It is said that one of the distinctive features of the Trump White House is the low levels of expertise of its staff, including some who are not relatives or in-laws of the president. The reason is that an overriding concern in hiring is loyalty and commitment to the president (the person) rather than the presidency, which rules out the most capable individuals who could have served holding job titles like Chief, Director, Deputy, Assistant, and Special Assistant. Of course, this focus on loyalty and commitment above all is an anomaly of the current White House… or is it?

A recent article in Administrative Science Quarterly by Roman Galperin, Oliver Hahl, Adina Sterling, and Jerry Guo has looked at how professional hiring managers select candidates and found that they typically prefer moderately high-capability applicants over extremely high-capability candidates. Why is that? When a job applicant has extremely high capability, the hiring managers question (without evidence) whether this person will be committed to the organization and motivated to work for it.

Notice what an odd kind of discrimination this is. For most kinds of employment discrimination that we know about, the people discriminated against are often different demographically than the hiring manager (so, not white, or not male), and the hiring manager can draw on cultural stereotypes to question their work capabilities. In this research, gender and racial stereotypes are not in play, and the hiring managers are fully aware that they are choosing the less-capable candidate. The problem is that they are comparing the applicants against an ideal-type hire who is good at exactly the job hired for and who will enjoy the job and stay with the organization for a long time. They are trying to predict the applicant’s future behaviors and worry that the most capable applicant sees the job as just a stepping stone to something better.

So, what can the extremely capable candidate do to get hired? One thing is to signal their commitment. The researchers were able to show that applicants with any kind of commitment signal would be more likely to be hired if they had extremely high capability than if they had moderately high capability.  For example, applicants can pay more attention to the organization’s mission than to the pay package or can tell the hiring manager that they have declined offers from other organizations. The only problem is that this is just talk, and it is not clear that actual applicants can persuade hiring managers of their organizational commitment as well as this research team could. If a hiring manager dismisses the signals of commitment as empty talk, the extremely capable candidate would again be less likely to be hired than someone less capable.

When we do research on how organizations make hiring decisions, we often encounter disappointments. The world is far from as meritocratic as we think it should be. The process documented by this research looks a lot like hiring contaminated by envy of the best candidates, and who knows, envy could be exactly what starts speculation that an extremely capable candidate isn’t good enough for the job and the organization. In any case, it is strange to see research showing that extreme capabilities can be a liability for job applicants, and it’s a reason to worry about how organizations function.

Galperin, R.V.,  O. Hahl, A. D. Sterling, and J. Guo.2019. Too Good to Hire? Capability and Inferences about Commitment in Labor Markets. Administrative Science Quarterly, published online ahead of print.
​

​How easy is it to start a new venture? The graph shows how people answer this question across many European countries. To the right, there is a surprise for those who listen to Fox News, because the Scandinavian countries (all of them supposedly socialist and anti-business) are where people believe businesses are easiest to start. From left to right, there is a big non-surprise for those who study entrepreneurship, because in all nations shown here, men consider it easier to start ventures than women do. Indeed, the graph is disappointing for those who think that Scandinavian gender equality extends to entrepreneurship, because it clearly does not. More on that in a moment, because this finding makes more sense after looking at some recent research.

The graph is from a recent article in Administrative Science Quarterly by Vartuhi Tonoyan, Robert Strohmeyer, and Jennifer E. Jennings, who have investigated the source of gender differences in the ease of entrepreneurship. Their idea is simple and powerful: because entrepreneurship starts with experience in the labor force, different treatment of men and women in the workplace is the origin of their different sense of how easy it is to form a venture, and also of their success in forming and growing new ventures.

We know from research on the labor market that the following are true: 1) women are less likely to be promoted into management positions, 2) women are concentrated in certain occupations with less pay and independence than typically male occupations, and 3) women are concentrated in certain industries that are less connected to the market economy than typically male industries. These patterns hold across levels of worker education and job prestige. The plumbing contractor is more likely to be male. The municipal administrator (especially at the bottom level) is more likely to be female.

