Saturday, March 30, 2019

CEOs imbue their organizations with the ability to feel & ability to suffer, which makes organizational punishments more satisfying, & apologies more effective

CEOs imbue organizations with feelings, increasing punishment satisfaction and apology effectiveness. Simone Tang. KurtGray. Journal of Experimental Social Psychology, Volume 79, November 2018, Pages 115-125.

Abstract: Organizations are easy to blame for wrongdoing because they seem capable of intention and planning (i.e., they possess perceived agency). However, punishing organizations for wrongdoing is often unsatisfying, perhaps because organizations seem incapable of feeling pain (i.e., they lack perceived experience). Without the ability to suffer, corporations and organizations cannot slake people's thirst for retribution, even with large fines and other penalties. CEOs may provide a potential solution to this “organization experience deficiency.” As feeling humans who embody the organizations they lead, CEOs provide a possible source of suffering and therefore organizational redemption. Across five experiments and one pre-registered experiment, we found that CEOs imbue their organizations with the ability to feel (Experiments 1–4b) and ability to suffer (Experiments 2a, 2b, and 3), which makes organizational punishments more satisfying (Experiments 2a, 2b, and 3), and apologies more effective (Experiments 4a and 4b). Implications for justice and mind perception in organizations are discussed.

1. Introduction
In 2014, car manufacturer Toyota was fined $1.2 billion for knowingly selling cars with defective accelerators. Despite the size of the fine—the largest at the time—people seemed dissatisfied and de-manded tougher sanctions (Douglas & Fletcher, 2014). Conversely,when the pharmaceutical company Valeant was fined the equivalent of$143.1 million for price gouging desperate patients—about 10% of the Toyota fine—people appeared more satisfied (Rapoport & Lublin,2016). Why the differences in reaction? Although reactions to any legal case are multiply determined (Demleitner, Berman, Miller, & Wright,2015; Erez & Rogers, 1999;Myers & Greene, 2004), Valeant's punishment might have been more satisfying because its CEO was fired, providing a tangible source of suffering. When wrongdoing occurs, people thirst for retribution, demanding an eye for an eye (Darley, 2009). Given that most immoral deeds end up harming a victim (even if only in perception; Haslam, 2016;Schein,Goranson, & Gray, 2015), people often want the perpetrator of misdeeds to suffer in kind. As most individuals possess the capacity forpain, this thirst for suffering is easily slaked when wrongdoers are punished, whether through prison time, social censure, or personal financial loss.

1.1. Organizations are deficient in experience
In contrast to individuals, organized group agents like corporations seem to lack the ability to suffer. Research in mind perception reveals that while organizations are seen as equally capable of agency (e.g.,planning and acting) compared to individuals, they are seen as muchless capable of experience (e.g., feeling and sensing, Knobe & Prinz,2008; Rai & Diermeier, 2015). This mind perception profile means that organizations are seen as moral agents (morally capable of perpetrating and being responsible for wrongdoing), but not moral experiencers (or“moral patients,”deserving of moral rights;Gray & Wegner, 2009;Opotow, 1990). In other words, companies are seen as capable of being villains perpetrating harm, but not as victims experiencing harm (Gray&Wegner, 2011;Rai & Diermeier, 2015). Consistent with this idea, society is often willing to paint corporations as evil masterminds ratherthan as deserving of compassion (Litowitz, 2003). This lack of perceived experience may be especially problematic fororganizations after they perpetrate harm because people are retributivists (Darley, 2009), and punishments are most satisfying whenthey cause the wrongdoer clear suffering (e.g.,Fitness & Peterson,2008).  Of  course,  not  all  transgressions  result  in  punishment—sometimes they are addressed through apologies to preemptpunishment (Ohbuchi, Kameda, & Agarie, 1989). Even here, however,successful apologies require sincere expressions of remorse and concern (Davis & Gold, 2011; Fehr & Gelfand, 2010). As organizations seem to lack the capacity to feel remorse and suffer, their apologies may beperceived as less sincere or heartfelt. Despite these apparent deficits ofmind, there may be one way to overcome them: through their CEO.

