New research from the Haas School of Business reveals that – as many have always suspected – flirting can pay off for women.
Laura Kray, a professor in the management of organisations group at Haas at the University of California Berkeley, says that feminine charm is an effective tool in successful negotiations.
With colleagues Connson Locke of the London School of Economics and Alex Van Zant a PhD student at Haas, Prof Kray wanted to discover if women who flirt are more effective in negotiations than men who flirt. In one experiment the academics asked 100 participants to imagine that they were selling a car worth $1,200 and then asked how much they would be prepared to accept for the sale of the car. The participants were then given one of two scenarios to read: in the first the fictitious female buyer is polite but serious in her negotiations. In the second scenario she is considerably warmer, touches the seller’s arm, compliments them on their charm and asks “What is your best price?”
As a result the academics discovered that male sellers who read the second scenario were more inclined to cut the car’s price by $100. Female sellers who read this scenario remained unmoved.
“Women are uniquely confronted with a trade-off in terms of being perceived as strong versus warm. Using feminine charm in negotiations is a technique that combines both,” says Prof Kay.
The study “Feminine charm: an experimental analysis of its costs and benefits in negotiations” says that female flirtation points to attractive qualities such as confidence, a trait which is considered essential for successful negotiations.
The study is published in the journal Personality and Social Psychology Bulletin.
● Traditional wisdom states that the key roles of chief executive and chairman should be separate and held by two individuals. But research from the Kelley School of Business at Indiana University suggests that the opposite may well be the case. The roles should be divided only if there is a performance problem the researchers suggest.
The researchers Matthew Semadeni an associate professor of strategy at Kelley and Ryan Krause, a PhD candidate in strategy at the school, have looked at the performance consequences of separating the roles of chief executive and chairman.
They believe that there is no relationship between a company’s performance and one individual holding both roles of chairman and chief executive. They add that if the roles are divided when the company is performing well it may cause a reversal of fortune, while if a company is performing poorly splitting the roles may lead to a turnaround, but it depends very much on the approach used.
“Companies shouldn’t undertake a separation process because they think they should, or because other companies have, but instead take a studied approach that looks at current performance, determines how a change will affect overall performance – and then separate only if necessary,” says Prof Semadeni.
The writers looked at 309 companies that separated the two roles between 2002 and 2006. These were classified into apprentice; when the chief executive/chair relinquished the role of chief executive, creating a succession event, but remained chair; departure when the positions were filled by two individuals and demotion in which the chief executive retained that title and a new chair was appointed creating a change in governance.
Using stock returns and analyst ratings as a benchmark, the academics discovered that when a demotion strategy was applied and the two roles were separated the company experienced significantly larger performance reversals.
“Although the demotion strategy carries some risk, it is the most corrective option when used in cases of poor performance because it imposes independent oversight on the chief executive and provides the best opportunity to change course,” says Mr Krause. “It is an unambiguous signal to the chief executive that the firm needs to be fixed and the chief executive’s only job is to provide a solution.”
The writers suggests that the other two strategies produce little change and can in some cases create more problems.
Mr Krause says that splitting the roles is not the right move for all companies. “Boards that do this under the wrong conditions can send their company off a cliff, so our caution to them, in the simplest terms, is ‘If it ain’t broke, don’t fix it’.”
The paper, Apprentice, Departure and Demotion: an examination of the three types of CEO-Board Chair Separation will be published in the Academy of Management Journal.
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