Something for the weekend

A spell working overseas is believed to enhance an individual’s career prospects as well as invigorate creativity. But a new study which has looked at living and working abroad has found that it is not as cut and dried as it might first appear.

Authors Adam Galinsky, professor of ethics and decision in management at the Kellogg School of Management at Northwestern University, William Maddux, an assistant professor of organisational behaviour at Insead and Carmit Tadmor, a senior lecturer in the faculty of management at Tel Aviv University have discovered that those individuals who thrive most – both personally and professionally – are those who are able to embrace both the new culture and the old one.

The writers describe this trait as “bicultural identification”.

“The ability to simultaneously identify with both one’s host and home cultures and the resulting capacity for complex thinking may be a key to translating foreign experiences abroad into a tangible toolbox that bolsters one’s creative ability and professional skill to the highest level,” they say.

In a series of experiments the authors tested participants – all of whom had lived overseas – on their levels of creativity and innovation. They also examined the professional outcomes of these individuals, for example looking at rates of promotion. They discovered that bicultural professionals, individuals who had lived and worked overseas and also successfully integrated the new culture with their home culture, were more likely to have been promoted and also to have more positive reputations.

The writers conclude that exposure to different cultures overseas gives individuals the opportunity to enhance their creativity, but adopting a bicultural approach was more likely to bring about lasting cognitive changes.

“Although living abroad matters, it is how one approaches that experience that adds critical explanatory value,” they say.

The study: “Getting the most out of living abroad: Biculturalism and integrative complexity as key drivers of creative and professional success” will be published shortly in the Journal of Personality and Social Psychology.

● Investing successfully in the stock market demands that investors pay attention, but as Lars Lochstoer, a professor of finance and economics at Columbia Business School, points out, investor inattention can be costly and can mean that inattentive investors are taken advantage of by savvier traders.

With colleagues Thomas Gilbert of the University of Washington, Shimon Kogan of the University of Texas at Austin and Ataman Ozyildirim of the Conference Board, Prof Lochstoer decided to dig deeper into the price of inattention. The group looked at the Leading Economic Indicator in the US which compiles data from key macro-economic activities such as stock prices and manufacturing new orders. The LEI appears regularly, its publishers make their methodology public and the final constituent statistic is in the public domain 24 hours before the LEI itself is released.

They discovered that if the LEI figure reflected good news the index level initially increased from after the last statistic was published until just before the LEI figure was released. In the five minutes after the LEI figure was published the index rose even further before it returned to more or less its initial level. However, if the LEI figure indicated bad economic conditions the pattern was the opposite, with stock prices initially declining.

The authors say that such a pattern indicates that inattentive investors believe that the LEI figure is fresh news. These investors are unaware that all the information comprising the LEI was available before the LEI figure was published and therefore had already been reflected in the price of the stock.

Prof Lochstoer and his colleagues suggest that investors should pay attention and consider how new the information is. Furthermore they say that media organisations should present information clearly to ensure investors are aware that figures such as the LEI are a summary of old news, meaning that the stock price already reflects this data.

The price of inattention can be read at Columbia Business School, ideas@work.