Your boss stomps and yells, criticizes you, and then proceeds to take the credit for your work – even it is an isolated incident? This can take a profound toll on employee well-being and performance. But despite the many years of research, the precise mechanisms through which bad leadership impacts employees’ performance remain a subject of interest.

In a new study, first published in Group & Organization Management, an international group of researchers, led by Stevens Institute of Technology and University of Illinois Chicago, offer a novel explanation of the cognitive factors through which abusive leadership degrades employee performance — and helps explain why some employees are more vulnerable than others to the negative impact of abusive bosses.

“Thankfully, abusive supervision isn’t too common, but when it happens it leaves employees far less likely to take the initiative and work to improve business practices,” said Howie Xu, an author of the study and an assistant professor of management at Stevens. “We wanted to understand the cognitive factors behind that effect — and ask how companies can shield their employees from the negative impact of bad bosses.” 

Xu’s team surveyed employees and supervisors from 42 different South Korean companies, along with hundreds of US students, to explore the ways in which abusive supervision impacts “taking-charge” behavior by employees. Subjects were then ranked according to whether they actively seek positive opportunities for promotion and advancement or take a more preventative approach that prioritizes safety and job security.

“We theorized that both the drive to obtain rewards (promotion, bonuses) and the drive to avoid punishments (maintain job security) would shape the way employees respond to abusive bosses,” Xu explained. 

But that’s not what Xu and his team found. Rather, they found that employees who prioritize career advancement are strongly affected by abusive leadership while employees who prioritized job security remained just as likely to take charge after experiencing abusive supervision. Employees who prioritize advancement tend to hunker down and reduce taking-charge behavior after experiencing abusive supervision.”

“That’s a very surprising finding,” Xu said. “We found clear evidence that the signal from abusive leadership is much more salient to employees who care about advancement than it is to employees who care about security.”

One possible explanation, Xu explained, is that ambitious employees may perceive an abusive boss as having direct control over whether they will receive bonuses or opportunities for promotion. By contrast, bad bosses may be seen as having less direct control over firing decisions, which often require ratification by HR teams or more senior managers. 

That’s an important finding, because it suggests that organizations seeking to mitigate the impact of bad leadership should focus on empowering employees and making them feel valued and appreciated, rather than simply reassuring them their jobs are safe. “If a leader slips into abusive behavior, our research suggests that they should not only apologize, but also work to reassure employees of their value to the organization,” Xu said.

Unexpectedly, the variation in employee response to abusive supervision was broadly constant across both the Korean and US populations. “We think of these countries as culturally distinct, but there was no real difference in how employees responded to abusive bosses,” Xu said. “That might reflect the effect of globalization — or might be a sign that this is a universal trait that exists across many different cultures.” 

Researchers from Texas Tech University, Hunan University and Seoul National University also contributed to the paper.

Multichannel retailing has become crucial to the sales strategy of any brand, including digital-native brands that started retailing as online-only. Digital-native brands like Quip in the U.S. and Myprotein in Europe have partnered with independent retailers to offer consumers an in-person retail option. But some brands—especially those in the fast-moving consumer goods (FMCG) category—have opened their own brand stores to create a bigger physical footprint.

Researchers from Erasmus School of Economics at Erasmus University Rotterdam, KU Leuven, Universität zu Lübeck, Christian-Albrechts-Universität zu Kiel, and FoodLabs published a new Journal of Marketing article that investigates the multichannel impact of brand stores by digital-native FMCG brands.

The study, appearing in the Journal of Marketing, is titled “Assessing the Multichannel Impact of Brand Store Entry by a Digital-Native Grocery Brand” and is authored by Michiel Van Crombrugge, Els Breugelmans, Florian Breiner, and Christian W. Scheiner.

Brand stores are brick-and-mortar stores owned and operated by the manufacturer. They carry only the brand’s products and are designed to sell them profitably in a brand-centric environment.

Van Crombrugge explains that “these stores offer physical exposure, which digital-native brands might struggle to attain on supermarket shelves given the steep competition from mass-market brands.”

Brand stores increase brand awareness, which in turn can increase sales in the company-owned online channel and independent supermarkets.

“Brand stores can also spark distributor interest and prompt supermarkets to distribute more of the brand on their shelves. Since the number of brand stores that a digital-native FMCG brand can open is limited, increasing breadth and depth of supermarket distribution can further drive brand sales,” adds Breugelmans.

Yet brand stores also entail risks. Sales in this channel may cannibalize sales in the incumbent channels if consumers migrate to the newly opened brand store. If brand stores signal the manufacturer’s encroachment, supermarkets might reduce their distribution of the brand. Finally, opening and operating brand stores is expensive and these substantial operational costs put pressure on profits.

The Supermarket Effect

This research uncovers a substantially different impact of brand store entry on own-online channel sales than on sales in independent supermarkets. In areas in the vicinity of brand stores, the brand’s online channel sales decreased, yet its supermarket sales increased. This is because for customers seeking a more elevated consumption experience, brand stores offer an interesting alternative, which causes cannibalization of its own online channel.

In supermarkets, on the other hand, buyers are mainly concerned with price and convenience. For them, brand stores offer an opportunity to discover a digital-native brand that otherwise would have remained anonymous between bigger mass-market brands, which in turn causes supermarket sales to increase.

