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Give to crowdfunding campaigns enjoy vicarious biz success – study

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.

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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.

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Office owners or managers, take note: Increased risk of bullying in open-plan offices

In traditional open-plan offices it is easier to notice colleagues’ shortcomings and become irritated by them. If someone gets frustrated and takes it upon themselves to “do something about” a colleague’s behaviour, and there are no clear guidelines for handling such situations, there is a risk that it may escalate into bullying. Those who are subjected to bullying lack access to a private space for retreat. 

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Open-plan offices entail a clearly increased risk of workplace bullying compared with employees having their own office or sharing with just a few colleagues. This is shown in research from Linköping University, Sweden. 

“Increased bullying is a tangible negative consequence of how you choose to organise the workplace. It’s important to highlight this, as it hasn’t previously been examined,” says Michael Rosander, professor at the Division of Psychology at Linköping University.

Open-plan offices, where many employees share the same space, have become increasingly common. Employers often justify this development as a way to use premises more efficiently and to encourage creative interactions between employees. However, research has shown that open-plan offices do not promote health, job satisfaction or productivity.  

Until now, it has been unclear whether open-plan offices also affect the risk of bullying and employees’ motivation to look for another job. Through surveys of more than 3,300 randomly selected individuals in employment in Sweden, Michael Rosander has now provided an answer. The results are published in the journal Occupational Health Science. 

Thirty per cent of those with some form of office-based work reported that they worked in a traditional open-plan office with no access to private space. Thirteen per cent worked in so-called activity-based offices, where employees spend part of their time in an open-plan environment but also have access to designated rooms for tasks requiring peace and quiet. The remainder had their own office or shared one with only a few colleagues.

For traditional open-plan offices, the survey responses showed a clearly increased risk of bullying compared with those who had their own office or shared an office with only a few colleagues. The difference remained regardless of factors such as personality traits and the extent of remote working. This suggests that the problems are indeed caused by the work environment in the office.  

The researchers’ explanation is that in traditional open-plan offices it is easier to notice colleagues’ shortcomings and become irritated by them. If someone gets frustrated and takes it upon themselves to “do something about” a colleague’s behaviour, and there are no clear guidelines for handling such situations, there is a risk that it may escalate into bullying. Those who are subjected to bullying lack access to a private space for retreat. 

Activity-based open-plan offices, by contrast, showed no increased risk of bullying, likely due to the availability of private spaces. However, in both types of open-plan office, employees were more likely to consider changing jobs. One possible explanation is that activity-based offices also involve more distractions, according to Michael Rosander.

For employers who have introduced, or are planning to introduce, open-plan offices, there are some lessons to be learned. One is to be prepared to deal with irritation and conflicts before they escalate. Another is the importance of providing rooms where employees can work undisturbed. Placing individuals with similar needs and tasks near one another may also reduce the risk of disruption.

“Traditional open-plan offices are in themselves negative for the individual, for productivity, and make people more likely to leave their job. Social interaction also suffers. So it’s worth considering how to handle it,” says Michael Rosander.

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Long-serving CEOs may weaken innovation, study finds

Companies led by long-serving chief executives may become less innovative over time unless challenged by strong independent boards.

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A new study from the University of East London has found that companies led by long-serving chief executives may become less innovative over time unless challenged by strong independent boards.

The research examined 215 FTSE 350 companies over an 11-year period between 2010 and 2021. It explored how CEO tenure and independent directors influence a company’s “R&D knowledge stock”, which is the research, expertise and technological capability built through investment in innovation.

The study published in the journal Corporate Governance found that CEOs who remain in office for many years often become more cautious and less willing to back risky research and development projects. These companies were more likely to reduce investment in innovation and long-term technological growth.

Firms with higher numbers of independent directors were more likely to continue building innovation capacity with experienced CEOs and independent directors forming an effective partnership, to combine deep company knowledge with outside challenge.

However, both experienced CEOs and independent directors become more cautious and less willing to back risky research and development projects when the company fails to meet performance aspirations, suggesting that independent directors do not have stable risk preferences.

The findings suggest that innovation is shaped not only by technology and finance, but also by leadership culture and corporate governance structures.

Author Dr Igbekele Sunday Osinubi, of the Royal Docks School of Business and Law, said: “Long-serving CEOs can bring valuable experience and stability, but there is also a risk that leaders become too cautious or too attached to existing ways of thinking. Our findings show that independent directors play an important role in encouraging companies to continue investing in innovation, especially during difficult periods when firms may otherwise retreat from long-term research and development.”

He added: “This matters beyond individual companies. Innovation drives productivity, competitiveness and economic growth. The study highlights how governance structures can influence whether firms continue building the knowledge and technologies that shape future industries.”

The paper argues that regulators and policymakers should consider governance reforms and incentives that encourage long-term innovation strategies, particularly in firms led by long-serving executives. The findings may also influence how boards think about CEO succession planning, oversight and the balance between short-term financial pressures and long-term investment.

Osinubi’s research, “Long CEO tenure, independent directors and R&D knowledge stock: the moderating effect of performance shortfalls”, was published in the Corporate Governance: The International Journal of Business in Society

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Profit alone is a poor measure of success, study shows companies can look efficient while harming the planet

Firms that appear highly efficient at generating revenue can perform far worse when their environmental footprint are included in the calculation.  

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Companies celebrated for strong financial performance may actually be inefficient once their environmental impact is taken into account, according to new research from the University of Surrey. 

The study, published in the European Journal of Operational Research, shows that firms that appear highly efficient at generating revenue can perform far worse when their environmental footprint are included in the calculation.  

To tackle this problem, researchers developed a new way to measure “sustainable corporate efficiency”, combining traditional financial metrics with environmental data such as energy consumption, carbon emissions and revenues generated from environmentally friendly products and services.  

Dr Menelaos Tasiou, co-author of the study and Senior Lecturer in Finance at the University of Surrey, said: “Businesses have long been judged on how efficiently they turn resources into profit. But if those profits come with large environmental costs, the picture changes completely. What we show is that true efficiency means generating revenue while also reducing the environmental damage caused by production. In other words, profitability alone can mask how wasteful a business really is when environmental costs are considered.  

The research analysed more than 2,800 publicly listed companies across 61 countries between 2010 and 2022, creating one of the largest global datasets measuring how sustainable companies are, when both financial performance and environmental impact are assessed together.  

The team combined company financial records, in alignment with the green economy (defined as a low carbon, resource efficient and socially inclusive economy), with environmental disclosures such as energy use and greenhouse gas emissions. They then applied a machine learning technique known as Convexified Efficiency Analysis Trees (CEAT) to estimate how efficiently companies convert resources into revenue while minimising pollution.  

Unlike older approaches, the method models the reality that production creates both desirable outputs, such as revenue, and undesirable ones, such as emissions. This allows companies to be compared on how well they balance profit with environmental performance.  

The results found a moderate link between financial efficiency and environmental efficiency, meaning many firms that are strong financially are not necessarily good at managing their environmental impact.  

The study also found large differences across industries and countries. Firms operating in sectors with high emissions, such as manufacturing and energy, often lagged behind leaders that were better at reducing carbon intensity while maintaining revenue.  

Dr Tasiou continued: “Measuring efficiency in this broader way can help investors, regulators and policymakers identify companies that are genuinely prepared for a low carbon economy. Stronger management capability plays a key role. Firms with more capable management teams were more likely to balance profitability with environmental responsibility, suggesting that leadership decisions can strongly influence sustainable performance.  

“As governments push towards net zero and investors scrutinise environmental performance more closely, companies that fail to integrate sustainability into their operations risk falling behind.” 

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