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Entrepreneurs benefit more from emotional intelligence than other competencies, such as IQ

Research from the Indiana University Kelley School of Business found that emotional intelligence – the ability to understand, use and manage emotions to relieve stress – may be more vital to a business’ survival than previously thought.

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Running a successful business has its challenges, but the COVID-19 pandemic has required many owners to pivot and look for new ways to operate profitably while keeping employees and consumers safe. Research from the Indiana University Kelley School of Business found that emotional intelligence – the ability to understand, use and manage emotions to relieve stress – may be more vital to a business’ survival than previously thought.

“We found that entrepreneurs benefit much more from emotional competences than other competencies — such as IQ — due to high uncertainty and ambiguity that comes with the world of entrepreneurship and even more applicable in a crisis,” said Regan Stevenson, assistant professor ?of entrepreneurship and management and the John and Donna Shoemaker Faculty Fellow in Entrepreneurship.

“Being an entrepreneur is not a ‘traditional workplace setting.’ If you are an entrepreneur, you know that managing your business can often feel like you are screaming alone on an emotional rollercoaster,” Stevenson added. “The extreme nature of this setting makes one’s ability to manage emotions and social connections critically more important, especially so during times of major disruption and crisis.”

According to recent US Bureau of Labor Statistics, about a fifth of all new businesses fail within their first two years and nearly half are shuttered within five years. More than a million US companies with employees were shuttered in 2020, in large part due to the COVID-19 pandemic. The number of bankruptcies in 2020 and those expected this year likely will approach levels last seen during the worst quarter of the 2008-09 financial crisis.

“The extreme nature of the pandemic has made one’s ability to manage emotions and social connections critically more important, especially so during these times of major disruption and crisis,” said Ernest O’Boyle, associate professor of management and entrepreneurship and the Dale M. Coleman Chair in Management.

The research found that those with a higher emotional intelligence are better able to be self-motivated and have higher social skills – even under more normal circumstances.

“Emotional Intelligence is linked to social skills such as accurately perceiving other’s needs, making good first impressions, and influencing others in interpersonal interactions. These skills are important for developing business networks, which can aid in signaling legitimacy and in acquiring resources,” researchers wrote. “These skills can enhance creativity and opportunity recognition; aid decision making in emotionally turbulent situations and enable adaptive responses to unpredictable events.”

Previous research has suggested that cognitive intelligence was a greater predictor of success among entrepreneurs. The two factors are seldom studied together.

“While IQ is unquestionably the better predictor of job performance and career success across all jobs and careers, within the domain of entrepreneurship, emotional intelligence was the stronger predictor of success,” O’Boyle added. “Those with high emotional intelligence tended to be more successful as business leaders and enjoy success than in more typical jobs and careers.”

Their findings are based on an empirical study of nearly 40 previous studies and a meta-analysis of 65,826 entrepreneurs observed through that research. Their paper, “What matters more for entrepreneurship success? A meta-analysis comparing general mental ability and emotional intelligence in entrepreneurial settings,” appears in Strategic Entrepreneurship Journal.

Other authors are Jared Allen, a doctoral student at the University of Central Florida and the corresponding author; and Scott Seibert, professor and chair of human resource management at the Rutgers University School of Management and Labor Relations.

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Prime Asia Hotel thrives through technology, shared values

“Our model is to always adapt and to listen to our guests, to see their requirements in order to adjust accordingly and improve our facilities,” said Prime Asia Hotel General Manager Walid El Zeer.

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In the dynamic sphere of hospitality, Prime Asia Hotel (PAH) has carved a niche that was built on unwavering values and confidence in technology.

At the heart of its success, there is relentless dedication to offer guests a memorable stay, making use of innovative tools, coupled with a commitment to the company values: Pleasantness, Attentiveness, and Honesty.

“Our model is to always adapt and to listen to our guests, to see their requirements in order to adjust accordingly and improve our facilities,” said Prime Asia Hotel General Manager Walid El Zeer.

Making good on this promise, the hotel opened its doors to furparents who would like to bring their small pets with them. The hotel is also working to improve their facilities to soon accommodate even bigger breeds. 