Brand Distribution

The research team also discovers that brand stores spark distributor interest and prompt supermarkets to start distributing the brand on their shelves. Indeed, part of the supermarket sales increase that brand stores bring about is driven by brand stores’ positive effect on the number of supermarkets that carry the brand. This increase in distribution breadth is an important component to drive sales since brands cannot open brand stores everywhere.

“We find that brand stores generate an influx of own brand store sales that more than make up for any online losses. This is not necessarily surprising because their strong local visibility, typically in locations with high foot traffic, and their appeal to customers who lack opportunities or motivations to visit the online channel or supermarket make brand stores an attractive sales channel on their own,” Scheiner says.

Despite the cannibalizing impact on their own online channel, brand stores are an effective means to increase a brand’s top-line sales. Digital natives in startup or growth markets that aim to draw investors’ attention can try to improve their valuation through brand stores and the corresponding sales growth.

However, opening and running brand stores is a capital-intensive operation due to factors such as store rental cost and sales staff wages. Breinder warns that “our analyses show that nearly half of the brand stores under study were not able to turn a profit. Brands therefore need to carefully weigh brand stores’ top-line gains against their high operational expenses to justify the investment financially.”

These findings offer important insights and caveats to digital-native brands that consider opening brand stores to increase their physical footprint beyond supermarkets. The upside is that brand stores can help digital natives reach potential consumers and gain additional physical exposure that FMCG brands especially require. Yet brand stores are not without risks: they may hurt the brand’s sales in the online channel where the digital native started and further impact brand profitability if the influx of new sales is not great enough to cover those online losses and the brand stores’ own substantial operating costs.

Why would someone decide to give their money to help a stranger bring a creative project to life?

Recent research has found that backers of crowdfunding projects participate, in part, because of a sense of indirect success and the feeling that they are contributing to something bigger.

Crowdfunding — raising money for a new venture by collecting small amounts from many people — is most often done online, and messaging on the most popular sites reinforces the perception of a more democratic market.

But the reality is a bit more complicated, the researchers said, because backers tend to come from similar groups of people and give to certain categories of projects.

“They tend to give money to projects they find cool,” said Andre Maciel, assistant professor of marketing at the University of Nebraska–Lincoln. “That limits the democratizing potential of crowdfunding… In the aggregate, there’s this effect that specific project categories tend to be more funded than others.”

Maciel and his co-author, Michelle Weinberger of Northwestern University, wanted to examine why ordinary people would give interest-free money to businesses and to understand the culture of crowdfunding.

Unlike traditional investing, people giving to crowdfunding campaigns do not have any legal guarantee that the money — usually less than $50 — will be used as promised. And they usually get no return on their investment beyond something like a mug or T-shirt.

“People could essentially run with their money, and nothing would happen to them,” Maciel said. “Maybe their reputation would get bruised, but there’s no legal contract there. So we started wondering: What’s the social contract that binds all those different parties together?”

The researchers made a distinction between reward-based crowdfunding and charity donation, with their study looking at projects such as a music album, cookbook or toy, rather than the type that would help pay for medical bills. Maciel said it’s an important phenomenon to understand because it’s a relatively new funding model for businesses, and one that is rapidly growing in scale.

“In 15 years, we’re talking about 200,000 new innovations coming to the market only through Kickstarter,” he said. “If you look at all the platforms together, it might be more than half a million.”

Maciel and his Weinberger interviewed a sample of all involved stakeholders: platform representatives, producers and consumers. They then analyzed the platforms’ websites and their messaging on what crowdfunding is. The duo also visited the offices of a leading crowdfunding platform. Finally, they became backers themselves, giving to eight campaigns from a variety of categories on two platforms.

The researchers found that crowdfunding platforms create a narrative of a more democratic process, enabling people to decide which products enter the market. Platform websites do this in part through language, such as referring to a “project” instead of a “business” or to a “pledge” instead of a “payment.” The websites also employ idealistic messaging about a higher purpose and collective action.

The study concluded that people who give to campaigns get a vicarious sense of success. When a campaign succeeds, contributors feel they are part of something bigger than themselves and gain a sense of ownership of the product, the researchers said.

“You’re not going through the pains of developing an idea, the emotional costs,” Maciel said. “And yet, even though they give, usually, small amounts of money, many consumers feel thrilled when a project comes to life.”

Backers also reported they liked getting behind-the-scenes information and some insider knowledge about the process, including explanations about delays in the project and information about how producers are tackling hurdles.

The study additionally found that a negative experience with a crowdfunding campaign doesn’t necessarily deter people from backing others in the future. Consumers view projects individually and don’t assume that a delayed or unsuccessful campaign will translate to others. If this happens repeatedly, however, they might be more likely to stop giving.

The team also determined that the campaigns attract a certain kind of consumer, meaning the model often falls short of its promise of a more democratic market. The researchers discovered that backers tend to be people who work in creative fields, such as web designers, fashion designers and writers, and that they give to projects that match individual interests rather than ones that address collective societal needs. The result is that campaigns in areas such as music, film, publishing and gaming are more likely to succeed.

“Crowdfunding does expand access to the market, but it’s just not as democratic as it seems,” Maciel said. “It is democratic because people get to choose, but it’s not egalitarian.”

Having focused on the relationship between platform and consumers, the team intends to shift next to the relationship between platforms and producers. Maciel and Weinberger will look at what keeps producers from misusing funds and the benefits of choosing crowdfunding over a loan or other source of funds.