Hardwired to Monitor: An Empirical Investigation of Agency-Type Social Contracts in Business Organizations

Abstract

This chapter, grounded in empirical analysis, supports the positionadopted by evolutionary psychologists that the human brain is hardwiredto solve adaptive problems involving social exchange relationships.First, the evolutionary psychology hypothesis regarding social exchangeis presented and explained in terms of its relevance to business. It isargued that the presence of cheater-detection/social-contract neuralalgorithms is ubiquitous among all members of a human populationregardless of formal business training. In Study I, I test thehypothesis on a sample of 300 business practitioners and students.Additionally, this study examines whether human brain circuits arestructured to recognize agency-type arrangements in firms. In a secondexperiment, the effect of organizational work experience was tested todiscover whether there exist moderating factors on the activation ofcheater-detection circuits in a business context. It is posited thatalthough corporate agents' minds are biologically evolved to identifyviolators in social contract situations, the neural circuits responsiblefor detecting these breaches are influenced by organizational componentsincluding, organizational culture, that affect individuals' perceptionsof the terms of the exchange. Implications for business practitionersand researchers are offered.