution limits as the next person-- so that I and Exxon would both be limited to $2,400 per candidate per election.]

If we were to list the top five or so Supreme (Court) mistakes of the last 200+ years, on that list would be the mistake in 1886 to treat a Justice’s unofficial remark about corporations’ hypothetical legal status as though it were part of the Court’s actual decision. This offhand suggestion that corporations could be considered ‘persons’ in the eyes of the law is a mistake that’s compounded over the years, to the point where it has fundamentally distorted democracy and capitalism as we “know” them.

Okay, so now you know my feelings about the issue.

But did you know that Stephen Colbert feels the same way?

Check out this clip from a show earlier this week, where Colbert makes sense of a most unfunny perversion of civil rights.

Corporations’ ‘Personhood’ is an inauthentic identity

The notion that corporations should have rights (but not responsibilities) as though they were actual human citizens has become so taken-for-granted as “the way things are” that it handicaps our ability to understand any for-profit organization’s authentic identity.

The ‘personhood’ that grants corporations the same rights to free speech and grants them even more political power than a human individual contradicts both our understanding of “person” and our understanding of “citizen”. It makes it hard for us to have a thoughtful discussion of how a for-profit corporation should participate in democracy. It distorts not only how we consider corporate cash contributions to political candidates and parties, but also how we think about corporate social responsibility and corporate citizenship.

Do you understand the ‘Corporations as persons’ logic?

There are many arguments for why corporations make bad “people” and even worse “citizens”. Chief among these is the difference between why people exists and why corporations exist. Consider this argument from the Attorney General, in this excerpt from the oral arguments to the Supreme Court, courtesy of the DailyKos,

JUSTICE STEVENS: One of the amicus briefs objects to — responds to Justice Kennedy’s problem by saying that the problem is we have got to contribute to both parties, and a lot of them do, don’t they?

SOLICITOR GENERAL KAGAN: A lot of them do, which is a suggestion about how corporations engage the political process and how corporations are different from individuals in this respect. You know, an individual can be the wealthiest person in the world but few of us — maybe some — but few of us are only our economic interests. We have beliefs, we have convictions; we have likes and dislikes. Corporations engage the political process in an entirely different way and this is what makes them so much more damaging.

CHIEF JUSTICE ROBERTS: Well, that’s not —I’m sorry, but that seems rather odd. A large corporation just like an individual has many diverse interests. A corporation may want to support a particular candidate, but they may be concerned just as you say about what their shareholders are going to think about that. They may be concerned that the shareholders would rather they spend their money doing something else. The idea that corporations are different than individuals in that respect, I just don’t think holds up.

GENERAL KAGAN: Well, all I was suggesting, Mr. Chief Justice, is that corporations have actually a fiduciary obligation to their shareholders to increase value. That’s their single purpose, their goal.

If organizations exist to make money (aka increase shareholder value), then their concerns are ultimately far more narrow than the concerns of real people, real citizens, whose life goals and purpose are far more complex. More broadly, citizenship itself requires a concern for more than short-term profit. Thomas Jefferson, Thomas Paine and even Alexander Hamilton all understood this too.

Defining Citizens & Citizenship: An Important Topic for Management Education

Whether you agree or disagree that corporations should be people, we should all be having a conversation about what it means to grant equal citizenship to corporations. Yes, many of us are focused on the organizational issues around the political conversation about Health Care reform, and thus may not be paying attention to Supreme Court rulings. Even so, we should also be educating ourselves about both sides of the argument about corporate personhood.

A conversation about the relationship between business, politics and society should be part of every MBA students education about business. Were I to redesign an MBA curriculum, or even teach again my class on “Books for Brave Managers”, this topic would be on our agenda.  One 90 minute class on this topic could teach future business & non-profit leaders how to think more deeply about the roles of organizations (for profit and not for profit) in our national and local civic lives.

