EVOLUTIONARY TENDENCIES OF SIMPLE SOCIAL EXCHANGE ACROSS THE STAGES OF EGO DEVELOPMENT: IMPLICATIONS FOR LEADERSHIP Melita Balas Rant University of Ljubljana School of Economics and Business, Slovenia melita.balas.rant@ef.uni ‐lj.si Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 55 in leader–members social exchange, a followers’ per ‐ cep ti ons and interpreta ti ons also are highly important for the trust and high ‐quality social exchange (Hollan ‐ der, 1978, 2009). “Changes can occur in percep ti on, when enriched by experience. The prospect for trust or mistrust may thereby grow. If posi ti ve, there will likely be loyalty and solidarity of purpose, and the reverse is also likely. Trust and loyalty are among those quali ti es needed to bind rela ti onships” (Hollander, 2009: 5). The purpose of this paper is to understand how trust is formed between two people in the social ex ‐ change while being impacted by stages of ego de ‐ velopment. Because both (1) the stage of ego development (Loevinger, 1976) and (2) the quality of social exchange are complex phenomena, the im ‐ pact of stage of ego development of the quality of social exchange thus is a higher ‐order complex phe ‐ nomenon. To uncover the basic regulari ti es of this impact between two complex phenomena, we focus on the most elementary form of the social ex ‐ change, “the act of giving.” 1 INTRODUCTION In leader–member exchange (LMX) theory, lead ‐ ership is a func ti on of the quality of the leader– member interac ti on; dynamics of this interac ti on construct the quality of the social exchange. Predic ‐ tors of high ‐quality social exchange have been iden ‐ ti fied on the side of the leader (charisma), on the side of the follower (follower innova ti ve role expec ‐ ta ti ons) (Meindl, Erlich, & Dukerich, 1985; Hollander, 1980), and in the dyadic leadership rela ti onship (LMX) (Hollander, 1980; Graen & Scandura, 1987). One of the predictors of the quality of the social ex ‐ change is demographic and rela ti onal similarity (Green, Anderson, & Shivers, 1996; Tsui, Xin, & Egan, 1995); both similari ti es increase the likelihood of trust in the rela ti onship (Scandura & Pellegrini, 2008; Harris, Wheeler, & Kacmar, 2009). Trust is a higher ‐ order a tt ribute of high ‐quality social exchange. Trust also is a func ti on of percep ti ons and inter ‐ preta ti ons of the both sides of the rela ti onship; thus, This paper addresses the research ques ti on of how the stages of ego development impact the interpreta ti on schemes of the simple social exchange (act of giving). Using a sample of N = 290 respondents, we present the research findings on the evolu ti on of the interpreta ti on schemes of the act of giving across the levels of ego development. Research findings reveal the tendency of the stage of ego development to impact the proper ti es and e ffects of the simple social exchange (act of giving). We theorize implica ti ons for leadership. We propose that the higher order of ego development induces a higher quality leader–member exchange (LMX) and greater likelihood of resolu ti on of adap ti ve leadership challenges. Furthermore, followers are more likely to entrust power to a leader in exchange for high ‐quality rela ti on ‐ ships. The paper is a tenta ti ve a tt empt of merger of the LMX theory with the construc ti ve school of adult development. This merger illuminates an interes ti ng rela ti on, namely that the stage of ego development might be a likely determinant of the quality of the LMX and leadership e ffec ti veness. Keywords: ego development, LMX theory, genera ti vity, act of giving, social exchange Abstract Vol. 11, No. 2, 55 ‐70 doi:10.17708/DRMJ.2022.v11n02a04 Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 56 Melita Balas Rant: Evolu ti onary Tendencies of Simple Social Exchange Across the Stages of Ego Development: Implica ti ons for Leadership The act of giving is worthy of study for several reasons: (1) it is the ac ti on/behavioral expression of the personal tendency for genera ti vity (Erikson, 1950; Fein, 2018;); (2) genera ti vity depends on the stage of adult development (Erikson, 1950, 1959, 1963); (3) genera ti vity might be a possible explana ‐ tory variable of a leader’s capacity for integra ti ng across di fference interests and expecta ti ons (Volck ‐ mann, 2014) and to resolve the adap ti ve leadership challenges (Heifetz, Linsky, & Grashow, 2009). The paper contributes to the field of LMX the ‐ ory. It gives a new perspec ti ve on LMX theory by merging the neo ‐Piage ti an school of adult develop ‐ ment with LMX theory. Furthermore, this paper brings the new concept to the field of trust forma ‐ ti on, namely genera ti vity viewed from the perspec ‐ ti ve of a simple act of social exchange—i.e., how the act of giving contributes to trust forma ti on in the LMX rela ti onship. Thirdly, the paper explains the trust forma ti on in the LMX rela ti onship from the perspec ti ve of the leader and the perspec ti ve of the follower. This paper is organized in eight sec ti ons. The second sec ti on reviews proper ti es of ego develop ‐ ment as iden ti fied by the construc ti ve neo ‐Piage ti an school of adult development. The third sec ti on fo ‐ cuses on the Eriksonian view of adult development, the phenomenon of genera ti vity, and research on the act of giving. The fourth sec ti on presents the re ‐ search design, followed by how the percep ti on and interpreta ti ons of the act of giving evolve across the ego development stages. We apply the Washington University Sentence Comple ti on Test (WUSCT) ego development decoding scheme and the grounded theory approach to iden ti fy proper ti es of the act of giving at the given ego development stage (sample size N = 290 respondents). In the sixth sec ti on we speculate on the possible influence of ego develop ‐ ment stage on the trust aspect of a simple social ex ‐ change (in our case, represented by the act of giving). We propose a tenta ti ve framework of co ‐flu ‐ ence (Hollander’s abbreviated expression for the two ‐side influence or collec ti ve influence) from the two perspec ti ves of the leader–follower rela ti on ‐ ship: (1) the follower perspec ti ve—how the willing ‐ ness to entrust power to another person in exchange for services (the follower perspec ti ve) might evolve as one moves across the stages of ego development; and (2) the leader perspec ti ve—how the willingness of a leader to address the adap ti ve challenges might evolve as one moves across the stages of ego development. The seventh sec ti on dis ‐ cusses theore ti cal contribu ti ons, prac ti cal implica ‐ ti ons, research limita ti ons, and possibili ti es for future research. The last sec ti on summarizes the main findings. 