Illustration: Jayachandran / Mint

Illustration: Jayachandran / Mint

India Knowledge@Wharton | Taking advice: emotions at play

India Knowledge@Wharton | Taking advice: emotions at play

Don’t read this story if you have just had a fight with your spouse or a co-worker. You will probably ignore it despite its grounding in solid academic research.

Illustration: Jayachandran / Mint

In a recent paper, Wharton professor Maurice Schweitzer and co-author Francesca Gino of Carnegie Mellon University show that emotions not only influence people’s receptiveness to advice but they do so even when the emotions have no link to the advice or the adviser. “We focus on incidental emotions, emotions triggered by a prior experience that is irrelevant to the current situation," the two scholars note in their paper titled Blinded by Anger or Feeling the Love: How Emotions Influence Advice Taking.

Schweitzer and Gino designed experiments in which they manipulated their subjects’ emotions using video clips, gave them advice and measured the effects. They found that “people who feel incidental gratitude are more trusting and more receptive to advice than are people in a neutral emotional state and that people in a neutral state are more trusting and more receptive to advice than are people who feel incidental anger".

The research has implications for all kinds of business dealings. Although not always discussed in these terms, relationships with lawyers, accountants, investment bankers, consultants and outside sales representatives all entail taking advice. Even internal corporate communications often boil down to giving and taking advice. When a task force prepares a report with recommendations for the CEO, the members of the group are giving him or her advice. When an internal auditor makes a suggestion to the CFO about how to depreciate an item of inventory, that is advice as well.

At one level, the conclusion seems obvious: Of course, people’s moods affect their frame of mind. Most people have felt stress or gloom seep into their thinking from time to time, colouring their overall outlook.

Even so, until recently, economic analysis has taken as its premise the idea that when it comes to dollars and cents, people can wall off their emotions. “Classical economics is predicated on this rational-man idea and also on the idea that mistakes will get extinguished by the market," Schweitzer says.

But Schweitzer and Gino’s research suggests that emotions can systematically distort people’s receptiveness to advice and thus, their rationality. And if everyone errs in similar ways, that could skew the classicists’ perfect calculus.

“My intuition was that we often base complicated decisions on how we feel," Schweitzer says. “If I ask you something complicated, such as ‘Should we hire this person or should we buy this house?’, you have to consider a lot of attributes and compare a lot of complex things. So, we often use a simple summary statistic, which is how we feel about the job candidate or the house. When we do that, we open ourselves up to the possibility of making a mistake based on emotion."

India, China ‘woefully ignorant’ of each other

China and India, the world’s two largest countries by population, share a border and the distinction of being the key forces in Asia’s economic resurgence.

But while Indian and Chinese companies today are increasingly challenging Western corporations more directly, the two Asian giants remain “woefully ignorant" of each other and share few business ties, according to Tarun Khanna, a Harvard Business School professor and author of Billions of Entrepreneurs: How China and India Are Reshaping Their Futures — and Yours.

“I suppose I would say that my own mental image, correct or not, of China as a child growing up in India was that of ‘the big guy to the north’, and perhaps ‘the big, bad guy to the north’, because, after all, there had been a border conflict in 1962 after which relations went into a deep freeze," Khanna says.

“I think it’s fair to say that for (our) contemporaries growing up in China, India would be utterly irrelevant. And I think that would still have been the case as recently as three or four years ago," he notes.

But that is beginning to change, if slowly. “It’s only in the last... I want to say, two-three years that India begins to show up in the editorial pages, or the equivalent of the editorial pages, in (Chinese newspaper) People’s Daily, even occasionally creeping on to the front page. But that’s a very recent phenomenon, and it has to do more with the rise of certain kinds of Indian companies that are supplying the Chinese and buying their products."

Is China more open to India than the other way around? “In (China’s) very practical world view, any money coming from India is just more money, more foreign growth investment," Khanna says. “Some (foreign companies) have been operating in China for quite some time. Plenty have set up shop and are busy operating as if there is no obvious value to their operation. India, in contrast, pursued a much more indigenous- centred — even autocratic — model historically, to its detriment.

“That general lack of openness to foreign direct investment (FDI) — open in different ways to different things, but on foreign direct investment I would still say rather closed — has been extended to the Chinese. India is particularly sensitive to the Chinese because there is this intrinsic appeal to security concerns as a hangover from the 1960s. So, I think that’s the economic reason why China is more open to outsiders, including India, and India is less open to outsiders, particularly the Chinese."

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