These labor market patterns form beliefs about entrepreneurship because our experiences at work help prepare us for entrepreneurship—or don’t. There is a distinction between a manager and an entrepreneur, but the distinction is smaller than that between a low-level worker and an entrepreneur. Managers (many of them, at least) and entrepreneurs obtain and allocate resources, formulate goals and pursue them, hire employees, define their roles, and evaluate their work. Having experience as a manager gives people confidence in their ability to start a venture, as well as a useful comparison point: management can be just as stressful and time-consuming as entrepreneurship but in support of someone else’s venture, not your own.

Stereotypes about what women can and should do have held them back from such management roles, as well as from certain parts of the labor market. Many women have been directed into typically female roles – caring and serving roles – and positions supervised by others, usually men. This has led to a list of occupations and jobs in which workers accumulate less experience relevant to entrepreneurship. For example, even though restaurants are famously easy ventures to found (and usually quick to fail), I have met only one restaurant owner who started as a waiter, and he was a man. And women are heavily weighted in certain industries, like public administration, which are remote from the markets in which entrepreneurs form new ventures.

So it is hard for women to escape discrimination in the workplace by pursuing entrepreneurship. They are found in exactly those roles and workplaces with the hardest paths to entrepreneurship, so they are disadvantaged in both games. No wonder women have to do more than men to succeed.

Oh, and the Scandinavian gender equality I mentioned at the start? Scandinavian nations are relatively good at avoiding underpayment in stereotypically female industries like public administration, and in stereotypically female occupations too. But that does not mean that people think differently in those nations than they do elsewhere in Europe. So in the absence of strong economic reasons to go against the flow, men and women have done more gender sorting in the Scandinavian labor market than in many other nations. As one would expect, the result is that Scandinavian women find it much harder to start a venture than men do, though still easier than a man in France or Germany.

Tonoyan, V., R. Strohmeyer, and J. E. Jennings
2019 "Gender Gapsin Perceived Start-up Ease: Implications of Sex-based Labor Market Segregationfor Entrepreneurship across 22 European Countries." Administrative Science Quarterly, forthcoming.

Interorganizational collaborations exist because organizations are compatible with each other and have complementary resources. That starting point makes collaborations sound friendly, as the word collaboration suggests, but things are never that simple in business. Each organization also has its own interests, and there may be enough conflict among them that power relations matter. How does that influence who gets added to an alliance when more members are needed? This is a very interesting and practical question answered by Lei Zhang and Isin Guler in a recent article in Administrative Science Quarterly.

The key to answering this question is to look at all the organizations that could enter an alliance as one big network and consider all the connections among them. Have two organizations collaborated before? If so, they may have had a conflict in the collaboration, but it is even more likely that they have learned to get along and have benefited from each other. That builds trust, as well as friendships among their executives. Have they collaborated many times? If so, they are especially likely to trust each other more than they trust others. They can be seen as political allies even when they operate along with other organizations in a collaboration. It’s a lot like the politics seen when children play. The closest friends are allies when playing in larger groups, and some groups prefer not to add such pairs of friends.
Take that one step further, and we can see how firms might be careful about who they add to a collaboration. Add a firm that you have not collaborated with but another partner has collaborated with many times, and there is a risk that the partner has gained a close ally to use against you. Adding a firm that has collaborated with many partners seems safer. Adding a firm that has collaborated with you but not others is ideal – but is unlikely to happen unless the other firms are naïve.

This was exactly how U.S. venture capital syndicates grew. Syndicates regularly add members because they need more money and the members prefer not to concentrate too much funding in a single venture, but every addition is a political calculation. Many prior collaborations with partners made an addition more likely, but not if the collaborations were with some members but not others. So, the syndicate members strengthened the collaboration by recruiting trusted new partners but were careful not to strengthen any one member’s power too much by adding members that were too closely tied to one member and weakly tied to others. Interestingly, there was an exception. A syndicate member with high status could influence new member additions so much that it could recruit friendly firms that were not close to the others.

Why all these politics when putting money into a firm? The neatest part of this study is that Zhang and Guler interviewed the venture capitalists and heard them explain why they cared who they collaborated with. It starts with the role of venture capitalists in advising and governing the firms they finance, which is a much closer relation than many other forms of financing. Because they support the firms so much (or meddle so much, depending on your point of view), they have strong views on what should be done with each firm, and they vary greatly in how much they trust the advice given by other venture capital firms. Venture capital syndicates resemble cars driven with many hands on the wheel and many feet on the accelerator pedal, so trust and agreement among the members matter greatly.
Zhang, L., and I. Guler. 2019.
"How to Join the Club: Patterns of Embeddedness and the Addition of New Members to Interorganizational Collaborations." Administrative Science Quarterly, forthcoming.