2 THEORETICAL BACKGROUND 2.1 Adult (Ego) Development The neo ‐Piage ti an construc ti ve school of human development studies di fferent evolu ti onary tendencies in humans such as self ‐referen ti al and meaning ‐making systems (Kegan, 1982, 1994), so ‐ cial cogni ti on (Selman, 1971, 1980), reflec ti ve judg ‐ ment (King & Kitchener, 2004), moral judgment (Kohlberg, 1984), the structure of the ego (Lo ‐ evinger, 1976; Hy & Loevinger, 1996), cogni ti ve com ‐ plexity (Commons, Trudeau, Stein, Richards, & Krause, 1998), the complexity of perspec ti ve ‐taking and the a ffec ti ve sensi ti vity (Cook ‐Greuter, 1985/re ‐ vised 2013; 2000), ac ti on logics (Tolbert & Associ ‐ ates, 2004; Rooke & Tolbert, 2005), leadership styles (Harris & Kuhnert, 2008), needs and mo ti va ti ons (Maslow, 1967; Barret, 2016), and dominant sub ‐ conscious values and beliefs (Graves, 1974; Beck & Cowan, 1996). Regardless of the foci of the studies, neo ‐Piage ‐ ti an scholars have iden ti fied the following evolu ti on ‐ ary regulari ti es in human/leader development (McCauley, Drath, Palus, O’Connor, & Baker, 2006): 1) People try to make sense of themselves by form ‐ ing meaningful and coherent narra ti ves around the experience (Bauer & McAdams, 2004). 2) The story and experience interpreta ti on is de ‐ pendent of the subject–object rela ti onship and meaning ‐making mechanisms (Kegan, 1982, 1994, 2009). Subject–object rela ti onships and the meaning ‐making mechanisms evolve. 3) The meaning ‐making mechanisms evolve in stages, referred to as orders of consciousness, ways of knowing, or orders of development (McCauley et al., 2006). Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 57 The stages of development unfold in a specific invariant sequence, with each successive order tran ‐ scending and including the previous order (Wilber, 1995/2001). Erikson (1950, 1959, 1963) constructed eight core polari ti es opera ti ng in the human psyche that need to be resolved in the process of human (ego) development. These are trust vs. mistrust, au ‐ tonomy vs. doubt/shame, ini ti a ti ve vs. guilt, indus ‐ try vs. inferiority, iden ti ty vs. iden ti ty di ffusion, in ti macy vs. isola ti on, genera ti vity vs. stagna ti on, and integrity vs. despair; these polari ti es construct an eight ‐stage model of adult development. In the case of ideal development, the person proceeds successively through these stages. From the perspec ti ve of the leadership and sus ‐ tainability, the most interes ti ng opposi ti on is gener ‐ a ti vity vs. stagna ti on (Ghislieri & Ga tti , 2012). Genera ti vity “is meant to include . . . produc ti vity and crea ti vity” (Erikson, 1950, p. 267). In the original Eriksonian no ti on of genera ti vity, the emphasis is on the intergenera ti onal inclusion; however, the per ‐ sonal tendency for inclusion also could be applied across all other social and business divides, and thus is cri ti cal for integral leadership (Volckman, 2014). Slater (2003) added to Erikson’s stage of conflict between genera ti vity vs. stagna ti on by including seven psychosocial conflicts, namely inclusivity vs. exclusivity, pride vs. embarrassment, responsibility vs. ambivalence, career produc ti vity vs. inadequacy, parenthood vs. self ‐absorp ti on, being needed vs. aliena ti on, and honesty vs. denial. Some of Erikson’s most compelling examples of genera ti vity appear in his psychobiographical explora ti ons of the lives of Mar ti n Luther and Mahatma Gandhi, two great leaders, both of whom appear to have been their most genera ti ve in the bright light of public ac ti on rather than in the private realms of friends and fam ‐ ily. Genera ti vity as a stage of adult development is a ffected by family background and cultural back ‐ ground (Pra tt , Matsuba, Lawford, & Villar, 2020). 2.2 Genera ti vity and the Act of Giving McAdams and de St Aubin (1992) studied the phenomena of genera ti vity from a wider perspec ‐ ti ve–how a shared psychosocial space impacts the expression of the genera ti vity, inclusion, and ten ‐ dency for giving. They iden ti fied a seven ‐feature conceptual model opera ti ng within a shared psy ‐ chosocial space that induces the genera ti ve ac ti on: (1) cultural demands for genera ti vity and acts of giv ‐ ing; (2) wish, desire, and the force in the human psy ‐ che for genera ti vity; (3) the power of the concern for the next genera ti on (the narrow Erikosonian view of genera ti vity); (4) a personal belief in the goodness of oneself; (5) implemented genera ti ve ac ti on and its consequences; (6) a virtuous loop in which the genera ti ve ac ti on is strengthened further by cultural demand or inner desire; and (7) a per ‐ son’s narra ti on of genera ti ve ac ti on into the coher ‐ ent subjec ti ve story about the self. Bradley (1997) and Bradley & Marcia (1998) studied the resolu ti on of genera ti vity vs. stagna ti on from the perspec ti ve of ego ‐iden ti ty structure. They found that the reso ‐ lu ti on of the conflict is dependent upon the capacity of the individual to synthesize the care with recep ‐ ti vity. Two criteria determine the extent of care or recep ti vity: (1) an individual’s level of involvement, defined as the ac ti ve concern for the growth of the self and others; and (2) an individual’s inclusivity and scope of caregiving concern. Adults can rate high or low on these two criteria in rela ti on to self and others. These ra ti ngs allow adults to be classi ‐ fied into five iden ti ty statuses: genera ti ve, agen ti c, communal, conven ti onal, and stagnant. Bradley and Marcia (1998) also showed that expression of gen ‐ era ti vity and the five iden ti ty statuses tends to be a property of the higher ‐order stages of ego develop ‐ ment, which they measured using the WUSCT (Hy & Loevinger, 1996). Generativity is a personality trait (placed in the upper left quadrant of the Wilberian all quad ‐ rants, all levels [AQAL] model), whereas the act of giving is the behavior expressed in a specific mo ‐ ment in time and context (placed in upper right quadrant of Wilberian AQAL integral theory; Wilber, 1995/2001). In the research literature, the act of giving is defined as “freely offering some ‐ thing of oneself to another person, which needs to be of value to the recipient without the expecta ‐ tion of receiving anything in return” (Knight, Sk ‐ outeris, Townsend, & Hooley, 2014, p. 258). Such a definition conceals the unexpected nature of re ‐ turns for the giver; for that matter, Knight et al. (2014) question whether the unexpected nature of Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 58 returns is truly unexpected due to hidden benefits for the giver, and thus the act of giving is inherently a two ‐way social exchange in nature. A meta ‐research review of the act of giving within the context of non ‐familial reciprocal inter ‐ genera ti onal interac ti on implied posi ti ve behavioral change on both sides of the social exchange (Knight et al., 2014). Furthermore, for both sides in the re ‐ la ti onship, the act of giving causes posi ti ve emo ‐ ti onal states (Morrow ‐Howell, Hong, & Tang, 2009), improved self ‐esteem, increased meaning, and pur ‐ pose in one’s life (Folts, 2006; Hegeman, Roodin, Gilliland, & Ó’Flathabháin, 2010; Reisig & Fees, 2007; Rozario, 2006). Furthermore, the act of giving increases proximity within rela ti onal links (Lohman, Gri ffiths, Coppard, & Cota, 2003); increases social cohesion across genera ti ons (De Souza, 2007); and increases a ffec ti ve and instrumental reciprocity (Breytspraak, Arnold, & Hogan, 2008). The e ffects of the act of giving are influenced by personal values (Cruz Passos, Silva Leite & Rezende Pinto, 2020), which evolve through stages of adult development (Hy & Loevinger, 1996). 