1.2. The benefits of a CEO
Although an organization may be represented by its logo, aspokesperson, or even its iconic headquarters, the CEO is often seen asthe human embodiment of the entire organization (Forrest, 2011;Woods, 2011; YaleInsights, 2014), such as Bill Gates for Microsoft andMark Zuckerberg for Facebook. CEOs not only provide a human face foran often opaque organizational structure, but may also provide humanfeelings and emotions. Although organizations are generally seen to lackfeelings, CEOs—as human beings—possess both agency and experience,and may be able to confer (at least perceptually) feeling to the orga-nizations they personify.
More specifically, after an organization commits a moral transgression, people may use the CEO's ability to feel as a proxy for theorganization's perceived ability to feel. Although experience is a rela-tively broad construct (Gray, Gray, & Wegner, 2007), we suggest onespecific capacity within experience will be of special importance—thecapacity to suffer. Feeling pain is essential to retribution (Darley, 2009),and so we suggest that the benefits of CEO-conferred-experience willhinge upon increased perceptions of suffering in organizations. Of course, there may be other reasons beyond perceived experience as towhy punishments are more satisfying and apologies are more effectivewhen CEOs are emphasized. People often hold leaders responsible fororganizational transgressions (Zemba, Young, & Morris, 2006),firmperformance (Crossland & Chen, 2013), and new initiatives (Menon,Sim, Fu, Chiu, & Hong, 2010), but we suggest that another possible,though overlooked, reason for increased punishment satisfaction is the CEO's ability to imbue the organization with perceived experience,especially the ability to suffer.
Here we explore whether CEOs are not only Chief ExecutiveOfficers, but also Chief Experiencing Officers, imbuing their organizations with the capacity to feel and providing their organizations po-tential benefits after organizational malfeasance.1.3. The current researchSix experiments investigate whether CEOs confer experience to organizations. We first test whether an organization represented by its CEO is ascribed relatively more experience than one that is not (Experiment 1). We then examine whether such imbued experi-ence—especially the ability to suffer—makespunishments more satisfying (Experiments 2a, 2b, and 3) and apologies more effective(Experiments 4a and 4b). In our experiments, we report all measures, manipulations, and exclusions. All data were analyzed after all datacollection was complete, except for preregistered Experiment 2 (be-cause of an issue by the Qualtrics platform that led some participants inthe initial sample to experience error messages during the study), andExperiment 4b (because the effect size was smaller than expected, leaving us with insufficient power from our initial sample).

8. General discussion
Across six experiments and one preregistered replication, we found that an organization's CEO can imbue it with experience (Experiments 1-4b), which makes punishments more satisfying (Experiments 2a, 2b, and 3) and apologies more effective (Experiments 4a and 4b). The more capable the CEO is seen of experience, the more effectively they imbue their organization with experience (Experiment 3). Experiment 3 also revealed that, despite thegeneral importance ofimbued experience, the perceived ability to suffer is especially important in generating positive organizational outcomes—likely because of the strong motivation for just deserts (Carlsmith, Darley, & Robinson, 2002). These findings are important because they highlight a way for organizations to regain the approval of consumers after wrongdoing. Trust in big businesses is at an all-time low—only 6% of Americans report having a “great deal” of confidence in them (Gallup, 2016)—and such trust is essential for a functioning society (Putnam, 2000; Sullivan & Transue, 1999). Our set of studies suggests one path towards rebuilding trust—the apparent suffering or remorse of CEOs.

