Milgram’s Experiment, Horrible Bosses and Dwight Shrute Co-Workers

Milgram’s Experiment, Horrible Bosses and Dwight Shrute Co-Workers

The recently released movie, Horrible Bosses, is about three friends who have three . . . you guessed it, horrible bosses.  While it might be fun to watch Jennifer Aniston play a bad character, the movie brings up some interesting issues about authority figures and their power to affect people’s lives.

In the early 60s, a guy named Stanley Milgram did some research into the willingness of people to follow directions given by those in authority. The question Milgram contemplated was:  If you were asked to shock someone with 400 volts of electricity, would you do it just because someone in a white lab coat told you to do it as part of an experiment? You may think not, but you may be surprised.

What Milgram was looking for was how authority leads to obedience. Isn’t that kind of what happens to you at work? You’re at the mercy of your leader or manager. You do what they tell you to do, because they are your superior, and you figure you should listen. Part of what makes up your personality is the part that is willing to obey commands that may not necessarily make sense to you.

There may be a few people you’d like to shock some sense into at work. We’d like to think we’d be the test subjects that wouldn’t have pushed the button to deliver the shock to the recipients. The thing was, though, although the people thought they were delivering a shock, they weren’t delivering any voltage at all. The people who were supposedly being shocked were actors who were just pretending to be shocked.

The people Dr. Milgram used as the “shockers” in his experiments were only paid $4.50, and were found through advertisements placed in newspapers. The reason Dr. Milgram wanted to do these experiments in the first place was what he’d seen the people in Germany doing in response to Hitler’s leadership. He was interested in answering a question that had haunted him from childhood: “What psychological mechanism transformed the average, and presumably normal, citizens of Germany and its allies into people who would carry out or tolerate unimaginable acts of cruelty against their fellow citizens who were Jewish, resulting in the death of six million of them?”(Blass, 2004).

His interest in this led him to conduct experiments into obedience, and he set up a simulated shock-generator box that had a label on it that read, “SHOCK GENERATOR , TYPE ZLB,

DYSON INSTRUMENT COMPAN Y, WALTHA M, MASS OUTPUT 15

VOLT S – 450 VOLT S” (Blass, 2004, p. 79). Initially, the “shocker” started giving a low voltage of what they believed was an actual shock, and they were then asked to gradually increase the voltage in response to suggestions from the experimenter, who would say things like:

1. Please continue.

2. The experiment requires that you continue.

3. It is absolutely essential that you continue.

4. You have no other choice, you must go on.

The experiment was intended to show just how far the “shocker” would go, based on receiving commands from someone in authority. This was all part of an experiment done at Yale. Predictions on how many people would be willing to continue to shock at high voltage levels were low … about 3%. In actuality, however, 65% were willing to give them the juice at the maximum level. Only 1% of the participants in the experiment, after having learned that it had been fake, were sorry they had participated.

Milgram had the following to say about the results: “Ordinary people, simply doing their jobs, and without any particular hostility on their part, can become agents in a terrible destructive process. Moreover, even when the destructive effects of their work become patently clear, and they are asked to carry out actions incompatible with fundamental standards of morality, relatively few people have the resources needed to resist authority” (Milgram, 1974). Milgram went out of his way to ensure that this simulation looked real. He wanted those doing the shocking to believe they had actually caused the person receiving the voltage pain. Those receiving the fake jolts would emit pitiful screams, begging the person to stop shocking them.

“The obedience experiments presented a disturbing view of human behavior. Milgram, his colleagues, and later the public were surprised by the sheer power of an authority to compel someone to hurt an innocent person, despite the absence of any coercive means to back up his commands” (Blass, 2004, p. 93).

What does this say about our personalities? Think about Dwight Shrute on the TV show The Office? Isn’t he willing to do just about anything that Michael tells him to do to please his boss or, in other words, a person of authority? We’ve all worked alongside the Dwights of the world. Is it Michael who is to blame for how Dwight acts because he takes advantage of his willingness to please? Possibly. How do you keep from turning into Dwight? How are you supposed to question your boss? In hard economic times such as we have experienced recently, many people find it difficult to turn down any request at work. Fear of losing one’s job is a big factor in what we will allow. Unfortunately, many may not feel as if they have a choice, and will comply with demands.

Is it OK to never question authority? There comes a point when employees feel psychologically abused, whether they recognize it or not. When someone is constantly a target of abuse of authority, they may not realize what’s happening right away. One instance of someone in authority making a negative comment may go unnoticed, however, should the comments continue, that can constitute an abuse of authority. This abuse can lead to poor work performance as the employee’s self-esteem drops.

This excerpt is from the book It’s Not You It’s Your Personality . . . Click here to read the rest of the book.