In Norway and Sweden, the paid parental leave after childbirth has one component that is exclusive to the mother and one shared between parents. Advocates of gender equality in the workplace have been critical of the parents’ ability to give all the leave to the mother and encouraged by the fact that most parents decide to let the father take some time off to care for the child. But think about this for a moment: If paid maternal leave is a major accomplishment of the movement for equal rights and opportunities for women in the workplace, does it make sense to let fathers take some of it?

Research by Irene Padavic, Robin Ely, and Erin Reid in Administrative Science Quarterlysuggests that sharing family leave benefits across genders is exactly the way to achieve greater equality in the workplace. Yes, much research has shown that women have disadvantages and that these grow greater after childbirth. The idea of a work-family conflict that needs to be addressed by providing various benefits to women and especially mothers is grounded in this observation. But firms unwittingly use these benefits in ways that stall women’s careers and prevent changes that could create less-demanding work conditions for both men and women as well as greater equality in opportunities.

First, the various benefits to make the workplace more flexible and adapted to provide work-family balance are typically oriented toward making it easier for working women to fulfill the wife and mother roles, which in a typical family handle much more of the housework than the husband and father roles. In practice, that means that the workplace allows women to work fewer hours and move to internal-facing roles, which in turn makes them less promotable and even stigmatizes them as recipients of benefits. In Padavic, Ely, and Reid’s research from a global consulting firm, women took 11 years to be promoted to partner, while men took 9 years. And this disparity applies only to those women who got as far as promotion: at the partner level, only 10 percent were women.

Second, it was widely recognized that women in this firm had less successful careers than men, but management in the firm emphasized that this stemmed from the nature of the work, which simply did not fit women’s needs to achieve a good work-family balance. Indeed, the firm was seen as accommodating these needs quite well because it offered women alternative job paths involving less demanding work schedules and less travel. The implication was that if women did the same work as men (putting in the same hours and accepting the same heavy travel requirements), they could do equally well.

Third, managers did not recognize that the firm’s work schedules, unrealistic deadlines, and demand for employees to be available 24/7 were as burdensome for men and equally disruptive to their family lives as they were for women. The belief that the bond between mother and child is special and much more important to maintain than the bond between father and child was so firm that evidence showing how the work hours and travel schedules disadvantaged male workers too was dismissed. Everyone “knew” that this was “women’s problem,” so the firm was doing enough by catering to women’s needs for family time.

Discrimination is actions based on beliefs. There is a distinction between the belief that women are not fit for work and the belief that women have greater needs for a work-family balance than men, but it is a small distinction. In both cases the result is discrimination and stalled careers, and it doesn’t help anyone that the second kind of belief and discrimination seems more considerate than the first.

Padavic, I., R. J. Ely, and E. M. Reid
2019. "Explaining the Persistence of Gender Inequality: The Work–family Narrative as a Social Defense against the 24/7 Work Culture." Administrative Science Quarterly, forthcoming.

Imagine that you have just purchased the latest self-driving car and you are on your way to work. The car is in control because the route is familiar and the car has all the modern sensing and decision-making functions. You assure yourself that you can take control of it at any time. But if there is a sudden dangerous situation—someone darts into the road or another vehicle is moving erratically—will you do so? I venture that the answer is yes if you are an experienced driver of old-fashioned cars that need to be driven—your instinct will be to rely on your own skills to avert problems. If you learned to drive after the self-driving technology was the standard? I’m guessing the answer might be no. And the answer could be very consequential.

Research by Matthew Beane published in Administrative Science Quarterly explores a situation with similarities to this one. He examined what’s happening in operating rooms around the world, where robots are increasingly used to perform surgeries. At least for the moment, the most effective robots do not make their own decisions, but they can be controlled quite effectively by a single surgeon at the control panel. That single surgeon often no longer needs a team performing different surgical tasks for the operation to go smoothly. And that surgeon is not likely to give up the controls during a challenging operation to a medical intern who needs to learn how to perform the surgery.

