Self-interest and Organizational Performance: an Empirical Examination with U.s. and Brazilian Managers

The strategy literature has drifted towards a polarized view of managers as either individuals concerned with mitigating self-interest (e.g. agency and organizational politics theories) or individuals who actively motivate and engage team members in the pursuit of common organizational goals (e.g. shared cognition and justice theories). Using a survey sample of 419 U.S. and Brazilian managers, we propose and find instead that managers exhibit complex attitudes and behaviors that do not reflect a single perspective of human behavior in the workplace. Managers who perceive self-interest to be common are not necessarily less concerned with other issues unrelated to self-interest (e.g. fairness and adequate treatment for team members). Managers also appear to adopt behaviors that blend recommendations consistent with multiple theories. For instance, we find that managers who are concerned with justice not only emphasize practices to foster justice, but also practices that directly follow from agency theory (such as performance evaluation and incentives); and the joint emphasis in those practices appear to positively influence organizational performance. By outlining the predictions of distinct theories and exploring their possible interactions, our study contributes with a more complete picture of the interplay between managerial attitudes, managerial behavior and performance. INTRODUCTION In the pursuit of explaining the relation between managerial practices and the performance of organizations, scholars have made diverse assumptions regarding managers’ interpersonal attitudes and the influence of such attitudes on their behavior in the workplace. Some scholars, emphasizing the hazards of shirking (e.g. agency theory: Jensen & Meckling, 1976) and selfserving political behavior (Milgrom & Roberts, 1990), depict managers as individuals who perceive or anticipate potential self-interest by their subordinates; based on these beliefs, managers then act by imposing formal governance mechanisms such as incentives, supervision, and organizational rules. Other scholars contend that this view of managers is a “narrow one” (Donaldson, 1990: 372), either rejecting or dispensing with the assumption of self-interest (e.g. Conner & Prahalad, 1996; Donaldson, 2008; Frey & Jegen, 2001). In these views, managers should focus on interpersonal aspects such as fairness (Folger, 1986; Mesquita & Brush, 2008). We submit that the received portrait of managers as either opportunism-controllers or active-motivators does not pay justice to the much more complex set of attitudes and behaviors that can be found in actual organizations. It is not clear whether managers really follow a single perspective on human behavior or instead attempt at combining managerial practices that they perceive to be performance-enhancing. Also, because managers interact with their subordinates in myriad ways and instances, there is room for multiple perceptions depending on the particular context in which parties are interacting (Lewicki, McAllister, & Bies, 1998). Lastly, from a practical standpoint, if the discipline of strategic management is to be of any service to managers regarding how particular practices lead to advantages in the marketplace, one needs to examine in a broader sense how attitudes and their consequential behaviors influence the ability of the firm to meet or exceed established goals (Gottschalg & Zollo, 2007). We test these ideas using a survey with 419 managers from the United States and Brazil, working in distinct industries and functions. Because distinct cultural traits (Hofstede, 1997) and various task characteristics in the work environment (Hackman & Wageman, 1995) should influence perceptions of how people behave, collecting data from two distinct countries and from managers involved in diverse functions allows us to increase the range of attitudes and behaviors that can be observed in practice. Although we examine how