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Friday, February 4, 2011

Antecedents to Self -Serving Behavior - Literature Review

The Role of High Executive Pay as an Antecedent to Self-Serving Behavior
Literature Review
Lynn Pregitzer
Pepperdine University
EDOL 766
Alex Liu, Ph.D.
January 29, 2010 
The Role of High Executive Pay as an Antecedent to Self-Serving Behavior
Two years ago, President Barack Obama capped executive compensation at $500,000 at companies that received government bailout (Obama, 2009). The President, like the public, was disgusted with the hubris of corporate executives who asked congress for bailout monies and later paid themselves multi-million dollar bonuses, purchased lavish corporate jets and spent millions on luxury office renovations. In a speech addressing the nation, President Obama said “For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste—it’s a bad strategy (Obama, 2009)”.
Past research has shown a strong relationship between employee’s behavior and their compensation (Robbins & Judge, 2011). Given this link, companies design pay and bonuses to reward and recognize employees that achieve organizational goals. Proper reward structures entail thoughtful planning and execution to ensure that the resulting employee behavior is in alignment with the organization’s mission(Robbins & Judge, 2011). In spite of well-intentioned compensation structures, bonus systems have gone awry in recent years. The systems incentivized executives to pursue high risk investments for extraordinary monetary returns.
Similar to President Obama (2009), others have also written about the excessive executive pay playing a role in the global economic crisis (Blinder, 2009). Bebchuk and Fried’s (2006) book, Pay for Performance, discusses the conflicting statements made regarding the impact of unwarranted executive compensation. They posit that the flawed corporate governance systems give executives power over board of directors, which have a fiduciary duty to the shareholders to protect their interests. The boards of directors, who have the responsibility of CEO oversight, thus, are conflicted. Some of these conflicts are: 1) The board during election is selected by management and presented on proxies to shareholders, 2) the CEO influences the board compensation, and 3) the directors are usually socially connected with the CEO. Due to this weak circular system, executives have power to influence their own pay. The authors find that without a complete reform, change will be difficult.
From a social and psychological view, this behavior is partially driven by one’s belief of what money represents. Kirkcaldy and Furnham (1993) found in their research that the work ethic of an individual influences one’s attitude towards money. As part of a good work ethic, money is presumed to equate to success because it measures one’s accomplishments (Kirkcaldy & Furnham, 1993). Other literature has described the symbolic nature of money. Power, one of various symbols human’s strive for, is closely associated with the accumulation of wealth (Mitchell & Mickel, 1999).
In a social context, an individual’s use of power varies based on their own perception of how powerful one is (Brass & Burkhardt, 1993). A leader is also given a sense of legitimacy based on the authority provided by a formal position, creating a sense of control (Robbins & Judge, 2011). In their study, Brass and Burkhardt (1993) find that individuals in formal power positions regularly demand and order compliance from others. Indeed, it is the prerogative of the powerful to use their position to influence others to achieve their own goals. From Maner and Mead’s (2010) perspective, these situations arise when dominating leaders see a threat to their position.
The approach/inhibition theory of power explains that the powerful will lean towards an active behavioral manner towards achievement of rewards (Kelter, Gruenfeld, & Anderson, 2000). The theory acts to complement studies asserting that power inhibits an individual’s capacity to have consideration for others (Galinsky, Magee, Inesi, & Gruenfeld, 2006; Gruenfeld, Inesi, Magee, & Galinsky, 2008) . Because more resources are available to those at the top of an organization, the top executives are more likely to act on internal cues rather than situational and environmental cues (Rus, van Knippenberg, & Wisse, 2010a). The same research also found that leaders have a personal philosophy regarding a self-serving or group-serving leadership style. Consequently, based on their personal definition of what an effective leader should be, resources will be allocated accordingly (Rus, et al., 2010a). In a similar study, the leader’s social reference was tested for relevance to their decision making processes for allocating resources to oneself (Rus, van Knippenberg, & Wisse, 2010b). The study looked at leaders who strongly identified themselves in the same context of other powerful leaders. Thus, they based resource allocation decisions on the standards of the social circle that defined them. This cognitive dissonance combined with the belief that effective leaders must be self-serving was shown to lead to behaviors primarily benefiting themselves (Rus, et al., 2010b).
The above review suggests the probable causation of excessive executive compensation to acts of self-interest. Persons receiving excessive amounts of bonus rewards begin cognitively disassociating themselves from others. The sense of disconnect and accumulation of wealth acts as a predictor to the propensity of an individual to be self-serving and reject the needs of the group. The causal relationship will vary along a continuum of self-serving to group serving behavior depending on the leader’s personal leadership beliefs.