3 METHODOLOGY 3.1 Research Ques ti on The research ques ti on is how trust is formed between two people in the social exchange while being impacted by stages of adult or ego develop ‐ ment. The social exchange was studied in terms of the act of giving. What are the regulari ti es of the act of giving across stages of adult development? A ft er the iden ti fica ti on of regulari ti es, what are the impli ‐ ca ti ons for the LMX rela ti onship, from the perspec ‐ ti ve of a leader and of a follower? 3.2 Research Se tti ng and Data Gathering We used convenience sampling strategy (Robinson, 2014). Data were gathered over the pe ‐ riod December 2018–December 2020 from the Slovenian adult popula ti on (aged above 18 years). The request first was sent to post ‐graduate stu ‐ dents at the University of Ljubljana, who were asked to disseminate it among their private net ‐ work in which also more senior people are repre ‐ sented. To increase mo ti va ti on for taking the test, all respondents were o ffered the opportunity to re ‐ ceive wri tt en coaching feedback on the dominant adult developmental stage. In that case, the person needed to reveal his/her email address. Otherwise, the person could stay anonymous. The WUSCT was conducted in Slovene. 3.3 Method We used a ques ti onnaire composed of three sec ti ons: (1) an ego development sec ti on; (2) inter ‐ preta ti ons of the act of giving; and (3) the socio ‐de ‐ mographic of the respondent. For the ego development stage, we adopted Lo ‐ evinger’s abbreviated sentence comple ti on test (WUSCT), composed of 18 stem roots (Raising a family…; Being with other people…; My thoughts…; What gets me into trouble is…; Educa ti on…; When people are helpless…; A man’s job is…; I feel sorry… ; Rules are…; I can’t stand people who…; I am…; My main problem is …; My emo ti ons…; A good mother…; My conscience bothers me…; A man (women) should always…; The meaning of life is…; and Happiness is…). We iden ti fied the stages by de ‐ coding using the guidelines in the WUSCT decoding manual (Hy & Loevinger, 1996). Decoding was done by two decoders, both of whom were experts in the field of a construc ti ve approach to adult develop ‐ ment with experience in the WUSCT decoding pro ‐ cedure. Cohen’s kappa is above 98.2%, indica ti ng good inter ‐rater reliability (Figure A ‐1). Answers on the reflec ti ve ques ti on “Reflec ti ng on your personal experience, please share with us what are the expected and unexpected conse ‐ quences of act of giving?” We deliberately le ft the act of giving undefined, thus invi ti ng respondents to apply their own interpreta ti ons to “the act of giv ‐ ing.” This aligned with the philosophy of the sen ‐ tence comple ti on test, in which the choice of approach and interpreta ti on is an important vari ‐ able of the research observa ti on. These answers were decoded using the grounded theory approach (Glaser & Strauss, 1967; Corbin & Strauss, 1990). We grouped people in subgroups according to their stage of ego development iden ti fied though the WUSCT scheme. Melita Balas Rant: Evolu ti onary Tendencies of Simple Social Exchange Across the Stages of Ego Development: Implica ti ons for Leadership Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 59 For more ‐e ffec ti ve pa tt ern recogni ti on, we also extracted the generic ego proper ti es at each devel ‐ opmental stage (Hy & Loevinger, 1996). Generic ego proper ti es in each stage presented thema ti c lenses through which we observed answers. We paid at ‐ ten ti on to the material/non ‐material aspects, posi ‐ ti ve/nega ti ve, a ffec ti ve/cogni ti ve aspects, and self/other/rela ti onal aspects of answers at each adult stage. Figure A ‐2 summarizes how these prop ‐ er ti es across the stages of adult development were iden ti fied. 3.4 Sample Characteris ti cs The sample totalled 290 individuals who com ‐ pleted the SCT and shared their interpreta ti ons of the act of giving. The ego development stages ranged from E2 (impulsive) to E7 (individualis ti c). Figure 1 summarizes the socio ‐economic features of the sample. A majority of the sampled cases occu ‐ pied the E4 stage of ego development (59.7%), fol ‐ lowed by the E5 stage of ego development (19.7%). The post ‐conven ti onal stage (E7) was weakly repre ‐ sented in the sample. The sample shows that people who occupy higher stages of ego development are on average older, which confirmed that the stage of ego development is impacted by age and experi ‐ ence (Kegan, 1994). 4 FINDINGS How do the percep ti ons and interpreta ti ons of the act of giving change when one moves through the stages of ego development? We observed the answers from material/non ‐material aspects, posi ‐ ti ve/nega ti ve, a ffec ti ve/cogni ti ve aspects, and self/other (rela ti onal) aspects of answers at each ego stage; Figure A ‐2 presents an in ‐depth review of the decoding process. On the most generic level, the following movements of percep ti on and inter ‐ preta ti on of the act of giving were iden ti fied: • There was a tendency for percep ti on and interpre ‐ ta ti on to move from the material to non ‐material as ‐ pect of the act of giving when moving ver ti cally from lower (E3) to higher stages of ego development (E7); • There was a tendency for percep ti on and interpre ‐ ta ti on to move from the nega ti ve to the posi ti ve as ‐ pect of the act of giving when moving ver ti cally from lower (E3) to higher stages of ego development (E7); • There was a tendency for percep ti on and interpre ‐ ta ti on to move from the simple a ffects to a more nuanced recogni ti on of a ffects—cogni ti ve inter ‐ preta ti ons of the act of giving gained higher ‐order phenomena recogni ti on (response, interac ti on, and trust) and higher ‐order perspec ti ve ‐taking— when moving ver ti cally from lower (E3) to higher stages of ego development (E7); Stage of development (Loevinger’s framework) Distribu ti on of cases (N = 290) Average age Gender Educa ti onal background Male Female Natural sciences, engineering Social sciences, economics Other Group of ordinary people Impulsive (E2) 1.8% 20 70% 30% 30% 60% 10% Self ‐protec ti ve (E3) 8.6% 31 50% 50% 50% 50% 0% Conformist (E4) 59.7% 30 50% 50% 29.1% 55.6% 15.4% Self ‐aware (E5) 19.7% 41 50% 50% 41.9% 51.6% 6.5% Conscien ti ous (E6) 5.4% 43 50% 50% 10% 60% 30% Individualis ti c (E7) 4.4% 45 50% 50% 10% 60% 30% Figure 1: Socio ‐economic features of the sample Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 60 • There was a tendency for percep ti on and inter ‐ preta ti on to move from a focus on the impact of the act of giving directly on the self, to a focus on the impact indirectly on the self (through the re ‐ sponse of the other side), on the quality of social exchange, on trust in the rela ti onship, and on the counter ‐response of the self to others, and on the e ffects of this on the