November 2011 University of Michigan Ross School Richard P. Bagozzi Joint Conference of Korean Consumption and Culture Association, Korean Society of Consumer.

November 2011University of Michigan

Ross SchoolRichard P. Bagozzi

Joint Conference of Korean Consumption and Culture Association, Korean Society of Consumer Studies, Korean Society for Consumer and Advertising Psychology, and Korean Society of Consumer Policy

and Education

Biomarketing: The Coming Revolution in Neurology, Neuroendrocrinology, and Genetics in

Marketing Science

Human empathy

Theory of mind

Boundary conditions of self-interest

Genetic and hormonal influences

Human Empathy

Existing theories, polices, and folklore do not work well in helping us understand and influence managers.

Existing approaches over-rely on flawed methods and frameworks:

•Psychologism (personality)•Situationalism (incentives)

“[Apple’s] Jobs is a relentless perfectionist whose company creates such beautifully designed products that they have changed our expectations about how everything around us should work. He has an uncanny ability to cook up gadgets that we…can’t live without.”

Daniel Lyons, Newsweek,April 5, 2010

Two Fundamentally Different Orientations that Salespeople

Take in their WorkSales orientation

“How can I convince the customer to buy our product?”

Customer orientation

“What is in the best interests of the customer and how can I best respond to those interests?”

http://www.youtube.com/watch?v=ofpYRITtLSg&feature=related

EmpathyAn affective response that arises from the apprehension or comprehension of another person’s emotional state (e.g., Eisenberg, 2000).

Three components:

A cognitive capacity to take the perspective of the other.

An emotional reaction that might include a sharing of the other’s feelings.

A monitoring mechanism that registers the source of the experienced affect in a way differentiating self from other.

(Decety and Lamm, 2006)

Mental States: only humans capable of representing mental states of others

• Intentions, beliefs, attitudes, emotions

• Subjective, internal, intangible, in the mind

• Can only be inferred from what we observe, hear or know about a person

Experimental DesignSubjects viewed 5 male and 5 female full-face,

full-color video clips showing (1)positive emotions (happy, surprised), (2)negative emotions (angry, disgust), (3)neutral, and (4)moving geometrical shapes.

..\..\cartoons\faces-Mirror Neuron taak V.mp4

Each clip was played for 3 seconds in 12 second blocks of 3 clips with interstimulus intervals of one second.

Counterbalancing was used.

Negative versus Neutral

(a) Location: Surface of the brain

(b) Location: Medial to the brain

Contrast activation maps (negative minus neutral facial stimuli), (a) Location: Surface of the brain; (b) Location: Medial to the brain.

Brain Areas Activated During Empathy

Function Hemisphere MNI coordinates Cluster size Statistics

Anatomical Region L/R x y z k Z-value r

1. Supplemental motor area Mirror Neuron R 2 -2 52 67 3.12# .55**

2. Precentral gyrus Mirror Neuron R 62 6 24 858 4.91# .72**

3. Postcentral gyrus Mirror Neuron R 48 -20 62 1051 4.18# .67**

4. Pars opercularis/p ars triangularis Mirror Neuron R 62 6 22 267 4.80# .72**

5. Precuneus

Executive processes

R 10 -76 42 237 3.25# .57**

6. Precuneus Executive

processes

L -12 -42 76 22 3.23# .57**

7. Inferior parietal lobule

Perception R 26 -56 50 40 3.25# .54**

8. Superior parietal lobule

Perception R -46 66 68 26 3.25# .68**

9. Fusiform gyrus

Face Recognition L -34 -76 -16 19 3.21# .57**

Note: * = p < .05, ** = p < .01, # = p < .05 corrected for multiple comparisons at cluster level with small volume corr ections of a sphere of 5 mm radius

Study 2: Implementation of Customer Orientation

How salespersons fashion shared intersubjective understandings with customers (alliance building).

Three actions:discerning capabilities and practices in the buying center social network

acquiring knowledge from customers

gaining knowledge of context.

