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MBA students travel abroad again on consulting projects as IBD celebrates 30th year

portrait of David Richardson standing in front of a taxi in Asia
“We’re so happy to be up and running again.” – IBD’s executive director David Richardson

For the first time in three years, MBA students are traveling abroad this month to work on consulting projects through the International Business Development (IBD) program at Berkeley Haas.

“We’re so happy to be up and running again,” said IBD’s executive director David Richardson, who runs the marquee Haas global management consulting program that is celebrating its 30th year. “This is one of the most popular electives for our students, and we were crushed when we got hit by COVID restrictions and our students could no longer travel. But we want everyone to know that we’re back.”

Lecturer Whitney Hischier, who teaches the IBD course, added that the hiatus “made us all appreciate the value of experiential classes more than ever.”

Thirteen students assigned to four teams will head to Singapore, Finland, and Guatemala in mid May. To prepare, the students began the IBD consulting course last January, which included the much-anticipated “big reveal” when the students learn where they’ll go.

Group of IBD students holding country signs
The 2022 class of IBD students will travel for the first time in three years.

In Singapore, one project team will work with a global food company. Two teams are heading to Finland. One will work with a software company that offers consumer electronics service management solutions, and another is assigned to a company that built a digital food safety and operations system for hotels, restaurants, and catering businesses. In Guatemala, students will collaborate with a social service organization that operates hospitals and vision centers that aim to eradicate treatable blindness.

portrait of Monica Shavers, MBA 23
Monica Shavers, MBA 23, will work in Singapore.

Monica Shavers, MBA 23, said she is looking forward to experiencing the culture and the food of Singapore, while working for the global food company.

“We’ve had lots of (virtual) client meetings, talking to our sponsor every week to figure out our itinerary and the ways in which we’ll learn about Singaporean food culture,” she said. “We’ve been talking through all of our ideas, and laying out what we will validate while we are in-country.”

When applying to Haas, IBD was one of the key attractions, she said. “I didn’t get to study abroad as an undergraduate,” she said. “I saw this as a great opportunity for me to get that global experience while I’m in school again.”

Kylie Gemmell, MBA 23, is heading to Joensuu, a small town in Finland, in mid-May to work with a client that makes hardware and software used to control food temperature safety.

Portrait of Kylie Gemmell
Kylie Gemmell, MBA 23, will work in Finland.

Gemmell, who worked in real estate investing before coming to Haas, said IBD has helped her explore a career change. “I’ve never had a consulting job and I wanted to experience what that would feel like—and here I am, 12 weeks into food safety regulation, an area I never knew existed,” she said. Gemmell added that her IBD consulting project has helped her learn more about herself, as the work differs from the independent nature of real estate.

“What I’ve realized is that I really love working on a team and that I get my energy from people and from working collaboratively.”

IBD has grown since JoAnn Dunaway, MBA 92, started the program after she graduated from Haas. “She saw a need for a challenging experiential learning program for MBA students to solve business problems,” Richardson said.  “JoAnn had an international background and interest and she brought that in—and the school ran with it.”

During the recent Alumni Weekend at Haas, six IBD alumni joined students for a combined virtual/in-person panel during the April 28 IBD class. The alumni shared insights on their projects and the impact the program has had on their careers. (Read more from IBD’s Associate Director Danner Doud-Martin on the IBD blog)

To prepare for the return to project work overseas, Richardson, a former Peace Corps volunteer, headed abroad last November to meet with potential IBD project clients. In recent months, he worked with UC Berkeley Study Abroad Office and Risk Services  to make sure Haas met UC Berkeley’s standards for mitigating the risk of Covid during student travel and at client sites. Over time, he said he’s updated the list of countries where IBD students were able to safely work.

Richardson said he feels great about the program’s future.

“We’re hopeful that we’re getting back into the business of sending more students overseas,” Richardson said. 

 

Despite ideals, people don’t really like reducing inequality, study finds

Researchers conducted eight experiments and a field study of voter perception of California’s Prop. 16, which would have overturned the state’s ban on affirmative action in public employment and education. (Photo: Kirby Lee via AP)

Berkeley, Calif—Most Americans say they want a more equal society, yet policies aimed at increasing equality for disadvantaged groups in higher education, corporations, government, and elsewhere continue to generate backlash.