quality of social exchange, proximity, and trust in the rela ti onship and well ‐ being of the other side. These tendencies of percep ti ons and interpre ‐ ta ti ons of the act of giving across stages of adult de ‐ velopment are presented graphically in Figure 2. The ver ti cal axis depicts a nega ti ve vs. posi ti ve focus in the interpreta ti ons, the horizontal axis depicts outer ‐material to inner ‐sensa ti onal focus, and the third axis depicts the focus of the e ffects of the act of giving on the self, on others, or on the rela ti on ‐ ship. The pa tt ern iden ti fied in the answers reveals a tendency for diagonal movement from inner lower le ft to the outer upper right corner. This indicates movement from a nega ti ve, material, self ‐focus to a posi ti ve, sensa ti onal and rela ti onal focus (i.e., quality social exchange). A posi ti ve, sensa ti onal, and rela ti onal focus of the act of giving on the quality social exchange (E7) vs. a nega ti ve, material, and self ‐focus (E3) indicates that E7 is more likely to in ‐ duce trust and create a high ‐quality social exchange than is E3. Furthermore, a person becomes a more e ffec ti ve inducer of trust and a high quality of social exchange when he/she reconstructs the ego toward higher developmental levels. What implica ti ons can we generalize about the evolu ti onary tendencies around social exchange as people progress through the stages of adult devel ‐ opment from this specific (narrow) case of social ex ‐ change (act of giving)? How might our findings around the impact of the stages of ego opment on the percep ti ons and interpreta ti ons of the act of giv ‐ ing inform the rehabilita ti on of trust in social ex ‐ changes between leader and follower? Based on our findings, we speculate how the willingness of a follower to entrust power to an ‐ other person in exchange for services (expected benefits) might evolve as one moves across the stages of ego development, and how the willingness of a leader to address the adap ti ve challenges might evolve across the stages of ego development. Melita Balas Rant: Evolu ti onary Tendencies of Simple Social Exchange Across the Stages of Ego Development: Implica ti ons for Leadership Figure 2: Impact of the ego development stage on the simple social exchange (act of giving) Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 61 5 DISCUSSION AND CONCLUSION 5.1 Follower perspec ti ve: How can the willingness to entrust power to another person in exchange for services (expected benefits) evolve as one moves across the stages of ego development? Heifetz (2015) calls for research (failing, suc ‐ cessful, micro, macro, case ‐studies, and qualita ti ve) that studies authority and leadership separately be ‐ cause of rising mistrust toward people in an author ‐ ity posi ti on due to the tendency that “people in authority violate the trust of the power that they have been given and, having violated that trust, they generate significant scar ti ssue; some of that scar ti ssue gets carried from genera ti on to genera ti on” (Heifetz, 2011, p. 306). In addi ti on to the research on the dark side of leadership and the corrup ti ng tendencies of leaders in a posi ti on of authority (Conger, 1990; Kets de Vries, 2005), more research is needed on (1) how to establish and amplify trust, and (2) how to renew trust when mistrust has been established (Heifetz, 2015). Thus, we need to be tt er understand the factors that impact the willingness to authorize the other side (the leader) and entrust him/her with power. The willingness to authorize the other side (i.e., the leader) depends on how followers perceive and interpret the ac ti ons, mo ti ves, and a tt ributes of a person (Hollander, 1978, 1980, 2013). A leader’s le ‐ gi ti macy is a func ti on of followers’ percep ti ons and interpreta ti ons. The level of legi ti macy impacts the leader’s power and influence to facilitate change (Hollander, 1978, 2013). Follower acceptance is es ‐ sen ti al to the legi ti macy and trust of leaders; thus, leadership is a process of co ‐fluence between the leader and followers (Hollander, 2008, 2013) 1 . 1 Hollander’s (2013) a tt ribu ti on of the idiosyncra ti c credit to a leader is a func ti on of perceived competence in the main group task and loyalty to group norms. The IC model thus explains the upward influence. When fol ‐ lowers accord such credits to leaders, followers have “upward influence” (Hollander, 2004). IC is relevant for IC dynamics of “giving and taking credit,” which the essence of the process of leadership (Hollanders, 2004b). Spending of leadership credit is constrained by the expecta ti ons of the followers. The challenge of the In construc ti ng these percep ti ons and interpre ‐ ta ti ons, followers are the ac ti ve component of lead ‐ ership. Followers’ interpersonal evalua ti ons of the leader are a func ti on of the needs and expecta ti ons of the followers (Hollander, 1978, 1980, 2013). Ac ‐ cordingly, “followers’ needs also determine which tangible and intangible rewards su ffice in mo ti va ti ng them to follow recognizing that individual di ffer ‐ ences do ma tt er” (Hollander, 2013, p. 131). Inves ti ga ti ng innovators, Scharmer (2009) found that two people in the same circumstances doing the same thing can bring about completely di fferent outcomes because the outcomes depend not only on what the person does, but also on their “interior condi ti on,” or the inner place from which they operate (Scharmer, 2009, p. 7). The quality of inner place or the quality of awareness is a func ti on of ego development (Loevinger, 1976; Cook ‐Greuter, 1985/revised 2013). We claim that followers’ per ‐ cep ti ons and interpreta ti ons of any outer observa ‐ ti ons (for example, words and acts of the leader) are thus a func ti on of the quality of awareness captured by level of ego development. Under what condi ti ons is the person at the lower stages of ego development (follower) willing to entrust power to another, and what do they ex ‐ pect in return? Based on the findings about how expecta ti ons and interpreta ti ons around the act of giving evolve across stages of ego development, we assume that if a follower is at the lower stages of ego develop ‐ ment (in our case, at E3 or E4), he/she would be will ‐ ing to entrust power to another in exchange for the benefits valued for the self. The valued benefits are self and materially focused. It is preferable that the expected benefits should be perceived as a prospect IC model is that leaders may ini ti ate change, but also show su fficient compliance to the group norms; the leadership challenge is to balance both forces. Hollander puts forth three limita ti ons to a leader’s poten ti al influ ‐ ence that arise from the follower side: (1) “What have you done for us lately?”; (2) the lack of percep ti veness of a leader on an available credit; and (3) followers rep ‐ resent a variety of interests (Hollander, 2013, p. 218). Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 62 for increased monetary reward, promo ti on, im ‐ proved social status, and other forms of tangible re ‐ wards. Furthermore, a person at the lower stage of ego development tends to pay more a tt en ti on to the instances in which expecta ti ons of the rewards are not met. They prefer to interpret the e ffects of the social exchange nega ti vely. In an open ‐system case (i.e., elec ti on and vo ti ng), the follower would prefer (a tt ribute idiosyncra ti c credit) a person who is per ‐ ceived to be more likely to deliver valued benefits (i.e., increase in wages, employment stability, etc.). In a closed ‐system case (i.e., a company), the selec ‐ ti on of a person in a posi ti on of authority unfolds in a top ‐down manner; in this case, we propose that a person at the lower stage of ego development would engage in more work e ffort in the case of percep ti on and delivery of material and status benefits. Under what condi ti ons is a person at the higher stages of ego development (follower) willing to entrust power to another, and what is expected in return? If the follower is at the higher stages of ego de ‐ velopment (in our case, at E6 or E7), the criteria for entrus ti ng a power shi ft from material to non ‐ma ‐ terial (sensa ti onal; shi ft ing a tt en ti on from material and behavioral appearances to feelings, assump ‐ ti ons, and beliefs behind specific appearances), from benefits for the self to the quality of the rela ‐ ti onship (the other side is taken in considera ti on in terms of its e ffects on the quality if the rela ti onship). The core criteria for evalua ti ng the quality of the re ‐ la ti onship are proximity and trust. Here, the person recognizes the ac ti ve role in defining the quality of the rela ti onship in terms of how she/he frames their own expecta ti ons and controls responses. People at higher stages of ego development prefer to inter ‐ pret the e ffects of the social exchange posi ti vely. In an open ‐system case (i.e., elec ti on and vo ti ng), the follower prefers to vote for the person who is per ‐ ceived to be more likely to create trust and build proximity in the rela ti onship (inclusiveness). In a closed ‐system case (i.e., a company), the person at the higher stage of ego development engages in a more dyadic rela ti onship in a case in which proxim ‐ ity and trust also are valued from the leader (i.e., the person in a posi ti on of authority). 5.2 Leader perspec ti ve: How can the willingness of the leader to address the adap ti ve challenges evolve across the stages of ego development? From the perspective of how a leader should approach the leadership situation, Heifetz, Linsky, and Grashow (2009) differentiated between two types of leadership challenges: technical problems and adaptive challenges. Whereas technical prob ‐ lems may be very complex and critically important (i.e., cardiac surgery), they have known solutions (the knowledge and capacity already exist); thus, such problems can be resolved by an authority, an expert, or by tested procedures, norms, and sys ‐ tems. In contrast, adaptive challenges have no so ‐ lution or the solution lies outside of people’s current repertoires; therefore, the solution can be addressed only through changes in people’s prior ‐ ities, beliefs, habits, and loyalties. An adaptive challenge is defined as the gap between the values people stand for and the reality that they face (their current lack of capacity to realize those val ‐ ues in their environment). In the next decade, the most predictable trend will be a rise of adaptive challenges (Sowcik, Andenoro, McNutt, & Murphy, 2015). The distinctive attribute of a leader is the capacity to address complex organizational chal ‐ lenges through adaptive leadership (Nelson & Squires, 2017). A classic leadership error is trea ti ng an adap ti ve challenge as a technical problem (Heifetz, Linsky, and Grashow, 2009). When dealing with the adap ‐ ti ve challenge, adap ti ve leaders are “certainly not as well received as when you are mobilizing people to address a technical issue that is within their compe ‐ tence or requires exper ti se that can be readily ob ‐ tained” (Heifetz, Linsky & Grashow, 2009, p.17). Not benefi ti ng from adap ti ve challenges, losing credits and authority, etc., are the core obstacles for ad ‐ dressing adap ti ve challenges. There is a need to ex ‐ tend the strategic leadership research to be tt er understand phenomena of addressing adap ti ve challenges from the perspec ti ve of (a) chief execu ‐ ti ve o fficer (CEO) characteris ti cs and (b) the dynam ‐ ics of interac ti ons among the CEO, the top management team, and the Board (Vera, Bonardi, Hi tt , & Withers, 2022). Melita Balas Rant: Evolu ti onary Tendencies of Simple Social Exchange Across the Stages of Ego Development: Implica ti ons for Leadership Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 63 The core task of an adap ti ve CEO is to enable the dynamic networks of all stakeholders (not only follow ‐ ers) to achieve common goals in an environment of uncertainty. The stakeholders are all those individuals who place value on a role (Mitro ff, 1983) while also expec ti ng to be impacted by the leader (Volckmann, 2014). When co ‐elec ti vely ac ti va ti ng such networks of stakeholders, the system first tends to de ‐construct [i.e., it goes down the U curve in Schamer’s (2009) U ‐ theory concept). This ini ti ally increases disequilibrium and causes an increase in the nega ti ve e ffects on the followers and other stakeholder groups. When opera ti ng in disequilibrium, the nega ti ve e ffects on di fferent stakeholder groups experienced in the state of disequilibrium will be a tt ributed to the leader. Adap ti ve leaders thus need the capacity to sustain opera ti ons in disequilibrium (Heifetz, Linsky, & Grashow, 2009). A high level of conflict, frustra ti on, panic, confusion, disorienta ti on, and fear can be at ‐ tributed to the leader (i.e., a person in the posi ti on of authority). Thus, the personal challenge of a leader is to sustain their own e ffec ti ve func ti oning when faced with nega ti ve returns. In other words, what are the condi ti ons under which a person is more willing to address the adap ti ve challenge and func ti on e ffec ‐ ti vely in the face of nega ti ve returns? Under what condi ti ons is the person at a lower stages of ego development (leader) willing to ad ‐ dress the adap ti ve challenge, and what is the expec ‐ ta ti on in return? If the leader is at the lower stages of ego devel ‐ opment (in our case, at E3 or E4), he/she gives more a tt en ti on to the material benefits for the self; even when it comes to most elementary social exchanges, such as the act of giving, such people tend to inter ‐ pret it in a sense of “what’s in it for me?” If addressing the adap ti ve challenge, a leader at the lower stage of ego development would need to foresee such bene ‐ fits in order to embark on an adap ti ve leadership journey. However, when addressing the adap ti ve challenge, the collec ti ve (stakeholder) system tends to move into a larger state of disequilibrium. The ex ‐ perience of conflict, frustra ti on, panic, confusion, dis ‐ orienta ti on, and fear in a leader at the lower stage of ego development