Aside from that, the hotel also offers a 24-hour access to its swimming pool, a menu specially-made for kids, spa, and massage services, budget-friendly offerings, a 24/7 coffee shop, as well as diverse culinary options perfect for leisure, business, and family travelers.

“A satisfying aspect for us is providing a safe and friendly environment for families and kids, to see them happy, and enjoying their time in the hotel. It’s touching when you see them sad to leave, wanting to come back or to stay more. It gives us happiness that we are able to achieve something that is good for these families,” El Zeer noted. 

In a business where every second counts, technology’s ability to eliminate bureaucratic roadblocks and enable real-time decision-making has been a game-changer for Prime Asia Hotel. 

They harness technology to optimize operations, freeing up staff from tedious chores so they can concentrate on creating meaningful guest interactions. This helps them foster an environment where the team can thrive and guests feel truly valued.

Converge ICT Solutions Inc., their technology provider, plays a crucial role in this evolution by offering up-to-date solutions that complement the hotel’s aspirations.

Their subscription to business-grade fiber of Converge, flexiBIZ, sees to it that the connectivity remains fast and reliable, meeting the speed and consistency that travelers require.

“Today, even if you give the cleanest room, cook the best food, give the best service, the nicest smile and you are not providing a good reliable Wi-Fi connection, the guest will not be happy. Now we are on FlexiBiz. It’s it’s very efficient, budget friendly and reliable solution,” El Zeer said.

“Sometimes the guests have two or three gadgets in the same room, but we are not receiving any complaints about it. It’s still working very well and very reliable,” he added. 

Beyond technology, Prime Asia’s success is nurtured by the core values it stands up for. Having their values at the core of their hiring decisions, they make sure that every staff member is motivated by a shared vision and goal.

For El Zeer, skills can be developed, but values are innate. Combining this with necessary skills, the hotel is positioned to create a synergy that sets them for exceptional service.

Undoubtedly, Prime Asia Hotel’s future holds immense promise. As Prime Asia Hotel continues to stride forward, its commitment to guest-centricity and innovation remains unshaken. 

With this dedication, Prime Asia Hotel guarantees that each visitor leaves with treasured memories, a sense of belonging, and a promise to return.

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Better or different? How brand differentiation affects pay and profits

High-quality brands taking advantage of brand cachet to pay employees less erodes profits due to negative effects on employee productivity and retention. More unique brands which tend to pay more, on the other hand, yield a net positive effect on profits due to positive effects on the same employee behaviors.

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New research finds brands that leverage a reputation for quality to pay employees less risk eroding profits.

The paper, published in the Journal of Marketing Research and authored by researchers from Duke University, London Business School and Texas A&M University, shows that vertical brand differentiation (being perceived as better) is associated with lower pay, whereas horizontal brand differentiation (being perceived as different) is associated with higher pay.

High-quality brands taking advantage of brand cachet to pay employees less erodes profits due to negative effects on employee productivity and retention. More unique brands which tend to pay more, on the other hand, yield a net positive effect on profits due to positive effects on the same employee behaviors.

“High-end brands, which are known for their quality and heritage of excellence, find it easier to attract employees who want the résumé boost of working for a well-known brand,” said Christine Moorman, Professor of Business Administration at Duke’s Fuqua School of Business. “Experiments undertaken during our study show that Human Resource managers believe, and employees agree that, on average, they will accept lower pay for such benefits.”

“More unique, lesser-known brands don’t have the same résumé cachet,” Moorman said. “Managers believe, and job candidates agree, that they require higher pay to work for these unique brands as such employment does not convey the same résumé power in securing future jobs.”  

Critically, these differential brand-pay relationships have important downstream effects on employee behavior and, consequently, on firms’ profits.

Nader Tavassoli, Professor of Marking at London Business School explained: “Taking advantage of high-quality brand cachet to lower pay represents a false economy because profits are diminished by negative effects on employee productivity and retention. Pay dissatisfaction can lead to people working less hard or leaving, ultimately costing companies money. Managers should, therefore, rely on brand reputation to attract talent, but not leverage it to suppress pay.”

“Higher pay can be motivating as employees exert extra effort, thereby driving up productivity and profits,” added Alina Sorescu, Professor of Marketing at Mays Business School, Texas A&M University.