If you’re the intern, that leaves you in a position of scrambling for any opportunity you can get to practice with the new technology so you can gain the necessary skills to guide the robots. At the same time, you aren’t (as often, at least) part of a surgical team performing traditional surgeries, so you aren’t building the skills that are essential backups if something goes awry during the robotic surgeries you’re observing.

Surgeons don’t live forever. What happens when they are replaced by the interns who are currently receiving less hands-on training than they had? I guess we’re all going to find out.

We immediately understand that less training of surgical interns is a very bad idea, but that does not solve the dilemma. Surgeries using robots are performed best by the most experienced surgeons with minimal help, so actively involving residents adds time and risk. The residents can do little more than observe the surgeon controlling the robot. The onus was on the residents Beane studied to learn the skills with minimal costs to the attending physician in charge. And some of them did, showing significant ingenuity in the process.

Because the robots were only supposed to be used by the most qualified surgeons, only two approaches to learn were open to the residents. They could learn when the surgeon was not there, or they could learn as a favor from the surgeon. Learning when the surgeon was away could be done before they even became residents at the hospital, if they were lucky enough to be in a place with the right equipment and surgeons who allowed them to practice. It could also be done by watching recordings of earlier surgeries, though this type of training only showed what the robot did, not how to use the actual controls.

The other option is to learn from the surgeon during an actual operation. Usually that means getting control of the robot during the less critical part of the operation, and being watched over by the surgeon at every step. This approach is fast and accurate, but it also means that any mistake becomes very visible, and usually leads to the surgeon taking over the controls right away. It is the best way of learning, but also the scariest one. The risk was real because residents would be compared based on very few operations, and surgeons would prefer to continue working more with those who had done best – whether it was because of skill or because of luck.

The difficulty of learning when robotic equipment takes over a production process but still needs human control is not just in hospitals. The self-driving car is an example, and there are many examples of more subtle processes. The software that recommends whether an applicant can get a mortgage or not, and at what interest rate, is an invisible robot that can be controlled by the bank employee. But as the software gets smarter and the employees get less training, they have less foundation for checking its work, or even to be employed at all. Robots are smart, but organizations need to use them smartly.
Beane, Matthew. 2019. Shadow Learning: Building Robotic Surgical Skill When Approved Means Fail. Administrative Science Quarterly, 64: 87–123.

There is also a TED talk on this research. ​

Here are two facts that should open your eyes. First, more than a decade of Iraq and Afghanistan warfare has increased the mental health diagnoses in the U.S. military by 65 percent. Second, a mental health provider willrecommend treatment of an unstable soldier, but the military commander can still send the soldier out on a mission – fully equipped with service rifle, grenades, and sidearm. This sounds like an extreme case, but it is actually an example of a common problem. Organizations use experts for many purposes, including those who control risks to human life, equipment, or finances, but the experts are often just advisors. The actual authority rests with the line manager in charge of operations.

The difficult relation between the non-authority expert and the authority non-expert is important to understand because the whole point of experts is to take advantage of their expertise when needed. Now we know more, thanks to an article by Julia DiBenigno in Administrative Science Quarterly. She investigated the example I just gave: U.S. Army mental health providers and their relationship with line managers (commanders) who decide how soldiers are used or treated. This is a follow-up of an earlier article byDiBenigno showing that organizational procedures can be used to help create a more successful relationship. But even in organizations that are set up correctly, individual experts can still fail to reach the powerful line command.

The main difference between success and failure was timing and speed. The mental health providers had a wide range of tactics to gain access to the commanders and subsequently gain their trust. What tactics they used depended on their resources. Because the army values military experience, anyone with military service or endorsement could use that to be recognized as an insider. Because the army values manhood, participating in rigorous training signaled commitment. Because the army values rank and protocol, learning and strictly following these helped communications. Doing each of these things quickly was essential because any specialist will sometimes make recommendations contrary to a commander’s wishes, and it is essential to build rapport before the first conflict happens.

A worrying implication of this research is that so much depends on the personal characteristics and initiative of each expert. Two-thirds of the provider–commander connections were good enough that the commander often followed the provider’s recommendations. What about the soldiers under the command of the other one-third of the commanders?  One-fifth of the providers were currently serving in the military, giving them a great advantage in gaining commander trust. What about the other four-fifths of the providers? Half the providers were female, in a context where gender is very meaningful. They would start out at the bottom rung of the trust hierarchy but could climb by, for example, participating in training. The men started out higher on the trust hierarchy but might fall quickly if they didn’t prove their manhood.

