Nexus - Summer 2011

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Nexus: Summer 2011 focuses on behavioural science, with Professor Bruno Frey discussing the measurement of happiness, Dr Christopher Olivola exploring the motivations for charitable giving, and alumnus Robert Craven writing about seeing your business through your customer's eyes.

Plus the latest news from WBS and updates from other graduates.

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Nexus - Summer 2011

  1. 1. 1Warwick Business School Alumni Association magazine: summer 2011
  2. 2. NOW OPEN! Gather, learn and discuss the business issues that matter Book online at wbs.ac.uk/go/cafeThe Virtual Business Cafe Find out more on page 18 
  3. 3. 3Message from the Dean Over the past year or so, I have recruited Contents some of the leading behavioural scientists in the world and created In this edition of nexus we focus on our own Behavioural Science group, Behavioural Science making WBS the first business school in Europe to have a dedicated facility Staff news 5 to delve further into this field, with a WBS news 6 superb set of behavioural scientists who Hot off the press 8 are already beginning to collaborate Instincts, motivations & choices: with our other top researchers across WBS and across the University, and to Behavioural Science uncovered form applied partnerships with, among Michael Prest 10 others, the Design Council and the The bright marketing manifesto Institute for Practitioners in Advertising. – seeing the business through As I write, our new Behavioural Science the customers’ eyes lab is about to go live and we are well Robert Craven 14Welcome to the Summer 2011 edition on our way to becoming the premier Happiness – a revolution inof nexus. For this issue I have chosen school for research, teaching, corporate engagement and media comment in social scienceto focus on Behavioural Science, a Bruno Frey 15relatively new discipline which is having this area.huge impact across society and which The science of giving:I believe will be hugely important in I hope you’ll be excited by this new what motivates charitabletaking WBS forward. venture and, to help you understand giving? what it’s all about, in this issue you will Christopher Olivola 16When I took on the role of Dean, I find: Personal & Careerdecided to put WBS at the forefront of Development 17this particular cutting-edge research. H Journalist Michael Prest talking to The WBS Virtual Business Cafe 18My experience as an asset manager members of our new Behaviouralduring the global crisis drove home to Science group Get involved 19me that there are important forces at H Professor Bruno Frey discussing the Mentoring 20work in the financial markets, and in the measurement of happiness Students and cohorts 21economy more generally, that just can’t H Dr Christopher Olivola exploring the Global networks 22be captured by analysing the world motivations for charitable giving Professional networks 24using traditional economic and financial H Alumnus Robert Craven writing WBS events 25models alone; to get to the heart of about seeing your business throughhuman behaviour as it impacts on the your customer’s eyes. Alumni news 26economy we need to cast our net morewidely. This is just one of several initiativesBehavioural Science is an intrinsically which will help us on our way tointerdisciplinary area, lying at the nexus becoming Europe’s top university-basedof applied psychology, organisational business school, keeping us at thebehaviour, neuroscience, sociology, vanguard of new research, and allowingmanagement science, economics, and us to offer new ways of seeing the worldfinance. I believe we can leverage it to to our students and graduates – ways ofimprove our understanding of the world looking at things differently. 7and to improve business performance.It can help us understand the economic Coupled with weaving creative thinkingdecisions of both individuals and through all our activities, I am confidentinstitutions – decisions which can have that these initiatives will offer the WBSmassive effects on market prices, on Community excellent returns on theirthe returns on investment and on the emotional and financial investments ingrowth rate of the economy. us. 10 26
  4. 4. 4 nexus: summer 2011Welcome to the Behavioural Throughout this edition, you will findScience edition of nexus. many examples of alumni and students contributing to, and benefitting from, theWith the focus this time on human WBS community. These include:behaviour – and in particular, whatmotivates us and makes us happy – it H our mentoring programme (page 20)seems a good time to consider the WBS H our active global and professionalcommunity and the important role it networks (pages 22–24)plays. H event speaker slots (page 25) H the Virtual Business Cafe (page 18).There are of course all sorts of reasonsto stay in touch with us. You might want The Alumni Executive (formerly theto keep your skills updated through Alumni Board) also plays a crucial roleembarking on further study, attending in this community, leading our alumnievents or visiting the Knowledge Centre. relations activity at the strategic level,Or want to maximise your career success acting as our most senior advocates, andthrough our mentoring programme, progressing key projects.careers services, and trainingprogrammes. Why don’t you join our growing team? Pages 19 and 21 give you some ideasBut, for many of us, the motivation goes on ways to get involved. New initiativesmuch deeper. The WBS community include:provides us with a sense of continuity, ofbelonging, of pride. It is an opportunity H our group for recent graduatesto keep in touch with old friends and H our class representative networkcolleagues, and to find new ones. H our pool of sector specialists, offeringIt provides a connection to a global advice to current students.network, many of whom we would feelcomfortable to call upon for advice or We are also keen to find alumni in therecommendation, simply because of that finance sector to drive forward ourshared affinity. Finance Professional Network. The WBS communityFor a rapidly increasing number of our provides us with a sense of I hope you enjoy this edition of nexusalumni, this sense of affinity is also and my team and I look forward todriving a desire to give back to WBS. This continuity, of belonging, of working with you.might be financially, but many also give pride. It is an opportunity togenerously of their time, knowledge, Alison Bondexpertise and experience. They want keep in touch with old friends Head of External Relationsto contribute to WBS because it has and colleagues, and to find new e Alison.Bond@wbs.ac.ukimpacted on their lives, and they want touse their own skills to make a difference ones. It provides a connection toto others. a global network. contact details Alison Bond Tracy Lynch Claire Stevens nexus is the magazine of the WBS Alumni Head of External Relations External Relations Officer External Relations Assistant Association T +44 (0)24 7652 4306 The Alumni Association T +44 (0)24 7652 4176 T +44 (0)24 7652 8487 T +44 (0)24 7652 8487 Warwick Business School E Alison.Bond@wbs.ac.uk E Tracy.Lynch@wbs.ac.uk E Claire.Stevens@wbs.ac.uk The views contained in nexus are those of University of Warwick contributors and not necessarily those of Coventry CV4 7AL Kathryn Chedgzoy Jen Young Renate Mason Warwick Business School or the University United Kingdom External Relations Officer Office & Events Co-ordinator, External Relations Assistant of Warwick t +44 (0)24 7652 2813 T +44 (0)24 7615 0515 External Relations T +44 (0)24 7615 0371 Design by Morse–Brown Design f +44 (0)24 7652 3719 E Kathryn.Chedgzoy@wbs.ac.uk T +44 (0) 24 7615 0171 E Renate.Mason@wbs.ac.uk w morsebrowndesign.co.uk E alumni@wbs.ac.uk E Jennifer.Young@wbs.ac.uk W wbs.ac.uk/alumni Ann Jackson Emily Jamieson External Relations Officer External Relations Assistant T +44 (0)24 7652 8197 T +44 (0)24 7652 2987 E Ann.Jackson@wbs.ac.uk E Emily.Jamieson@wbs.ac.uk