As we wait for MBA curricula to be redesigned to reflect the emerging needs of business and society, we can learn more about this topic ourselves. It may seem very abstract to ask questions like “What is an organization really?” “Should organizations be the legal equals of individual people?” “Is making corporations ‘persons’ the best way to have corporate (for profit) entities participate in democracy?”, but the implications of our explicit and implicit beliefs are quite real. Just consider What could Change if Corporate Personhood Were Abolished?

What about you: Do you think that more managers and leaders should understand the arguments for and against Corporate Personhood?
Originally posted September 18, 2009

Here are some resources to check out:

David Korten’s book ” When Corporations Rule The World”
Thom Hartmann’s book “Unequal Protection: The rise of corporate dominance and theft of human rights”.
The Women’s International League for Peace and Freedom
Reclaim Democracy.org

Related articles by Zemanta

• The Supreme Court examines Citizens United vs. FEC, the case of an anti-Hillary documentary. (slate.com)
• Citizens United Case Underlines Court’s Deep Ideological Divide (christyhardinsmith.firedoglake.com)

Are flatter organizations really “better”? If they are better, how?

Hey, I already wrote a dissertation, so I’m not going to take on that question in its entirety. And, I’m not going to do the proper academic thing of being super-specific and qualifying my points. You got complaints? Email me and I’ll send you the scientific citations. Or, I’ll chair your dissertation. < grin >

Otherwise, bear with me here. I want to re-consider a really important assumption about one way that flatter organizations with internal network structures are better. (I’m thinking about the organizations advocated by folks bringing social media inside organizations, mostly proponents of Enterprise 2.0 and social business.)

Flatter, more networked organizational structures do not significantly reduce power inequalities among employees or across domains within a firm.

Just last week I was complaining that proponents of socially-mediated organizations aren’t being radical enough. After all, these new work arrangements and organizational structures can really change the world!

Think about it—the ideal network structure and work processes of Enterprise 2.0 look an awful lot like feminist organizations. And, we are already seeing emergent networks of social advocates that demonstrate more collaborative, more egalitarian dynamics. So what’s the problem?

The problem is that these kinds of structures, when brought into your basic business organization, don’t necessarily bring along with them a real change in employee relationships within the firm. The change to a more networked structure can make an organization more productive, but it doesn’t make the organization more egalitarian, more democratic, or more just.

A bummer, I know.

Studies show that organizations that are flatter because they have a network structure encapsulated or embedded inside them still, in the big picture, feel and act like hierarchies (Dean, 2007).

Oh, sure, you as an employee feel a bit freer in your day-to-day situation (especially if you have some control over your time). But, overall, you and your colleagues are still locked into a bureaucratic-ish organization where authority over medium and large-scale decision remains concentrated in a few high levels of (management) employees.

Flatter does not mean that power is more evenly-distributed across the levels that remain.

In a “flatter” organization, there are fewer levels of decision-making authority (e.g., less hierarchy) than there were before. We assume that when levels are reduced, some amount of decision-making power is freed up. (For example, if we get rid of the brand supervision level, someone else at some other level gets to choose the new label while someone else sets cost targets.)

Further, we assume that if a level is removed, the decision-making power of that level gets evenly distributed across the remaining levels. For example, if the organization drops from 5 levels to 4, the power once held by the eliminated level gets equally distributed across the remaining 4 levels. Everybody gets 25% more decision-making power. More power to us, less power over us.

Our assumptions are wrong. It doesn’t work that way. Power is rarely redistributed in any kind of egalitarian fashon. A little power might go to the levels below the ones eliminated, but the important power stays up above.

Although power gets redistributed in a network, the surrounding hierarchy doesn’t actually give up power that matters.

When organizations restructure some units into to networks, they are usually very strategic about what ‘power’ and ‘authority’ is delegated to the network or team.

Networks/teams get more “production-level authority” over who’s doing what within the overall project, what parts of the day are spent where, and the like. But the team or network doesn’t get ‘high level’ decision making authority. This still remains with upper management.

Even when managers in the hierarchy above the network solicit input and invite innovative ideas, ultimately it is the managers (still) in the hierarchy that make the big decisions. Authority is still concentrated in higher-level managers, who make the important decisions, decisions about whether there will be layoffs, how much money goes into everyone’s 401Ks, whether the project is outsourced, etc.

