Tag: Management

If you wish to signal power to your colleagues, your boss, or your subordinates, you should consider reducing your use of pictures and emojis in favor of words – these are the conclusions of a new study at Tel Aviv University’s Coller School of Management.

According to the researchers, “Today we are all accustomed to communicating with pictures, and the social networks make it both easy and fun. Our findings, however, raise a red flag: in some situations, especially in a work or business environment, this practice may be costly, because it signals low power. Our advice: think twice before sending a picture or emoji to people in your organization, or in any other context in which you wish to be perceived as powerful.”

Words are Powerful

The study examined the response of American participants to verbal vs. pictorial messages in different contexts. The results were clear-cut: In all experiments, the respondents attributed more power to the person who chose a verbal vs. a visual representation of the message.

To test their hypothesis, the researchers conducted a series of experiments in which various everyday scenarios were presented to hundreds of American respondents. In one experiment, participants were asked to imagine shopping at a grocery store and seeing another shopper wearing a Red Sox t-shirt. Half of the participants were shown a t-shirt with the verbal logo RED SOX, while the other half saw the pictorial logo. Those who saw the t-shirt with the pictorial logo rated the wearer as less powerful than those who saw the verbal logo.

Pictures Reveal a Desire

Similar results recurred in a range of other contexts. Because of Covid-19, online meetings using platforms such as Zoom and Microsoft Teams have become an essential organizational fixture. The researchers examined the effects of picture versus word use in this important organizational context.

Participants were asked to choose one of two co-participants to represent them in a competitive game that suited people with high social power. Critically, one co-participant had purportedly chosen to represent themselves with a pictorial profile, while the other had purportedly chosen to represent themselves with a verbal profile. Sixty-two percent of the participants selected the co-participant who chose to represent themselves with a verbal profile. Thus, employees who signal power by using words are more likely to be selected to powerful positions, compared to those who signal weakness by using pictures.

Dr. Elinor Amit from TAU’s Coller School of Management summarizes: “Why do pictures signal that a sender has little power? Research shows that visual messages are often interpreted as a signal for desire for social proximity. A separate body of research shows that less powerful people desire social proximity more than powerful people do. Consequently, signaling that you’d like social proximity by using pictures is essentially signaling you’re less powerful.”

Amit notes that such signaling is usually irrelevant in close relationships, as in communications between family members. However, in many arenas of our lives, especially at work or in business, power relations prevail, and we should be aware of the impression our messages make on their recipients. “Our findings raise a red flag: When you want to signal power – think twice before sending an emoji or a picture,” she concludes.

The study was conducted by Dr. Elinor Amit and Prof. Shai Danziger from Coller School of Management at Tel Aviv University, in collaboration with Prof. Pamela K. Smith from the Rady School of Management at UCSD. The paper was published in the prestigious journal Organizational Behavior and Human Decision Processes.

A new TAU study, the first of its kind, examined whether there is a connection between the rapid growth of investment in social investment funds and the decrease in donations to charitable organizations. The researchers studied the actual investment behavior of approximately 10,000 clients of an investment app, and found that investors switching to invest in a recently introduced social fund reduced their donations, mainly in charities supporting causes similar to those of the social fund.

However, the researchers also found that most of the investors in the social fund had not previously donated to charities, so, looking at the big picture, social funds entice more people to fund social causes.

The study was conducted by Dr. Shai Levi and Prof. Shai Danziger of Tel Aviv University’s Coller School of Management, in collaboration with Dr. Jake An of the Australian firm Raiz Investing and Prof. Donnel Briley of the University of Sydney. The study was published in the prestigious journal Management Science.

Charities Take a Hit

In recent years, investment firms have been marketing social investments (Environment, Society and Government, or ESG) as a way for investors to achieve financial returns while making a social impact. Such funds will for instance avoid investments in certain industries, like oil, and rather invest in others, like renewable energy.

In 2018, global social investment assets exceeded $30 trillion, an increase of 34% since 2016. During this same period, in the U.S., total donations to nonprofits – the traditional avenue for advancing social goals – dropped 1.1 percent to about $300 billion. Until now, the causal link between the popularity of social investments and the decline in charitable giving had not been examined.

Dr. Levi explains that the study was conducted using the unique database of the Australian digital investment platform Raiz Investment – a phone app aimed primarily at millennials, young investors with relatively small investment portfolios.

According to Dr. Levi, in 2017 Raiz added the option of investing in an ESG social fund, which invests only in companies that meet certain standards of sustainability, social values ​​and governance. Because the app is connected to users’ bank accounts, it was possible to monitor investors’ charitable donations both before and after they joined the fund. The researchers tracked the investments and donations of about 3,300 investors who invested in ESG, about 4,000 investors who invested in another, non-social fund, and another 3,300 investors in a control group, that were matched on investor characteristics to those that had switched to the ESG fund. They found that, on average, investors who contributed to charitable organizations before investing in a social fund tended to donate less afterwards – that is, some investors saw their ESG investment as a kind of donation.

Overall Effect Uncertain

Prof. Danziger points to the complexity of the findings. “On the one hand, investment firms could use social funds as a marketing ploy to attract investors. For example, say you’re told the ESG fund invests only in companies with a low carbon footprint – that doesn’t mean that you’re investing in companies in the field of renewable energy. It can mean that you’re investing in technology giants like Apple, that is, companies that are not necessarily causing damage. Our findings show that after investing in a social fund, investors reduce their traditional contributions to environmental and social nonprofits.”

“On the other hand, since 79% of investors in the ESG fund did not make any charitable contributions before investing, the overall effect must be assessed. Ultimately, the question is whether ESG contributions to society outweigh the decrease in investor donations that result from substitution. In our study, we estimate that overall, funds will have a positive impact on society only if their annual contribution to social causes exceeds 3.2% of the balance invested. In practice, this is difficult to measure, and we don’t know whether the contribution of the social funds crosses this threshold, so it is not clear whether their impact on society is positive.”

In conclusion, the researchers say, “The trend that emerged from the study indicates that investors may replace charities with social funds. This could have a major impact on charities, who will lose a significant source of income and find it difficult to continue to function.”