All these findings suggest that the expert’s path to influence is a complicated one in organizations. My intuition is that it is probably worse in many other organizations than the army, for two reasons. First, the army is a pretty nonpolitical organization if we go far enough down the ranks – its culture of valuing “straight shooter” communication rather than intrigue reduces intra-organizational politics. Second, an army at war has an external enemy and an understanding that all insiders – even mental health care providers – are on the same team.

The best advice to line managers from this research is to pay very careful attention to the experts, because many of them will not know how to gain trust and communicate their concerns. They need managerial attention and help, and you need their expertise.

DiBenigno, J. 2019. Rapid Relationality: How Peripheral Experts Build a Foundation for Influence with Line Managers. Administrative Science Quarterly, forthcoming.

We often see signs of organizational competition in the market turning into battles fought on multiple fronts. Apple and Samsung have good-looking telephones that compete vigorously in the market, and their lengthy Patent War is famous. Ride-sharing firms Lyft and Uber compete in the market but have also accused each other of covertly placing fake orders and then canceling them. They also fought in the media when Uber used taxi workers’ protest against the U.S. immigration ban as a business opportunity: Lyft struck back with a strong stance against the morality of Uber’s efforts and made a donation to the ACLU, which accelerated the trend of #DeleteUber across social media.

Just how far will organizations go in such battles? A forthcoming article by Benjamin M. Cole and David Chandler in Administrative Science Quarterly looks at the famous War of the Currents between Edison and Westinghouse and finds ample evidence of how such battles can escalate. The War of the Currents started when Westinghouse realized that the Edison direct current (DC) electrical system could not be used for long-range transmission of power. He obtained the necessary patents for alternative current (AC), which transmits much more efficiently, and his company was soon a major competitor of the Edison companies. The market competition expanded into a full-blown rivalry when Edison started using competitive slander to turn media and consumers against AC and Westinghouse.

Edison’s recipe was simple: Make the newspapers publish stories about experiments showing that AC easily killed dogs and other animals, so that people would associate AC with danger—unlike the safer DC. A simple strategy, but also a grotesque one. To make it work, he needed to conceal his association with the experiments, having an electrical engineer act as the front man, and also make them seem legitimate by conducting them in famous institutions’ facilities. As a final step, his company made direct contacts with politicians who could influence the marketplace.

The campaign worked because it was well orchestrated and because Westinghouse initially thought there was no need to strike back. This left Westinghouse exposed, and when his company did respond, it chose an ineffective approach—directly countering the Edison attacks through attempts to discredit the message and expose Edison’s methods as sensationalist and immoral. This was ineffective because Edison had chosen a vulnerable point to attack: although killing dogs is immoral, it correctly illustrated that AC is more dangerous than DC at comparable voltages.

I suppose we could have all ended up with expensive DC as a result of this rivalry. But in the end, Westinghouse won by returning to the foundation of the AC advantage: it is a superior system for distributing electrical power over long distances. He won the bid to illuminate the city of Chicago as part of the World’s Columbian Exposition. He sank considerable resources into the contract, making it a financial loss but a spectacular success as a PR event for AC and for Westinghouse technology. Soon after, AC dominated and even Edison started marketing AC systems.

The War of the Currents has many lessons for current organizations, and I want to highlight one disturbing and one promising lesson. The disturbing lesson is the effectiveness of attacking: when the attacker picks the target well and is willing to go far, the rival is very likely to get hurt. The promising lesson is the effectiveness of sticking to basics: when the rival emphasizes its own strength rather than countering the attack directly, its chances of recovering are best.

Cole, B. M., and D. Chandler. 2019.
"A Model of Competitive Impression Management: Edison versus Westinghouse in the War of theCurrents." Administrative Science Quarterly, forthcoming.

There is evidence that beer has been around for about 2,500 years, but over time the technology for producing it has changed quite a bit. A modern beer brewery is scalable almost without limit, and there are existing and in-construction plants that can produce more than 20 million hectoliters of pilsner (pale lager) in a year. That production exceeds the weight of 3 million people. Modern plants are very cost efficient, and the beer quality is completely consistent. Yet there is currently a strong movement away from beer produced in these large, modern, and efficient plants toward smaller craft breweries producing a variety of different beers. Why is that?