Flatter may mean more power over your immediate situation, but still the same (low) amount of power over the big picture, adding to a minor net reduction in power difference.

A bummer, I know.

Some people are going to argue that networked organizations really do have different internal power dynamics that do traditional hierarchies. That’s true, and sometimes the degree of shared power is really significant. In fact, given all this additional autonomy and collaboration and input-giving, employees might not even notice that they still lack power where it matters the most: over the distribution of gains.

Keep in mind the ‘real’ business reason that organizations restructure and create internal networks. Organizations restructure to improve productivity. They want more stuff produced and they want to produce it at a higher quality. Why? So that the organization is more profitable.

The gains of a flatter, more networked structure are rarely distributed in an egalitarian way.

Consider where those productivity gains go– into “surplus value”, otherwise known as profit.

When the employees of an organization become more productive because they feel more autonomy over their work, because they have more input into decision-making, and because they are able to collaborate with less friction, where do these profits go? Are they evenly distributed across the layers of employees whose work created this extra value? Because if gains were distributed this way, if would demonstrate quite clearly that the organization was more egalitarian in a material way (pun intended).

I’m not saying that, in order to be more egalitarian, everybody in the organization has to get paid the same. I’m arguing that in an organization that is “flatter”, where there is more democracy, more autonomy and more decision-making power for employees, we would see all employees benefiting financially at least at similar rates.

Go ahead, call me Dr. Buzzkill. Bringing some management science into the picture does refocus things, doesn’t it.

The overall point is, creating networks inside organizations won’t necessarily make these organizations more egalitarian, more democratic, and better for everyone.

We can use network structures, shared decision processes, and collaborative work systems to make organizations more just, if we do this intentionally. On purpose. With purpose.

We just have to make egalitarianism and justice overarching goals. These goals have to be as important, if not more important, than increased innovation, nicer interpersonal interactions, and yes more surplus value.

Caveats include:

Organizations starting from scratch (i.e., greenfields) find it easier to create egalitarian structures, though research shows that these structures can find it harder to sustain legitimacy, depending on their institutional environment.

Organizations that are organized around a mission or purpose (e.g., non-profits, ideological organizations) often have core values that override hierarchical power hoarding.

Yes, I am implicitly explicitly saying that organizations that are more democratic, more egalitarian, and more just are ‘better’. No, I am not saying that all organizations should be flat, or that hierarchy should be abolished.

More to come.

Resources:
Joan Acker, 2006. Inequality Regimes: Gender, Class, and Race in Organizations, Gender & Society 2006; 20; 441- 464.

Conaldi, Guido. 2009. Flat for the few, steep for the many: Structural cohesion as a measure of hierarchy in FLOSS communities. Working paper. Institute of Management, University of Lugano, CH-6904 Lugano, CH. guido.conaldi@lu.unisi.ch

Dean, Paul. 2007. Flat and Egalitarian? Evaluating worker hierarchies in software companies. Unpublished Master’s Thesis.  University of Maryland, College Park, MD.

Rajan, Raghuram G. & Wulf, Julie, 2006. “Are perks purely managerial excess? Journal of Financial Economics Elsevier, vol. 79(1), pages 1-33, January.

Photos from Flickr:
Ladders and Lamp from tomswift46
Jacob’s Ladder  from italianjob17
Jacob’s Ladder from ShellyS

I was excited to hear from a few social media/Enterprise 2.0 advocates after my post last week asking When will social business become social change business? Special thanks to Jon Husband of Wirearchy, who not only confirmed that he has a revolutionary agenda behind his networked models of organizing but who also sent me some of his own work on the subject. I am excited to be finding more colleagues who share the vision of real social change in organizations behind these relationship technology innovations.

As I geared up over the weekend to start blogging about social change and social media, I was preparing to write more about my concern that what proponents of Enterprise 2.0/Social Business are suggesting is not transformational enough. However, we need also to consider that not only are these tools and structures not as revolutionary as they could be — some of these changes aren’t even as revolutionary as we already assume they are.