  5. 5. staff news nexus: summer 2011 5Academic appointments Professor Bruno group. Margit has published nine books as author, co-author, or editor, and over Frey Professor Steve An international 160 scholarly articles. She is Research and highly cited Director of CREMA. Brammer A leading scholar researcher. on what drives Professor Daniel an organisation’s Read social and ethical Bruno is Distinguished Professor of World renowned performance. Behavioural Science at WBS, and is based for his work on in the Behavioural Science group. He intertemporal choice.Stephen joined WBS in January as retains the post of Professor of EconomicsProfessor of Strategy and Associate Dean at the University of Zurich, Switzerland,for Research, based in the Marketing & where he has specialised in politicalStrategic Management group. Previously economy, non-market economics, and Daniel has held positions at Carnegiehe was Professor of Business and Society the theory of economic policy since Mellon University, the London School ofat the University of Bath’s School of 1977. He is Research Director of CREMA Economics and Political Science, LeedsManagement. (Centre for Research in Economics, University Business School and Durham Management and the Arts, Zurich). University Business School, in additionHis research has been widely published Bruno is author of over 600 articles in to visiting positions at the University ofin leading journals such as the Strategic professional journals. Illinois, Yale School of Management, andManagement Journal, the Journal INSEAD. He is Professor of Behaviouralof Management Studies, Financial Professor Economics based in the BehaviouralManagement, and the Journal of Graham Loomes Science group.Business Research. A highly cited scholar and Fellow Daniel’s work has appeared in journals Professor of the British including Management Science. He Academy. has written book chapters and reports Graeme Currie and has been an Editor of the Journal A late entrant to Graham joined WBS in February, of Economic Psychology, and Associate academia and now a as Professor of Behavioural Science, Editor for Management Science. leading international academic in public retaining his role as Professor of management. Economics in the University’s Economics Professor Richard Department. He has undertaken research TafflerGraeme joined academia in 1996, for a number of government bodies An authoritygaining his PhD from the University of in the UK and elsewhere. Graham has on behaviouralNottingham where he worked for 14 authored, co-authored and edited finance, he relishesyears. For the last three years he was numerous journal articles and books. his engagementDirector of an applied research institute. with investmentHis title at WBS is Professor of Public Professor Margit practitioners.Management, based in the International OsterlohCentre for Governance & Public A scholar with a Richard joined WBS in January 2011 asManagement. Graeme’s research has deep and practical Professor of Finance and Accounting andbeen published in a range of studies and understanding of Head of the Accounting group.journals, over 60 to date. management issues. He has published over a hundred Margit joined WBS in 2010 as Professor academic and professional papers and of Management Science after holding books, and is frequently quoted. a chair in Human Resources at the University of Lüneburg, Germany, and Professor Taffler is currently helping to then a chair in Business Administration develop the new paradigm of emotional and Management of Technology finance. and Innovation at the University of Zürich, Switzerland. She is based in the Marketing & Strategic Management
  6. 6. 6 nexus: summer 2011 WBS newsRankings and The first exchange of undergraduate students from Cornell University, USA, The Lanner Group has awarded prizes to WBS students on our MSc in Businessaccreditation also took place, with the arrival at WBS Analytics & Consulting for their excellent of Karl Delaroche and Nicole Wolski from work in the Analytic Consulting module.The Financial Times has ranked WBS fifth Cornell’s Industrial & Labor Relations Course Director Dr Mette Asmildin the world, and second in the UK, in its School. Nicole said, ‘I had always wanted commented, ‘We are very grateful to thefirst ranking of pre-experience Finance to see England and Warwick gave me not Lanner Group for their support for ourMasters programmes. only the chance to do that, but also to students. The winning group’s report was study at one of the best schools in the UK.’ an excellent piece of work’.For the WBS Undergraduate programme,came the great result of second to Oxford As the warm spring weather arrived, A team of participants from the Warwickin this year’s Guardian newspaper’s WBS played host to doctoral students Global Energy MBA won the WBSUniversity Guide. The Financial Times from Oxford’s Saïd Business school and MBA Student of the Year Award. Johnranking of customised executive courses Cambridge’s Judge Institute taking Armstrong, Brent Brough, Shawn Lesaw WBS rise two places in the world part in in the fifth annual ‘Woxbridge’ Maitre, Gage Garner and Juergen Ritzekand hold its place in the UK – no mean doctoral conference. The two day were chosen because of an investmentfeat in the current economic climate and conference enables doctoral students club they set up to track the progresscompetitive market. and academics in training to present of companies studied on their course, their research. enabling their class to monitor theWBS remains in the elite group of performance of their investments.business schools worldwide whohold the sought-after triple-crown Student awardsgold standard in business education External recognition for A team of five undergraduate studentsafter achieving full five year EQUIS beat off competitors from other top WBS academicsreaccreditation. UK universities, including Oxford and Cambridge, to win the Royal Bank of Emeritus Professor John Benington wasProgramme news Scotland (RBS) Indian Summer Challenge. awarded a CBE for public service in the UK’s New Year Honours List. This honour After a series of challenges and fund- was followed by Keith Hoskin’s nominationTwo new finance masters courses will raising activities, the Warwick team won as the Distinguished Academic of 2011launch this September. The MSc in a three-week all expenses paid trip in for the British Accounting and FinanceAccounting & Finance and the MSc September to India where they will help Association. Temi Abimbola was invitedin Finance with Behavioural Science the RBS community project SUPPORT and to present at the annual Harvard Africajoin the four established courses in our spend time in the RBS Global Banking & Business Conference.finance suite. Dr Elisabeth Dedman,Academic Course Director, commented Markets Mumbai offices.‘Recent events have revealed the needfor a new breed of financiers who think WBS undergraduates also won, and weremore critically and who are prepared to highly placed, in the British Council’schallenge theories.’ UK Shine! 2011 competition for overseas students, and the Warwick Advantage Awards, where no less than 23 of our undergraduates won awards. In the classroom, the Association of Corporate Treasurers gave prizes for the tenth year running to WBS undergraduates. John Benington CBE IIMA MBA students at WBS Simon Collinson has been appointed as aIn the depths of winter, 18 executive member of the influential Economic andMBA students from the Indian Institute of Social Research Council and Chair ProfessorManagement, Ahmedabad, braved the at Zhejiang University for a period of threeweather at WBS to gain an years. Paul Marginson, Director of theunderstanding of business in Europe and Industrial Relations Research Unit, wasthe challenges facing British businesses. invited to present a webinar organised by the UK’s Chartered Institute of Personnel & Winners of the Lanner Group prizes Development and Unilever.