Customer orientation

Contextual knowledge formation

+

Salesorientation

Motivation to learn

from customers

Buying center

knowledge formation

+

+

0

0

0

21

1

2

3

Causal Model for Testing Effects of Customer Orientation and Sales

Orientation on Opportunity Recognition Dimensions (indicators of factors

omitted for simplicity)

2(25)=27.69P=.35

R 2= .40

R 2= .26

R 2= .33

.75***

.65***

1.01***

ns

ns

ns

Managerial Implications

1. Managers high in customer orientation feel the pain of customers so to speak and as a consequence are better able to provide customer solutions.

2. Managers high in customer orientation feel less personal distress in interactions, have greater social competence, feel less socially anxious, and exhibit less fear of embarrassment.

Managerial Implications (continued)

3. Managers high in customer orientation (a) discern capabilities and practices better in buying centers, (b) gain greater knowledge from customers, and (c) have better skills in gleaning contextual knowledge about firms and their needs.

4. Customer orientation can be measured with a scale.

Theory of Mind

Autism

A developmental brain disorder characterized by impaired social interaction and communication

Interpersonal Mentalizing by Salespersons

Interpersonal mentalizing refers to the activity of inferring another person’s beliefs, desires, risk preferences, decisions, intentions, and other mental states or events and adjusting one’s volitions accordingly.

It is associated with putting oneself in the shoes of another person, so to speak, and mentally simulating what another person thinks, wants, intends, etc.

Representation of the Brain Areas Associated with Interpersonal

Mentalizing

Medial prefrontal cortex

Temporo-parietal junction

Temporal pole

Outline of Experimental Tasks

Stories involving mental state attributions: the interpersonal mentalizing condition

Stories not involving mental state attributions: the process condition.

Unlinked sentences condition.

The Brain in Action

How do functional imaging studies identify which pattern of brain activity is associated with a particular cognitive process?

It is done by comparing activity during the performance of two tasks, which are identical in every way except for one: the presence of the cognitive processes of interest in the experimental task, and the absence of that process in the comparison task.

Scenarios: Interpersonal Mentalizing Condition• Scenario 2:

Before visiting a customer, Jacqueline always browses the customer’s website. While browsing one of these websites she notices that the director, whom she has known for a long time, still works for the firm in question; but she also notices that many new people have joined the firm. Jacqueline is especially curious about what these new people think of her firm. However, Jacqueline first decides to speak with the director, the person she has known a long time; therefore she calls him to suggest having dinner together.

Why did Jacqueline ask the director to have dinner with her?

Scenarios: Process Condition

• Scenario 1:

In a steel company the buying process occurs via a well-defined method: the buyers first study how previous firms supplied goods; and in collaboration with the technical stuff, they make up a request for a proposal. This RFP is then sent by e-mail to salespersons from different firms, who then indicate by e-mail whether they can match the RFP. Subsequently, using economical arguments, the buyers determine which salesperson will deliver the goods.

On what basis do buyers make decisions about which salesperson will deliver goods?

Scenarios: Unlinked Sentences Condition

• Scenario 5:

People are working hard on the new block, and they expect it to be ready at the end of the next year. People are starting to ask when they will come with the new folder. One can ask if our vision about the future will catch on in the marketplace. The number of customers is rising according to a pattern. The housing market at this time is a bit unstable because the future of the tax deduction for rent is unclear. Around the Christmas season, the days are always short.

Why is the housing market unstable?

