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Is Greed Good At Work?

The very notion of greed is typically seen as a very bad thing.  Indeed, it takes pride of place among the seven deadly sins.  In a corporate world, greed is typified by Gordon Gecko in his infamous speech during the movie Wall Street.

"The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind."

See Also: Can greed be a good thing for your business

In recent years, such thinking has been the subject of criticism by the likes of the Occupy movement, and greed was tagged as a major cause of the financial crash a few years ago. A recent study has set out to explore whether greed is good or bad, for business.

Is greed good or bad?

The study explores the very essence of greed, both in terms of the assumption that it’s inherent within CEOs, and that too much greed is bad news for an organisation.

The paper reveals that it isn’t right to assume that all greed is good, or indeed bad, and the reality tends to be much more nuanced, both in terms of the motivations behind greed and its outcome. The study attempts to remove the emotion from the debate and instead use pure data to explore the topic, and in particular whether a greedy leader helps or hinders their employer.

The study saw interviews conducted with executives, public data analysed and an analysis of other publicly available data from executives (such as interviews in the media). It revealed that greed isn’t really something that can be linked with the pay differential between the executive and their staff, and the authors highlight that this gap could be fully deserved, whilst lower pay is not always representative of a lack of greed.

Confidence vs. hubris

The study also explored the issue of hubris, which is often tagged alongside greed.

"Hubris is an extreme manifestation of confidence, characterized by preoccupation with fantasies of success and power, excessive feelings of self-importance, as well as arrogance," the authors say.

If the leader is averse to risk, that can harm the performance of the company.  Too much risk, especially for short-term gain, however, is a strong indicator of greed in the leader. The data suggested that such risk taking was often common among younger entrepreneurs, who perhaps underestimated the kind of things needed to achieve success. However, displays of greed were much more common among leaders with a short-term focus and a weak board who are thus unable to keep a check on them.

The paper concludes on a positive note, saying that even if a leader is notably greedy, they can still be controlled by a strong board and good corporate governance, therefore maintaining a good balance between self-interest and more altruistic tendencies, which is where success generally resides.

"Overall, we conclude that measured self-interest keeps managers focused on the firm’s goals and measured altruism helps the firm to build and maintain strong human and social capital," they say.

See Also: UK Lecturers: Greedy, Impoverished or Uncaring?

What’s your personal opinion? Do you think that greed is a good or bad thing? Has this study changed your view at all?

SOURCES
Tipping points: How self-interest turns into greed, or altruism

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