This backlash has been blamed on a range of causes—including majority white Americans’ fears of losing their status, political partisanship, and overt prejudice.

A study by Berkeley Haas researchers, published today in the journal Science Advances, offers a new take, identifying an underlying cause of this opposition that cuts across ideologies: People in advantaged positions view equality itself as harmful, and tend to think that inequality benefits them.

“We found that people think of the world in zero-sum terms, so that a gain for one group must necessarily be a loss for another,” says study co-author Derek Brown, a Berkeley Haas doctoral student. “This seems to be a cognitive mistake that everyone is susceptible to, not just a vociferous minority that has antipathy toward any certain group.”

The paper, co-authored by Berkeley Haas assistant management professor Drew Jacoby-Senghor along with Columbia University PhD student Isaac Raymundo, helps explain why even people with strong egalitarian beliefs may still block policies that reduce disparities. Beyond the threat of losing status, people in advantaged groups are prone to the perception that greater equality means less for them—to the point where they’ll vote for policies that cause them economic harm and increase inequality over policies that benefit them and reduce inequality, the study found.

“In our experiment, it was more important to people how well off they were relative to other groups than how they were doing in absolute terms,” Jacoby-Senghor says. “They view a loss in relative advantage as an absolute loss, even when it’s a clear material gain.”

Beyond race and ethnicity

In prior research, Brown found non-Latino white and Asian people—who make up the majority in higher education—see policies that increase minority representation in a graduate program as reducing their chances of admission, even explicitly win-win policies that also increase the number of admission spots for the majority.

In the new paper, Brown and colleagues go beyond race and ethnicity to other types of real-world inequalities, such as the gender wage gap and the hiring gap for those with disability status or a criminal record. They also studied voters’ perceptions of a 2020 California ballot initiative to overturn the state’s ban on affirmative action, and even concocted scenarios involving disparities between fictional teams with random names. Time and again, across all ideologies, study participants in advantaged groups rejected policies to reduce inequality on the false belief that they would end up with less access to resources.

Zero-sum game

Past research has often focused on policies that are zero-sum, such as hiring fewer white people in order to hire more members of minority groups, making it hard to parse perceptions from actual impact. Brown and Jacoby-Senghor asked people to only assess non-zero-sum policies that help disadvantaged groups without taking anything away from—and even improving things for—advantaged groups. Across all experiments, they controlled for five well-studied forms of ideological opposition to equality: political conservatism, preference for hierarchical social structures, belief that society is zero-sum, system-justifying beliefs, and explicit prejudice. While they found some of them correlated with perceptions of policies, variations in ideology did not explain people’s negative view of greater equality.

In one scenario, for example, non-Latino white study participants were told, “In 2018, white homebuyers received roughly $386.4 billion in mortgage loans from banks, while Latino homebuyers only received around $12.6 billion in mortgage loans overall.” The participants were then presented with proposals for banks to either increase the amount of loans for Latinos, decrease the amount, or leave it unchanged, while maintaining the loans for white homebuyers. Even so, participants misperceived the proposal to increase the amount for Latino buyers as lowering their own chances of getting a loan, and thought decreasing the amount available to Latinos would improve their chances.

This misperception also held true when the researchers tested win-win policies that benefit both majority and minority groups. A mention of societal benefits also did not cause a shift: White participants in one study thought a policy that would reduce inequality by offering more loans for Latinos and benefit society by stimulating mortgage investment for all groups would reduce their ability to get a loan, while they perceived a policy that would decrease loans to Latinos—worsening inequality—and decrease overall mortgage investment as not harming them.

Even when white participants were directly told that anyone who wanted access to a loan could get one and there was no limit on the amount available, they continued to believe that also boosting loans to Latinos would slightly reduce their chances of getting a loan.

“The causes and solutions to inequality are complex, but even when we simplified it and bent over backwards to make sure everyone is better off in these scenarios, people still found a way to believe they’ll be harmed,” Jacoby-Senghor says.

In fact, the only thing that erased majority participants’ misperceptions were proposals that enhanced equality between members of their own group—such as when a group of male participants considered reducing pay disparity between men, rather than between men and women.