For consumers, the answer is pretty clear: people generally like variety. Many people like and can pay for premium products, so the main issue is whether they would look to beer for variety instead of products like wine or spirits. But an article by Jochem Kroezen and Pursey Heugens in Administrative Science Quarterly looked at this question from a different viewpoint: that of the beer makers who have decided to form new breweries to compete with the established, efficient, and powerful brewers using modern manufacturing techniques. This is a more interesting perspective because for producers taking this path, it is not enough to believe that consumers might like their products—they also need to believe that enough consumers will pay enough money to make such businesses viable.

It turns out that the viability of smaller craft breweries is rooted in local variations in the products and processes of the beer industry’s past. This research was done in the Netherlands, which had a remarkable variety of beers and brewers in the 19th century, before the turn toward mass production of pilsner, a light and standardized pale beer. In the mid 20th century, when variation in the industry was all but extinct—and the industrial pilsner brewers had a stranglehold even on distribution—the flicker of the craft brewing industry we have today began with a return to the past in search of ways of brewing the distinctive kinds of beers available before industrialization.

Small associations of beer lovers, members of former brewing families, and home-brewing enthusiasts in the Netherlands were inspired by the growth of craft brewing in other countries, such as the United Kingdom and Belgium, and thought that the Dutch brewing industry had a history that could be reincarnated in a modern form. They wanted to restore local traditions through drawing on existing recipes and knowledge passed along in the brewers’ families. To them, craft brewing was a way of returning to the diverse tastes and artisanal production methods of the past, which was filled with community traditions such as local brewing. The breweries that opened because of these enthusiasts’ efforts were often literal copies or reinterpretations of the past.

These “reincarnated” breweries proved that craft breweries could be viable if their beer was sufficiently distinct, and so it opened the door to others who had different ideas. Some brewers thought that although the past might have been good, the world has moved on, and better-tasting beer can be made by using craft techniques as a form of artistic expression. These brewers had their own ideas of what beer should taste like, access to broad knowledge about craft beers in different parts of the world, and the ability to buy ingredients (such as hops and yeast) from anywhere. They appreciated the diversity of beers in the past but did not feel constrained to use only the ingredients, recipes, and processes that had been used in the past. To them, craft brewing was a way to express themselves as artists of taste, just as other artists express themselves visually.

Still other brewers saw technology as a tool that craft brewers could use just as industrial brewers did. After all, the mass production done in a large-scale brewery is a product of the industrial revolution 200 years ago, but current technology can be used very flexibly and precisely to customize products. To them, the history of craft brewing was also one of constraints, because the old breweries did not have access to the means of controlling production and testing the beer that are now possible. A modern craft brewer can, with modest investment, pursue perfection in the brewing without giving up on variety, because a modern craft brewery can easily switch between brews. To them, craft brewing was a way to reach perfection at small volumes.

Reincarnation means rebirth in a different body. This is exactly what happened in the Dutch brewing industry: the past was drawn upon as an inspiration, but the result was different and arguably more diverse than the past that inspired it, as craft brewing became big business and challenged the dominant players, transforming the industry in the process. 

Kroezen, J. J., & Heugens, P. P. M. A. R. 2018. What Is Dead May Never Die: Institutional Regeneration through Logic Reemergence in Dutch Beer Brewing. Administrative Science Quarterly, Forthcoming.

The nations that are Western, Educated, Industrialized, Rich, and Developed (WEIRD) have long experience with markets and democracy and are rightly proud of these. They hold the world’s oldest joint stock company (established in 1288 in Sweden), stock market (1602, in the Netherlands), and democracy (930, in Iceland). But they also started the world’s greatest economic downturn (1929, in the U.S.) and greatest war and genocide (1939, in Germany). Now that we have entered an era with significant threats to markets and democracy, it may be time for the WEIRD nations to learn something from Kenya.

Kenya is a complex nation with markets threatened by distrust and corruption and democracy threatened by ethnic divisions and conflict. This makes it ideal for studying the formation of trust in the form of stock market participation spreading beyond the well-connected elite, creating a market for investment that includes many ethnic groups and income levels. An article by Christopher B. Yenkey in Administrative Science Quarterly looks at how this was done and has many useful lessons for those who want to maintain and grow trust in markets and societies across the world.

