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Occupy Chicago protesters rally to send a message to leaders: end greed and corruption.

While Wall Street protests continue, new study shows nice leaders finish last

by Natalie Brunell
Oct 06, 2011

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Natalie Brunell/MEDILL

Jake Van Heel, 18, says he wants  corporate leaders is to share their wealth.

Occupy Chicago 4

Natalie Brunell/MEDILL

Posters and protesters seeking an end to greed line the streets of the Chicago financial district.

In Oliver Stone’s 1987 film, "Wall Street," self-centered stockbroker Gordon Gekko famously proclaimed “greed is good.”

And when it comes to what quality people want in a leader, the quote may ring true. It's supported by a study of Stanford University students published in this month’s Journal of Personality and Social Psychology.

Researchers found that leaders who are more generous might be regarded as ideal commanders only in situations in which there is little or no competition. In tough times, power-wielding leaders may be more desirable because they are viewed as better able to protect their group interests.

Protesters of Occupy Chicago across from the Chicago Board of Trade found the findings surprising.

"I don't understand why you would want someone greedy," said Jake Van Heel, an 18-year-old pizzeria host and active protester.  "People are conditioned to try as hard as they can to get as much as they can. But if people were raised to think about helping other people, then we would get good leaders."

The study involved nearly 200 participants and followed their willingness to share game chips that symbolized wealth for the testing.

“This research was motivated by the observation that ‘nice guys’ sometimes finish first and sometimes finish last,” said Nir Halevy, lead author of the study and acting assistant professor of organizational behavior at the Stanford Graduate School of Business.

“Two factors are important in this – first, how one defines status, and second, whether the group faces a conflict with another group or not,” he said.

Halevy and his team identified two distinct components of status – prestige and dominance. Self-sacrificing leaders are endowed with prestige and sought after in peaceful situations. Greedy, competitive leaders are coveted at times of conflict.

The research team included Robert Livingston, assistant professor of management and organizations at the Kellogg School of Management at Northwestern University, Taya Cohen of Carnegie Mellon University’s Tepper School of Business and Kellogg PhD student Eileen Chou.

Some might equate the current economic turmoil in our country with the notion of tough times. That may explain why - despite President Obama’s recent “dominant” actions to take on Republicans on the national debt crisis and take out Osama bin Laden - his generally “good guy” persona keeps his public opinion numbers waning, according to Ron Riggio, professor of leadership and organizational psychology at Claremont McKenna College. Riggio is not associated with the study.

“Machiavelli said, ‘it’s better to be feared than loved,’ but in reality it’s better to be both feared and loved,” said Riggio. “You want to be the charismatic leader but you also want that weapon in your potential arsenal that when someone crosses you, they’re going to get punished,” he said.

The late Steve Jobs arguably merged both components of leadership. His now infamous $1 salary as CEO of Apple, Inc. represents his effort to convey a self-sacrificing persona to the public, while masterfully maintaining his dominant position as a frontrunner in consumer technology and innovation.

“It seems like the controlling sides of his leadership may have led some to see him as high-dominance,” said Halevy. “Whereas his vision, expertise, and self-sacrificial efforts for the company may have earned him respect and admiration which are central to perceptions of high-prestige.”

"He really does set an example," said Van Heel.  "If he worked hard and thought of new products, the company as a whole did well."

In the study, Halevy and his team carried out three experiments where participants took part in an economic game. Individuals were given an initial endowment of 10 game chips that were worth $20 to either keep for themselves or contribute to a group pool.

The experiments varied in whether contribution of the endowment benefited, harmed, or had no effect on another group, in addition to benefiting one's own group members. Participants rated each other on dominance and prestige based on how individuals handled their endowment.

In the first two experiments, Halevy’s team found that those who displayed “in-group love” (i.e. shared the endowment with fellow group members rather than kept it to themselves) were viewed as prestigious - respected and admired by others.  In contrast, those who displayed selfishness or caused harm to members of another group were viewed as dominant but were not highly respected by others. 

But the third experiment was the most telling: when participants shared their endowment with both fellow group members and individuals from another group, their status was negatively affected the most. “Universal generosity” was found to decrease perceptions of both prestige and dominance as opposed to participants who only shared chips with fellow group members.

“People expect fellow group member to be ‘loyal’ and only share their resources with other in-group members,” said Halevy.

In a nutshell: being selfish at the expense of the in-crowd of fellow group members decreases one’s prestige and respect but it increases perceptions of dominance. The dominant individuals were more likely to be elected by their group as a leader in competition.

Considering this study may also be helpful in dealing with the everyday job of leading a family.

“From a parent standpoint, you want your kid to love you but you also want them to have a healthy level of respect for you,” said Riggio. “I remember with my father or mother, if you did something wrong the look was worse than anything.”

“That’s the ideal. Walking softly but wielding a stick behind your back,” he said.