Predicting voting

The researchers examined this dynamic in a real-world field study, surveying California voters on Proposition 16, which would have overturned the state’s ban on considering race, sex, color, ethnicity or national origin in public employment, education, and contracting.

“We wanted to see if this misperception about equality predicted how people would vote,” Brown said.

It did. They found that the majority of whites and Asians believed the measure would reduce their access to education and job opportunities. The more strongly they held that belief, the less they supported Prop.16. In fact, a belief that the measure would harm their chances was a stronger predictor of how people would vote than their political party or any other ideological variable. In a follow-up survey two weeks after the first, researchers found that people who switched to a no vote reported a growing perception that the measure would hurt them.

Rattlers vs Eagles

In their final experiments, the researchers tested whether majority members of completely fictional groups would reject more equitable outcomes based on a misperception of harm. In contrast with prior experiments that only involved majority group members, the researchers recruited a racially and ethnically diverse subject pool. They told them they were assigned based on a personality test to a team called the Rattlers, which would compete against the Eagles in a problem-solving challenge (in reality, this personality test did not determine group assignment and the Eagles didn’t exist). Participants were told that the Rattlers had received more bonuses than the Eagles in the past couple of weeks, and so they were asked to consider more equal ways to distribute bonuses.

Even with made-up groups, the same dynamic held: Members of the Rattlers rejected a win-win proposal that would give monetary bonuses to 5 more Rattlers and 50 more Eagles—still leaving the Rattlers ahead—and instead chose a lose-lose plan, forfeiting 5 bonuses and taking 50 from the Eagles. “This policy harmed everyone and made the bonus distribution more unequal,” the researchers point out.

In a final twist, the researchers presented study participants with side-by-side scenarios that would either reduce or increase inequality without affecting their bonuses, so they could easily compare. They still perceived the equity-enhancing policy as harming their chances.

Implications

The findings shed new light on one of the foundational theories of social psychology, social identity theory, which posits that people tend to prefer relatively greater amounts of resources be allocated to their in-group than to an out-group. This preference is predicted by the misperception that reductions of relative advantage necessarily harm advantaged groups in absolute terms, according to the researchers.

Beyond theory, the findings are troubling given the massive social and economic costs of inequality, Brown says. Lost GDP from racial inequality has been estimated at $16 trillion, and the gender pay gap is estimated to reduce the global economy by about $160 trillion. People may fundamentally misunderstand how much disparities weigh down society as a whole, the researchers suggest.

This zero-sum view of equality is a roadblock that policy makers seeking to reduce disparities will need to grapple with, Brown says.

“Our research suggests that you can’t expect everyone to be on board and you should always expect there’s going to be a backlash,” he says. “The change itself has to be the justification.”

Researcher Contact: Derek Brown, d_brown@berkeley.edu

Media Relations: Laura Counts, lcounts@berkeley.edu, (510) 643-9977

More Information: 

“If you rise, I fall: Equality is prevented by the misperception that it harms advantaged groups”
N. Derek Brown, Drew S. Jacoby-Senghor, Isaac Raymundo
Science Advances, May 6, 2022
DOI 10.1126/sciadv.abm2385

‘Decision Leadership’: New book guides leaders on maximizing the potential of others

In their new book, Decision Leadership, Don Moore of Berkeley Haas and Max Bazerman of Harvard Business School provide practical advice on how leaders can improve decision-making for themselves and those around them.

When people think of great leaders—whether of a country or an organization—they often imagine them affecting change through the sheer force of their outsized personalities.

Decision Leadership book coverA new book by Berkeley Haas professor Don Moore and Harvard Business School professor Max Bazerman, launching April 19, argues that it’s time to put that notion to rest.

“Great leader theories are often so simplistic in how they imagine the power of a leader to rule by fiat or inspire others with visions or goals that motivate them to work,” Moore says. “The evidence on leadership and organizational processes suggests that leaders’ potential influence is both more and less than those theories would imply.”

On the one hand, it’s quite rare that a leader can direct an organization through force of will, Moore explains. “On the other hand, most leaders have enormous untapped potential when it comes to empowering those who work with them in designing systems that facilitate the success of the broader organization.” The new book, Decision Leadership: Empowering Others to Make Better Choices (Yale University Press), launching April 19, uses research in decision science and behavioral economics to examine how leaders can be more effective in two ways: first, by learning how to make better decisions themselves, and second, by influencing those around them to make better decisions as well.

