In June, World Bank president Paul Wolfowitz resigned after being accused of arranging a big raise and promotion for a woman with whom he was having a relationship. But as anyone who works in an office knows, favouritism isn’t confined to love and sex: Family relationships and office friendships can upset co-workers’ sense of propriety and fairness, too, and end up undermining an organization’s performance.
“Unfairness leads to all sorts of problems,” says Wharton management professor Jennifer S. Mueller. In a paper—Does Perceived Unfairness Exacerbate or Mitigate Interpersonal Counterproductive Work Behaviors Related to Envy? —Mueller and Yochi Chohen-Charash from City University of New York found that situations in which “employees receive fewer resources from the organization than they believe their performance warrants” will be perceived as unfair. When envy is added to the mix, the result is magnified: What would have been a negative interaction between the employee and the organization now becomes interpersonal, involving another co-worker as well.
The situation is a catalyst for a potential chain of behaviour that can negatively impact the company, the researchers note. “Harming behaviour” aimed at envied employees—such as gossip—becomes a means of indirectly hurting the organization.
The situation can become especially messy where dating is involved. But relationships can’t always be policed. “People get involved at work all the time; there’s no way we can outlaw it,” says Janis Von Culin, a former executive with a Fortune 500 company who now runs an HR consulting firm.
The key is to be sure the senior person does not make important decisions concerning the other, such as pay and promotions, Von Culin says. It may be necessary to have such issues handled by a person or committee outside the chain of command that normally oversees the subordinate. “You have to have an approach that is fair—that is handled by multiple people. People will always say there is favouritism, but at least the organization can say, ‘No, here’s how we do the process’.”
NRIs a growing catalyst for Indian business
In 1980, Vivek Paul left India to obtain his MBA in the US and, after graduating, had the good fortune to be recruited by Jack Welch at GE. In 1999, he left his position as the global head of GE Medical Systems to join Wipro, the Bangalore-based IT services firm which at the time had about $150 million (about Rs615 crore) in revenue. By the time Paul stepped down in 2005 as Wipro’s CEO and vice-chairman, the company had become a leader in global outsourcing, with revenue reaching $1.4 billion.
Paul, who is now a partner with the US private equity firm Texas Pacific Group, is a high-profile example of what some believe is a growing catalyst for the development of Indian business: non-resident Indians (NRIs) educated in the West who participate in the overseas expansion of Indian companies or who help international firms expand their business in South Asia.
According to Jitendra Singh, a professor of management at Wharton, and Ravi Ramamurti, professor of international business at Boston’s Northeastern University, émigrés can help their countries of origin in a variety of ways.
In India, émigré contributions are not readily apparent in economic terms. “Overseas Chinese accounted for 80% or more of the inward FDI into China in the 1980s, when it opened up,” Ramamurti says. By contrast, “NRIs accounted for 10% or less of FDI after India opened up. Most of the capital sent by NRIs was personal transfers to family and friends, not FDI.”
Instead, NRIs bring a mixture of “hard” skills—like engineering training—and “soft” skills, such as a more intimate knowledge of global business culture. Some of the latter are quite subtle, but still important. “The subtlest aspect can be a different set of aspirations and the confidence, which can transform a firm’s culture if leveraged well,” Singh notes.
Marketers prey on parental egos and anxieties
Just a decade ago, a company called The Baby Einstein Co. helped launch not only a new line of educational videos and toys but a new generation of kid-centric parents who believed that so-called “enrichment activities” could put their toddlers squarely in the fast lane to success. The firm was soon joined by others promoting educational and entertainment products for babies and the under-three-year-old set.
As this educational baby business grew into a $20 billion-a-year industry, some child advocacy groups warned parents to rethink the products and the messages behind the campaigns.
In 2006, Campaign for a Commercial-Free Childhood filed a complaint with the Federal Trade Commission against Baby Einstein for false and deceptive marketing. The American Academy of Pediatrics, which advocates no television for a child under two and suggests limits for older children, quickly supported the complaint, noting that “there is no current evidence to prove these videos help infants and toddlers in an intellectual or developmental way.”
As a group, parents are definitely vulnerable to marketing strategies, says Wharton marketing professor Leonard M. Lodish. “They are one of the vulnerable pockets” of consumers, the same way “people are vulnerable when someone dies” and they are preyed upon by the funeral industry. “Parents are vulnerable because they always want the best for their kids.”
Wharton marketing professor Lisa Bolton points out that the marketing of these toys takes advantage of both parental egos and anxieties with such brand names as Baby Einstein, Learning Curve and Brainy Baby. “Many (parents) end up by saying, ‘At least I bought my kid the best. At least I’ve been trying’”.
But until studies can back up companies’ educational claims, Lodish has another suggestion: “The best toy for our children?... Read to them. That’s what you do. Read to them every night.”
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