Abstract
This chapter, grounded in empirical analysis, supports the position adopted by evolutionary psychologists that the human brain is hardwired to solve adaptive problems involving social exchange relationships. First, the evolutionary psychology hypothesis regarding social exchange is presented and explained in terms of its relevance to business. It is argued that the presence of cheater-detection/social-contract neural algorithms is ubiquitous among all members of a human population regardless of formal business training. In Study 1, I test the hypothesis on a sample of 300 business practitioners and students. Additionally, this study examines whether human brain circuits are structured to recognize agency-type arrangements in firms. In a second experiment, the effect of organizational work experience was tested to discover whether there exist moderating factors on the activation of cheater-detection circuits in a business context. It is posited that although corporate agents’ minds are biologically evolved to identify violators in social contract situations, the neural circuits responsible for detecting these breaches are influenced by organizational components including, organizational culture, that affect individuals’ perceptions of the terms of the exchange. Implications for business practitioners and researchers are offered.
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Appendices
Appendices
1.1 Direct Arrangement Task
You are the owner of DMW Company, a manufacturer of cell phones. Your company’s financial situation is dire. You discuss this problem with your employees, explaining that DMW will go out of business if production rates stay the same. To fix the problem, the employees suggest, and you agree to, the following new rule:
If an employee is to receive a pay bonus, then that employee must produce more than 1,000 units in a week.
This is the only way an employee can earn a bonus in your company.
At first things seem to be going well. But then you hear that some of the employees may be breaking this new rule. As owner, you want to check to see if any employees are breaking the rule.
The documents below tell about four employees in DMW’s plant: Ed, Bob, Pete, and Tom. But some papers fell on top of them, so you can only see half of each document.
Each document tells what happened last week with one of these employees. The top tells how many units that employee produced last week, and the bottom tells whether or not that employee got a pay bonus last week.
Some of these employees may be breaking the new rule. Which document(s) would you definitely need to uncover to find out if any of these employees have broken the rule: “If an employee is to receive a pay bonus, then that employee must produce more than 1,000 units in a week.”? (Don’t choose any more documents than are absolutely necessary.)
1.2 Agency-Type Arrangement
The paragraph in boldface above is interchanged with the paragraph below to reflect the agency relationship in this task.
You have hired a new manager whose job it is to enforce this rule. Each time a bonus is paid, the manager also earns a small bonus. At first things seem to be going well. But then you hear that your manager is crafty, and may be breaking this new rule on purpose. He would benefit by breaking it. As owner, you want to check to see if the manager ever breaks the rule.
Note: The card choices and rule are the same on all tasks.
1.3 Honest Incompetence Task (Agency relationship)
You are the owner of DMW Company, a manufacturer of cell phones. Your company’s financial situation is dire. You discuss this problem with your employees, explaining that DMW will go out of business if production rates stay the same. To fix the problem, the employees suggest, and you agree to, the following new rule:
If an employee is to receive a pay bonus, then that employee must produce more than 1,000 units in a week.
This is the only way an employee can earn a bonus in your company.
You have hired a new manager whose job it is to enforce this rule. At first things seem to be going well. But then you hear that your manager is absent-minded, and may be breaking this new rule by accident. As owner, you want to check to see if the manager ever breaks the rule.
The documents below tell about four employees in DMW’s plant: Ed, Bob, Pete, and Tom. But some papers fell on top of them, so you can only see half of each document.
Each document tells what happened last week with one of these employees. The top tells how many units that employee produced last week, and the bottom tells whether or not that employee got a pay bonus last week.
The absent-minded manager may be breaking the new rule by accident. Which document(s) would you definitely need to uncover to find out if the manager has ever broken the rule: “If an employee is to receive a pay bonus, then that employee must produce more than 1,000 units in a week.”? (Don’t choose any more documents than are absolutely necessary.)
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Wasieleski, D.M. (2011). Hardwired to Monitor: An Empirical Investigation of Agency-Type Social Contracts in Business Organizations. In: Saad, G. (eds) Evolutionary Psychology in the Business Sciences. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-92784-6_8
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