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Study shows how power can embolden decision makers

Posted February 21, 2013

Decision makers who feel powerful and in control of resources are more likely than others to make decisions that will benefit their future selves, a USC Marshall faculty member reports in new research.

Conversely, those who lack feelings of power tend to prefer smaller immediate gains – those that benefit the present self – to potentially greater benefits in the future, according to “Power and Reduced Temporal Discounting,” a research paper by Nathanael Fast, an assistant professor of management and organization at Marshall and Priyanka Joshi, a doctoral candidate in management and organization at USC Marshall. The paper is in the current issue of Psychological Science.

A pervasive tendency among decision makers to opt for immediate gratification – known as temporal discounting – has implications for everything from investing money and saving for retirement to developing a business strategy, Fast said. For more than a decade, researchers in numerous disciplines have sought ways to overcome temporal discounting because it is so widespread.

Joshi and Fast hypothesized that one of the ways to help people wait for larger future benefits in lieu of small immediate gains is to make them feel more powerful. “Consistent with our predictions, we found that feeling powerful actually increased people’s willingness to wait for larger rewards,” reported Joshi. “We also found that the experience of power in the workplace is positively correlated with one’s total accrued assets, even after controlling for more likely factors such as annual income and age.” In other words, power appears to foster saving behavior by putting people more in touch with their future selves.

“Power provides control over future outcomes, so the future seems more certain when you feel powerful.” Fast said. “You’re therefore more likely to expand your sense of self to include your future self and, as a result, consider long-term consequences when making decisions.” Decision makers may better connect with their future selves by “power priming,” or thinking of a time in their lives when they did have power over others, Joshi said. “By revisiting experiences from the past, one typically experiences the same feelings they had during that time,” she said. “Of course, the best way for organizations to make their employees feel powerful is to actually give them more power.”

“Our research doesn’t mean that power holders are always going to make the best decisions,” said Fast. “Power also leads to greater risk-taking, illusory control, and heightened reward sensitivity, all tendencies that can lead to disinhibition and poor decision making. Yet, power holders do often make good decisions and they may be particularly good at considering future consequences.” Indeed, as Fast noted, we often think of the best leaders as being visionary and helping subordinates adopt these future goals and aspirations. In this way, perhaps the experience of power is an essential part of what allows effective leaders to lead.

Source: USC Marshall School of Business

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