  7. 7. WBS news nexus: summer 2011 7The Royal Shakespeare Company announces plans forthe Centre for Teaching Shakespeare at WarwickRoyal Shakespeare Company partnership between a cultural(RSC) Executive Director Vikki organisation and a university. It’s a bold new initiative which is entirely in keepingHeywood, Warwick’s Vice- with a business school that looks atChancellor Nigel Thrift, Dean of things differently’.WBS Mark Taylor, and Professorof Creativity Jonothan Neelands, The event was attended by over 130 guests including Members ofhave announced plans for the Parliament, peers from across the house,RSC/Warwick Centre for Teaching representatives from funding bodies, Mark Taylor talking to Michael Boyd (RSC)Shakespeare. donors, teachers, students, board members and representatives from theThe announcement was made at an University of Warwick.event, organised by Liberal DemocratPeer Baroness Sally Hamwee, to celebrate It included many young voices: a hip-hopthe RSC’s inspirational education work response to Shakespeare from emergingat an event at The House of Lords on spoken word artist Toby Thompson; aTuesday 10 May. Photography by RSC/Ellie Kurttz Jonothan Neelands ‘Of the teachers who have worked with us, 43 per cent have gone on to receive promotion. We’re delighted that more of this work is going to be available to teachers across the world through our new partnership with Warwick.’ Michael’s message to government is ‘We want to get closer to the A young performer takes centre stage curriculum, not further away from it. Words like assessment and talk from two members of the RSC’s Young standards and attainment don’tThe unique collaboration between the Company about their relationship with frighten us. Shakespeare is both atwo organisations will offer online and Shakespeare; and an extract from King cultural entitlement and a curriculumresidential courses to teachers in the Lear, performed by students from Isleworth requirement for students. We want to beUK and across the world. The centre and Syon Boys School and directed by RSC an active collaborator on the curriculumwill open in 2012 with the ambition ensemble member Kelly Hunter (Goneril and the assessment of the teachingof transforming the school learning in the company’s current production of the and learning of Shakespeare in orderexperiences that young people in play). to play our part in ensuring that everythe UK and across the world have of single child in this country can choose toShakespeare’s plays. Artistic Director, Michael Boyd said, ‘We have develop a life-long relationship with his already created a postgraduate certificate work.’ w tinyurl.com/3blsr7tProfessor Mark Taylor, Dean of WBS in the teaching of Shakespeare with thesaid, ‘The new Centre for Teaching University of Warwick, and 97 per cent of For more information the RoyalShakespeare will be developed within teachers who take the course complete Shakespeare Companys’plans forWBS. This is a unique adventure for all it. This can be compared to a national Teaching Shakespeare at Warwick seeof us, and we think a very innovative average completion rate for postgraduate w tinyurl.com/3blsr7tapproach to developing a long term qualifications of around 40 per cent.’
  8. 8. 8 nexus: summer 2011 hot off the press Contesting the Philosophy and Metaphors we lead by. Corporation: Struggle, Organization Theory. Co-edited by André Power and Resistance Jointly edited by Spicer. Published by in Organizations. Professor Hari Routledge. Seeking to Co-authored by Tsoukas. Published understand the faith Professor André by Emerald Group we place in leadership, Spicer. Published by Publishing Limited. the authors draw on Cambridge University What is the studies of managers. It Press. This book relationship between presents six metaphors counters the view that philosophy and for the leader: as the power of large organization theory gardener, cosy- organisations goes (OT)? Papers in this crafter, saint, cyborg,unchecked by showing they’re driven by volume explore connections between several commander and bully, offering insights intopolitical struggle, power plays and attempts streams in philosophy and OT. The central how leadership does and does not work.to resist control. Each chapter illustrates a question explored is: ‘what does a particular w amzn.to/iplrwZdifferent dimension of workplace struggle philosophy contribute to OT?’through studies relating to sexuality, w amzn.to/jmpXg6 Public Value:cynicism, social movements and trade Theory and Practice.unionism. Co-authored by Offshoring Strategies:w amzn.to/keqF5x John Benington. Evolving Captive Center Models. Authored by Published by Palgrave Global Strategic WBS Associate Dr Ilan Macmillan. This text Management. Jointly Oshri. Published by provides a concise authored by Professor MIT Press. One mode and internationalised Kamel Mellahi. of offshoring has restatement of the Published by Oxford continued to grow public value approach, University Press. This despite economic an assessment of its text provides a global turmoil: the captive impact to date and perspective on strategy center, subsidiaries or its relevance to the challenges of public covering traditional offices that provide management in a time of crisis and austerity. management as well the parent company with services. This text w amzn.to/m0QwBD as new topics such as examines the evolution of the captive centercorporate social responsibility. This second identifying basic models and examining Key Concepts inedition features global case studies, a new strategies pursued by Fortune Global 250 Critical Managementchapter on knowledge and innovation and is firms. It offers case studies that illustrate six Studies. Jointly editedsupported by an online resource centre. models. by Professor Martinw amzn.to/jgzkxc w amzn.to/muZret Parker. Published by Sage Publications Ltd. Promoting Social Organizing Health This text with over 50 Cohesion: Implications Services (Organising entries, from Actor for Policy and and Managing Public Network Theory to Evaluation. Edited Services). Jointly edited Utopianism, explores by WBS Principal by Professor Graeme and explains essential Research Fellow Ines Currie. Published by concepts used within Newman and Peter Sage Publications Ltd. the field of critical management studies Ratcliffe, Professor The research of public today. of Sociology at the services organisations w amzn.to/jDaJ6A University of Warwick. is an expanding field. Published by Policy This four-volume set The Oxford Handbook Press. This book brings together papers of Strategic Sales andmakes a case for a shift in policy focus from spanning research and practice, bridging Sales Management.‘community cohesion’ to social cohesion. It the gap between organization studies and Co-edited by Professoris a valuable source for practitioners and for literature more specific to the sociology of Nigel Piercy. Publishedthose studying theory-based evaluation and health and illness, social policy and health by Oxford Universityareas including housing, intergenerational services research. Press. This text isissues, the recession and education. w amzn.to/mjblyj structured aroundw amzn.to/lqpkQd four topics. It explores the strategic positioning of sales, For more information about WBS faculty, sales management, disciplines and publications customer relationships and the composition w wbs.ac.uk/faculty of sales within the organisation, and highlights how ‘sales’ responds to the environment. w amzn.to/lQ9RZq