Study 4: Significant Correlations Between SToM and Neural Activity for Interpersonal Mentalizing Minus Process Task Condition

Findings for Predictive Validity Model in Study 2 (method 1 results not in parentheses: method 2 results in

parentheses)

AdaptivenessR2=.68(.72)

PerformanceR2=.33(.39)

Perspectivetaking

R2=.20(.34)

Social anxietyR2=.11(.12)

SToM1

RapportBuilding

SToM2*

Detectingnonverbal

cues

Taking a “birds-eye”

view

Shapingthe

interaction *p<.05 **p<.01***p<.001 ap<.08

.56*** (.53***)

.03(.09) .09(-.03)

.09(.04)

.35a(.61**)

.13(.23a

)

-.03(-.04)

-.32*(-.32**)

-.21*(-.18*)

-.02(-.07).81***

(.80***)

.36*(.43**)

Managerial Implications1. Interpersonal mentalizing can be learned to a

certain extent. By observing good and bad interactions, role playing, and receiving good coaching, we all can learn to a certain extent to be better mind readers.

2. To help managers become better mind readers, we need to help them (a) build rapport with customers, (b) gain skills in detecting nonverbal cues, (c) acquire a birds eye view and sense of irony with regard to their relationships, and (d) learn how to subtly shape conversations and influence people with whom they interact.

Managerial Implications (continued)

3. Interpersonal mentalizing can be measured. We developed a 13-item Sales Theory of Mind scale to accomplish this.

4. The person-job fit is crucial. Not all tasks require managers high in interpersonal mentalizing. People scoring low actually perform better in tasks that require people to categorize things and act closely in relating to these categories.

Boundary Conditions of Self-interest

(Machiavellianism)

Machiavellianism

The personality style or trait characterized by social conduct that involves taking advantage of others for personal gain.

Contrasted with benevolent or cooperative actions.

Plays a central role in politics, business, and legal matters, as well as everyday behavior.

Key Characteristics of Machiavellianism

World view: dismal outlook on life and the nature of people

distrust people; cynical

Orientation: opportunism

strike first before people takeadvantage of you

Tactics: deceit and guileflatterymanipulation

Amoral (immoral): tend not to feel guilt, shame,

or embarrassment much

Temperament: exhibit a “cool syndrome”

not distressed by others’ suffering

not committed to individuals, groups, or ideals

Theory of Mind Skills and Machiavellianism

Are Machiavellians cooperative and trustworthy when it is to their advantage?

Do Machiavellians use influence tactics that are both coercive and prosocial?

Is the success of Machiavellians due to their ability to read the minds of people with whom they interact?

Empathy and Machiavellianism

Are Machiavellians good at experiencing the emotional states of others and do they use these to influence them?

Do Machiavellians take the perspective of others better than non-Machiavellians?

Experimental DesignSubjects viewed 5 male and 5 female full-face, full-

color video clips showing (1)positive emotions (happy, surprised), (2)negative emotions (angry, disgust), (3)neutral, and (4)moving geometrical shapes.

Each clip was played for 3 seconds in 12 second blocks of 3 clips with interstimulus intervals of one second.

Counterbalancing was used.

Medial Prefrontal Cortex

Temporoparietal Junction Temporoparietal

Junction

Precuneus

Medial Prefrontal Cortex

Temporoparietal Junction Temporoparietal

Junction Precuneus

Pars Opercularis Pars

Opercularis

Insula Insula

Precuneus Pars Opercularis Pars

Opercularis

Insula Insula

Precuneus

(a)

(b)

Figure 2 Activation Maps ToM and Mirror Neuron Networks

Figure 2 represents below represents the spatial location of the significantly activated areas in both the Theory-of-Mind (ToM) task (a); and the Mirror Neuron (MN) task (b). Using FSL and the Harvard-Oxford Cortical structure atlas to pinpoint these locations. Abbreviations: L (Left Hemishpere), R (Right Hemisphere), A (Anterior part of the brain), P (Posterior part of the brain), S (Superior part of the brain), I (Inferior part of the brain). X, Y and Z are the slice coordinates in the XYZ-plane. Note: it might be counter intuitive that Right and Left are mirrored, however, in medical imaging this is common practice that the images are presented this manner.