most likely would put more a tt en ‐ ti on on decisions and ac ti ons that increase the likeli ‐ hood to gain the material benefits for the self. In this case, a nega ti ve, vicious circle is created, and the neg ‐ a ti ve percep ti ons and a tt ribu ti ons may amplify. This creates the dynamic of “absencing” in Scharmer’s sense (2009). Absencing might become a leader– stakeholder dynamic despite the fact that the leader ini ti ates the adap ti ve challenge. Under what condi ti ons is a person at the higher stages of ego development (leader) willing to ad ‐ dress the adap ti ve challenge, and what does he/she expect in return? When a leader is at the higher stages of ego de ‐ velopment (in our case at E6 or E7), he/she substan ‐ ti ally changes interpreta ti ons of the benefits caused by the act of giving; the core interpreta ti onal move ‐ ment is from material to non ‐material (sensa ti onal; shi ft ing a tt en ti on from material and behavioral ap ‐ pearances to feelings, assump ti ons, and beliefs behind the specific appearances), from benefits for the self to the quality of the rela ti onship (the other side is taken into considera ti on as much as it e ffects the quality of the rela ti onship), from a nega ti ve to a more posi ti ve ‐ oriented focus. The core criteria for evalua ti ng the quality of the rela ti onship are proximity and trust. When a leader at the higher stage of ego development addresses an adap ti ve challenge, he/she is more ca ‐ pable of opera ti ng and living in the face of conflict, frustra ti on, panic, confusion, disorienta ti on, and fear. This capacity to thrive in chaos is sustained by the lead ‐ ers’ a tt en ti on to decisions and ac ti ons that increase the likelihood of trust and proximity in the rela ti on ‐ ships with stakeholders, posi ti ve interpreta ti ons, and the constant scanning of the assump ti ons and beliefs behind the specific appearances. Such leaders thus are more likely to induce a cycle of presencing in the col ‐ lec ti ve of stakeholders (Scharmer, 2009). 5.3 Theore ti cal Contribu ti ons, Prac ti cal Implica ti ons and Research Limita ti ons The core theore ti cal contribu ti on of this study is the merging of LMX theory with neo ‐Piagetan adult development theory, also referred to as construc ti ve developmental theory, which is understudied in the Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 64 leadership literature (McCauley et al., 2006). This is addressed through the study of the evolu ti on of the act of giving through ego development stages. The iden ti fied evolu ti onary proper ti es of act of the giving are interpreted through the perspec ti ve of LMX the ‐ ory. This merger brings a completely novel perspec ti ve to LMX theory. It sets the cogni ti on, percep ti on, and interpreta ti on of a leader and a follower as an object of study. This also is an understudied phenomenon in leadership research (Toader & Mar ti n, 2022). The next theore ti cal contribu ti on is explaining the follower perspec ti ve through the willingness to entrust power to another person in exchange for ser ‐ vices (expected benefits), whereas the leader per ‐ spec ti ve is explained through the willingness of the leader to address the adap ti ve challenges. This is an ‐ other novel perspec ti ve on LMX theory. Our findings advance the understanding of the development of leader–follower rela ti onships and have implica ti ons for strengthening follower percep ti ons of high ‐qual ‐ ity rela ti onships with their leaders, and when a leader is addressing adap ti ve challenges. This also is an understudied phenomenon in leadership re ‐ search (Wang, Jiang, Xu, Zhou, & Bauer, 2022). This study may have several prac ti cal implica ‐ ti ons. When selec ti ng people for leadership posi ‐ ti ons, the selec ti on criteria should include the stage of adult development. Leaders at a higher stage of adult development are more willing to address adap ti ve leadership challenges. Next, followers’ stages of adult development also ma tt ers. Whereas followers at a lower stage of adult development en ‐ trust power to a leader in exchange for more mate ‐ rial benefit, followers at a higher stage of adult development are more willing to entrust power to a person who is more likely to create trust and build proximity in the rela ti onship (inclusiveness). This has profound implica ti ons for the prac ti ce of leading and leadership e ffec ti veness. The stage of adult de ‐ velopment and self ‐awareness are cri ti cal elements in the prac ti ce of leading and leadership e ffec ti ve ‐ ness that are on the rise in leadership research (Car ‐ den, Jones, & Passmore, 2022). The study has several research limita ti ons. Al ‐ though it appears that the use of adult development is gaining trac ti on in the field of leadership develop ‐ ment, instruments for assessing adult development such as the WUSCT can appear to be unreliable (Realms, 2017). The study was conducted in the Slovene language and then translated into English; in the process of transla ti on, some of the meaning may change or even be lost. The proposed rela ti on ‐ ships for LMX theory also have weak generalizability. This study is hard to replicate. However, we propose some future research that may overcome some of the research limita ti ons. We propose the study of leader–member social ex ‐ change using quan ti ta ti ve ques ti onnaires that in ‐ clude the iden ti fied adult development constructs: posi ti ve/nega ti ve interpreta ti ons, material/behav ‐ ioral/sensa ti onal focus, and focus on self/other/re ‐ la ti onship. These constructs can be studied quan ti ta ti vely using appropriate ques ti onnaires. Some in ‐depth case studies of leaders’ inten ti ons for addressing the adap ti ve challenges and followers’ in ‐ ten ti ons for entrus ti ng power to a leader also would add novel evidence that would validate or invalidate our findings. Future research should include the stage of adult development as an important explana ‐ tory variable in LMX rela ti onship. 5.4 Conclusion This paper addresses the research ques ti on of how the stages of ego development impact the in ‐ terpreta ti on schemes of the simple social exchange (act of giving)? The act of giving is worthy of study for several reasons: (1) the act of giving is the be ‐ havioral expression of genera ti vity, which is an im ‐ portant aspect of ego development; and (2) genera ti vity is an important phenomenon to be ob ‐ served in a case scale system transforma ti on. Using a sample of N = 290 respondents, we present the research findings of how the evolu ti on of the inter ‐ preta ti on schemes of the act of giving evolve across the levels of ego development. Based on research findings, we theorize how di fferent interpreta ti on schemes of the act of giving might inform the phe ‐ nomenon of social exchange between the leader and followers (and all relevant stakeholders). Specif ‐ ically, we formed implica ti ons from two LMX per ‐ spec ti ves: (1) the follower perspec ti ve—how a willingness to entrust power to another person in exchange for services (expected benefits) might evolve as one moves across the stages of ego devel ‐ Melita Balas Rant: Evolu ti onary Tendencies of Simple Social Exchange Across the Stages of Ego Development: Implica ti ons for Leadership Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 65 opment; and (2) the leader perspec ti ve—how a will ‐ ingness of the leader to address the adap ti ve chal ‐ lenges might evolve across the stages of ego development. 