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We Are Hard-Wired for Relationships

Scientists have known for decades that we are relational beings. Humans are hard-wired to be social, to interact with each other. The social brain hypothesis3 explains why the brains of humans are larger than those of other primates and animals. Individuals who live in groups face greater cognitive demands than those who live alone. They must coordinate their behavior with others and defuse the direct and indirect conflicts generated by foraging, for example, in the same space. The cultural intelligence hypothesis4 makes the case that humans as young as 2 1/2 years old have more sophisticated cognitive skills for dealing with a social world than apes and other primates. Humans are not just social, they are ultra-social—they have the capability to create differing cultural groups, each with a distinct set of artifacts, symbols, social practices, and institutions. For children to learn how to function effectively in this world, they must learn to use these tools and participate in the practices of the groups within which they reside.

  • Given a hard-wired propensity for developing, managing, and maintaining relationships, why is our understanding and teaching of business principles generally devoid of relational and social aspects?

Given a hard-wired propensity for developing, managing, and maintaining relationships, why is our understanding and teaching of business principles generally devoid of relational and social aspects? Organizations are inescapably relational, because they are composed of humans who are wired that way. Yet in business schools we study the rational and narrowly self-interested human, homo economicus. Organizations, though, do not express solely rational and self-interested tendencies. There is a good deal of emotional language in business. Managers may describe a partner as arrogant, or trusting, or disloyal. It is common for them to speak of organizational customers and suppliers as rogues or thieves, or of an exchange between the partners as a hookup or an ugly divorce. Researchers have been studying the relational tendencies of firms for decades.

The key is to know which element—emotional or rational—might dominate the partnership at any point in time. Education can make this clearer. If children can be taught to successfully coordinate and to thrive in group settings, then professional managers can be taught how to use their relational skills to improve organizational performance.

Importantly, all the individual interpersonal behavior of humans does not necessarily transfer to a partnering context. This is why we behavioral theorists spend our lifetimes attempting to separate the social and relational effects from the cold and rational calculations of a firm. Our goal is to identify the circumstances under which emotional versus rational aspects are synergistic, or complementary. Can they be harnessed to make both firms better off? Yes. But it is wrong to assume that this will occur simply because it has been demonstrated with individuals or groups in other contexts.5

Sociologists have made great strides in getting managers to think about how social and personal relationships, or non-economic activity, plays into the business of business. More than 30 years ago, Stanford sociologist Marc Granovetter’s seminal work on “social embeddedness” formed the basis for much of the literature on network theory and ideas broadly known as “the strength of weak ties.” This concept explains how socially weak relationships, such as those formed through acquaintances or friends of friends, can lead to novel and unexpected opportunities better than any that might arise from relationships with stronger ties.

For example, a manager might learn about an interesting job from a school alum whom she had run into by chance at a reunion but had never been particularly close to. Granovetter concluded that it is vitally important that we understand such non-economic or social activity in firms because “it affects the costs and available techniques for economic activity” (1985). Put differently, this means that economic opportunities often come about or are afforded through the social interactions of managers. If this is the case, the implication for partnering is that if we are able to manage or at least understand the relational behaviors between partners, we can improve the firms’ revenue performance and its cost of management.

Strategic exchange decisions and partnering are carried out between humans, not machines, so they cannot be purely transactional. They’re tangled up with long-term relational investments, learnings, social norms, past histories, and both implicit and explicit understandings. Each strand plays an important, sometimes untraceable role in determining the overall success of a joint effort. Yet many firms make the mistake of creating business partnerships with only transactional and economic aspects—forgetting that relationship dynamics and other social factors are what pull the strands together and give the partnership a useful shape. We must learn to manage the economic and non-economic factors together, because their value is jointly created; they are interdependent, complementary, yin and yang. The economics of partnering are well-known and there are numerous books on partner selection, control, incentives, and consequences. The non-economic side of the house requires the same kind of scrupulous attention.

  • The economics of partnering are well-known and there are numerous books on partner selection, control, incentives, and consequences. The non-economic side of the house requires the same kind of scrupulous attention.
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