  9. 9. 10 nexus: summer 2011 behavioural science Nick Chater, Professor of Behavioural Science at WBS
  10. 10. FeatureInstincts, motivations and choices:Behavioural Science uncoveredMichael Prest interviews our leading academics to demystify thediscipline that is shaping the teaching at WBS.You know the feeling. It’s Friday afternoon and your Warwick Business School is tackling these essentialfriends are gathering for their end of week drink. But questions head on. The idea that behaviour isyou are still in the office. How do you decide when more complex than is suggested by economists’to leave? You half-remember an economics lecture broad aggregates has been around for a longon utility: basically, the appeal of something to you time. A whole branch of economics, behavioural– in this case, sneaking out of the office early. With economics, has grown up over the last 20 years orthe help of a program discreetly downloaded from more. But the financial crisis threw into doubt long-the Economists 4 Sloth website you work out exactly standing notions of rationality such as the perfectthe value of labouring on relative to the value to market hypothesis which approximately states thatbe gained from hastening to the bar, and therefore you cannot achieve returns in excess of averagewhat time to leave: 6.13! risk-adjusted market returns for long because prices reflect all publicly available information. Dean MarkBut of course you don’t make any such calculation. Taylor was convinced that it was ‘time to ditch oldYou instinctively make a guesstimate which includes ideas about rationality that don’t work in the realother considerations of a quite different sort: not world and get out of the academic silos’.letting your friends down, the weather, the feelingthat you’ve contributed your pound of flesh this WBS is therefore setting up a Behavioural Scienceweek– in short, what you think is right and will group which is drawing together leading experts frommake you happier. As individuals, we all know the disciplines constituting behavioural science andthat is generally how we make decisions, even from economics. Headed by Professor Nick Chater, awhen specifically financial questions are under psychologist and Professor of Behavioural Science atconsideration. WBS, the group intends to be the biggest of its kind in Europe. ‘The aim of the group is to help build aThis is the central insight of what has become known bridge between what people know, and what studiesas behavioural science: the utility function does confirm about human behaviour, and the standardnot fully, or perhaps mainly, explain why we make economic model. We have to move to new methodsthe decisions we make. Bringing together many for understanding aggregate behaviour, departingdisciplines which study human behaviour, such as from those used by conventional economics, to takepsychology, evolution, neurology and sociology, account of the behavioural factors which seem to bebehavioural science raises fundamental questions so important that they can no longer be ignored’,about how economists have conventionally Professor Chater said.described our world and our behaviour. And theimplications are profound. If financial incentives Another prominent member of the group is– prices – are less important to the choices we Professor Bruno Frey, a Professor of Economics atmake than economics has tended to assume, do the University of Zurich and Distinguished Professorgovernments and companies need to change how of Behavioural Science at WBS. Professor Frey hasthey deal with citizens and consumers? If so, what published extensively on behavioural economics.might those changes be? ‘I never believed that people are wholly motivated I 11
  11. 11. by money. It was totally different from the way research suggests that we are poor at comparingthe world looked. But I didn’t know how to find small amounts and large amounts. Assume athe difference between economic theory and the large and small gamble. The large one is £10,000world’, he said. for certain vs a 50–50 chance of winning either £0 or £25,000. The small one is £10 for certain vsPrecisely because there was a difference, a 50–50 chance of winning either £0 or £25. Theeconomists made some heroic assumptions in sums are very different, but in practice peopletheir models, for example that we have a well- treat the gambles as roughly the same and willdefined utility for each good or service. The probably avoid both risks in roughly the sametendency grew as the profession became more proportions.mathematical from the mid-twentiethcentury on. ‘Economists started to The reasons for our being local thinkers andbelieve their own propaganda. They Bringing together many risk averse for small stakes are buried deepbelieved their models. But models strip disciplines which study in the evolution of our brains. Essentially,away the richness of human behaviour human behaviour, such we cannot easily compare apples andand lose that dimension of analysis’ said oranges. We do not have an underlyingProfessor Graham Loomes, Professor of as psychology, evolution, mental ‘currency’ to convert options intoBehavioural Economics at the University neurology and sociology, directly comparable terms. Our brains areof Warwick and WBS. therefore forced to operate by using ‘local’ behavioural science raises comparisons. Assessing how light a patchIn more theoretical terms, that analysis fundamental questions of grass is depends on local comparisoncan be explained like this. Classical of the number of photons from that patcheconomic theory makes several demands about how economists have with adjacent patches. In other words, weof its agents when they take decisions: conventionally described are fairly insensitive to overall changes ofextensive knowledge, enormous our world and our behaviour. scale.calculating power, consistency andutility optimisation – all in all, making And the implications are The way we think has consequences at oddsthe financially most profitable choice. By profound. with conventional wisdom. Experience iscontrast, behavioural science suggests highly respected. But research into medicalthat we operate very differently. Our calculating diagnoses suggests that we do not necessarilycapacity is limited; we are unsure about our make better judgements by virtue of repeatingpreferences and indeed surprisingly flexible tasks. Equally intriguing, there is evidence that,about them; we prefer the status quo; we are for some types of decision, snap judgements maywhat the jargon calls ‘local thinkers’; and we are be better than those much pondered on.risk averse for small stakes. Our behaviour can also be viewed from anotherLet’s take the last two points. Being a local angle, intrinsic and extrinsic motivation. Intrinsicthinker means two things. We tend to compare motivation is behaviour derived from somesimilar items and to compare them reasonably internal norm or sense of what is right. Professorclose together in time. If petrol prices go up, we Frey cites the example of a Swiss commune whichmake the comparison with what prices were last. was asked to accept a nuclear waste processingIf they go up again, we compare them with what plant. The commune agreed. But when thethey were recently and not a long time ago. The commune was offered money to take the plantprinciple may even refer to physical locality. We it refused. The offer of money had changed thecompare the price of a cappuccino at a posh sea game and broken unspecified norms in whichview café with a similar establishment, not with the commune believed. The clearest example ofthe price of cappuccinos worldwide. extrinsic motivation is money but, Professor Frey notes, the case of the commune shows that ‘youIt might sound counter-intuitive to say that we cannot just use money to motivate people’.are risk averse when the stakes are low. But12 nexus: summer 2011 behavioural science