References

Blinder, A. S. (2009). Crazy Compensation and the Crisis. Wall Street Journal - Eastern Edition, 253(123), A15.
Brass, D. J., & Burkhardt, M. E. (1993). Potential Power and Power Use: An Investigation of Structure and Behvaior. Academy of Management Journal, 36(3), 441-470.
Galinsky, A. D., Magee, J. C., Inesi, E. M., & Gruenfeld, D. H. (2006). Power and Perspectives Not Taken. Psychological Science, 17(12), 1068-1074. doi: 10.1111/j.1467-9280.2006.01824.x
Gruenfeld, D. H., Inesi, M. E., Magee, J. C., & Galinsky, A. D. (2008). Power and the Objectification of Social Targets. Journal of Personality & Social Psychology, 95(1), 111-127.
Kelter, D., Gruenfeld, D. H., & Anderson, C. (2000). Power, Approach and Inhibition: Stanford University, Graduate School of Business.
Kirkcaldy, B., & Furnham, A. (1993). Predictors of beliefs about money. Psychological Reports, 73(3), 1079.
Maner, J. K., & Mead, N. L. (2010). The Essential Tension Between Leadership and Power: When Leaders Sacrifice Group Goals for the Sake of Self-Interest. Journal of Personality & Social Psychology, 99(3), 482-497. doi: 10.1037/a0018559
Mitchell, T. R., & Mickel, A. E. (1999). The Meaning of Money: An Individual-Difference Perspective. [Article]. Academy of Management Review, 24(3), 568-578.
Obama, B. (2009). Remarks by President Barack Obama on Executive Compensation with Secretary Geithner Retrieved January 25, 2011, from http://www.whitehouse.gov/the_press_office/RemarksbyPresidentBarackObamaOnExecutiveCompensationSecretaryGeithner
Robbins, S., & Judge, T. (2011). Organizational Behavior. Upper Saddle River: Prentice Hall.
Rus, D., van Knippenberg, D., & Wisse, B. (2010a). Leader power and leader self-serving behavior: The role of effective leadership beliefs and performance information. Journal of Experimental Social Psychology, 46(6), 922-933. doi: DOI: 10.1016/j.jesp.2010.06.007
Rus, D., van Knippenberg, D., & Wisse, B. (2010b). Leader self-definition and leader self-serving behavior. The Leadership Quarterly, 21(3), 509-529. doi: 10.1016/j.leaqua.2010.03.013

Antecedents to Self -Serving Behavior - Research Plan

Research Plan
Lynn Pregitzer
Pepperdine University
EDOL 766 – Research Design and Analysis
Alex Liu, Ph.D.
January 16, 2011






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The Relationship Between Leader Compensation and Group Serving Behavior