“There are a lot of conceptions of leadership that imagine a leader’s job is to change hearts and minds and inspire followers with some great vision of the organization’s potential,” says Moore, who is Associate Dean for Academic Affairs and Lorraine Tyson Mitchell Chair in Leadership and Communication at Haas. “But changing hearts and minds is often a much more difficult and less successful way to lead than by simply changing behavior—which leaders can do in by virtue of their power to structure organizations and social environments.”

Talent vs luck

Most leaders get to where they are through a combination of talent and luck, Moore says. Once in a position of power, however, they tend to overweight the former, thinking they are where they are due to talent alone. “It’s tempting to say, I got here because I’m really good, and my intuition is always right,” he says. Such a reliance on intuition, however, can lead to dangerous overconfidence that results in flawed decision-making.

To illustrate the point, the authors use a topical example: the response to the COVID-19 pandemic. “Donald Trump was someone who very intentionally engaged in a leadership strategy that went first to positive spin and optimism—he never admitted an error, and everything he did was always great,” Moore says. “As president, he insisted at every turn that the pandemic was almost behind us and everything was going to be fine.” That relentless optimism, however, led to some dangerous miscalculations that exacerbated the pandemic’s effects. By contrast, countries such as South Korea took a much more pessimistic but realistic approach to the dangers of COVID-19, causing them to take stronger preventive measures and mitigate the virus.

“The goal is honesty,” says Moore, “and learning how to calibrate your confidence in order to create a better forecast to prepare for an uncertain future.”

Dangers of intuition

In a series of chapters, he and Bazerman present real-world strategies to overcome the inherent biases in decision making that intuition can create. Rather than engaging in all-or-nothing thinking, for example, effective leaders learn to think probabilistically about the future. In addition, they learn to capitalize on the wisdom of crowds within their organization, empower others to give better advice, and design experiments that can help provide better information to make good decisions.

In an example involving Netflix, Moore and Bazerman describe how in 2011 CEO Reed Hastings split his company in two, by focusing Netflix on streaming content, while launching another company, the ill-fated Qwikster, that would send DVDs by mail. While many of his fellow executives were skeptical of the idea, Hastings was so confident and enthusiastic about it, that they kept silent, leading to a debacle when customers rebelled against having to pay separate fees for both services. “Great leaders have to be decisive, but that does not mean cutting short the gathering of evidence and useful perspectives,” Moore says. “In order to make wise decisions, leaders should question their assumptions and be open to inputs from advisors.” Oftentimes, says Moore, that means not just asking if anyone has any questions or suggestions, but actively seeking out clashing opinions in order to fully vet an idea before executing it. “That’s courageous leadership.” (To Hastings’ credit, he learned from his mistakes, scrapping Qwikster and committing to soliciting better advice in the future.)

Using behavioral science

In the final chapters of their book, Moore and Bazerman expand beyond individual decision-making to examine how leaders can influence the behavior of those around them. Behavioral science research shows that oftentimes that can be better achieved through subtle “nudges” than through more heavy-handed interventions. The concept of a nudge, popularized by the eponymous book by Richard Thaler and Cass Sunstein, involves designing an environment in such a way that the default decision leads to the desired behavior—oftentimes for both the individual and the organization. While the concept has been used successfully in domains from organ donation and financial savings, Moore and Bazerman argue that it can be a powerful tool for leaders to use in a wide variety of situations within organizations. “It’s paternalistic in providing guidance to individuals, while at the same time libertarian in allowing people the freedom to choose for themselves.”

Through all these suggestions and techniques, Moore and Bazerman hope that they can empower leaders to improve decision-making, leading to organizations run according to scientific principles rather than arbitrary hunches. “If our fondest hopes came true and leaders implemented the lessons of the book,” says Moore, “they would be running more effective decision factories that maximize the welfare of people both inside and outside the organization.”

More information:

Decision Leadership: Empowering Others to Make Better Choices
by Don A. Moore and Max H. Bazerman
Yale University Press, 2022