  12. 12. Here the question of behaviour merges into thatof happiness. The evidence is that there is only aweak correlation between income and happinessfor societies and individuals. It seems, for instance,that work is an intrinsic motivation. Unemployedpeople appear to be less happy than employedpeople even when their incomes are identical.Recognising that happiness has not increasedcommensurately with prosperity, and that greaterhappiness may lead to greater prosperity as well asbeing a desirable end in itself, the UK government About the authoris exploring how to measure ‘gross nationalhappiness’.There are other public policy implications. Utilitytariffs, such as for electricity or mobile phones,have a tendency to proliferate and distortcompetition. Behavioural science’s descriptionof us as local decision makers could help toredesign utility companies’ price informationso consumers are better able to compare appleswith apples instead of apples with oranges. It canalso have implications for firms. It seems they, likeindividuals, are risk averse for small stakes. Yet ifyou take many small risks the chances are highthat you will do better than if you avoid those risks. Michael Prest is aOddly, however, supposedly risk averse firms are national newspaperoften willing to take major risks on huge decisions, journalist with thirtywhere risk-aversion would be entirely appropriate – five years’ experiencewhich may partly explain the financial crisis which of business andoccurred despite close regulatory supervision. economics writing. He specialisesAs with all intellectual developments, however, in the businessthere are difficulties associated with behavioural school sectorscience. Worthy though an official search for and has writtenhappiness is, governments have a strong incentive for publicationsto manipulate methodology and its outcome. including TheUnder the then Mrs Thatcher’s administrations, Independent andthe way unemployment was counted was revised The Times. Michaelrepeatedly – and strangely each time reduced the also worked injobless count below what it would have been using Washington DC forthe previous method. If companies understand five years as a speechmore fully how their customers behave they will be writer to Presidentstempted to game the system to their advantage. of the World Bank.That said, there can be no doubt that behaviouralscience has the capacity radically to challenge For more informationdeep-rooted assumptions in economics. You no contact e mprest@longer need to feel guilty on Friday afternoons. G blueyonder.co.uk 13
  13. 13. 14 nexus: summer 2011 behavioural scienceThe bright marketing manifesto – seeing thebusiness through the customers’ eyesRobert Craven the author in minuteAll businesses want to get closer to their The Manifestocustomers. They want their marketing to reminds us of the Robert Craveninfluence consumers to the point where fundamentals and MBA (Warwick) isthey make the positive decision to buy a rattles that cage of a keynote speakerproduct or service. corporate myopia and author of the that mesmerises so best-selling businessAfter ten years of working to make big many companies books Kick-Startbusinesses more entrepreneurial (or and kills any Your Business andmake entrepreneurial businesses more sense of action Customer is King.businesslike), a manifesto has been orientation. It puts As MD of The Directors’ Centre, thedeveloped. Using entrepreneurship as the customer (and, consultancy for growing businesses, hethe starting point, it challenges how as a result, profit) You can buy Robert’s works with ambitious directors to breakyou do marketing. It acts as a wake-up back at the centre of book from here: through constraints on business growth.call for tired (and often lazy) marketing your business focus. w bit.ly/brightm For further information, contact Robertdepartments that wonder why they don’t Craven on 01225 851044,seem to be getting the results they used In no particular order, consider the list of e rc@directorscentre.com.to get. 23 statements below. How could you use, See his blog at say, four of the most relevant ones to get w Robert-Craven.blogspot.com closer to your customer?THE MANIFESTO 8. What the customer thinks matters more 16. Create a money and time budget for your than you can imagine. Talk to them... do a marketing activity. And focus on results.1. If there’s a choice between being better customer survey, now.or different then different wins every time. 17. Spend time with weird people. You don’tIdeally you should be different and better. 9. Blow your customers away with your get great ideas staring at your computer legendary service. Or they will leave you in screen.2. Why should people bother to buy from you droves.when they can buy from the competition? 18. Work the 80:20 Rule. Get effective byWhat makes you different from the rest? 10. Select your target customers and focus on concentrating on the Law of the Vital Few them and what they want and need. Ignore and the Law of the Trivial Many – sack3. Marketing is not a battle of the product; the rest. 20/30/40/50 per cent of your customers.marketing is a battle for the mind of thecustomer. How will you win this battle? 11. Work the expert model. Become the 19. Ask for the business. If you are not leader rather than a follower in your field/ asking for it then I am pretty sure that4. You get known for what you do. So what marketplace. your competitors will be!is it that you are known for? Is it the rightstuff? 12. Feel the fear and do it anyway. You won’t 20. Make it easy for people to buy from you. die. Make it as easy as possible.5. Infect your customers and staff with yourpassion and excitement for your business. 13. Don’t compete on price. There’s always 21. You are too much in love with yourThey are your ambassadors! someone out there who can do it cheaper business. Get a grip on it! than you6. Selling is everything. Most businesses think 22. Remove your self-limiting beliefs. What’stheir product/service is pretty cool so what’s 14. Understand and work your sales pipeline. holding you back?the problem? How can you convert leads into clients faster? 23. Stop procrastinating. It’s easier to7. Put your prices up, now. 95 per cent of people 15. Do the maths. Small changes in the right ask for forgiveness than it is to ask fordo not buy on price, despite what they say. places have a massive impact. permission. Take action.