Several well-known chief executive officers and Wall Street investment bankers in the past years have acted irresponsibly. They’ve squandered away constituents’ life savings and kept spending millions of dollars for unnecessary extravagances while their companies were on the verge of bankruptcy. The leader’s self-centered approach to managing was chastised by the President of the United States and drew disgust from the public.
This was clearly demonstrated during the Lehman Brothers bankruptcy hearing at Capitol Hill. Lehman Brothers was an international financial firm with over $600 billion of assets in various types of instruments. The collapse of the firm affected thousands of workers, investors and other companies such as AIG. Nevertheless, the chief executive officer, Richard Fuld, Jr., was paid $500 million the year of the bankruptcy and $300 million in the years prior.
This research will explore whether the high levels of executive compensation is a factor in the inability for leaders to have consideration for others. The consideration of others will be measured by characteristics associated with group serving behavior versus self-serving behavior. Research that began in 1957 with the Ohio State Leadership studies have explored nine dimensions of leadership and concluded that “Consideration” and “Initiating Structure” were the two common characteristics of leaders. This paper will explore whether pay is a moderating factor on “Consideration” or a leader’s orientation towards the people. Past studies have shown that a positive relationship between a leader is important to effective group dynamics.
The purpose of the study is to extend the knowledge and research around leadership and power. The results are important to understanding the level at which compensation remediates a leader’s ability to lead according to situational and environmental forces. Theories have conjectured that high executive compensation equates to a powerful leader whereby creating an environment where leaders lead based on internal beliefs which are often self-serving. This was illustrated in a 2006 study by researchers at Stanford, New York and Northwestern University where the leader’s ability to takes another’s perspective into consideration was diminished as their power base grew. I believe this research takes the postpositivist worldview as a causal relationship will be drawn between executive compensation and group serving behavior characteristics.
The main prediction is that the higher the compensation the less a leader will exhibit group serving behaviors. These behaviors can be measured by the degree to which a leader will share or hoard recognition, information, pay, and even office space.
A multi-dimensional approach will be used for this study. The measures used in Leader power and leader self-serving behavior: The role of effective leadership beliefs and performance information (Rus, van Knippenberg, & Wisse, 2010) will be given to the GAP cohort. A sampling of the questions for Effective Leadership Behavior and Leader Self-Serving Behavior are exhibited below(Rus, et al., 2010).
1. To be effective, a leader should pursue his or her own goals even if this would come at the expense of his or her group’s goals.
2. A leader concerned with his or her personal outcomes is effective.
3. An effective leader fully takes advantage of perks such as a company car, a larger office, and company stock options.
4. A leader is effective if he or she invests little time and effort into group tasks.
5. To be effective, a leader should always pursue group goals even if this would come at the expense of his or her personal goals.
6. A leader concerned with group outcomes is effective.
7. An effective leader gives up perks such as a company car, a larger office, and company stock options.
8. A leader is effective if he or she invests time and effort beyond the call of duty into group tasks.
9. I have negotiated a bonus for myself that was substantially higher than the bonus my subordinates received.
10. I have used my leadership position to obtain benefits for myself.
11. I have pursued my personal interests, even if those interests were not serving my group’s interests.
12. I did not put my own position at risk, even when I thought that this could have helped promote my group’s goals.
13. Instead of giving credit to my subordinates for jobs requiring a lot of time and effort, I took the credit myself.
14. Although I was partly to be blaimed, I did not take personal responsibility for my group’s failure to meet a goal.
15. I have shifted the blame for a mistake of mine onto one of my subordinates.
16. I did not work overtime, although this would have helped my group meet its goals.



References

Rus, D., van Knippenberg, D., & Wisse, B. (2010). Leader power and leader self-serving behavior: The role of effective leadership beliefs and performance information. Journal of Experimental Social Psychology, 46(6), 922-933. doi: DOI: 10.1016/j.jesp.2010.06.007

Thursday, February 3, 2011

LBDQ - Leadership Assessment Instrument Assignment - Lynn, Brenda,Jacque

Review of the Leadership Assessment Instrument:
Leadership Behavior Description Questionnaire (LBDQ)
EDOL 700-Dr. Farzin Madjidi
Pepperdine University
Jacque Johnson Hirt
Lynn Pregtizer
Brenda Wilson
January 17, 2011