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Defaulting on a Mortgage: How it Affects Your Credit Score

Many consumers have taken a financial hit with the recent economic climate.  As more people are defaulting on their home loans, it is interesting to see the impact on FICO scores. 

What may be a surprise is how many wealthy people with good credit are going into foreclosure.  A recent article by the Arizona Republic mentioned how affluent, savvy homeowners are choosing to default on their home loans based on weighing the pros and cons to such a decision.  “Recent research suggests that affluent people tend to be the main strategic defaulters, and these individuals are also the ones who would sustain more serious credit-score damage.  This chart shows the resulting credit scores for two hypothetical consumers – one with an average initial score of 680 on the FICO scale and another with a high initial score of 780.”

Situation Initial 680 Score Initial 780 Score
     
30 days late on mortgage 600-620 670-690
90 days late on mortgage 600-620 650-670
Short sale, no deficiency 610-630 655-675
Short sale with deficiency or foreclosure 575-595 620-640
Bankruptcy 530-550 540-560

The savvy homeowner that sees their home investment as a money pit, may go ahead and buy what they perceive as a better home  purchase, perhaps a short sale, before they default on their original investment.  In this way, they have good credit to purchase the new home before they take the hit to their credit score caused by the default of their original home purchase.

What to Know before Investing in IPOs like LinkedIn or Pandora

Is investing in an initial public offering (IPO) a good idea?  With the recent LinkedIn and Pandora IPOs and talk of future IPOs with Twitter and Facebook, this is a question that many investors may be considering.  Imagine getting in on the ground floor of a giant like Coca-Cola? It might have been a wild ride, but those that hung in there, had a nice payoff.  Joshua Kennon of About.com reported, “A single share of Coca-Cola purchased for $40 at the IPO in 1919, for example, crashed to $19 the following year. Yet, today, that one share, with dividends reinvested, is worth over $5 million.”

Kennon suggests that if you have the stomach for risking your investment, you might want to consider whether the company can grow at a rate high enough to justify its price, whether there are any patents or trademarks to protect the business, whether you’d want to hold onto this stock for 30 years and if it fell by 50% would you have the stomach to handle it?

DailyFinance reported some additional questions to ask before investing in an IPO: (1) Is there an attractive market for the product? (2) Does the company have a significant share of the market? (3) Is the company’s management team experienced? (4) Is the company growing and profitable?

The following list shows some more recent IPO original offering prices compared to their current price (as of July, 2011):

Google Initial Offering Price, 2004:  $85/share

Google Price July, 2011:  $530/share

Pandora Initial Offering Price, June, 2011:  $16/share

Pandora Price July, 2011:  $19/share

LinkedIn Initial Offering Price, May, 2011: $45/share

LinkedIn Price July, 2011:  $98/share

Many employees of companies like Google became wealthy overnight when their companies went IPO. The New York Times article Google’s IPO 5 Years Later stated, “When the offering finally happened, it turned an estimated 1,000 Google employees into millionaires, at least on paper. Since then, many more millionaires have been minted inside the Googleplex, the Web search company’s headquarters in Mountain View, Calif.”

Not all startups have been this successful.  Businesspundit lists the 25 Internet Startups that Bombed Miserably. MSMoney also warned, “Many investors fret they’ll miss the next big thing because they have no access to the IPO market, but study after study has proven that IPOs historically underperform the broader markets.” FIGuide echoed that same sentiment in their article Should You Invest in IPOs, stating that there might be better options.  “A seminal paper published in The Journal of Finance looked at IPOs from 1970 to 1990. During the five years after issuance, investors in these IPOs got average annual returns of only 5%.(1) By contrast, the overall stock market’s average annual return from 1970 to 1990 was more than double that figure, at 10.8%. To put this in perspective, $1,000 invested at 5% for 20 years would have generated $2,653, while $1,000 invested at 10.8% would have generated $7,777, almost three times as much.”

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Reality of Being Seen Live on Facebook, Google+ and Facetime

via google.com

Today Facebook announced its new integration with Skype that will allow video calling and group chatting. Zuckerberg is touting “ease of use” as one of the key benefits of this system. Facebook can now compete with Google+ and their video chat service named Hangout.

The question now becomes, do you really want to have the capability of having people see you? Recently I was having a conversation with my husband on my iPhone using Apple’s Facetime application. As my husband took his iPhone around the office and said, “say hello to so and so”, I realized that as I could see them, they could also see me in my jammies with no makeup, hair up on top of my head and wearing my reading glasses. It wasn’t glamorous.

Many people use these video calling services when they are at home. Do we really want to see what everyone looks like when they first wake up in the morning? As we start opening up our homes to people with our video capabilities, we may also be showcasing things that may be better left unseen. Think about the dirty dishes in the sink or the unmade bed. Now more people than ever will know everyone’s dirty little secrets.

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