So I’m backing up a little to look at a different set of assumptions, the assumptions about why internal social media & networks might be revolutionary in the first place.

Take, for example, two very popular myths about the effect of more networked social/production/creation structure social networking inside organizations.

People assume that:

1. Networked work flow, the kind of workflow enhanced by social media within workplaces (e.g., wikis, google wave) will lead to flatter organizations.

2. Flatter organization are better, because flatter organizations reduce power differences between employees. They create more democracy, more autonomy and more decision-making power for employees.

Neither of these assumptions is true.

In this post, I’ll (start to) tackle the myth that networked structures reduce hierarchical levels. The myth that ‘flatter organizations are better’ is the subject of the post following this one.

First, what does it mean to be ‘flatter’?

Simply, to call an organization flatter is to say that it has fewer levels of decision-making authority, power, and control wrapped around the work.

Here’s an example: Instead of having a brand assistant, assistant brand manager, brand supervisor, brand director, category manager, division manager (you see where this is going) we have instead the brand “team”, the brand supervisor, and the category director. That’s going from 6 hierarchical levels to 3.

The idea is that within the team or network there are not only fewer steps to get anything decided or approved, but also that  in your own particular role you have more autonomy over a larger part of the production/creation process. This is a ‘good’ thing, because (most) people like to have some control over what they do.

The big change happens in the arrangements within the ‘team’. These days, these arrangements are made possible by communication technology that allows people to share information more directly, without it being mediated by their boss or someone else’s boss. They also get to contribute information (have input, as it were) without having it be passed up and then down some organizational ladder. So far, so good.

However, the network structure doesn’t permeate the whole organization.

The secret is outside the network.

When organizations adopt networked or team structures, they tuck these networks into existing managerial hierarchies. The basic hierarchical model and mindset remain in overall control.

And, sometimes these networks themselves have what are called ‘worker hierarchies’ (Dean, 2007). These hierarchies can be more fluid than those outside the network, since people within the network/team often change leadership roles with each project. (This also dilutes the feeling of being controlled, since you’re in charge on project A and she is in charge on project B).

It’s like the difference between a regular M&M (hierarchy) and a peanut butter M&M. Even if one section of the candy is peanut butter, the structure that matters most is created by the chocolate & candy coating. The center may be softer, but it’s still an M&M.

Now let me follow the candy example with something a little less sweet:

“Hierarchy is a property of a network’s structure, not something that a network replaces”
(Barley & Kunda, 2001, p 78).

Ultimately, embedding networks or teams in to an organization can flatten the organization slightly, but not in a way that transforms the organizations or the employees’ overall influence within them.

That’s not so bad if what you ultimately wanted was an M&M, and not a Hershey’s kiss.

But what if you were hoping for a more significant change?

See Also:
M. Ezzamel, and H. Willmott, “Accounting for Team Work: A Critical Study of Group-Based Systems of Organizational Control”, Administrative Science Quarterly, Vol. 43, 1998, pp. 358-396.
S. Barley, and G. Kunda, Bringing Work Back In”, Organization Science,Vol. 12, No. 1, January-February 2001, pp. 76-95.

When Will “Social Business” Become Social Change Business?
Can an organization not be ‘ready’ for Enterprise 2.0? (fastforwardblog.com)

Just a note: 5 of the 6 flavors of M&M candy are represented by male characters. The peanut butter one is represented by a female character. What’s that about?

I love sticking my nose into other people’s business.

There, I’ve said it. It’s true, if a little odd. I think it sometimes embarrasses my family, this interest in other people’s business.

If you ever run in to me at a dinner party, or picking up kids at Tae Kwon Do, or walking to the train, probably the third thing I’ll ask you about (after yourself and your family) is what’s happening with your business.

If I can, I’ll ask you about the direction your business is taking, how healthy (or not) your organization feels, whether you are inspired, and how you’re trying to make a difference there.