The Leader Behavior Description Questionnaire (LBDQ) is a testing instrument that evaluates leadership behavior. The LBDQ Questionnaire originated from an Ohio State University project under the supervision of Dr. Carroll Shartle in the 1950’s. Two students by the names of J. Hemphill and A. Coons created the original questionnaire.
The Leader Behavior Description Questionnaire was created for research purposes and was tested in numerous leadership situations after WWII. Ohio State University provides the LBDQ questionnaire free of charge for continued leadership research. The copyright and acquisition rights are held by Ohio State University, College of Commerce and Administration.
The Leader Behavior Description Questionnaire is based on subgroups related to leadership styles. The validity of the LBDQ subgroups is determined by a modified Kuder-Richardson formula. (Stogdill, 1963). There is various data supporting the reliability of LBDQ, but little to none regarding its validity. (Stogdill &Coons, 1957, Stogdill, Goode &Day, 1963, 1964).
The LBDQ is largely criticized for narrowing down the multifarious characteristics of leaders down to only two factors, “consideration” and “initiating structure”. The reliability of the two factors have been substantiated by several studies (Bass, 1990), but the validity of the results are in question. To illustrate, the LBDQ measures observed behaviors using nine categories. The categories range from representation, tolerance of uncertainty to persuasiveness and superior orientation. Although the researchers initially reviewed the responses to 150 questions in the nine categories, the reason for condensing the various factors down to the two was never explained. Subsequent research using randomly generated data found that the study could have derived several dominant characteristics (Armstrong & Soelberg, 1968). Therefore, although the original conclusion is not necessarily false, it was questionable whether only two factors were dominant.
In support of the LBDQ, Stogdill (1969) verified its validity by conducting experiments by performing two separate scenarios. In the first scenario, he had two different actors portray the same leadership dimensions and in the second scenario, two dimensions were portrayed by the same actors. In both cases, the audience (seven graduate students) was able to choose the correct dimension on the LBDQ questionnaire. The importance of the LBDQ was again emphasized by Schriesheim and Bird (1979). They said leadership studies shifted from traits analysis to behavioral analysis. Secondly, the LBDQ also pointed out the importance of leadership in situations—given certain situations, leaders may arise from within a group.
The LBDQ has been used to describe the qualities of a leader by the followers, given that the followers had past experience with the leader. The questionnaire can be given to small groups as long as each respondent’s answer remains anonymous. The sampling should be approximately seven participants or a minimum of four. The LBDQ has been used in various industries and for various research purposes, including the military, nonprofits and for profit organizations, training and educational institutions and service organizations. It can be used for research purposes, but also to give feedback to leaders regarding their consideration and initiating tasks. Additional notable studies include Fleishman, Harris and Burt’s use of the LBDQ in their studies of factory foreman, Hemphill in a study of 22 departments in a liberal arts college and Halpin reported the LBDQ descriptions of a sample of 50 school superintendents (LBDQ Manual, 1957).
Initiating Structure, one of the two factors measured by the LBDQ, refers to the leader’s behavior in delineating the relationship between himself and the members of his group, and in endeavoring to establish well-defined patterns of organization, channels of communication, and ways of getting the job done (LBDQ Manual, 1957, p. 1). The second factor, consideration, refers to behavior indicative of friendship, mutual trust, respect, and warmth in relationship between the leader and members of the group (LBDQ Manual, 1957, p. 1). In administering the LBDQ, no mention should be made of the Initiating Structure and Consideration dimensions (LBDQ Manual, 1957, p. 2).


























References

Armstrong, J. S., & Soelberg, P. (1968). On the interpretation of factor analysis. Psychological Bulletin, 70(5), 361-364. doi: 10.1037/h0026434
Bass, B. M. (1990). Bass & Stogdill's handbook of leadership: Theory, research, and managerial applications (3rd ed.). New York, NY US: Free Press.
Bernard, B. & Stogdill, R.M. Handbook of Leadership. New York, NY: Free Press.
Christner, Charlotte A. & Hemphill, J.K. Leader Behavior of B-29
Commanders and Changes in Crew Members’ Attitudes
Towards the Crew. Socimetry¸1955, 18, 82-87.
Halpin, A. W., (1957). Manual for the LEADER BEHAVIOR DESCRIPTION QUESTIONNAIRE. Fisher College of Business. The Ohio State University, Columbus, OH.

Schriesheim, C. A., & Bird, B. J. (1979). Contributions of the Ohio State Studies to the
Field of Leadership. Journal of Management, 5(2), 135-145.
Stogdill, R.M.&Coons, Alvin E., Editors. Leader Behavior: It’s Description
and Measurement. Columbus: The Ohio State University, Bureau
of Business Research Monograph, 88, 1957.
Stogdill, R. M. (1969). Validity of Leader Behavior Descriptions. Personnel Psychology, 22(2), 153-158.

