Why salary bonuses drive executives to cheat

You don’t have to look far these days to find examples of corporate scandals involving fraud. A new study finds that performance-based pay is to blame for fraudulent behavior and actually motivates people to “cook the books”. Judi McLean Parks, the Reuben C. and Anne Carpenter Taylor Professor of Organizational Behavior at Olin Business School at Washington University in St. Louis and co-author of the study believes the results have implications for CEO compensation plans and the financial difficulties many companies are experiencing today. “All I have to do is look at Enron, Fannie Mae, Freddie Mac to know that this does happen. And now we’ve demonstrated the causal link to contingent pay.” Fraud uncovered at Fannie Mae alone from 1998-2004 has been estimated to be in excess of $10.6 billion.

Technology can help ease the pain when corporations change

Streaming video can make for a very authentic form of communication.While most businesses pay lip service to the importance of communication in managing change, few successfully do it. A business professor from Washington University in St. Louis says using the internet to stream short videos every week from the CEO is the first step toward smooth transitions.

Firstborns — under the right circumstances — more likely to be creative

Expectant parents eagerly await the arrival of their bundle of joy, hoping that they will have the most beautiful and intelligent baby in the world. While parents might not have direct control over brains and looks, new research from a business professor at Washington University in St. Louis finds that parents can influence their firstborn’s creativity. More…

Five professors join the faculty at Olin

Markus Baer comes to Olin wrapping up his doctoral work at the University of Illinois at Urbana-Champaign, Ph.D. expected in fall 2006. He is originally from Germany where he earned a master’s degree in psychology at the University of Giessen. Baer joins Olin as an assistant professor of Organizational Behavior. His research interests focus on […]

Teamwork: Where the weak help the strong

Group work is the name of the game in many companies. The thinking is that workers will learn more and help each other when they are put into groups composed of people with a variety of expertise. But does this always happen? Some recent research suggests that it may not … at least not always.

Employees are most likely to cut corners when they lack clear goals and feel overworked

The television show “The Office”  portrays more truth than fiction. But the consequences of bad management can be more serious than the awkward moments portrayed on the program. Employees get cynical when they endure multiple changes in company strategy and when they are overworked, according to experts at Washington University’s Olin School of Business. As a result, people produce work, but they don’t care how they produce it. The drive to get things done in today’s business environment is so strong that workers start thinking only of short-term gains and ignoring long-term consequences. More…

Removing the shadow of suspicion

StewartCan Martha Stewart regain the trust of her customers or could Enron’s former chief Ken Lay get a new job under the clouds of suspicion left in the wake of their legal problems? It depends upon the match between how they respond to the allegations and the extent to which the alleged offense is perceived to involve their integrity or their competence, according to a recent study by Washington University in St. Louis professor Kurt T. Dirks and three colleagues.