Wednesday, December 21, 2011

Upper echelons

In the aftermath of the past financial crisis, a lot of people have been really upset about the greedy behavior of managerial decision makers. Especially in the financial industry top managers are still granting exorbitant compensations to each other and don’t consider the widening disparity of incomes and the problematic dissemination of value created by companies. As people got stunned about this obvious exhibition of pure self-interest and the pronounced ignorance of consequences for the society at large, they started to protest. A well-known example is the now fading “Occupy”-movement. However, public, media and even psychiatrists are wondering if those managers’ peculiar behavior is a distinctive expression of narcissistic personality traits, which accumulate in upper echelons.
As a social psychologist I am somewhat prone to take the social context into account to explain a specific phenomenon. People tend to define their self-concept not only by their individual personality, but also through relationships and memberships in social groups. Moreover, once a person perceives herself as a member of a social group and therefore identifies with it, this social identity influences her perceptions, attitudes and behaviors. Therefore, a social identity provides a person with a framework to interpret but also makes sense out of her social environment and adds to the questions of “Who am I?” and “What is my role in society?”.
If we consider the existence of an upper echelon identity, we have to assume the existence of a social group consisting exclusively of top managers. It is not very difficult to find examples of such social groups, for example during the formal World Economic Forum (WEF) or the infamous and informal relationships between members of top management in various globalized organizations. As every social group is based on similarities between its members, power, decisiveness, prestige and high salaries may are distinctive shared characteristics of top managers. If a person then identifies with a social group, those characteristics become part of her self-concept, other in-group members are perceived as more similar and, thus, generally more positively evaluated.
Coming under attack by other social groups, members of social in-groups move even closer to each other, trying to protect their social self-concept by sticking to the well-known values and norms of their shared identity, partly ignoring the concerns of their wider social environment. In the case of an upper echelon identity, the behavior of top managers therefore resembles the one of pure self-interest, described above. But actually, this behavior is not simply driven by self-interest, but also by those managers’ specific upper echelon identity and its corresponding values and norms.
To counteract the described problematic behavior of top managers, much more is needed than to focus simply on personality traits: the values and norms of an upper echelon identity have to be utterly questioned and replaced. This endeavor of changing a powerful and prestigious social group’s norms and values may can’t be accomplished by regulations, but by a paradigmatic shift from self-interest to mutuality as guiding value and shared norm.

Tom Schneider

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