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Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 68 Melita Balas Rant: Evolu ti onary Tendencies of Simple Social Exchange Across the Stages of Ego Development: Implica ti ons for Leadership APPENDIX: Figure A ‐ 1: Inter ‐rater reliability measured by Cohen’s kappa Figure A ‐2: Percep ti ons and interpreta ti ons of the inten ti ons for giving and the expected or unexpected consequences resul ti ng from the act of giving across ego development stages Intraclass Correla ti on Coe fficient Intraclass Correla ti on a 95% Confidence Interval F Test with True Value 0 Lower Bound Upper Bound Value df1 df2 Sig. Single Measures 0.965 b 0.953 0.973 55.462 184 184 0.000 Average Measures 0.982 c 0.976 0.987 55.462 184 184 0.000 Two ‐way mixed ‐e ffects model in which people e ffects are random and measures e ffects are fixed. a Type A intraclass correla ti on coe fficients using an absolute agreement defini ti on.. b The es ti mator is the same, whether or not the interac ti on e ffect is present. c This es ti mate is computed assuming the interac ti on e ffect is absent, because it is not es ti mable otherwise. General cogni ti ve and behavioral tendencies of the stage (Loevinger, 2013) Perspec ti ve focus on the expected and unexpected outcome of giving Excerpts Self ‐protec ti ve (E3) Controlled by impulses. Poor language. Interpersonal rela ti onships are viewed from the perspec ti ve of taking. A manipula ti ve or decep ti ve a tti tude toward others. Fear of being manipulated and deceived. Material focus. Act of giving and its consequence not under reflec ti ve a tt en ti on. Focus on nega ti ve e ffects (nega ti ve feelings and thoughts). Words and feelings simplis ti c. Material focus. E ffects on the self (how I feel). E ffects on another person not included in the interpreta ti on “Dissa ti sfac ti on of a person.” “Spoiling.” “Not ‐good enough present.” “Good feeling when I give.” “Bad if ge tti ng an expensive gi ft .” “The embarrassment of choosing a gi ft .” “Gra ti tude not shown.” “Something in return.” “Feeling to give back.” Conformist (E4) Give many conven ti onal responses. Interpreta ti ons conceptually simplis ti c. Frequent use of like, never, or everyone. Judgmental approach, right/wrong. Interpersonal rela ti onships described as behaviors. Search for social acceptability and belonging. Giving gets more a tt en ti on. Material focus. More complex interpreta ti ons. Focus on the emo ti onal impact of the act of giving on the self. Emo ti onal e ffects are framed simplis ti cally (sa ti sfac ti on, dissa ti sfac ti on). The other side enters into the perspec ti ve, but the a tt en ti on is given primarily to how the response of the other side e ffects the self. Transac ti onal ‐material approach to act of giving (exchange of equal values). The expecta ti on of reciproca ti on of equal value. Disappointment if the reciprocated response is not aligned with the expecta ti ons. A lack of clarity around the expecta ti ons as a response. “Feeling of joy, love, importance.” “That the gi ft is not well received or does not end where it should.” “A problem can arise when the value of gi ft s is di fferent, and you may feel that you owe someone else who gave you a more expensive gi ft .” “I get a sense of possession or abundance.” “Gi ft ing is something nice, and it is polite for the gi ft ed person to accept and give thanks. It also happened to me that he did not want to accept the gi ft .” “If you receive a gi ft , you feel obliged to return it yourself.” “In the past, I learned that it is necessary to think carefully who you give to, and how much one deserves. In the past, I probably, like everyone, was very nega ti vely surprised in this regard." “People taking it for granted, and forge tti ng what I have done for them." “You give too much to someone who doesn’t deserve it.” “Dissa ti sfac ti on with high expecta ti ons, desire for more and more.” “More willingness to engage.” “Gi ft ing brings a smile to your face.” “Tears of happiness if the gi ft was a surprise.” “We always want more and more.” “Sa ti sfac ti on.” “Sa ti sfac ti on that you help.” Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 69 Self ‐awareness (E5) Perceived mul ti ple possibili ti es and alterna ti ves in the situa ti on. Ac ti ons in terms of appropriateness. More in ti mately ti ed to interpersonal rela ti onships. More aware of individual di fferences in a tti tudes, interests, and abili ti es. Being responsible and fair is an important theme. The morality is one of helpfulness, altruism, and some concern for larger social issues. Material focus. Giving in the perspec ti ve from e ffects on both sides, thus focus on the rela ti onship, social exchange. Recogni ti on of multi‐ faceted nature of e ffects giving on the rela ti onship. E ffects of giving on the social exchange are posi ti ve (social glue), nega ti ve (subversive expression of) and neutral (a method of influence). Emo ti onal impact of the act of giving on the self is becoming more nuanced, emo ti onal dis ti nc ti ons are becoming more fine ‐grained; a tt en ti on remains on the posi ti ve e ffects of the self, yet the e ffects are induced by the quality of social exchange (and not narrowly by the behavioral response of the other side). “Now and again I am amazed at how grateful some people can be, sincerely grateful when you give them something, even if you give only a li tt le.” “In the past, I was very disappointed to give more than I received, and over ti me, I learned how to evaluate people well and thereby reduce uncertainty in such situa ti ons.” “Giving promotes collabora ti on and social cohesion.” “Too many people give things just to display a higher social status than they hold. We should give to those to whom we are precious, and not only to those who are dear to us.” “Some special emo ti on like joy when you sense someone happy/joyful/sa ti sfied with the gi ft and a tt en ti on.” “That instead of having a posi ti ve e ffect on a person, your e ffect is nega ti ve, and that way you hurt a person, and cause damage to the rela ti onship.” Conscien ti ous (E6) Absolute statements and rules replaced by comparison, con ti ngent statements. Capable of combining opposing alterna ti ves holis ti cally. Presen ti ng choices and decisions. Have long ‐term goals and ideals. Concerned with life’s purpose. Recognize the inevitability of human imperfec ti ons. Report emo ti onal nuances. Dis ti nguishes appearances from the underling feelings. The physical aspect of a person is contrasted to mental and spiritual aspects. A broader temporal and social context. The non ‐material aspects of giving enter our a tt en