Let me take just one example of what we can learn from Kenya. Investments require some level of trust, which is difficult in a society in which some banks are corrupt and people worry about what other ethnic groups might do to them. How is this trust created? As the figure to the right shows, it spreads from many starting points as citizens hear about others nearby making investments and gaining profits from them. The decision to invest is determined by the balance between fear and hope, and both are influenced by what happens to other people. Importantly, people pay attention both to their own ethnic group and other ethnic groups, and they can learn from the experiences of those they do not fully trust.

What if the distrust is so strong that it amounts to rivalry? Some of Kenya’s ethnic groups saw each other not only as different and untrustworthy but also as rivals for economic and political power, so we know the answer to that too. The figure below shows that more-successful rivals pushed people away from the stock market, suggesting that potential investors came to see the profits of the rival ethnic group as a sign that the rival controlled the market, so that they could not profit from it. The figure also shows some easy ways of making this effect go away. Religious integration in the communities also integrated markets. Advertising that emphasized nation over ethnic group (by using the shared language) also integrated markets. Finally, spatial integration – having neighbors who were of the rival group – had the same effect. All of these mechanisms helped spread participation in the stock market for low-income Kenyans, helping their income and the economic growth of the nation.

Democracy means contests for power, and these contests can be done in many ways. Tribalism and distrust may help someone gain loyal followers, but at the cost of tearing up the trust that underlies markets and the democracy. Kenya teaches us how the torn fabric of trust can be mended, as one of the many steps needed for a society in which everyone is welcome to contribute and gain rewards.

It is well known that organizations work well when subordinates know how to manage managers. Experienced work groups often need to teach their new and inexperienced manager what routines are important because they work much better than the alternatives. Work groups facing new conditions often need to tell their experienced manager that the world has changed and that their work needs to change with it. Managerial effectiveness starts with the ability to listen to subordinates and learn from them.


When organizations need to change, can the subordinates managing their managers be a good tool for making it happen? Research published in the Administrative Science Quarterly by Katherine C. Kellogg answers this question. The managers she studied were actually medical doctors who do a range of managerial tasks and are at least as protective and assertive of their own ideas and ways of working as regular managers. If a hospital wants to change its overall activities, who are best situated to manage the medical doctors: medical directors or medical assistants? Kellogg’s research showed what happened when two hospitals tried to implement patient-centered reforms in their clinical practices.

As you might have guessed from the title, medical directors were not very useful for getting doctors to change their practices. A doctor can easily ignore instructions from higher levels in the organization, or even protest them. A doctor can also ignore suggestions from lower levels in the organization, but one of the hospitals found a set of tactics that made the suggestions coming from subordinates very persuasive. Those subordinates were medical assistants, who help to manage doctors’ patient inflow, time, and information. Each medical assistant works with multiple doctors, so they are central nodes in the doctor network. By having medical assistants meet without the doctors in the room, the hospital let them benefit from the experience of other medical assistants in their networks and become even more central. The hospital could also use the meetings to motivate the medical assistants, teach them how to influence doctors, and have them teach each other how to do so.

The medical assistants ended up with a wide range of influence tools and with a network that gave them exactly the information needed to use those tools well. They put together information for the doctors that helped the doctors follow reforms while still feeling that they were in charge. After all, the doctors felt they were reacting to better information, not to the assistants assembling it. The medical assistants would ask the doctors to change practices to help the assistant work better, and the doctors would grant such favor requests because they knew they were dependent on the assistants and felt that favors were a good reward. The medical assistants would strategically choose which doctors to approach first for changing practices and would let other doctors know when those first doctors had agreed to make changes. That way doctors felt they were not following assistants but other doctors.

Why do we know that these tactics for managing the manager work? As I wrote earlier, two hospitals tried to implement patient-centered reforms, but only one succeeded – the one using these tactics. Maybe not all of these tactics were needed in the hospital, or are needed elsewhere, but Kellogg’s research certainly shows how managers can be managed to make changes in an organization.

Kellogg, K. C. 2018. Subordinate Activation Tactics:Semi-professionals and Micro-level Institutional Change in Professional Organizations. Administrative Science Quarterly, forthcoming.