“As Henry Ford once said, ‘Paying good wages is not charity at all, it is the best kind of business,'” Sorescu said. “This is borne out by our findings, which show that when managers at more unique firms pay more, profits increase.”

Given these dynamics, the researchers recommend that managers should consider brand differentiation in their pay benchmarking:

  • Consider your brand in setting pay, as your brand’s perceived quality and uniqueness have opposing pressures on employee pay.
  • Leverage your brand’s perceived quality to attract talent but not to pay less, as this results in a net profit loss due to negative effects on employee productivity and retention.
  • Take a benign view of paying employees more based on your brand’s perceived uniqueness, as this results in a net profit gain due to positive effects on employee productivity and retention.
  • Adjust your competitive pay benchmarking based on relative levels of both vertical and horizontal brand differentiation.
  • Have marketing and HR work together to compete effectively in the war for the “right” talent.

“Brands in the Labor Market: How Vertical and Horizontal Brand Differentiation Impact Pay and Profits Through Employee-Brand Matching” by Christine Moorman, Alina Sorescu and Nader T. Tavassoli appeared in the Journal of Marketing Research.

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Nudging food delivery customers to skip fork drastically cuts plastic waste – study

As food delivery services became increasingly popular during the COVID-19 pandemic, the surge in plastic waste generated by single-use cutlery has become a key environmental challenge for many countries.

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In 2021, more than 400 million metric tons of plastic waste were produced worldwide, and it is predicted that the world’s plastic waste growth will continue to outpace the efforts to reduce plastic pollution in the coming decades. As food delivery services became increasingly popular during the COVID-19 pandemic, the surge in plastic waste generated by single-use cutlery has become a key environmental challenge for many countries.

A new study finds “green nudges” that encouraged customers to skip asking for cutlery with their delivery orders were dramatically successful and could be a powerful policy tool to reduce plastic waste.

“Few policies target plastic waste production at the consumer level, except charges on plastic bags,” says EPIC-China’s research director Guojun He, an author of the study and an Associate Professor at the Hong Kong University Business School. “Our findings show that simple nudges can make a big difference in changing consumers’ behaviors and could become a tool for policymakers as they confront the immense challenge of plastic waste.”

Reducing single-use cutlery waste in the food-delivery industry is particularly important in China, the world’s largest producer and consumer of single-use cutlery. As of 2019, more than 540 million Chinese were active users of food-delivery services and each day consumed more than 50 million sets of single-use cutlery that were not adequately treated or disposed of. To reduce single-use cutlery consumption, policy-makers in China set a target of reducing its usage in food deliveries by 30 percent by 2025.

Guojun He and his co-authors Yuhang Pan, Albert Park, Yasuyuki Sawada and Elaine Tan worked with Alibaba’s online food-ordering platform Eleme. Eleme is China’s second largest food-delivery company, similar to Uber Eats and DoorDash, with more than 753 million users in 2022. The researchers evaluated the effectiveness of Alibaba’s green nudges to reduce single-use cutlery consumption. These nudges included changing the default selection to “no cutlery” and including green points as rewards for not using the cutlery. When a customer accumulated enough green points, they could then be redeemed to plant a tree under the customer’s name.

The researchers studied each user’s monthly food-ordering history for two years through 2019-2020 in 10 major Chinese cities. These included the three treated cities with green nudges (i.e., Beijing, Shanghai, and Tianjin) and the seven control cities without the nudges (Qingdao, Xi’an, Guangzhou, Nanjing, Hangzhou, Wuhan, and Chengdu). Among these cities, the authors randomly sampled about 200,000 active users (i.e., those who placed at least one order between 2019 and 2020).

The authors found that the green nudges—changing the default to “no cutlery” and rewarding consumers with green points—increased the share of no-cutlery orders by 648 percent. If green nudges were applied to all of China, they discovered that more than 21.75 billion sets of single-use cutlery would be saved annually—eliminating 3.26 million metric tons of plastic waste and saving 5.44 million trees (from wooden chopsticks) each year.

“Other food delivery platforms, such as UberEats and DoorDash, could try similar nudges to reduce cutlery consumption and plastic waste globally,” says He.

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