Social impact has become a buzzword in business, but what does the evidence say about the success of social impact initiatives? In separate research papers, three Wharton professors — Deborah Small, Franklin Allen and Susan Wachter — look at whether “doing good” means doing well in different contexts: When it comes to corporate image, are “nice” firms perceived as less likely to succeed? How can banks serve rural populations and remain profitable? And can something as simple as planting a tree in an urban setting bump up real estate prices?
This research reflects an ongoing effort by Wharton faculty, and particularly the school’s Social Impact Initiative, to examine how business knowledge and strategy can be leveraged to solve pressing social problems. This week (April 8-12) has been designated Wharton Social Impact Week.
Why Consumers Don’t Want Companies to Do Well by Doing Good
You hear it all the time in the business world, on the ball field or even at the singles bar: “Nice guys finish last.” But what does this actually mean? Do people really believe this? And how do people reconcile this saying with the commonly held belief that good things happen to good people?
Wharton marketing professor Deborah Small and Fern Lin-Healy, a marketing professor at Auburn University, examined the perceptions behind this aphorism and its converse in their new study, “Nice Guys Finish Last and Guys in Last are Nice: The Clash Between Doing Well and Doing Good,” published in the journal Social Psychological and Personality Science in February.
The type of “niceness” that Small and Lin-Healy focus on in the paper is altruism and positive actions aimed at helping others. Specifically, they look at the motivation behind good deeds and the perception others have of “nice” guys. “We all have a prototype in mind about altruism,” Small says. “Signals from behavior and environment that diverge from this prototype raise cynicism.”
While the saying about nice guys commonly applies to individuals, Small thought it was important also to look at companies, since consumers tend to personify corporations. To examine the motivation of a nice guy (or business), Small and Lin-Healy first studied perceptions of what drives people to do good (or not). Participants were asked to read scenarios involving acts of altruism by individuals and companies.
For the individual case, participants were presented with a situation in which spectators at a professional football game had the opportunity to donate $100 to charity and then be entered into a raffle to win dinner with the players. Some subjects read a scenario in which a person entered the raffle because he really wanted to win the dinner; others read about someone who entered because he wanted to help the children’s charity receiving the donations.
Participants were then asked to rate how likely they thought the donor in question was to win the raffle. In line with “niceresearchers note, “donors whose motivation was selfless were perceived as having a worse chance of winning the raffle than the donor whose motivation was selfish.”
Published: April 10, 2013 in Knowledge@Wharton