Team production and Gift Exchange

When it comes to team production and behavior, one important aspect to analyze is the definition of individualism vs interdependency. The following table lists the difference in identity on Independent Societies (Western) vs. Interdependent Societies (Eastern).

But I believe that the same aspects can be transferred into different industries. Independent industries are composed of those individuals that work mainly alone to achieve the desired results of the firm. Some examples of careers that would fall under this category are traders, advertisers, real estate agents, researchers etc… Pretty much a
lot of the commission based jobs out there. The independent industry is highly competitive and low on teamwork, kind of “everyone for themselves”. The only way I can see the Gift Exchange model being applied to this industry is in cases where the individual feels like the company is part of their identity although I believe the probability of this happening is way higher on what I call “Interdependent industries”

Interdependent industries are very high on teamwork and employee collaboration. Some examples might be factory jobs, construction, chefs and cooks, athletes, military careers. Now a day a lot of office jobs are increasing the demand for teamwork, I worked for PepsiCo this summer as a sales intern, and I very was mistaken when I thought that sales would be characterized as an “independent role”. Even though most of the sales representatives had their own routes and list of clients Pepsi did a very good job on creating a sense of community that felt almost like “one big family”.

I will explain how they achieved that by using some of the concepts I learned when I took Social Psychology. Drawing a comparison to the “Sharing the Marbles” mutual effort to achieve the final result increases the probability of “sharing” and the collaboration between employees. But one thing that the article missed to mention is that the 1% have power and this is the reason why they are able to force the hand of those who make the rules. A famous social experiment that studied how power changed people’s behavior was the Stanford Prison Experiment. (This is a link to a trailer of a movie based on the experiment. Taking into consideration the “Hollywoodization” of the experiment, it gives you an idea of what the experiment was about.) The study concluded that simply by random assigning subjects to a guard position, they felt empowered and superior to the point where they started to act cruel towards the inmates. This related to the discussion of teamwork since people are less likely to collaborate when there is a power differences between equals, this is seen as unfair and could be considered favoritism from management.

Some factors that I noticed PepsiCo used to influence behavior to facilitate collaboration between employees are:     

1.     Channel Factors such as proximity. Even though each sales rep had their own route and list of clients. We had weekly sales meeting were all the sales rep sat next to each other while the manager would go over the progress towards the sales goals, new ads/promotions for the week, as well as highlighting any individual achievements by handing out “way to go’s” awards. When the team reached the target, we would likely have a round of applause, and some sort of souvenir.

2.    The second channel factor used was Planning. A point that David Brooks article touched is the idea that when a punishment, such as fines, is introduced intrinsic motivations usually decrease. At Pepsi, management had the hard role of “hitting the targets” while being encouraging and motivating employees rather than using fear tactics and threatening punishments. One way they did this was through planning. On the weekly meeting we would be handed out progress reports and we would discuss some of the difficulties on achieving certain goals. This summer Propel launched 4 new flavors and one of the goals was to have all four on every single small format store - gas stations, family owned businesses etc… This was a very challenging goal since Propel is not a top seller and a case of the product was not very cheap either. Management realized the challenge and came up with a plan on how to convince clients to provide more space in store so that we could bring this new product in. Some of the strategies were “buy 5 get one free deals” or discounts on items that were very popular if they agreed to bring in all 4 flavors into the store.

3.    As discussed on the David Brooks Article “Economic, utilitarian thinking has become the normal way we do social analysis and see the world. We’ve wound up with a society that is less cooperative, less trusting, less effective and less lovely.” This reminds of the discussion of construal. Construal is the way we see the world. Our perception is guided by active but mostly nonconscious interpretation of what the object represents. A good economic illustration of construal was used by testing prisoner’s dilemma output by telling subjects they were playing the community games vs The Wall Street game.

As we can see on the results, the idea of whether the participants were playing the community vs the Wall Street game drastically changes the outcome. This happened because of construal. Wall Street is perceived as an Independent “everyone for themselves” group vs a community where people know each other and are more likely to collaborate.

Pepsi constructed the image of teamwork as the fuel for success. At least the location I worked in which was Indiana, had a sense of reciprocity between the firm and the employees. They were the perfect example of Arkelof’s gift exchange theory. Workers were all paid the same, but a lot good workers put a lot more effort than the required from the firm, while some workers (which I don’t characterize as necessarily bad workers) put in the bare minimum required. There was still a sense of identity and shared responsibility since the targets were for the whole team rather than for the individual sales rep. The good workers derived a sense of identity by being part of the firm/team. Many time even though they had already reached their goals, would put in extra effort in order to relieve some of the pressure of the group.

The firm rewarded those workers by not being so strict with the rules and helping out those good workers when they needed it. If a good sales rep had to miss a day, or leave early management would not question. Of course days off were not unlimited but I believe they were more than sufficient to reward those with good behavior (they get 3 weeks of paid vacation days). Another incentive for individual’s hard work was the prospect of being promoted.

I apologize if I related the topic more to psychology than to the listed articles, but I believe this generated a rich discussion on how to influence team collaboration on independent industries where the gift exchange model does so often not apply.