  14. 14. nexus: summer 2011 behavioural science 15Happiness – a revolution in social scienceBruno FreyWe are in the midst of a revolution. We that National Income per capita is not an The government should create the rightare turning away from material aspects adequate indicator of well-being. Higher political conditions. In particular, it’sof life towards well-being. The way to income does not have much effect on important to increase citizens’ rights inmeasure well-being is happiness. happiness. terms of political participation. There is now strong evidence that citizensI would like to make two propositions. The Human Development Indices and involved in politics are more satisfiedFirstly, although National Income and other social indicators are not very good with their lives. Another condition thatSocial Indicators are good indicators, either. Take life-expectancy. It is great improves public satisfaction is politicalhappiness, or life satisfaction, are much to live a long time, but what if your last decentralisation. People are more at easebetter. Secondly, we must be very careful ten or fifteen years are unhappy? School with local political decision takers at thenot to do the wrong thing. Although enrolment is also often used as local level.government should make it possible a Social Indicator, but itfor people to be happy, they is not an output. We The conclusion is: Happiness is ashould not try to maximise know from PISA wonderful concept and can be used tohappiness. and other studies make better policies. It should be used by that there are governments to enable people to achieveWith respect to the first many countries their own personal happiness in their ownproposition, I have where a lot of way.some good news. Most inputs go intopeople are happy. It’s schools, butnot true that we live the children the author in minutein a terrible world and do not learnshould lament all the much and Bruno Frey istime. Statistically we they are not Distinguishedknow most people are very satisfied. Professor ofvery happy. Behavioural Science I would now like to at WBS, ProfessorWe have many ways to measure consider the second of Economics at thehappiness. The most important are proposition. ‘Assuming that University of Zurich,surveys. Experience Sampling is when we can measure happiness in a satisfactory Research Directoryou are asked randomly how happy way, what do we do with this informationyou feel just at this moment, which is at the political level?’ of CREMA and Managing Editor ofthen aggregated up. Then, even more Kyklos. He seeks to extend economics byscientifically, one can do brain scanning. Governments should not jump to the including insights from other disciplines, conclusion that because we can measure including political science, psychologyI won’t go into a critique of national happiness it should be maximised. and sociology. w bsfrey.chincome as a well-being measurement. Once the happiness indicator is seen asI just want to mention one aspect. important, governments will manipulateRoughly 50 per cent of National Income it. We should not be naïve. We know that on the knowledge centre...is attributed to government activity. in the wake of the financial crisis severalGovernment activity is measured by countries manipulated their deficits and Watch Brunoinput, in the form of materials and level of public debt. They will find it even Frey deliver thework. You can immediately see that it easier to present a happiness indicator first in a series ofhas nothing to do with welfare. So GNP influenced in their favour. Inaugural Lecturesis great as a business cycle indicator; it by WBS professorsmeasures productive capacity but not Another reason why governments should entitled Shouldwell-being. not try to maximise happiness is that it is Government Maximise Happiness? not the only thing that should matter for w tinyurl.com/6eqfg5sPer capita income is sometimes used politics. There are other important aspectsas a Social Indicator but econometric of life such as justice, responsibility andhappiness research has demonstrated solidarity.
  15. 15. 16 nexus: summer 2011 behavioural scienceThe science of giving:what motivates charitable giving?Christopher OlivolaOur planet is plagued by problems in Going forward, research will uncoverneed of solutions. Citizens of wealthy social scientific principles that will helpindustrialised nations are in a unique charities raise money, help donors toposition to help address many of these contribute and derive greater well-beingissues through donations of money, time, from doing so, and help those in need,and other resources. Charitable giving who depend on charity for support or evenis a large and growing industry; total survival. The results, quite simply, shouldprivate giving in the US alone more than make the world a better place.doubled between 1996–2006, reaching£185 bn annually. These donations Referencesprovide essential aid to the world’s poorest Liu, W., & Aaker, J. (2008). The happiness of giving:countries. Therefore, understanding the The time–ask effect. Journal offactors that motivate charitable giving has Consumer Research, 35, 543–557.enormous benefits. Oppenheimer, D. M., & Olivola,Fascinating research by psychologists and C. Y. (Eds.)behavioural economists has begun to Willingness to donate increases when there’s (2010). Theuncover the factors that drive people to suffering involved! Science of Giving:donate. Experimental of their time to a cause, compared to when Approaches to the they are asked to imagine giving money to Study of Charity.Did you know? PsychologyH Giving to others often makes people the same cause. Press. happier than spending the same sum of money on themselves The more pain, the more gain You can buyH People donate more when they see My own research has examined the Chris’s book that others like them have made popularity of fundraising that involves here: contributions pain and effort on the part of participants, w amzn.to/H We are more moved by a single photo such as marathons and bike-a-thons, or kohBEQ of a person in need (eg a hungry even events that involve walking barefoot child) than we are by the same photo over hot coals or broken glass! combined with statistics detailing the the author in minute extent of the problem (eg the number Although most theories of human of malnourished children worldwide) motivation and behaviour would predict Christopher Olivola that making the fundraising process is a Royal SocietyHow people contribute difficult and painful should deter donors, and British AcademyResearchers are also identifying factors we find that willingness to donate Newton Fellow inthat influence charitable giving decisions, increases when people anticipate that the Behaviouraldiscovering that emotions, social norms, they, or a friend, will have to suffer to raise Science group atand simple cognitive strategies play money for a cause, compared to when the WBS. He receivedimportant roles in governing whether, fundraising process is easy and enjoyable. a joint-PhD inwhen, and how much people are willing to In one study, participants contributed Psychology and Policy from Princetoncontribute. more when doing so required that they University, and a BA in Psychology from keep both hands immersed in near- the University of Chicago. He studiesAnother important variable is how people freezing water for one minute! In addition the psychology of human decision-contribute. That is, the fundraising process to explaining the popularity of painful- making, experimental philosophy, anditself impacts donations. Research by effortful fundraisers these studies reveal behavioural economics. He is co-editor,Wendy Liu and Jennifer Aaker has shown that human motivation is much more along with Daniel Oppenheimer, ofthat willingness to donate increases after complex than previously thought. The Science of Giving: Experimentalpeople are asked to imagine giving some Approaches to the Study of Charity.