I’m not so much interested in whether that accounts receivable issue is under control again (although I can talk about strategies for that) or whether it really makes sense in this climate to take on extra debt to invest in a new laminating technology (although I can pose tough questions about that too).

But I can- and will – talk about your strategy, your boss, your employees, your big picture, your enterprise perspective, or even your own hopefulness about your new direction, if you’ll let me.

People often find my favorite line of inquiry a little surprising.

I imagine that people are surprised because, while we often want to talk with our friends about how ‘work’ is going or what’s up with our careers, it’s not often that someone asks us about the mood in the company, about our views of leadership, and about how our organization is being authentic or not.

And, some people seem surprised when questions like these come from a woman.

Especially when I meet someone new (as I did at that New Year’s Day brunch last week, when we were talking about the threat of content farms to the magazine industry) I feel like I need to mention that I have a PhD from a business school, that I’ve taught MBA students and execs for years, and that I work with organizations and managers to establish strategies for aligning their actions and their purpose. As much as I hate to think it, sometimes new acquaintances assume that I’m your stereotypical work-from-my-home-office mom with a blog who “writes” and “consults”, and who has more to say about PTA fund-raising than about the motivational effects of various programs for re-pricing employee stock options.

And thus, sometimes people are surprised when I start to stick my nose into their business.

But, once we get past that possible implicit barrier, here’s what I usually discover:

• Most people quickly warm to the idea of talking about their business.

• They are actually delighted to have someone to listen to them talk it out, to bounce ideas off of, and to ponder alternative perspectives. Once they get going, they can unfold some pretty sophisticated concerns, and they do enjoy looking closely at the big picture.

• People secretly want to talk about their business, and just don’t get asked to do it often enough.

The best part? Sometimes I can even ask a question that helps people reframe the situation in a way that feels more hopeful, in a way that helps them see how they can make a difference. That’s actually my favorite part.

I am not quite sure why we don’t talk invite ourselves to talk with each other about our businesses, more often. It’s fun, really it is.

So forgive me if at first I seem nosy, asking you about your business.

I’m not trying to drum up another consulting gig (though, I’ll be here should you need me). I’m curious. I just want to know more about your business.

I’m pretty sure you’ll have fun telling me.

Photo: Wake up and smell the flowers from nualabugeye on Flicker

What does it take to rein in the outrageous compensation of CEOs? The absurd bonuses of Investment Bankers? The “bail us out so we can award ourselves bonuses”-behavior characterizing Wall Street this year?

Do we need more transparency? More shareholder oversight? More whistle-blowing? More government regulation?

How about just a little bit more public mockery?

Reflecting on soon-to-be-published research by Lammers, Stapel & Galinsky, it seems that maybe all we need to regulate Wall Street is a bit more public derision.

Yes, public derision. Your mom might not approve, but it makes good sense. Read on.

In their study of how Power Increases Hypocrisy, these scholars demonstrate in a lab setting* that “powerful” actors condemn other people’s cheating and are more strict in judging others’ moral transgressions, all while cheating more themselves, and judging themselves more leniently.

These scholars also found that what causes this effect is not ‘having power’ but rather believing that one’s powerful position is legitimate. As long as people think that their their power is legitimate, they engage in self-serving, hypocritical behavior.

Deep in their last paragraph, these scholars suggest that the way to break this link may simply be to undermine the reputations of these so-called powerful actors:

Our last experiment, however, found that the spiral of inequality can be broken, if the illegitimacy of the power-distribution is revealed. One way to undermine the legitimacy of authority is open revolt, but a more subtle way in which the powerless might curb self-enrichment by the powerful is by tainting their reputation, for example by gossiping (Keltner, Van Kleef, Chen, & Kraus, 2008). If the powerful sense that their unrestrained self- enrichment leads to gossiping, derision, and the undermining of their reputation as conscientious leaders, then they may be inspired to bring their behavior back to their espoused standards. If they fail to do so, they may quickly lose their authority, reputation, and— eventually—their power.

