Chuck Bednar for redOrbit.com – @BednarChuck
Gordon Gekko, the character portrayed by Michael Douglas in the movie Wall Street, once said that greed was “good” and “right,” but is that true? And what exactly is greed?
Those questions are at the heart of three studies published recently in the Journal of Leadership and Organizational Studies, the Journal of Management and the Journal of Management Studies. In those papers, researchers from the University of Delaware and elsewhere conducted detailed research in an attempt to find an impartial analysis of the entire concept of greed.
“We tried to look at what we think greed is more objectively,” Katalin Takacs Haynes, an associate professor of management in the UD Alfred Lerner College of Business and Economics, explained in a statement last Thursday. “What we’re trying to do is clean up some of the definitions and make sure we’re all talking about the same concepts.”
They found evidence that some CEOs are insatiable when it comes to their own compensation, though they opted not to address the issue of how much money is too much. Haynes said, “It’s not for us to judge what too much is for anybody else, but we can see when the outcome of somebody’s work is the greater good, and when it is not just greed that is operating in them.”
Balance between self-interest, altruism ideal in executives
Haynes, along with Michael A. Hitt and Matthew Josefy of Texas A&M University and Joanna Tochman Campbell of the University of Cincinnati, spent several years reviewing annual reports, comparing credentials, and developing definitions to provide insight into the impact that a company’s chief executive can have on their employees, investors and partners.
Among the topics they looked at was the range of pay within companies, and whether or not an executive that make significantly more than the average worker is naturally greedy. Haynes and her colleagues said that the issue is more complex than most people might think.
Sometimes good, sometimes bad
She said that a look at the data revealed it is “possible that high pay is perfectly deserved because of high contributions and high skill sets, but just because somebody doesn’t have high pay doesn’t mean they aren’t greedy.”
Rather, the trademarks of greed show up elsewhere, such as in intrusive employee and records monitoring, and ‘other’ compensation in executive pay, as well as in continuing high levels of CEO pay when their companies are struggling.
Overall, the authors found that greed appears to be worst among short-term leaders with weak boards, and that strong corporate oversight can keep both the greed and self-interest of CEOs in check. They also reported that a balance between altruism and self-interest leads to the greatest corporate success, and that executives that are “too nice” can also be a negative.
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