  16. 16. 17 17Personal & Career DevelopmentSalary negotiations‘Money’, is one of the most daunting questions your figure. Assume you’ll be negotiated down so allow roomyou’ll face during interviews and reviews. But, it for manoeuvre; remember the organisation will be trying to secure the best deal too.doesn’t need to be uncomfortable if you rememberthat money is a natural part of the job negotiation The full packageprocess. A benefits package is not restricted to salary, so analyse the details before rejecting what may seem a like a low offer!After all, if you can’t negotiate over your own pay packet what Additional benefits can equate to 40 per cent of your basicdoes it say about your abilities as an employee? These tips from salary, for example bonus schemes, company shares, training,Leon Richards, Recruiter Relationships Manager at WBS, will holiday, medical benefits and travel expenses.help you to use your influence to get the best deal. Think!Preparation Don’t make rash decisions. If you’re made an offer be positiveWithout knowing your value you’re in a weak position. Research but ask for time to respond. This allows initial emotions tothe salaries commanded by others in similar roles. Sources of subside and space for analysis of the package on offer. If youinformation include: w vault.com, glassdoor.com and feel an offer is below par, express your concerns when asking forsalary.com. If you’re still struggling, use your network and time to consider. You’ll quickly find out if there’s any flexibility!careers team. Once you have a salary range in mind beprepared to use this during negotiations. Set in stone Once you’ve accepted an offer, get it in writing. HRWhat motivates your boss? departments can be slow sending out paperwork so, if you’reIf you’re negotiating within your existing role or company moving to a new company ask for a confirmation email at thefind out what motivates your boss. Do they have concerns or least before handing in your notice.projects you can help them with? If you can add value and helpthem to reach their goals, then they’ll be more inclined to make Just say no!you a competitive offer. If you decline a job or pay offer be polite and honest. You never know who you’ll come across throughout your career so don’tHow low will you go? burn your bridges.It seems obvious but many people don’t take the time towork out what their bottom line is. How much do you needto live, how much are you hoping to earn and what is your on the knowledge centre...compromise position? Think these issues through and practicehow you will react in different scenarios. Work with a friend How often do weand ask them to provide feedback on your performance and examine the risks weinfluencing skills. take in our own careers? Or examine the talentSell yourself risk that may develop inIn any negotiation, affirming your position is paramount… and our own organisations? Christhat means selling. Have a clear argument ready as to the value Beer, UK Managing Director ofyou will/do add to this role. Merryck & Co, examines risk from a career and leadership perspective.Show me the money? w tinyurl.The art of negotiation lies in not revealing your hand until the com/3c9da3clast minute. If you’re negotiating over a new role it’s wise not todiscuss numbers until you’ve had an employment offer. A politeholding tactic is to say you’d be happy to talk about salaryonce you have learned more about the role. In any situation,if you’re pressured to reveal your financial expectations,resist. If you’re specifically asked to name anumber select a calculated odd number.This will make it more difficult for theorganisation to knock evenchunks off
  17. 17. 18 18The WBS Virtual Business CafeNow open!The Virtual Business Cafe is the free online space Q: What’s your vision? I’d like the Virtual Business Cafewhere the WBS community can gather to listen to to become the place for the WBS community to discuss the business and career issues facing organisations andexperts discuss topical business issues... without individuals globally. I believe it will support the vision of WBSleaving the comfort of their own homes or offices! being the best university-based business school in Europe.So many business meetings now happen in cafes and using I hope individuals will suggest ideas and topics to grow theour virtual meeting room, wbsLive, we can now bring that cafe and that other WBS professional networks will host theirenvironment to you. own events.Every ‘meeting’ ends with a Q&A session with the presenter, Q: What’s coming up? We’ve got some great meetingsall of whom are alumni of WBS. scheduled over the next six months. Experts will discuss subjects ranging from leadership and the importance ofNigel Brownbill, Virtual Business Cafe innovator, took five collaboration to transformation and change management.minutes to discuss his motivations and vision for the project. Tuesday 6 September Chris Beer, CEO, Merryck & CoQ: How did you come up with the idea of the VirtualBusiness Cafe? I thought it would be a great idea to mirror Wednesday 5 October Andy Cole, CEO – Blisstoday’s practice of having business meetings in cafes so Marwa Bouka, Resources Manager,students and alumni could engage with each other, hear UN World Food Programmecurrent thinking and gain practical business and career Thursday 3 November John Pendleton, President anddevelopment knowledge. COO, HP Pelzer Thursday 1 December Iestyn Evans, Head of BusinessQ: Why is it important to you? My motivations are varied. Development, Lloyds BankingPast students have achieved so much, both in the profit and Groupnon-profit sectors. Many are executives and CEOS of globalorganisations and I want to showcase that. WBS is lucky to Tuesday 10 January Nigel Brownbill, Chairman,have passionate and proud alumni who want to give their Advanced Corporate Conceptstime and share their experiences. Thursday 2 February Shubhendu Mathur, Senior Consultant, Elix-IRRI also think it’s essential that students and alumni areenabled to engage with this vast network of skills and talent For more information visit w wbs.ac.uk/go/cafeas it adds value to their WBS experience.Q: How is the cafe different to a lecture? This is an easy About Nigelone! You’re sitting in your own home, alone or with friends, Nigel Brownbill MBA (Warwick) is Lead Ambassador torelaxing with a cup of your favourite latte, cappuccino or the Strategy & Consulting Network. Founder and Executivemacchiato listening to a business leader discuss a topic Chairman of Advanced Corporate Concepts he has overrelevant to today’s global economy. It might be leadership, 22 years’ strategy, leadership and talent managementstrategic alliances, managing turnarounds and change, or experience. Nigel is author of Be the Best in Business andlinking strategy with talent management, but whatever it is writes for w bethebestinbusiness.blogspot.comyou’ll have opportunity to question and participate.Q: Why should people come along? They’d be crazy not to!Why wouldn’t a student or experienced professional whois developing their career want to build their competitiveadvantage in today’s tough job market? I mean, whowouldn’t want to learn from and talk to business leaders? Idon’t think other business schools offer access to executivesin such an innovative way, so I’d encourage everyone to takefull advantage of it.
