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Understanding and Addressing Managerial Sabotage in Organizations

In today’s competitive corporate landscape, the workplace can be a battleground of ambition and performance. While healthy competition can fuel innovation and productivity, research (“Determinants of Top-Down Sabotage”) by Hashim Zaman, Post-Doctoral Fellow at the Laboratory for Innovation Science at Harvard (LISH) and Karim R. Lakhani, Professor of Business Administration at Harvard Business School, founder and co-director of the LISH, and co-founder and chair of the Digital Data and Design (D^3) Institute, revealed a potential dark side to this dynamic: top-down sabotage (TDS). This phenomenon, where managers intentionally undermine their talented subordinates, poses significant risks to individual careers, organizational culture, and long-term performance. In their study, the authors analyze survey data from 335 corporate executives across various industries and firm sizes.

Key Insight: The Prevalence of Managerial Sabotage

“Approximately 30% of the survey participants report observing sabotage in their organizations, and over 70% throughout their careers.” [1]

Research highlights the reality that managerial sabotage is widespread in corporate environments. Zaman and Lakhani’s study reveals that over 70% of executives have witnessed such behaviors during their careers, with nearly one-third observing sabotage directly within their organizations. In addition, approximately 28% of survey respondents said they were victims of TDS within their current organizations, and 60% were affected by it during their careers.

Key Insight: The Root Cause—Fear

“[A]bout 21% [of survey respondents] cited status concerns as a major determinant of TDS, which is almost equal to the number citing both status and monetary concerns simultaneously, and substantially higher than the 3.3% who observed TDS for monetary reasons
alone.” [2]

The research identifies the root cause of managerial sabotage: fear. Managers, particularly in hierarchical organizations, may perceive talented subordinates as threats to their status and pride. This insecurity drives them to pre-emptively undermine their team members, which can hurt employees’ careers and the organization’s culture and performance.

Key Insight: The Role of Relative Performance Evaluations (RPEs)

“[W]hen a firm operates on RPE but the final decision on compensation or promotion relies on subjective managerial discretion, the incidence of TDS increases to 46.8%. Conversely, the magnitude of TDS under RPE without managerial discretion drops to 26.9%.” [3]

The study delves into the impact of relative performance evaluations (RPEs), a common method used to assess employees by comparing their performance. While RPEs can drive productivity, they may also inadvertently encourage sabotage, particularly when managers have significant discretion in determining promotions. Zaman and Lakhani found that firms relying heavily on subjective RPE systems saw a marked increase in sabotage incidents. By contrast, organizations with more objective and transparent evaluation processes experienced significantly lower levels of sabotage.

Key Insight: Building a Culture That Prevents Sabotage

“Our survey results show that organizational culture is the single biggest factor that mitigates TDS.” [4]

The research underscores the critical role of organizational culture in combating sabotage. Companies that emphasize open communication, collaboration, and transparency are less likely to experience managerial undermining. Strategies such as implementing and enforcing 360-degree feedback systems (in which feedback is gathered from multiple sources about an employee’s performance); ensuring performance evaluations are transparent, standard, and objective; and shifting incentives away from individual to team-based performance measures can significantly reduce the fear and competitiveness that drive sabotage.

Why This Matters

TDS is more than a human resources challenge—it is a strategic business issue with far-reaching consequences. It weakens organizational performance, makes it difficult to attract and retain employees, and can jeopardize succession plans. C-suite and business leaders can address this problem by taking a few key actions: 

  • Increasing transparency and objectivity in performance evaluation
  • Enforcing the use of 360-degree feedback systems
  • Creating a culture of collaboration, openness, and communication
  • Aligning incentives with team-based performance metrics

References

[1] Hashim Zaman and Karim R. Lakhani, “Determinants of Top-Down Sabotage”, HBS Working Paper 25-007 (August 22, 2024): 1-81, 2.

[2] Zaman and Lakhani, “Determinants of Top-Down Sabotage”, HBS Working Paper 25-007 (August 22, 2024): 9-10.

[3] Zaman and Lakhani, “Determinants of Top-Down Sabotage”, HBS Working Paper 25-007 (August 22, 2024): 10.

[4] Zaman and Lakhani, “Determinants of Top-Down Sabotage”, HBS Working Paper 25-007 (August 22, 2024): 26.

Meet the Authors

Hashim Zaman isa Post-Doctoral Fellow at the Laboratory for Innovation Sciences at Harvard. His research lies at the intersection of information economics, strategy and finance. He uses observational data and field experiments to study the role of economic incentives in mitigating agency issues in organizations. In addition, he uses machine learning methods to study the impact of social media sentiment on firm performance.

Headshot of Karim Lakhani

Karim R. Lakhani is the Dorothy & Michael Hintze Professor of Business Administration at the Harvard Business School. His innovation-related research is centered around his role as the founder and co-director of the Laboratory for Innovation Science at Harvard and as the principal investigator of the NASA Tournament Laboratory. He is also the co-founder and chair of the The Digital Data Design (D^3) Institute at Harvard and the co-founder and co-chair of the Harvard Business Analytics Program, a university-wide online program transforming mid-career executives into data-savvy leaders.


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