Learning Design Post 2.3.2011

Cognitive Load
Lynn Pregitzer (lpregitz) (Feb 3, 2011 10:07 AM) - Read by: 1Reply
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While designing instruction requires a multifaceted analysis, some aspects are frequently done at the convenience of the instructor, not the learner. Robert Mager states that an efficient training design will leave the learner ready and able to perform. One important aspect of ensuring learning in an optimal state is to recognize the volume of information a person can process at a time. This is referred to as “cognitive load” or pacing the material to keep the audience alert, fresh and stay focused.


Designing new knowledge into manageable pieces is desirable as it will alleviate the need for repeat training. In the real world, however, this rule sometimes is overlooked. This could be due to cost, convenience of the instructor’s availability or even facility constraints. I found that I was “overloading” in Dr. Liu’s class at the last face to face. The cognitive load in the statistics class was heavier than the instructional design and the leadership class. Speaking for myself, I didn’t have statistics in at least 10 years and diving into latent variables on the 3rd day was difficult. A proper structural analysis was needed, however, to know that his lecture would have been more effective on the first day, not the last.

Learning Design Post 2 -Rummler Path B: Approach

Rummler's "Path B" Approach
Lynn Pregitzer (lpregitz) (Jan 20, 2011 11:52 PM) - Read by: 13Reply
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As part of the change management planning for the IT project I’m working on, it is becoming apparent that a needs assessment will be critical to the successful deployment of the system. The training is required for the end users in Hawaii, however, since this is a second phase of a nationwide deployment, the training consultant’s Hawaii plan is identical to the first phase of the project, which was in Colorado. There was a needs analysis conducted in Colorado during the early stages of the five year project and the training has been well received there. I believe due to the success there, the team is assuming that the same training will translate to Hawaii. Rummler emphasizes that the WLP should begin by asking key questions such as “What is currently occurring that precipitates the need for training?” and “How will we determine if the training has been effective”. The critical piece missing in our action plan is the “Path B” approach which is described above. Conducting investigate work up front and observing the employees before designing the training program is prudent to ensuring a cost effective training with skills that will transfer to the job.


Elliott reinforces a similar idea of ensuring that training is transferred to the job by analyzing the accomplishments of the employee versus the competencies. Collecting data on the major accomplishments of high performers will allow the WLP to identify shortcoming of others. The WLP can benchmark the granular tasks and identify opportunities for performance improvement to make training recommendations. I will be discussing Elliott’s method of analysis with the trainer which should help us understand where the real gaps of knowledge exist.

Learning Design Post 1-1.14.2011

Generally speaking, andragogy (adult learning) is explained as the opposite of pedagogy (child learning). By 1984, ten years after Malcolm Knowles wrote about the two separate theories, teachers began mixing the two models. Teachers found that explaining the importance of the subject matter and allowing the student to have a say in how they should learn ( both andragogical qualities) enhanced learning. Knowles differentiates the two theories by distinguishing the degree of dependency on the teacher. Central to the andragogical model is the learner who, as a participant, contributes directly by influencing the delivery of the learning to benefit their life goals. In contrast, in the pedagogical model, the student’s must abide by a preset curriculum designed by the teacher.


I have benefited greatly in both by masters and doctoral experience by the andragogical model. It has given me a sense of relevance and applicability to my life and career. Knowledge retention and transference of the learned skills are reinforced because of the influence I had on the delivery of the education. The programs have also resulted in lifelong friendships with the teacher and fellow students. My training experience where I work follows the pedagogical approach. At expensive all day offsite “retreats” , comedic skits and child-like games such as matching colors and shapes to boards and placing stickers on charts are used to teach leadership skills. It’s disconcerting to see the money wasted when businesses don’t understand how to apply andragogical principles to training. As stated in the book Working With Emotional Intelligence, it is the Billion Dollar Mistake (Goldman, 1998)