  18. 18. 19 19Get involved...Help us to make an impact on our students from Sharing the Warwick experiencetheir first point of contact through to building a Matt Stocker (BSclasting and beneficial relationship with WBS. Management) spoke to prospective students at theWhy not: WBS Undergraduate Open H offer a project or placement to a WBS student Days on 16 February and 2 H join the conversation w wbs.ac.uk/conversation March 2011. H recruit a student H speak on a programme or at an event Since graduating, Matt has H buddy a new student set up his own consultancy H support a recruitment fair or open day business H mentor a student or recent graduate w mattstocker.com H run or join a global or professional network H work with us on a project. Matt Stocker Professor Peter Corvi, Associate Dean of the WBSIf you’re interested email e alumni@wbs.ac.uk to arrange a Undergraduate Programme, said ‘Matt described how he hadtime when we can call you to discuss how you’d like to get found not one but two of his jobs via the Warwick Careersinvolved. For information on all the ways to get involved, visit Service and also how he had met his wife here!’w wbs.ac.uk/alumni/givingback.cfm Christopher Cole (BScVolunteering with the Cranfield Trust Management) also took centre stage to speak to prospectiveIn the spring edition of nexus undergraduate students atwe introduced our partnership the University Open Day onwith the Cranfield Trust, a Saturday, 7 May.not-for-profit organisationproviding free consultancy for Christopher is an analyst forcharities and social enterprise the Royal Bank of Scotland.groups. Charlotte Brown MBA During a joint presentation,(Warwick) works for the Royal Christopher Cole with Nicola O’Day theyMail and volunteers with the described what they gainedCranfield Trust. from the course, and how it helped to prepare them for their future careers.Charlotte says ‘Volunteering has proved a very good fit with mylife demands as I am able to manage the volunteer activities WBS is extremely grateful to all its undergraduate alumniaround work and family. The forms were straightforward to event volunteers. If you’d like to get involved in undergraduatecomplete and they approached my references very quickly. recruitment events, contact e Oliver.Walmsley@wbs.ac.ukWithin a short space of time, I was approached with a potential Who’s been joining the conversation?volunteer assignment. I was given time to assess the assignmentto determine if I had the skills and time to take it on. Abimbola Olufore – Abimbola talks about her MBA, how the Warwick MBA programme helped her focus on the importantThe team at the Trust gives you all the background information things in her job, and how its flexibility was fantastic.you require for a potential assignment, and then provides youwith the key contacts for you to make direct arrangements for Steve Hales – Steve is CEO of Sapien Innovations Ltd, ayour volunteer activities. company supporting early stage business development. He talks about how his experience at WBS shaped his career.What I really enjoy is the space you’re given to supportthe charity. I’ve been privileged in shaping a key piece of Join the conversation:work, knowing that the outcome will play a key role to that w wbs.ac.uk/conversationorganisation’s future funding needs.’If you’re interested in volunteering with the Cranfield Trust visitw cranfieldtrust.org
  19. 19. 20 20MentoringEntrepreneurship pilot mentoring scheme launches‘More support and guidance in terms of personal opportunity. That person provides a sounding board in whatand professional development’ is what you asked us is, really to be honest, one of the loneliest places because when you run a small business you run it more or less on your own.’for last year. We responded with the launch of theentrepreneurship pilot programme on Tuesday 17 Could you be a mentor?May. The main WBS mentoring programme is now in its second year and recently took on another 70 participants and 26The pilot is sponsored by the London Chamber of Commerce mentors, bringing the total number of volunteers to 90.and Industry Commercial Education Trust, and will supporteight mentees through the first year of their new business We’ll be recruiting mentors for the 2012 programmeventure using one-to-one mentoring, an online toolkit and (March start) from September. We’re specifically looking forspecialist training seminars. individuals with a minimum of 15 years’ industry experience who have set up their own businesses or are based withinIncreasing success the finance and banking sectors.Chair of the Steering Committee and pilot project manager,Steve Martin MBA (Warwick) commented, ‘statistics for newstart-ups show that only one in four make it past 18 months Steering committee welcomes new memberwithout a business mentor, whereas four out of five do succeed The WBS Mentoring Steering Committee is delighted towhen an experienced business mentor is actively involved. welcome alumna Alison Watts, Managing Director, Icendris Ltd.Whether you believe the statistic or not, having someone Alison is a member of the Alumni Executive and her role on thewho has been there and done it can certainly help new committee will be to work with the steering group to developentrepreneurs understand the pitfalls and provide a sounding plans to look at the routes for women in industry to reach seniorboard and guiding hand during this high risk stage – this board level.is what this new pilot scheme is all about – improving yourchance of success.’Dean Mark Taylor said, ‘the commitment to giving back to WBSshown by this group of volunteer alumni is truly outstandingand I am delighted with the progress and momentum gainedby not only this pilot but also the main WBS mentoringprogramme, which has doubled in size again this year.’The pilot has the backing of senior faculty members whoattended the launch, presenting research and case studies.Delegates were also impressed with external practitioners whovolunteered to come and talk about their own start ups.There was a real feeling of excitement at the launch as pilotmentees delivered their elevator pitches, revealing theirmotivations and unique selling points.A different perspectiveMentee Fiona Williams said, ‘I’m excited about the pilotbecause I’ll get a different perspective, a sounding board –someone to essentially check what I am doing –I’ll then goaway and decide what the right direction is for me’. MarkBroome another mentee commented, ‘It’s definitely goingto be useful to have a mentor to bounce ideas and conceptsoff because they’ve got the experience of what is and is not avaluable idea.’Mentor Mark Payton said ‘I founded my own business and havejust led a buy out of another business. The thing that I’ve foundextremely useful is having a confidant, a mentor who you cancall and say I have got this particular challenge, problem or Entrepreneurship pilot participants

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