This regulation strategy is a nice market-based solution …. it doesn’t require any government intervention, or labor union activity, or extra taxation. All we need are a few more Keith Olbermans, a Rachel Maddow or two, and a reincarnation of Molly Ivans.

And, a little more truth-telling by business journalists, a little less “objective” instruction by business school professors, and a few more of us willing to find that sweet spot between being dismissibly strident and submissively polite.

Regulation by Public Mockery: Mockulation®

Regulation by Public Mockery might also work to curb unethical and just plain unseemly behavior by organizations. If this tendency of individuals to be more hypocritical if they also feel legitimately powerful also applies at the organizational level, and if organizations that believe their market/social/political power is legitimate will also engaging in self-serving, hypocritical behavior, maybe mocking whole industries might also be an effective regulation strategy.

Who needs Freakonomics ® when we can have Mockulation®?

Let’s regulate Wall Street and all manner of corporate gluttony with some plain old human psychology.

You might also be interested in these posts, about attitudes & responsibility by Wall Street and Leaders:

6 Reasons Why Taking Responsibility is Good for Your Organization
Homophobia and (In)Authenticity at Omnicom: What can a leader do?
An Authentic Response from Glamour Magazine

Notes:

It’s a special delight to see, in research conducted by economists and business school professors, citations to Gramsci. Woot!

Lammers, J., Stapel, D. A., & Galinsky, A. D. (in press). Power increases hypocrisy: Moralizing in reasoning, immorality in behavior. Psychological Science.

Keltner, D., Van Kleef, G.A., Chen, S., & Kraus, M.W. (2008) A reciprocal influence model of social power: Emerging principles and lines of inquiry. Advances in Experimental Social Psychology, 40, 151-192.

* Results from lab experiments are always subject to concerns about ‘the real world’. YMMV.

I just got done commenting on the blog of my colleague and blogging buddy Michael Roberto, a strategy professor at Bryant University. Michael blogged today about his concern that Americans (and by extension, students in the Business Schools where many of us teach) have lost faith in Capitalism.

Michael’s answer to this problem, in so many words, is that

"As educators, we should never flinch from teaching that capitalism is far superior to socialism, while acknowledging that people of different political affiliations may have different views on the form of capitalism that should be employed."

Should I have been surprised to find myself writing 300+ words in reply?

Probably not. I know my views on Capitalism (and by extension, democratic socialism) are not as common in the business schools where I have learned and taught as they are in the political science and philosophy departments where my views were first formed.

Moreover, I recognize that I was probably the only Darden faculty member ever to receive anonymous feedback from a student that "People who don’t believe in Capitalism shouldn’t be allowed to teach in a business school."

Apparently being married to a Harvard MBA, getting a 4.0 in my MBA Finance course, having a PhD from a Business School, owning stocks and amassing property wasn’t enough to establish my street cred as a believer in Capitalism. Which is, in the end, fine with me. Why? Because —

It’s less important to be a believer than it is to be someone who understands.

And, it is less important to accept what Capitalism as practice has to offer us, than it is to consider how to adjust, reform, and apply Capitalism to make the world a better place.

I’m pasting most of Michael’s post, as well as my reply, below, for your enjoyment. Please do check out Michael’s blog directly… not because I agree with him most of the time (I generally do) but also because he has useful insights on a wide range of business & strategy issues.

I’d love your thoughts on these issues… if you share them in the Comments, below, I’ll incorporate them in my upcoming discussions of Progressive Organizational Movements…

Capitalism vs. Socialism

Rasmussen released a shocking poll last week about Americans’ views regarding capitalism and socialism. Here’s an excerpt from their report:

Only 53% of American adults believe capitalism is better than socialism.

The latest Rasmussen Reports national telephone survey found that 20% disagree and say socialism is better. Twenty-seven percent (27%) are not sure which is better.

Adults under 30 are essentially evenly divided: 37% prefer capitalism, 33% socialism, and 30% are undecided.

