When theories become self-fulfilling, companies better pay attention


Sometimes new scientific theories don’t just describe social reality, they change it. Companies that resist these changes may suffer, but companies that embrace them can profit. Especially if they are early adapters.

But how do you know if a new theory will change your reality?

Dr Emilio Marti of Rotterdam School of Management, Erasmus University (RSM) and Prof. Jean-Pascal Gond describe the conditions under which scientific theories become self-fulfilling.

Until 1870, employers in the USA paid little attention to the well-being of their employees. Then, radical theories of ‘industrial betterment’ emerged, which stated that increasing the welfare of employees would make factories more productive. The railroad industry began to experiment with this theory, and after positive results, more ...

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