ti on (i.e., giving a tt en ti on to someone is also an act of giving). Giving as a mechanism of high ‐quality bonding; a tool to induce trust in the rela ti onship. The crea ti on of trust in the rela ti onship is a func ti on of my response on the response of others; becoming aware that proper/improper act of giving is defined expecta ti ons one carries; star ti ng to learn to loosen expecta ti ons; not to expect anything is the best approach. The properly performed act of giving increases proximity with other person in the rela ti onship, high quality. A high ‐quality social exchange creates a posi ti ve impact on the self because it induces a feeling of connectedness (compassion). “It is more important to take ti me and e ffort to make someone happy and joyful; material things are not so important.” “When I give something, I can feel good, a li tt le more fulfilled; some ti mes I expect something in return but not always. Some ti mes when I give, do that to express a tt en ti on that is expected in our society. When I give, I am also aware of my will to serve. Some ti mes I have assisted people with di fferent acts of kindness out of my sub ‐ consciousness because this is part of us humans. When I help, I also give advice, because this helps build up communica ti on and trus tf ul rela ti onships and friendships. I help because I feel I am connected and I am not uncaring. In school, I have received more help than I have given in return. . . . At work, I help most of the ti me and only some ti mes and rarely say no.” “Tears of happiness and a hug. Pleasure and compassion.” “I expect not to be moved, but usually it pleases me. Usually, people are surprised. I prefer to give ti me, a ffec ti on, gi ft s, and emo ti onal support. You need me, I’ll be there. Why would I need to get anything from it? I like it, so I do it.” “Sa ti sfac ti on, the feeling that I have done something right—when I see the posi ti ve reac ti on in the person I have influenced with a gi ft or a tt en ti on.” “What I give to others it is uncondi ti onal and I expect nothing in return, so I have no unexpected consequences.” “Consequence is the connec ti on through a sense of fulfilment, inner warmth, posi ti ve a ffect.” “When giving, releasing even greater happiness than when receiving a gi ft .” If the gi ft is perceived with sincere joy, I feel that I made that person happy and I get the feeling of sa ti sfac ti on. I think that I like the person more. If the gi ft is not appreciated. I try not to show disappointment. I think that a ft er such “acceptance” of the gi ft I move away from that par ti cular person.” “When I’m a giver and I need to give a gi ft to my family or friends I ini ti ally feel stressed out! This is when I have to choose a gi ft . Usually, I choose something they would be able to use. When this phase is behind me, I am happy that I was able to choose “the proper” gi ft . When I give the gi ft to the person that is close to me, I usually feel happy and gentle. However, more important for me is how the gi ft is being perceived. If the gi ft is perceived with sincere joy, I feel that I made that person happy and I get the feeling of sa ti sfac ti on. I think that I like the person more. If the gi ft is not appreciated (you can hear thank you, but your gut feeling tells you it is not sincere), I try not to show disappointment. I think that a ft er such “acceptance” of the gi ft I move away from that par ti cular person. Dynamic Rela ti onships Management Journal, Vol. 11, No. 2, November 2022 70 Melita Balas Rant: Evolu ti onary Tendencies of Simple Social Exchange Across the Stages of Ego Development: Implica ti ons for Leadership Individualis ti c (7) Responses are unique, but not all unique responses are rated that highly in terms of interpreta ti on and perspec ti ve ‐ taking. The exact wording is rarely replicated. Embrace simple ideas expressed at the lower levels as one complex idea). Like to reconcile ideas that are at previous stages expressed as polar. Distrust purely ra ti onal analysis in favor of a more holis ti c view. feelings and context are taken into an account. Realizes that most prior meaning ‐making and iden titi es were socially constructed and culturally condi ti oned. Learn to consciously scru ti nize their own beliefs and assump ti ons. do not impose their views on others. Non ‐material aspects of giving receive full acknowledgement. Giving is a language of social exchange. Expecta ti ons of the response of giving are loosened. A tt en ti on is paid to the inten ti ons and assump ti ons behind the act of giving. Be tt er sensing the inten ti ons and assump ti ons behind the act of giving serves to structure more proper response. The proper response is defined by the capacity to create a posi ti ve impact on others. Cri ti cal to assess the impact on other is change well ‐being. An increase of the feeling of well ‐being in others increases the feeling of well ‐being in the self. Giving creates a space/mirror for learning about the self and others. Giving as a form of being. When a tt en ti on is paid to society at large, recogniti on that there is a mismatch between how one act in terms of being and what is unfolding in the outer reality. “When I receive something, I understand it as a sign of apprecia ti on and thank you, either for good deeds done or just as gra ti tude for being there for someone. I’m always interested in what the purpose of giving is so that I can thank them for their a tt en ti on and see what made them feel so good that they decided to give me something. It is always good to know the reason so that you can make them feel good more o ft en and teach you what one cherishes and appreciates. Besides, it gives me the reflec ti on to see how much they know me and give me things that means a lot to me. Things in this context can be material or immaterial, such as “thank you,” hug, kiss, breakfast, help in preparing lunch, a voluntary ini ti a ti ve to do something instead of me . . . in a business se tti ng, we do not take ti me for personal rela ti onships, for building the trust and le tti ng each other know that going the extra mile ma tt ers and it’s no ti ced. It also creates a team spirit, where mutual wins are greater than individual ones, and that we are not an egois ti c society. Unfortunately, this doesn’t always work.” “I always want to give a gift‐ hit. Of course, it happens a gift‐ miss to me, too. But giving is a kind of language, so if I give a gift‐ miss, then we speak two di fferent languages. The unexpected consequence is that I start analysing where I missed and plan to improve that on the next occasion; I want to know you. This means a lot to me. The unexpected consequence is a reflec ti on on how people care less and less: ‘Just bring a present like each year and we're done.’ This happens in a personal and business context. This reflec ti on is for me unpleasant. I es ti mate it is also a reflec ti on of the ti me we are living in. At the end of the day, I just wish the receiver recognizes my e ffort in preparing and giving the gi ft to him. I shake hands, I hug, I kiss.”