These numbers clearly reflect some disenchantment associated with the poor economy. Still, these data startle and worry me. Do young people truly understand what socialism means? Do they recognize that, throughout our history, well-meaning Americans of all political stripes have worked very hard to build and defend our system of democratic capitalism. This economic and political system has brought freedom and posterity to many parts of the world. Socialism has brought nothing but ruin, and with it has often come dictatorship and oppression. As an educator, I worry that perhaps we are not teaching our young people the critical lessons of history. As educators, we should never flinch from teaching that capitalism is far superior to socialism, while acknowledging that people of different political affiliations may have different views on the form of capitalism that should be employed.

Posted by Michael Roberto at 4/14/2009

Here’s my comment:

Michael,

I have a few problems with this research/poll, only one of which you mention. Very few Americans actually know
(1) what Socialism is,
(2) how Socialism works,
(3) how Socialism works in a democracy,
(4) how Socialism differs from Communism, and
(5) how Capitalism actually works.

Given these 5 points of ignorance, it’s hard to imagine that a poll of average Americans tells us anything about whether they prefer Socialism to Capitalism, or which is inherently better. It’s like those surveys about the number of Americans who don’t believe in evolution. Those surveys indicate not a failure of evolution, but a failure of *education*.

It’s hard to "know" that Capitalism is "better" than Socialism, when both are practiced in a democracy. Where democratic socialism is practiced, there is more gender equality, less social stratification, lower infant mortality, longer life spans, higher literacy, better healthcare and so on. Are these indicators of failure? I don’t think so; ymmv.

When I teach international students– you know, students from countries with democratic socialist governments & parties — I am always careful not to denigrate the values on which democratic socialism is based. The execution may be flawed (as so often is the execution of capitalism), but the values are to be respected (whether or not one disagrees).

We have in business schools right now a very serious parochialism about how capitalism should be executed (e.g., the ‘which variety’ question) and we also have a severe/obstinate resistance to analyzing how and where captialism as practiced in the US is flawed/letting us down.

I don’t think that the answer is to step up to the challenge of teaching students that captialism is far superior to socialism. I think that the better strategy is to teach students how to get in touch with their values, how to analyze systems, how to separate ideology from data, and how to make the world a better place.

Remember, I share will you a faith in the metaproject… even if we disagree on tactics.

Your thoughts? Please join in….

I confess a nagging frustration with certain trends in my academic discipline, Organizational Theory.

While good research on organizations and organizational behavior fascinates and delights my nerdy self, boring and poorly executed research makes me lay my head on my desk in despair. Sometimes I even consider resigning from the editorial boards I was so honored to join. The variety of ways to create bad research approaches infinity.

What bothers me most is when researchers take perfectly good research questions and topics, and then grind them to insignificant bits with their statistical methods. It’s like swatting a fly with a baseball bat.

As a doctoral student, I can remember making fun of organizational climate research and person-organization fit research that relied on fancy-schmancy statistics, but came up with no interesting and actionable results. What was true in the application of logit, probit, and structural equation modeling in the 90’s is now true of agent-based complexity models and Gaussian nets– nice stats, but what do they really tell us? That you took a class last summer at ICPSR? The point of using any particular technique is not to show that you can do the math, but to help us understand a phenomenon.

Why do we care what algorithm fits best, if it tells us nothing about how to help people engage with organizations more effectively?

So I was tickled to see an article in the latest issue of Perspectives on Psychological Science , a journal of the Association for Psychological Science. This special issue is devoted to articles about how to improve psychological research and psychological science as a field. In contains a direct and pertinent challenge to those scholars tempted by methodological overkill:

Minimally Sufficient Research
Chris Peterson, The University of Michigan.

Abstract— Psychology would be improved if researchers stopped using complicated designs, procedures, and statistical analyses for the sole reason that they are able to do so. The present article reviews some of the classic studies in psychology, all of which are breathtakingly simple. The notion of minimally sufficient research is suggested as an ideal worth following. More generally, questions should dictate research methods and statistical analyses, not vice versa.

In science, as in fashion, as in life, sometimes "less is more".

I’ll take a simple T-test and an actionable insight any day.

From the Table of Contents, you can access articles in this special issue for free.