Correlations between Machiavellianism and Mirror Neuron Activity for Negative Faces versus Objects

Correlations between Machiavellianism and Mirror Neuron Activity for Negative Faces versus Objects

Interaction effect of Machiavellianism and managerial control systems on sales volume

4

4.5

5

5.5

Low Machiavellianism High Machiavellianism

Sal

es P

erfo

rman

ce

Low Managerial Control

High Managerial Control

Conclusions and Implications

1. Machiavellians score low on social and emotional intelligence and suffer from social anxiety.

2. Machiavellians have lower social and empathetic skills.

3. Machiavellians have more difficulty taking the perspective of customers but actually are more sensitive in detecting the emotions of others.

4. Machiavellians are less able to read the minds of customers.

Conclusions and Implications (cont.)

5. As a consequence, Machiavellians rely more on manipulation tactics.

6. Tight managerial control inhibits the freedom of Machiavellians to manipulate others but also their performance.

7. Machiavellians are less committed and loyal to organizations.

8. Machiavellians engage in few organization citizenship behaviors.

9. Machiavellianism can be measured with a scale.

Genetic and Hormonal Influences

Nature versus nurture

Art and science

Gene-gene, gene-environment, gene-person interactions

Genetic and Hormonal Influences on Manager

BehaviorThe role of attachment styles and dopamine receptors (DRD2 and DRD4) on customer orientation.

The effects of oxytocin receptor and serotonin transporter genes on customer orientation.

Attachment Styles

Research by psychologists Bowlby (1988) and Ainsworth (1991) showed that people exhibit one of three styles of interpersonal orientation in their relationships with other people: anxious, avoidant, and secure.

These styles arise early in childhood through interactions with a caregiver and persist chronically into adulthood. Most research has been done with children and with adult romantic relationships, not with managers.

A person showing an anxious attachment style tends to be preoccupied in their relationships with others and often feels unneeded, even unloved, and as a result may become fixated on eliciting support, affection, and approval from others.

The secure attachment style consists of openness and trust in relationships with others, leading often to intimacy.

Under an avoidant attachment style, a person is often reserved and desires to keep a certain distance or remoteness from others.

The moderating role of DRD2 gene variants on the effects of avoidant attachment style on customer orientationcu

stom

er

ori

enta

tion

avoidant attachment style

5

6

7

1 72 3 4 5 6

x

x

DRD2 A2/A2 A1/A2 or A1/A1

x

A2/A2Delay gratificationRequire low stimulationFlexible

A1/A2 or A1/A1Difficult delaying gratificationRequire much stimulationInflexibleProne to addiction

The moderating role of DRD4 gene variants on the effects of avoidant attachment style on customer orientation

cust

om

er

ori

enta

tion

avoidant attachment style

5

6

7

1 72 3 4 5 6

x

xDRD4 7R- 7R+x

9

8

7R+Seek novelty, open to risk takingAdaptableProcess business

opportunities well

7R-Risk averseRigid in style

Two Genes Found to Underlie Social Behavior

Oxytocin receptor gene (OXTR

Reduces social anxiety in stressful relationships

Increases interpersonal trust

Related to empathy

Serotonin transporter gene (5-HTT)

Sensitivity to anxiety and stress

Cust

om

er

ori

enta

tion

L/S S/S

L/L

5-HTT(serotonin transporter gene) Sensitivity to anxiety and

stress

4.50

5.00

5.50

6.00

6.50

7.00

xx

x

G/G

A/G

A/A

OXTR(oxytocin receptor gene)

ANOVASensitivit

y to rewards

and proclivity

to experien

ce empathy

ANOVAC

ust

om

er

ori

enta

tion

A/G G/G

A/A OXTR

(oxytocin receptor gene) Sensitivity to rewards and proclivity to experience empathy

4.50

5.00

5.50

6.00

6.50

7.00

x

xx L/S

L/LS/S

5-HTT(serotonin transporter

gene)

Sensitivity to

anxiety and

stress

Managerial Implications of Genetic and Hormonal Research

Selection

Promotion

Training

Coaching

Assignment to accounts/territories

Help managers overcome or compensate for shortcomings and take advantage of strengths

Thank you very much