University of Amsterdam Study Finds People Perceive Rule-Bending Leaders as Attractive Despite Ethical Concerns
What do Charlene de Carvalho-Heineken, Elon Musk and some bankers have in common? They are rule benders: people who follow the letter but not the spirit of the law. Organisational psychologist Astrid Homan, along with her colleagues, conducted research on these types of people. As it turns out, we prefer our leaders to be rule benders. We prefer them over people who actually break the rules, but in competitive environments, even over people who strictly follow the rules.
In her recently published research, Homan distinguishes between two categories of people within organisations: rule benders and rule breakers. This distinction is not always easy to make. Homan explains: ‘In simple terms, it is the difference between the letter and the spirit of the law. Rule breakers simply do not abide by the law: they break the established rules. Rule-benders do officially obey the law, but do not act according to the spirit of that law. Rule benders look for ways around rules without breaking them, even though it is clear that this does not comport with the underlying intention of the rule.’
The way Carvalho-Heineken interpreted the rules is technically legal, but it is obviously not what our tax laws are meant for.
Tax avoidance versus evasion
A well-known example of bending rules is tax avoidance: it is not punishable, like tax evasion, because it uses legal methods to avoid paying certain taxes. ‘Recently, Charlene de Carvalho-Heineken, the richest woman in the Netherlands, made the news for this reason. She had set up tax structures to pay significantly less tax on her enormous wealth. The way she did this is technically legal, but it is certainly not what our tax laws are intended for.’
Dominant and prestigious
Ethical or not: we generally see people who bend rules as attractive leaders. This is because we associate leadership with traits like dominance and prestige, according to research by Homan and colleagues. ‘People who break rules are only seen as dominant and assertive. People who bend rules are seen as both dominant and prestigious; they achieve things that often benefit a larger group without committing a crime. This combination of traits is highly valued in a leader, more so than just dominance.’
In environments that call for extensive collaboration, it is often more effective to follow rules than to bend them.
Not all environments equally appreciate bending rules, Homan explains. ‘In competitive environments, people like it when the leader bends the rules a bit. For example, when budgets are tight or parliamentary seats are involved. This is where dominance, which is part of a rule bender’s character, comes in useful.
In more cooperative environments that call for extensive collaboration, following rules is often more effective. Here, prestige is appreciated in a leader, whereas dominance and thus bending rules are less valued in such situations.’
Overpriced subscription with a welcome gift
An example of a leader in a competitive setting is Elon Musk, founder of electric car manufacturer Tesla. When Tesla was not yet licensed to sell electric cars, Musk decided to find a loop hole in the law: he sold overpriced subscriptions – priced remarkably similar to an electric car. As a welcome gift, subscribers received a free electric car. Musk successfully circumvented the rules without breaking them.
You can come up with all sorts of new rules now, but within a couple of months, I’ll have found ways around them.
The banking world is also no stranger to circumventing rules. ‘A director of De Nederlandsche Bank once gave a lecture on regulation to a group of bankers in London, explaining why these rules were important. Afterwards, a banker approached him and said: you can come up with all sorts of new rules now, but within a few months, I’ll have found ways to circumvent them again.’
Different cultures – different preferences
Homan has not conducted research on how different cultures see the bending of rules, but sees some plausible parallels with research on breaking rules: ‘When it comes to leaders who break rules, a clear distinction can be made. Countries and cultures that are relatively collectivist and strictly adhere to rules logically do not like leaders who break rules. Cultures that are more individualistic, like the Netherlands, have more appreciation for rule breakers. Chances are this is also true for rule benders.’