Inc. Magazine
Corporate greed may look like ambition, but science says it damages people, teams and long-term business success.
Why Corporate Greed Is Backfiring on Businesses in the AI Era, According to Science
Author: Kit Eaton
For anyone who feels that corporate greed has gotten out of hand in our maximalist society, a new academic study will be an interesting read. Management researchers looked into greed and how its impacts play out, finding that the powerful drive to amass gains actually has no benefit, either to organizations that embrace greedy philosophies or to society as a whole. The data may prompt savvy company leaders to take a long, hard look at their long-term business goals and the strategies they plan on following, as well as checking that their company culture is one where greed isn’t rewarded.
The research team, led by University of Delaware management professor Kaitlin Takacs-Haynes, noted in their report that greed is actually understudied—and that one reason for this is that it can be hard to define what the term means. For this study, greed was defined as comprising a drive for “acquisitiveness, excess, and harm,” with harm seen as the factor that separates it from simple ambition or self-interest, Phys.org notes.
The report notes that greed is truly “one of the oldest social constructs” and that it’s sometimes “lauded for driving competition and economic ambition.” These behaviors are drivers that can stimulate economic growth as well as help advance cutting-edge technology. In an era where controversial AI tech is being embraced by profit-seeking organizations like Meta at an incredible rate—though sometimes at the cost of thousands of people’s jobs—this argument may ring very true. On the flip side, the paper notes that to critics, greed is “ostracized as the root cause of economic inequality, global poverty, and climate change.” The problem is that greed “prioritizes short-term profits over sustainable, equitable development.”
The researchers admit that if a company or a person is driven toward success by greed, it can of course lead to short-term gains. But greed can also be psychologically harmful, and greedy people tend to always think the grass is greener somewhere else, which can dampen happiness and self-esteem in the long run. In fact, greed may push individuals into a cycle of wanting ever more, so they’re not even satisfied when they achieve a win.
You may think this is all so much common sense, and bring to mind many long-held moral lessons or even a quote or two from The Wolf of Wall Street.
But it’s interesting and important, from a business development point of view, that the researchers also found that greed is a “multi-level construct,” according to Takacs-Haynes, and it affects “Not just individuals, but groups and organizations” as well. As well as being embedded into the structure of an organization, greed can also spread via influence networks, Takacs-Haynes explains, as a person with power pushes for greedy behavior or workers seek to copy a well-known greedy person. Though greed can sometimes be hard to spot from the outside, it may emerge as an unhealthy obsession with efficiency or a drive to generate value at any cost.
This is where the research has valuable meaning for your company and your leadership choices.
As Takacs-Haynes notes, the fact that greed exists is an “inconvenient reality.” The fact that it also causes harm should be a prompt for leaders to “measure it and acknowledge its existence,” she says. Seeking success at any cost and pushing for ever-higher efficiency can lead to toxic workplace environments, crises, and higher employee turnover, which in the long term may erode company successes. That’s something to bear in mind when you roll out AI tech and expect your workers to deliver more productive output from the same number of work hours.
Acknowledging that greed can be harmful is merely the first step, the researchers suggest. Moving to emphasize value-based leadership and strong, team-led long-term strategies over short-term financial wins may actually prove smarter in the long run.
There’s another practical upshot for eschewing greedy business philosophies: They are probably out of line with the social and ethical choices of Gen-Z, which is currently entering the workforce in increasing numbers. This age group is known for favoring work-life balance over the kind of all-in business mentality that aligns with greedy thinking. Showing that your company has a better philosophy than greed may help you attract the right kind of young talent—especially since company reputation is highly important to them.
Credits: TCA, LLC.