8.1. Caveats
We note that the role of CEOs is not limited to imbuing experience, as CEOs are generally viewed as the source of an organization's behaviors (Crossland & Chen, 2013; Menon et al., 2010; Zemba et al., 2006). We further note that the presence or absence of an experiential CEO is not the only—or perhaps even most important—determinant of reactions to corporate malfeasance. Researchers have examined the factors that affect attributions of responsibility and blame across crises, including accidents and malfeasance. Consistent with current models of moral judgment (Schein & Gray, 2018), people assign less blame to harmful agents when the harm is seen as unintentional (Alicke, 2000), when they lack clear victims (Alicke & Davis, 1989), when the causation of harm is unclear (Paharia, Kassam, Greene, & Bazerman, 2009), and when they involve gradual degradation rather than abrupt drops in ethical conduct (Fincham & Shultz, 1981; Gino & Bazerman, 2009). We also acknowledge that the results may be different if people are the victims of the wrongdoing, rather than when making third-party judgments (as examined here). However, we suggest that the effects could be even stronger, as wrongdoing is more relevant for and more impactful on victims compared to observers, and related past research on motivated cognition suggests that motivated attitudes and behaviors are stronger when the event is increasingly relevant to the self (Kay, Jimenez, & Jost, 2002; Laurin, Shepherd, & Kay, 2010).

8.2. Implications
More broadly, our experiments replicate past work on mind perception revealing that people ascribe more experience to humans than to organizations (Rai & Diermeier, 2015). However, they also provide an important qualification: when an organization is represented by its CEO, the organization's experience is increased. This effect is not only practically important for organizations seeking to manage their impressions, but also has theoretical implications for how we understand groups in general and organizations in particular. Groups are often seen as the combined collection of their individual members, but this work highlights how they are also identified via their leader, who lends his or her characteristics to the collective. Just as the King or Queen of England is the human symbol of the English Commonwealth—and has the capacity to redirect resentment away from the government to him or herself (Ayling, 1972)—the CEO is the human incarnation of the organization. This helps us understand why some organizations, like Apple (prominently represented by former Steve Jobs), appear to be more capable of experience than other organizations, like Chevron (whose CEO is not as prominent)—and why (among other reasons) organizations do not want a CEO who seems like an unfeeling psychopath. A feeling CEO translates to a feeling organization, as Experiment 3 demonstrates. However, there could be a dark side to the satisfaction that people feel from the CEO's suffering. Although punishing an organization through its CEO may be more satisfying, it is often less effective and more costly than implementing systemic change, such as changes to legal policies (Cohen, 2015). That is, people's satisfaction from retribution may come at the expense of more important change, such as changing the underlying system to prevent future wrongdoing (Tufekci, 2018). This may explain why the government, the news media, and the public relish in seeing CEOs lambasted in court (e.g., The New York Times Editorial Board, 2016) and are often unwilling to let corporations off the hook until senior executives leave in disgrace (Thompson & Liakos, 2015). Given people's desire to satisfy short-term desires over long-term goals (e.g., Baumeister, 2002) and that people punish for retributive reasons (Carlsmith et al., 2002), they may end up extracting suffering from a series of CEOs at the expense of dedicating the limited amount of resources to fixing the underlying problem. An important implication of our findings for scholars and practitioners is the significance of perceiving minds in organizations when it comes to justice and punishment. People care not just about ways to rectify wrongdoing andpunish, butalsoabout whether theycan makea mind suffer in the process—and in organizations, this is often the mind of the CEO. An interesting twist, as we have shown, is that if the CEO is perceived as incapable of feeling or experience, they are less able to confer the benefits of punishment satisfaction (and presumably apology effectiveness). The inability of both the CEO and organization to experience may even lead to less punishment satisfaction and apology effectiveness than only an organization that does not experience.
Finally, although speculative, this research hints at a new understanding of extreme pay packages of CEOs. CEOs receive substantially more compensation than other employees, often making millions more than the next closest executive. Explanations for this pay gap include their background (Carpenter, Sanders, & Gregersen, 2001), their talent (Gabaix&Landier,2006), their managerial skills (Combs&Skill,2003), their willingness to weather business volatility (Dow & Raposo, 2005), andtheirpower to influence compensation packages (Bebchuk, Fried,& Walker, 2002), but our results suggest that such a disparity can also inadvertently serve a purposeful function. After wrongdoing, CEOs who make much more money have further to fall, and so sanctions and terminations seem to cause them more suffering. Being high above the rest of the company also draws more attention to them, allowing them to act as a lightning rod to protect the rest of the company. CEOs may therefore be understood not only as powerful leaders, but also as sacrificial lambs, whose disgrace and termination after wrongdoing allows the broader organization to achieve redemption.

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